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Impact of assembly elections on TV ad spends

Impact of assembly elections on TV ad spends

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MUMBAI: “Bad officials are appointed by good citizens who do not vote.”  We’ve all heard that every citizen must cast their vote because it’s the very essence of a country’s democracy and also their right. However, a lot of people choose to turn a blind’s eye. This could either be due to lack of awareness about getting voter ID cards ahead of time or just sheer boredom to go out, stand in a queue and getting inked. 

Election time is fairly interesting because we get to see so many different and new ads during this time. The ruling party is gushing about its achievements whereas the opposition party criticises the existing regime and the changes they intend to bring if elected. Brands on the other hand, often come up with some tongue-in-cheek advertisements that talk about the importance of voting and so on. Today, with digitisation, availability of low cost smartphones and low data costs, digital and social media has become the front leader of all marketing mix. Bands and political parties are sure to leverage the medium to reach a large set of audiences where traditional media kind of seems to fail. 

India’s 2014 election was the world’s biggest exercise in democracy, with a price tag to match. Indian politicians spent around $12 billion on their campaigns, which, in terms of expense, makes these polls the most expensive since the US presidential elections hit the $7 billion mark.

The next General Elections will take place in 2019 which is promised to be a game changer in the way political parties spend during elections. If we’ve learnt anything from the 2014 elections where BJP spent Rs 714 crore and Congress spent Rs 516 crore, 2019 election is set to break all major records. However, before we enter 2019, The Indian Assembly Elections are scheduled between November-December in the states of Madhya Pradesh, Rajasthan, Chattisgarh, Telangana and Mizoram.

In order to understand what will be the impact of Assembly elections on ad spends this year and which brands or categories will advertise the most, we bring to you industry expects’ views: 

MediaCom national director for buying K Srinivas Rao thinks that advertising on elections, especially state elections is majorly driven by local retail advertisers or semi-corporate advertisers with a B2B advertising objective.

Local/retail advertisers majorly depend on news channels for their advertising and hence are most likely to go big during elections. Retail players do long term deals keeping in mind the election time which gives them a leverage to get the best value from the channels. Election time is generally seen as the time when news channels expect an upside in revenues on the back of specific programming and its sponsorships. We have typically seen around 10-15 per cent upside in revenues for the national channels during elections. However, this number grows many times on the respective local news channels in which the elections are being conducted.

Dentsu Aegis Network chairman & CEO South Asia Ashish Bhasin thinks that election ad spends are not that significant because the total size of the market is Rs 65000 crore whereas election ad spends contribute to only Rs 2000 crore. 

The government/political ad spend goes up during elections, especially before election silence starts. Digital and mobile play a vital role during this time as all of them want to reach the younger user/generation. The 2014 general election was the first one where digital was used in a big way and it will be pertinent in the next elections as well. News channels become more active and advertise the most during this time because advertising follows eyeballs and people who follow elections, tend to switch on those news channels for election coverage. Other than the government and political parties, there is no significant change in the advertising spends because brands advertise according to their consumer cycle and the need of their category.

Havas Media Group CEO - India and South East Asia Anita Nayyar is of the opinion that automobile, FMCG, e-commerce brands and e-wallet sectors are expected to advertise the most during elections along with digital and mobile which will play a major role in political advertising.

According to the PTI report, the government spent nearly Rs 1,286 crore in 2016-2017 on ads about government policies, schemes, projects and events, through various media. The amount spent by the advertising agency for 2016-17 was 8.15 per cent higher than Rs 1,188.85 crore spent in 2015-16. The decibel level of marketing by government and brands will only go up in the coming months. While political advertising is an important arm of the Indian adex, it is very sentiment-driven and dynamic. If the government is stable, there is positive sentiment leading to brands spending more on advertising.

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