IPL going well, but ad spend is muted

A lowdown on advertising, marketing and media consumption trends.

JioCinema, the official digital streaming partner for the Indian Premier League (IPL) 2023, has been showing-off the large number of sponsors and advertisers it has been able to onboard for its platform’s inaugural season of the tournament. Other than 23 sponsors, the streaming app, owned by Viacom18, boasts of nearly 400 advertisers if numbers cited by Anil Jayaraj, CEO, Viacom18 Sports, are to be believed. “Advertisers on TV are fairly well known and they have dropped to about 44 compared to last year,” he told HT. “On digital, we are 9 to10 times that number, and growing,” he said.

Kolkata Knight Riders players celebrate the dismissal of Sunrisers Hyderabad batter Rahul Tripathi during the IPL 2023 cricket match between Sunrisers Hyderabad and Kolkata Knight Riders, at Rajiv Gandhi International Cricket Stadium in Hyderabad, Thursday, (PTI)

One of the big reasons for a large cache of small and medium advertisers on JioCinema has been its ability to offer geographical targeting or geo-targeting where brands and advertisers are able to sharply aim ads at people within a specific radius. This allows brands to pick the most interested users at the right location at an affordable price. “Geo-targeting on digital allows brands to address consumers at a pin code level,” said Vivek Das, CEO, FoxyMoron, the digital agency of the Zoo Media network.

To be sure, geo-targeting is nothing new. Facebook, Google and Amazon offer geo-targeting solutions to brands. When Disney Star held the digital rights to IPL, even Hotstar allowed geo-targeting.

But it’s suddenly become the buzzword because JioCinema has been able to offer scale, said media experts. “Since IPL is free on JioCinema, there’s been a surge in viewership. From an average concurrent viewership of 7-8 million on Hotstar it has moved to 12-13 million on JioCinema,” said Shanu Jain, vice president, media and e-commerce at Dentsu Creative India.

With the overall base of people watching each match increasing, geo-targeting makes more sense. “Brands looking to reach 50% of the targeted universe are now able to reach 80% as the universe has expanded,” Jain said. Dentsu is working with at least 12 advertisers with budgets of ₹2 crore to ₹3 crore riding on IPL bandwagon. Several of these brands have shifted ad spends from Google and Facebook to leverage IPL's popularity that offers top of mind recall, he added.

For advertisers seeking affluent customers, JioCinema is offering more targeted messaging on connected TVs (internet-enabled TVs that allow streaming). “Through connected TVs in affluent homes, digital is becoming more family viewing than individual viewing. So, it makes more sense to geo-target,” said the head of a large media agency declining to be named. His agency estimates 50 million connected TV homes in India though other experts peg it at half that number.

On linear television, IPL on Star Sports network also has 16 new categories and 70 new advertisers for the first 35 matches this year as compared to last year, said TAM Sports, a division of TAM Media Research, in a report.

But despite these numbers, the critical question is whether this season of the IPL will eventually result in significantly higher ad revenue as compared to last year’s ₹4,500 crore.

Both Disney Star and Viacom18 responded with caution.

Sanjog Gupta, head of sports at Disney Star said there are genuine headwinds in the advertising ecosystem. The macro-economic situation, especially the Russia-Ukraine conflict, has led companies to cut back on their expenses including ad budgets. Funding crunch has rattled startups who no longer have access to a large cache of money to promote themselves. The automobile sector is less aggressive too. With supply chain shortages they are not able to ramp up production. “They don’t want to create more demand by advertising,” Gupta said.

But the network did see a recovery in March, and increased buoyancy and demand among advertisers for exposure on IPL, he said.

The overall economic sentiment is down, agreed Viacom’s Jayaraj. “We can’t control what is happening in the market but we are fairly okay with what we set out to achieve," he said.

While IPL ad volumes may not have declined, its ad rates have softened. The ad market is neither bullish nor flush with funds. “Though data is awaited, IPL may see a marginal 5-7% jump in total ad revenue, if that,” said a media agency head. Every advertiser is seeking return on IPL investment this year, he added. But on Thursday, Elara Capital's Karan Taurani said IPL’s overall ad revenue is 30% lower so far.