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Ad volumes on TV reach pre-COVID levels thanks to IPL, but value growth still some way off

While ad volumes started picking up pace in the second half of 2020, overall there has been less than 1 percent increase in ad volumes compared to last year.

December 31, 2020 / 06:35 PM IST
While there is an expectation of a strong ad revenue growth in the second half of FY22, there could be some challenges the broadcasters would have to face. (Representative image)

While there is an expectation of a strong ad revenue growth in the second half of FY22, there could be some challenges the broadcasters would have to face. (Representative image)

Despite a sharp fall due to the coronavirus impact, ad volumes on TV reached pre-COVID levels in three months after the lockdown. And the major credit goes to the Indian Premier League (IPL).

"The good thing this year was that the festival period was buoyant and for the first time IPL happened during the festive period. And now it (TV advertising) is steadily improving," Ashish Bhasin, CEO, APAC & Chairman India, Dentsu, told Moneycontrol.

Unlike previous years when it took place between March and May, IPL this year was scheduled in September and went on till November.

So, if we look at the ad volumes per day, it dropped from 1,032 hours during the pre-COVID period (January to March) to 752 hours between April and June. Volumes picked up in the July to September period and increased to 1,165 hours, according to recently released report by AdEx India, a division of TAM Media Research, a TV audience measurement analysis firm.

Ad volumes continued to grow in October until mid-December with 1,364 hours per day.


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While this is a good sign for TV advertising, N Chandramouli, CEO at TRA Research, a consumer analytics and brand insights company said, "brands were active in September as it was pre-Diwali period. Hence, what will be relevant is whether the volumes continue to increase in the January-February period. If that happens that will be a good sign for TV advertising."

Growth in ad volumes in 2020

During the festive period, ad volumes on television witnessed double-digit growth.

Also, average ad volumes per day between October to mid-December this year saw 39 percent growth as compared to the January to September period. The study takes into account data up to December 19.

The report further said that average ad volumes per day saw 90 percent growth post lockdown (between June to December) as compared to the lockdown period (April-May).

In the period after lockdown, shampoos among categories, and Hindustan Unilever among advertisers saw the highest increase in terms of visibility.

While ad volumes started picking up pace in the second half of 2020, overall there has been a less-than-one-percent increase in ad volumes compared to the whole of last year.

Volumes are up, but what about value?

Also, while increase in ad volumes is a good sign, it doesn't mean that ad revenues have seen similar growth as ad spend is a function of both volume and price. And ad prices on TV had dropped as many broadcasters gave discounts as high as 40 percent.

In fact, during the festive period too, broadcasters offered discounts. During pre-Diwali this year, ad spends were only 30-40 percent of what it was during the same period last year.

Despite TV being the first to see a substantial recovery thanks to the 13th edition of the Indian Premier League (IPL) and reality shows like Bigg Boss, industry experts estimate that advertising on TV will drop by 10-15 percent this year.

For 2020, industry players had expected a 10-12 percent growth in ad spends before the coronavirus outbreak in India.

"Volumes and value are not necessarily the same thing. Time on TV is a perishable commodity. There is zero value if it's missed. While by giving bonus spots etc, volumes may increase, it does not mean value has increased in the same proportion," said Bhasin.

Adding to this, Karan Taurani, Vice-President, Elara Capital, said, "Pricing for many large genres are still lower versus pre-COVID which means there may be a decline of five to seven percent year-on-year in the month of January too."

Talking about recovery in value, Bhasin said, "What remains to be seen is: will value pick up? If the economy does well it will be good for advertising as well. The budget will be one indicator and the monsoon next year will be important as well. So, I think by next festive season things should be looking good and we may be back to normalcy even in terms of value."

Even Sandeep Goyal, Chairman, Mogae Media, a marketing and communication agency, is optimistic about TV advertising in 2021. "With the vaccine now on the horizon and the pandemic looking like receding, 2021 looks a better year. In the immediate future, England’s tour of India and IPL in early summer will be big apertures for advertisers. So, volumes and value will both see an uptick for sure."

Lockdown gave way to new categories on TV

Although the TV advertising market shrank due to the coronavirus-led lockdown, the period did bring many new advertisers to the fore on TV.

With many online education technology companies going aggressive on TV, the education sector became the new entrant in the top 10 sectors’ list.

Video streaming platforms, social media categories moved up by five positions to second rank, replacing toilet/floor cleaners amid the top categories on TV.

Over-the-top (OTT) platforms in the media and entertainment space and social media saw the highest increase in ad volumes amid categories with growth of 70 percent in 2020 as compared to 2019.

Plus, rubs and balms category was the only new entrant in top 10 categories’ list.

Also, hand sanitizer advertising per day grew by more than 100 times in July as compared to January this year.

In September, average ad volumes per day for antiseptic creams/liquids grew by 3.5 times compared to January 20. And in December, Chyawanprash advertising grew by more than six times compared to January this year.

In terms of channels, regional channels this year saw two percent growth in ad volumes and their advertising share on TV grew marginally by one percent as compared to 2019.

Celebrity ad volumes also see COVID-19 impact

Coming to celebrity endorsements, this category has seen a marginal decline this year. Celebrity ad volumes accounted for a 23 percent share of overall TV advertising as compared to 24 percent last year.

When it comes to celebrities, Bollywood star Akshay Kumar continues to remain the most visible film actor with 16 percent share of celebrity ad volumes followed by Amitabh Bachchan with 10 percent share.

Amid TV celebrities, Ram Kapoor and Raju Shrivastav were the top two actors with 36 percent and 28 percent share of celebrity advertising respectively this year.

Maryam Farooqui
first published: Dec 31, 2020 06:20 pm
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