TV ad spends to grow 5% thanks to T20 World Cup but its clash with IPL14 puts advertisers in fix

Kolkata Knight Riders' Eoin Morgan during an IPL match against the Punjab Kings in 2020. (Image: IPL, BCCI)

Cricket fans have some exciting times ahead of them as two major cricketing properties will be clashing in the second half of 2021.

While the T20 World Cup was already scheduled in the second half, the remainder of the 14th edition of the Indian Premier League (IPL) will also happen between the September and October window. The league was suspended on May 4 due to the second wave of coronavirus pandemic.

With both IPL and T20 World Cup catching audience attention, TV advertising will see a positive impact.

According to Karan Taurani, Vice President, Elara Capital, there will be incremental spends for the advertising industry thanks to the T20 World Cup.

"With T20 World Cup coming in, Rs 1,200-Rs 1,500 crore will be added to the current base of TV ad revenues. So, there will be four to five percent of positive impact."

TV ad spends had dropped from Rs 32,000 crore in 2019 to Rs 25,100 crore last year, according to an EY 2020 report.

This year, a Group M report estimates that TV ad spends will grow by 18 percent to Rs 35,914 crore.

And T20 World Cup will be a significant contributor to this growth.

But will the T20 World Cup, which is likely to happen in the October-November window, eat into the ad spends of other genres?

No cannibalisation

"There will be no cannibalisation. There is a high likelihood that it (T20 World Cup) will not eat into other genres because whatever sporting advertising budget we had for 2020, that was completely missed out. So, there will be pent-up demand for sports," said Taurani.

Last year, out of Rs 5,894 crore which is the estimated size of the Indian sports industry, major contribution came from ad spends on TV, digital and print to the tune of Rs 3,657 crore, according to a report by GroupM ESP, entertainment, esports and sports division of GroupM India.

While there's high interest for T20 World Cup, said Taurani, the back-to-back scheduling of two cricketing properties will put advertisers in a fix.

Advertisers in a spot

This is because the budgets are limited and both are high-impact properties.

"A lot of money will run out for newer clients to come on board for T20 World Cup. Clients work on quarter planning. At the start of a quarter they have budgets set and they start spending. Now the problem is both of them happening in the same quarter, the budget will remain the same. That's where the budget impact comes in," Rikki Agarwal, Co-Founder & Chief Business and Operating Officer (CBO) of Blink Digital, told Moneycontrol.

While IPL 14 will not eat into the ad spends of the T20 World Cup, many advertisers who would want to advertise on both the properties will now have to make a choice between the two as budgets are limited.

Although Star India, the official broadcaster of IPL, has sold around 90 percent of the league's ad inventory at Rs 14 lakh for a 10-second slot, it has remaining ad inventory to offer to the advertisers.

In fact, the remaining ad inventory which is left for the last few matches is sold at a 10-15 percent premium.

For IPL 13, the broadcaster had increased ad rates by 15-20 percent for the playoff matches.

Hence, media planners planning to have a presence during both T20 World Cup and IPL 14 will have to decide between the two.

Advertiser interest

And it looks like startups including Dream 11, Byju's, and Mobile Premier League (MPL) will continue betting big on IPL 14.

Take MPL's example. Sai Srinivas, Co-founder and CEO, MPL, the esports and online gaming platform, while announcing the three-year title sponsorship deal with Kolkata Knight Riders (KKR), which is owned by actor Shah Rukh Khan, had said that the platform will be spending more on IPL this year than 2020 in terms of marketing.

When it comes to marketing, MPL has been spending significantly. The company's marketing expenses increased from Rs 29.62 crore in FY19 to Rs 137.67 crore in FY20, according to reports.

For IPL 14, edtech companies like Byju's and Unacademy are estimated to spend over Rs 300 crore. In fact, Unacademy is the associate sponsor of IPL14. And an associate sponsorship deal for a period of three years costs around Rs 120 crore.

With startups focusing on IPL, for T20 World Cup, Blink Digital's Agarwal said that FMCG and e-commerce players will be big money spinners.

In fact, RS Sodhi, MD, Gujarat Co-operative Milk Marketing Federation (GCMMF), the makers of Amul, in an interview had said that T20 World Cup is a bigger event for the company.

He pointed out that while IPL is a high impact property, T20 is not a yearly event and that the viewer interest will be high as there are more teams.

In addition, Agarwal pointed out that T20 World Cup is closer to Diwali and this is why spends on that campaign will be higher. "For calendar planning, campaigns start in the first week of Navratri. So, a lot of money will be spent on T20 World Cup."

While the ideal situation for advertisers would have been a considerable gap between the two big cricketing properties, the clash of IPL 14 and T20 World Cup will result in high voltage cricket which will be a big money spinner for the TV industry.