Sam Balsara, chairman and MD of Madison World, in an interview to CNBC TV18 Storyboard in 2021. (Image: Screen grab)
The big spending season is here, with festive-period euphoria and sporting events like the IPL and the upcoming ICC T20 World Cup. Sam Balsara, chairman and MD, Madison World, is very bullish about ad recovery at this time and feels that with a bit of luck, we could almost reach 2019 levels. Storyboard speaks to him about the festive season, advertising’s recovery and his take on the headline-making mega merger of Sony Pictures Networks India (SPNI) and Zee Entertainment Enterprises (ZEEL).
Edited for length and clarity.
Festive season has begun, the second phase of IPL is going on and the ICC Men's T20 World Cup is coming up. This has proven to be a window of opportunity for a lot of brands, given the tough times we are coming out of. How are brands leveraging this opportunity?
Overall this is a boom time for the media. TV is doing extremely well, print is looking up, so is outdoor, and digital continues to be strong. So indeed it is a boom time. The only dampener is that the largest category of spenders, FMCG, which contributes to almost one-third of the total ad spends, is facing a lot of inflationary pressures in their raw materials. Having said that, even FMCG is on the forefront and other usual categories of e-comm, mobile phones, auto and education startups are spending like there’s no tomorrow. So I am bullish that the months from August-November are going to be the best months in a long time and would even surpass 2019 figures, based on current indications.
What are your clients asking for, given the uncertainty? How and where are they spending?
In September-October, they are going to open their wallets quite a bit. Despite the phenomenal growth of digital as a medium, which has now crossed 30% of the AdEx (ad expenditure), last year TV crossed the 40% threshold level and had a market share of 42%. TV continues to be a large advertisers favourite.
ZEE’s merger with Sony Pictures Network is big news. It’s also a big disruption. What does it mean for the industry and advertisers?
It is certainly big news. And if (the) two promoters are able to iron out different pulls and pushes, it certainly will be very big news, after Disney’s takeover of Star or I guess this is even bigger news than that.
What the news means for the industry, as I see it, will be very good for the two groups because they have become larger and there are obvious advantages of being larger in this space. They will be able to command higher rates, they will be able to save on a lot of costs because of scale and bringing two organizations together.
But in a lot of ways it is not good for marketing and advertisers, because if it’s going to lead to inflationary pressures, then advertisers, who are already under pressure of high inflation of raw materials currently, are going to get a double whammy, with also inflation in advertising rates.
An increase in advertising rates is not necessarily good for overall growth of advertising, because advertising is a key stimulant that drives the sales and economy up and reduced advertising volume does not augur well for increasing sales.
What about the other broadcasters? Could this have an industry-wide effect on rates?
I guess if one channel group succeeds in increasing its channel rates, then it will become that much easier for other channels also to follow - at least the stronger channels. I think it could lead to an overall inflation in television.
The merged entity will be the largest entertainment network in India, bigger than Star & Disney India. Your thoughts on the new order?
Being No. 1 or No. 2 doesn’t matter to consumers or even advertisers. It matters only to people within the industry and the promoters. Yes, Star may lose their No. 1 rank, but ultimately that doesn’t mean much.