Festive demand to fire up TV ad rates by 10-15%?

BY Sonam Saini

With the festive season approaching, television advertising is expected to witness a good boost. Industry experts predict a 10-15% increase in ad rates compared to the regular periods. Marketers, say experts, are expected to significantly increase their spending during the festive period, despite already having made substantial investments in major events such as IPL 2024, ICC Men’s T20 World Cup, and the general elections in the first half of the year. The increase in demand will drive up advertising rates for TV channels.

While the overall industry growth may not be exceptional, experts are optimistic about genres such as General Entertainment Channels (GECs) and movies, which are expected to perform well due to the absence of major sporting events which usually command the big chunk of ad dollars. 

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Says Hema Malik, Chief Investment Officer at IPG Mediabrands India, “Due to the absence of other major events, especially in regular programming and even in digital, the demand for regular entertainment will increase. This may lead to a price hike or festive premium in a similar range, depending on the category,” said Malik. 

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Malik expects 10-15% increase in advertising rates, influenced by varying demands across different product categories. “The festive premium varies across categories. With the closure of many startups and sunrise categories, the share of FMCG is back to being predominant on television. But these categories tend to operate steadily and are not heavily influenced by festive seasons. Therefore, the demand from non-festive sensitive categories will largely determine market dynamics,” she shared.

According to Dhiraj Khanna, Associate Vice President and Cluster Head, Mudramax, “This festive period, we will witness a rate hike of around 15-20% on leading GECs within HSM. The September-November period is the crucial time for major networks, specifically GECs, followed by movies to drive their revenue,” said Khanna.  

Khanna says the leading networks are estimated to witness 5% to 7% growth in terms of FCT consumption during this year’s festive period. 

Here’s how the networks saw growth in terms of FCT (Free Commercial Time) consumption in 2023 (Sep-Oct) period, when compared to 2022 

Khanna also mentioned that television viewership during the last four months (September to December) of 2023 compared to 2022 showed a decrease in FCT consumption by 2%. There were 60 crore secondages consumed in 2022, whereas in 2023, this figure decreased slightly fell to 59 crore secondages.

Elaborating on the strategies employed to drive revenue during the festive burst, he stated, "GECs integrate 20% of the FCT into their Non-Fiction shows to enhance regular FCT deals. Popular reality shows such as Bigg Boss and KBC are strategically scheduled during this period to maximize revenue impact. Movie genres include Worth Watching Time (WTP) in their regular deals to fulfill annual commitments and maintain effective rates."

According to Vaibhav Choudhari, Vice President, West, Carat, “The sectors that see high spending from advertisers during the festive period, include FMCG, Automotive, Real Estate, Retail, and BFSI. These sectors experience a surge in business, reflected in how advertisers allocate their budgets. This limited inventory availability for broadcasters needs to be sold to the same advertisers, but with higher demand. This automatically translates into increased rates, resulting in a projected 7-10% rate increase due to heightened demand across these major spending sectors.”

He also noted that advertisers have already allocated a significant portion of their budgets to IPL and the World Cup. While they do reserve funds for the festive season, categories like FMCGs refrain from spending excessively high amounts due to economic considerations. They must maintain a year-round presence, ensuring sustainability throughout the financial year. If they exhaust their budgets during the festive period, it could pose challenges for their operations in subsequent months.

“At this point in time, the consumer sentiments are positive towards spending, and when the spending from the consumer is there, advertisers also tend to pump in the money. In fact, after the elections and the government formation, the sentiments are stabilizing even for consumers and hence they will also start spending more,” said Choudhari.  

As earlier reported by exchange4media, experts believe that the festive season in India will always be high and that advertisers keep the budgets aside for this period irrespective of their expenditures on other properties.

Compared to previous years, this year's festive period will be shorter, which means spending will be more limited.

According to Malik, it's a relatively shorter festive season because Diwali falls at the end of October this year, unlike the last couple of years when it was closer to mid-November. "Instead of six weeks, it looks like it's going to be three to four weeks for the festive period. So, the shorter duration will inevitably impact the overall budget," she explained. Malik also mentioned that they are still awaiting details from clients regarding their festive plans. 

She also pointed out that when comparing it with the previous year, we are now in a different world post-COVID. In 2021, the industry experienced a fantastic festive season. There was substantial growth and it was quite exceptional—an aberration, in a way. It outperformed even the pre-COVID festive seasons, setting a high baseline. “However, the years following—2021, 2022, and 2023—did not fare as well. Last year, despite hosting a World Cup in India, was an all-time low. Although the World Cup attracted some advertising spending, other broadcasters did not benefit as much. A significant portion of the available advertising budget was absorbed by the World Cup,” said Malik. 

According to PITCH Madison advertising report 2024, the first half of 2023 was really subdued and AdEx grew by just 6% during this period, but fortunately as raw material prices fell, AdE grew 14% in the second half. The higher growth was also driven by festive spending and marquee events like ICC Cricket World Cup and Assembly Elections. 

The categories including FMCG, E-commerce, Auto, HH Durables and Real estate are the top five spending categories on TV in 2023. Among them, Auto Real estate, BFSI, Retails spend money on advertising during festive season. 

Tags : Ad Rates Festivals Tv Advertising