Freeze! Media agencies put on hold IPL-7 buys given uncertainty over tourney

28 Mar,2014

By A Correspondent

 

Media-buying firms have frozen all ad sales of the Indian Premier League for the next 48 hours as they await clarity on the future of the tournament, two top officials of leading media buying firms said.

 

They said advertisers are considering either re-negotiating ad rates for the IPL, or considering pulling out of the twenty20 tournament and putting their money on elections instead, after the Supreme Court on Thursday recommended suspension of two teams – Chennai Super Kings and Rajasthan Royals.

 

Gautam Kiyawat

Gautam Kiyawat, CEO at media buying firm Madison Media group, said the development will hit the sentiments of marketers. “There was a bit of scepticism from the beginning with some matches being moved out of the country and now with the potential disappearance of two star teams, advertiser sentiments are going to tank even further,” he said. Media buyers, which represent some of the country’s biggest advertisers, are of the opinion that if 20-30 per cent of the IPL matches are scrapped, it would bring down the overall revenues of the popular twenty20 tournament by half.

 

Multi Screen Media-run Sony Entertainment, which holds broadcasts rights for the tournament, would also face a similar quantum of losses because advertising airtime would also shrink with less number of matches, said the CEO of a top media buying firm.

 

Multi Screen Media (MSM), which is charging Rs4.5-5 lakh for 10 seconds, was expected to better its last year’s IPL earnings of around Rs900 crore that was helped by 30 per cent – 40 per cent jump in advertising revenues. Rohit Gupta, president at MSM, said: “Since the final order has not come yet, it is too early for us to comment on the matter. Let the order come.”

 

If Chennai Super Kings and Rajasthan Royals are banned, then it would have a direct negative rub-off on advertisers. Title sponsor PepsiCo, which had has committedRs400 crore for five years, stands to lose the most, as it has hinged its entire annual plans on the tournament that falls in peak summer season for the soft drinks sector. PepsiCo declined comment on the matter.

 

CVL Srinivas

CVL Srinivas, CEO at GroupM, the country’s largest media conglomerate that also represents PepsiCo, said, “It is too early to take any decision (on whether or not we should advice our clients to stay away from the IPL) as we don’t know which way the scenario will pan out. We will get more clarity in days to come and then we will weigh the options for our clients.”

 

Some matches of the IPL will be played in the UAE, which is not a market for many brands, and with the Supreme Court banning two teams, advertisers stand to accrue huge losses if the tournament is scrapped. Navin Khemka, managing partner at media buying firm ZenithOptimedia, said absence of two key teams will bring down the value of IPL as a property.

 

IPL’s brand value grew 4per cent, from $2.92 billion in 2012 to $3.03 billion in 2013. The total brand value of the nine franchises last year reached $325.8 million from $321.12 million in 2012, according to consulting firm Brand Finance.

 

Nandini Dias

Mr Khemka said that big advertisers may choose to be on elections over IPL, while likely lower ad rates may open IPL doors to smaller companies. “The sense is that overall ad rates could come down in the IPL. The flip side is that many small advertisers, who otherwise were not able to afford IPL as the entry costs were very high, may get a chance to be a part of it this time,” he said. Nandini Dias, CEO at media-buying firm Lodestar UM, said the agency was not advising clients to pull out of the tournament.

 

“Controversies in cricket seem to have become a regular occurrence. Advertisers like PepsiCo have paid unprecedented amount of money despite all the controversies and uncertainties,” she said. “There are enough clients who want to ride on the higher viewership likely due to controversies. In fact, there are clients who change their media plans and skew their media plans to news channels when the channel is breaking news regarding controversies and scams.” The hospitality industry too could take a hit if some matches are cancelled.

 

Source:The Economic Times

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