The world’s richest cricket league is finding the going tough in its fifth season. Advertisers are beginning to feel the Indian Premier League (IPL) may be too expensive a property.
With the start of the tournament just four days away, Multi Screen Media (which runs SET Max, the official broadcaster of the league) it still to sell its ad inventory unlike any of the previous seasons.
According to media buyers, only 50-60 per cent of the ad inventory has been sold until now as against 80-85 per cent around the same time in 2011. Around 10-15 per cent is kept for spot buys.
Typically, there is an allocation of 2,400 seconds of airtime per match. “This time around only 1,000 seconds have been utilised, mainly filled by the sponsors,” said a media buyer.
Till now, the channel has roped in five sponsors: Vodafone, Pepsi, Hyundai, Idea and Tata Photon. Last year, it had 10 on-air sponsors. Among them were Vodafone, Pepsi, Cadbury-Kraft, LG, Samsung, Godrej and Airtel DTH.
People in the know told Business Standard ad rates had been lowered a bit from the initial asking rate and some sponsors had been offered additional airtime and presence. “There has been a 10 per cent decline in ad rates,” said a media buyer.
The channel is now asking for Rs 4.5 lakh per 10 seconds for sponsors and Rs 5 lakh for spot buys whereas last year it was Rs 4.75 lakh for sponsors and Rs 5.25-5.5 lakh for spot buys.
SET Max, however, continues to put up a brave face. Rohit Gupta, president, Multi Screen Media, ad sales, said there had not been any decline in ad rates. “We have sold nearly 70 per cent of the ad inventory and expect to fill up the ad spots, as we are still adding one or two sponsors,” Gupta said.
Last year, SET Max raked in revenues in excess of Rs 1,000 crore thanks to almost 70 advertisers it had on air. But, this year, revenues could be less, given the hard bargains most companies are driving.
The advertisers as well as organisers are worried about diminishing viewer interest. Last year, the average viewership for IPL as a whole was rated 3.91, the lowest for the league since its start in the summer of 2008. The first season of the tournament had a rating of 5.39, the second had 4.66 and the third had 5.51.
“This is a year when SET Max will get a reality check and, hopefully, it will be more realistic with its rates next year,” said a media buyer on the basis that some big sponsors of the past such as LG and Godrej had preferred to stay away while Samsung, Micromax and Canon, among others, had cut ad spends.
"We are considering spot buys because our campaigns are scattered this year as opposed to last year when we had six campaigns launched one after the other. It made sense to take up on-air sponsorship during the IPL. This year, it doesn't. In our view, cricket is still interesting and its reach is good. As a format, IPL works, which makes it appealing, too," a Samsung spokesperson said.
L K Gupta, chief marketing officer, LG Electronics, said the decision to keep away from the IPL this year was taken keeping in mind falling viewership. "You have to look at all aspects, the costs vis-a-vis the returns," he said. "While doing our annual budgets for 2012, we decided we would not advertise in the IPL this year. The decision was taken almost two or three months ago," he said.
However, a few companies are still excited about the property. Vodafone is both the on-ground and on-air presenting sponsor this year, and Karbonn Mobiles the official mobile phone partner. Shashin Devasare, executive director, Karbonn Mobiles, says he sees no reason why his company should not be advertising in the IPL this year. "It is an important property and one that still gives good reach," he says.
Media planners feel the risk appetite among advertisers has come down significantly.
"If it means there will be moderate returns on investment on non-IPL properties, even then that is what clients want," said a media buyer.
The IPL season five starts on April 4. In all, 76 matches will be played at 12 venues across the country.