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Thursday, March 23, 2023

IPL 2023 to see higher ad revenue riding on digital; audience reach to be on par with TV

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JioCinema is betting big on connected TV with more people opting for a big screen experience via streaming. The connected TV audience base is expected to reach 100 million in 2023.

Digital will drive growth both in terms of advertising and audience reach this year, with the Indian Premier League (IPL) going free for viewers.

Viacom18, which had bagged the digital rights of the IPL during the media rights auction last year, decided to stream the league on JioCinema.

The media company had won the digital rights at Rs 20,500 crore for the 2023-27 cycle and had also bagged non-exclusive digital rights for 18 matches of the tournament at Rs 3,273 crore.

Advertising agencies say that new ad inventory, JioCinema’s move to make the IPL free for viewers, and faster growth in the digital ad market are among the reasons the IPL has become more attractive for advertisers.

“Making it a mobile first inventory and putting it on DV360 has made it very affordable for any brand to leverage this opportunity,” said Meher Patel, Founder of performance marketing agency Neon, which is part of the marketing firm Wondrlab Company.

DV360 is Display & Video 360, which goes beyond just media buying and allows marketers to optimise ad campaigns by letting them design creatives and organise audience data, among other things.

“Last year, as it was not a digital DV360 inventory, the ad rate was based on the negotiation skills and the commitment spends a brand was able to make. The minimum entry for a brand is as low as Rs 25 lakh, making it viable for a larger pool of brands, unlike last year, where minimum investments were at around Rs 1 crore,” he added.

IPL ad revenue 

Ad rates have increased by about 5-7 percent this year, noted Rishabh Mahendru, VP, Client Success, AdLift.

Ad rates during IPL 2022 ranged between Rs 199-277 per CPM (cost per mille/thousand impressions) for 10-second ads.

The ad rates are estimated to see a 10-15 percent premium as the IPL is expected to continue its growth in reach this year, according to Utkarsh Sinha, managing director, Bexley advisors, a boutique investment bank.

“The response from advertisers for the upcoming IPL season is great. Traditional advertisers especially are loving the fact that there is spot buying on CTV (connected TV). Ad rates range between Rs 200-250 and Rs 6.5 lakh for CTV,” said a marketer, who didn’t want to be named.

JioCinema is betting big on connected TV with more people opting for a big screen experience via streaming. The connected TV audience base is expected to reach 100 million in 2023.

The platform is offering highly competitive rates compared to last year, said Rohit Agarwal, Founder & Director, Alpha Zegus.

Overall, digital ad revenue for the IPL is expected to reach Rs 2,000 crore, a 33-percent increase versus last year’s digital ad revenue, estimates Mahendru. He said that Disney+Hotstar earned ad revenue of Rs 1,500 crore from IPL 2022.

On the other hand, Karan Taurani, senior vice-president, Elara Capital, said that JioCinema can make 50-60 percent more in ad revenue this year, riding on a 40-50 percent increase in MAUs (monthly active users).

Audience reach on digital

“With the IPL being free this year, you may see digital come on par with TV in terms of (audience) reach. This will be a big driver for the (ad) pricing. While TV ad revenue will be largely flattish, the share of digital for IPL ad revenue will increase and the ratio could be 60:40, with TV contributing 60 percent from 70 percent earlier,” he said.

The IPL is expected to record a reach of 550 million this year, according to JioCinema.

“IPL for free will push JioCinema’s subscriber base toward new records, as they may start to compete with the likes of YouTube India, which has an MAU base of 520 million, the largest in India,” said Taurani.

Advertiser interest

When it comes to the types of brands, Alpha Zegus’ Agarwal said that this year, they were anticipating more service-based brands among automobiles, as well as quick delivery to dominate IPL media buying.

“The big change this year is that we are seeing smaller players, who are seeing positive signs in growth, and are willing to experiment with the IPL,” Patel said.

He added that advertisers being able to see a live dashboard of served and secured impressions is an additional benefit this year as it helps validate the volume of impressions and views on the brands’ video.

JioCinema is bringing back YouTube like masthead for ads, which I haven’t seen Disney+ Hotstar doing in the last few years. Plus, this year you can watch the IPL for free digitally, which will bring in a lot of the Tier II, III audience,” said Mahendru.

JioCinema is expecting to bring 500 advertisers on board the platform this year during the IPL.

While digital is expected to see significant growth this year, Taurani said that it will be important to track user traction in the first year. “How things pan out after the first year will depend on user experience of the app and whether people are hooked to digital for the IPL,” he added.

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