Advertising expenditure during the festive season this year may increase 12-15 percent from last year, driven mainly by the ICC Men’s Cricket World Cup tournament, marketers said.
Ad expenditure during the festive season – the busiest shopping period of the year – is expected to be higher than last year on the back of increased spending by FMCG companies and auto and consumer discretionary firms.
The festive season this year has an additional sparkle of the ICC World Cup and we are expecting to see an increase of at least 15 percent in ad spends, said Prashant Puri, co-founder of AdLift, a digital marketing agency.
“The festive period this year coincides with major sporting events and there is a positive consumer sentiment, which is expected to lead to a substantial increase in activity during the festive season. Sports will be a significant contributor to the higher ad spends as these events attract diverse and sizable audiences,” said Archit Agarwal, founder of Tikshark Solutions, an ad agency.
The cricket World Cup will boost ad spend growth by about 4 percent in the second half of 2023 comprising the festive period and take growth to 10-12 percent, noted Karan Taurani, senior vice-president at Elara Capital. He said the cricket World Cup is estimated to record Rs 1,000 crore in ad spends.
“We estimated a growth of 8-9 percent during the festive period this year in ad spends. The growth is expected to be good in overall advertising expenditure because of festive ad spends, but it is not expected to be blockbuster because overall industry advertising expenditure is low. But the cricket World Cup will give the extra push,” he said.
Sports ads
Ad spends for sports in 2023 are projected to be substantial, noted Agarwal.
“Ad spends for sports-related advertising could reach around Rs 9,000-10,000 crore this year, with cricket accounting for the lion’s share,” he said.
There are back-to-back cricket tournaments during the festive period this year including the Asia Cup (August 30 to September 17) followed by the World Cup 2023 (October 5 to November 19) and brands want to capitalise on this, said Raghav Bagai, co-founder of Sociowash.
“Sports will be a major factor to drive ad spends in the festive period. Around 40-45 percent of the total ad spends annually take place in this specific phase (festive period). A potential spend of around Rs 30-40,000 crore is expected during this festive season,” he added.
Apart from cricket, categories including e-commerce, FMCG, hospitality, fintech and health will take the front seat in terms of advertising expenditure during the festive period, Agarwal said.
“Factors including the gradual recovery of the economy are expected to contribute to this rise in advertising expenditure,” he said.
The festive period will see new launches in the auto and consumer discretionary categories and increased ad spends by FMCG companies because some of the inflationary pressure has cooled off, Taurani said. However, gaming and new-age categories remain under pressure, affecting overall ad spend growth.
Ad spends going down by the gaming vertical will affect sports ad spends in a big way. While the gaming category contributes around 5 percent to the overall ad industry, it accounts for 15-20 percent in terms of the sports ad expenditure pie. Also, new-age companies, which were under pressure in the first half of 2023, have not come back in a big way,” he said.
Online gaming platforms are reducing their marketing spends to survive after their businesses took a hit due to GST-related changes, including the rate increasing to 28 percent from 18 percent. Some gaming firms have shut shop and others have reduced employee strength.
Digital frontrunner
The major share of the ad spends will go to digital platforms and TV, said marketers.
“Digital is expected to see higher ad spends during the festive period compared to TV. This trend is driven by the increasing shift in consumer behaviour towards digital platforms, said Agarwal.
Digital’s share in ad spends is expected to reach 56 percent in 2023, noted Bagai. He said 60-70 percent of sports consumption is on digital these days.
“Digital will come out to be the frontrunner this season, especially because of the abundance of inventory available,” he said.
In 2022, the share of digital in total advertising revenue of Rs 1,04,900 crore stood at 47.5 percent, or Rs 49,900 crore, while TV’s share stood at 30 percent, or Rs 31,800 crore, according to the FICCI-EY 2023 report on media and entertainment.