Demand for lower ad rates in future IPL due to poor viewership

Heavy advertisers such as LG and Havells said while IPL remained a strong platform for brand communication, the changing viewership called for a price correction.
"LG is using IPL to promote its range of 3D television and we have seen a great response from consumers in terms of sales. IPL is a great property but given the declining ratings, Set Max will have to rejig its pricing," LG Electronics India Ltd consumer electronics business head Amitabh Tiwari told PTI.

Expressing similar sentiments, Havells India Vice President Vijay Narayanan said: "The overall (viewership) ratings are about 25 per cent down. Advertisers were hoping that the ratings will go up in the fourth season and the event as a whole will become bigger which has not happened. So there is obviously a sense of loss".

He said the company will engage in discussions with the broadcaster on the ad rates and other deliverables after the tournament.

As per industry estimates, MSM has charged about Rs 5 lakh per ten second spot for the IPL matches.

Admitting that TV viewership has been unsatisfactory, Multi Screen Media (MSM) President (Network Sales) Rohit Gupta said: "While the total viewership and the reach of IPL has been good this season, the TV ratings have gone down, which is a matter of concern.

"It means that people are not spending enough time to watch IPL. We will analyse the reason for the same after the tournament gets over. We do not know what exactly it is (the reason for low ratings), but will surely analyse".

It could be the World Cup effect or afternoon timing of the matches, Gupta said, however, adding in ongoing season, IPL has already registered 155 million viewers.
MSM had raked in Rs 750 crore from advertising and sponsorships last year from IPL and it is expecting about 20- 25 per cent increase after the fourth tournament this year.
The company had sold off majority of the inventory for the matches about six months before the event began.

"For the last four matches, the leftover ad inventory has been sold at Rs 15 lakh per ten seconds," Gupta added.

The final IPL match will be played in Chennai on May 28. The advertisers are, however, sure that despite declining viewership they would not stop using the IPL platform in future.

"IPL is a big property and nobody will let it go away just like that. Better planning is required in the next one year to make it more relevant for advertisers," Narayanan said.
According to a report on IPL by India Infoline Securities, there has been a 20 per cent year on year drop in the overall viewership ratings this season due to various reasons, including the ICC Cricket World Cup.

"Set Max had successfully sold a large part of the ad inventory at rates higher than last year’s. This was largely on the back of the surge in ratings for the IPL in 2010, and this has helped the broadcaster skirt a 20 per cent year-on- year drop in ratings," the report said.

Set Max’s overall ad revenue from IPL 2011 is likely to be more than Rs 900 crore, ensuring a profitable edition, it added.