Small advertisers splurge on big-ticket television shows3 min read . Updated: 22 Sep 2009, 09:30 PM IST
Small advertisers splurge on big-ticket television shows
New Delhi: Small advertisers have begun jostling with big-budget brands for key, high-visibility slots on reality shows on television, even if it means paying three times the rates they are used to.
This push for premium slots, say experts, is ironically a consequence of the economic downturn. The slowdown has curtailed media budgets and advertisers want to be sure that every rupee they spend delivers results.
A 10-second spot on a reality show may cost Rs90,000-1.5 lakh, a 200% premium over regular rates, “but just buying two ad spots here will ensure us more eyeballs than I would get buying bulk on other channels," said Naved Chaudhary, head of marketing at Intex.
Only the leading companies in sectors such as home and personal care products and telecom and financial services, where the annual advertising budgets typically exceed Rs50 crore, have traditionally been able to afford such rates.
Crowding the premium space are a number of small brands such as Everest Spices, Micro Max mobile, Fuel deodorant, erectile dysfunction drug Manforce and emergency contraceptive I-pill, with marketing budgets of Rs15-25 crore a year, according to media buying agencies.
“Advertisers are realizing the value of investing in high-impact shows because it guarantees reach, even if that means paying one exorbitant amount to a single channel rather than buying FCT (free commercial time) across channels," said Joy Chakraborthy, chief revenue officer, Zee Entertainment. “This way at least, advertisers know they are not wasting money."
In demand are the reality shows notching high viewership ratings.
“Brands benefit from reality shows because they get surround sound, which means they get a chance to integrate their brand in interesting ways other than just buying commercial time," said Kevin Vaz, executive vice-president, ad sales, Star India.
Reality formats command about 25% higher television ratings than soap operas on Hindi general entertainment channels and 400% times higher than other genres, according to estimates by media buying agency GroupM India Pvt. Ltd, part of WPP Plc., the world’s largest advertising group by revenue.
Such ratings give an immediate boost to a product’s brand equity.
“When we acquired Fem, the brand had been absent from the media for a long time, and picking this show (Rakhi ka Swayamwar) helped us give Fem a lot of prominence and visibility," said Vikas Mittal, executive vice-president, marketing, personal care, Dabur India Ltd.
In July alone, when the show was still on air, Fem’s sales grew 30%, confirmed a senior executive from the company who did not want to be identified.
Dabur completed the acquisition of Fem Care Pharma Ltd, a maker of women’s skin care products, in June.
Traditional advertisers on Indian television such as Hindustan Unilever Ltd and Procter and Gamble Co., which typically boast of marketing budgets of at least Rs50 crore a year, continued to top the list of advertisers on television in July and August, according to data by Audience Measurement Analytics Ltd, a television audience measurement agency.
The difference now is that they have to contend with smaller advertisers for the same space. The increase in the number of channels as well as reality shows has widened the opportunity for new advertisers to enter the space, as has the lowered rates for reality show sponsorships by 20-30% from a year ago, according to estimates by media agencies.
Media buyers also attribute the burst of smaller advertisers on the scene to the upcoming festival season.
“The overall spending levels were compressed this year but as we get into the festival season, we will see a lot of smart spends being made by established as well as lesser-known brands," said Shubha George, chief executive of Mediaedge:cia, part of GroupM India.
“Reality shows and cricket are established platforms that deliver results, so the battle for eyeballs will continue though the approach will be well-thought of from the cost-efficiency perspective," George said.