A lull in advertising post Diwali is not an unexpected phenomenon for the broadcast industry, with most advertisers slowing down around this time of the year after spending large sums during the festive season. As per TAM AdEx data, the advertising volume on news genre dropped by 20 per cent in November 2022 over October 2022. While the drop in ad volume does not come as a surprise for broadcasting industry, experts feel for news channels particularly, it’s a combination of multiple factors that has caused the drop.

“Similar pattern is being experienced this year too. Diwali this year culminated on October 24 itself, and immediately thereafter there was decline in activity. Hence, November saw a substantial decline in AdEx. But it bounced back by the last week of November, gaining momentum in December,” explained Jain.

She further added, “If we look back, a similar pattern was observed in 2019 and 2021. In 2020, however, the Diwali season spilled over to November as the festival was on November 14.”

If we look at the last year data by TAM, October had 9.9% of the monthly share of average ad volume share of the year 2021. While November had 8.3% and December had 7.9%. It is also important to note last year Diwali was in the first week of November.

Recession

Gaurav Srivastava, Head-Ad Sales, North & East, NDTV, pointed out that the major reason for the decline in ad volume is that some advertisers have cut down spends because there has been a hike in the prices of raw materials. “They have to cut down their ad monies to maintain the cost of the product. Therefore there is a decline,” he noted.

Decline in news viewership

Some industry observers share that there has been a decline in viewership post the resumption of ratings for news channels and this has now started impacting advertising.

However, Srivastava claims that the drop in viewership has no effect on advertising. "There is a drop in viewership, but it is not significant enough to affect advertising. News channels cover every small to large event and people continue to tune in to watch news channels for any news."  

He also mentioned that some advertisers have increased their digital ad spends, which could be contributing to the drop in advertising. "But advertisers who are spending more on digital are few in number, with the majority still advertising on television. Also, those who spend on digital haven't cut back on TV, rather, they've increased their digital budgets."

As per the TAM data, the top category that was common in both months was Toilet Soaps. While categories like Aerated Soft Drink, Two Wheelers and Retail Outlets Jewellers were missing in November.  While top advertiser Reckitt Benckiser (India) remained same for both periods, ITC was the new advertiser seen in November and Pepsico was missing in top 10. Similarly, Dettol Antiseptic Liquid was the common brand in both the months and also the top brand in the news genre. However, brands like Coca-Cola, Mazza, Phonepe, Veet and Colgate were missing in the top 10.

News channels pulling out of BARC

On the condition of anonymity, the CEO of a media agency shared that obviously there is a decline in TV advertising post festive period. One of the reasons is that certain categories have reduced their budget drastically due to a decline in production, and one such category is hosiery.

"Viewership data for the news genre has always been volatile," he said. “There was previously no data, and some channels have now opted out of BARC ratings. I don't believe news channels are purchased solely on the basis of viewership. Advertisers look at channel share and numbers to some extent, but numbers always fluctuate within a certain range," said the CEO.

He also stated that the shift of advertisers from television to digital media will have an impact on other genres in the near future, in addition to news. He actually predicted a drop across most genres in January-February-March.

Another senior media planner made similar claims. "One is a logical observation of the fact that the overall advertising scenario comes down for a while post the festive season. As a result, the drop in volume is not only for news but for overall television, which is not surprising. However, when it comes to the news genre, if you look at the data, there has been a decline in terms of ratings per channel,” he pointed out.

The media planner went on to say that some broadcasters have opted out of BARC this year (NDTV followed by Zee News and iTV Network). “Given that there were no ratings previously and planners were uniformly using previous ratings to project ROI. Now that some channels have opted out, and viewership for some channels is declining, the ROI has become hazy,” he added.

He also shared that advertisers are also thinking about re-channelizing investment into other genres like Hindi movies which are good in terms of ROI. “One is the business cycle agenda, and second, because of the drop in ratings and channels opting out of ratings, the ROI has gone down. These are the reasons for investment going down in news channels,” he summarized.

However, the industry is hopeful that advertising will bounce back for the genre as three state elections are coming up.

Jain explained, “This December will most likely end up doing well for news as because of the three state elections, categories that spend high on the news genre such as automobiles, education, durables, e-commerce, infrastructure and of course government, have timed their new communication and launches around that time. This will benefit both national- Hindi and regional channels.”

She also mentioned that AdEx also picked up with brands surrounding their campaign on FIFA World Cup for news and other frequency enhancer genres like music and sports.