With unmatched viewership numbers, the Indian Premier League (IPL) stands as an undisputed sporting entertainment property in India, drawing in millions of avid spectators. The league has shown exponential growth since its inception in 2008, with its value soaring by 433% to reach INR 89232cr. Expectedly, the cricketing extravaganza has become a hotspot for advertisers looking to make big bucks. Fantasy gaming platforms, especially, have a close connection with the IPL, consistently ranking among its top five advertisers. The top two fantasy gaming players, as per industry estimates, should be spending upwards of 250cr. on IPL 2024 cumulatively. They rely heavily on the IPL for their income, with Redseer estimates suggesting that the league contributes between 35% and 50% to their earnings. However, this year, there was concern that these platforms would cut back on their IPL ad spending due to new GST rules imposing a 28% tax on online gaming, specifically, on the full value of bets. So, what is the future of these heavy ad spenders on the IPL? The answer is a bit surprising.
Cannot Miss The IPL
While the revised GST rules have certainly strained the resources of fantasy gaming platforms, with many trying to cut costs by laying off employees and calibrating marketing spends, their marriage with IPL remains unfazed. The e-comm-gaming category, which includes fantasy gaming platforms along with real-money gaming and e-gaming players, has a share of 16% among overall advertisers in the first thirty-nine matches, TAM data shares. Further, Sporta Technologies Pvt Ltd, the parent company of Dream11 remained the top advertiser during the first seven matches of the IPL, contributing a significant 11 percent to the total ad volume.
Vinit Godara, CEO, MyTeam11 shares, “The revised GST rates have impacted our entire cash flow and hence the marketing spends as well. We have planned a cut of 25-30% on our overall marketing spends for the year. However, we cannot compromise on IPL spends as it gives us the opportunity to get the best of users. For us, our IPL spends have remained the same as last year.”
Anand Chakravarthy, Chief Growth Officer of Omnicom Media Group agrees that IPL is a core part of fantasy gaming platforms’ strategy. He says, “If they don’t advertise during a key cricketing event like this or the World Cup, their revenues will completely disappear. Therefore, it is only logical for them to keep spending big on such platforms. This is helping them generate more money as well. Obviously, the GST ruling can reduce the appetite to invest, but they will eventually return.”
Smaller Players Missing the Season
Even though the majority of big players, including Dream11, Myteam11, My11Circle, and Trade Fantasy Gaming, are maintaining their spends on IPL, it is the smaller players who are suffering. An industry insider, on condition of anonymity, tells IMPACT, “While the bigger players are spending large sums during the league, the smaller ones continue to suffer. There are several who have already shut down their apps, and yet others who are struggling to maintain the cash flow. Even the bigger players are spending out of their pockets as it is not possible to run profitable games with bigger prize pools and incentives without passing on the tax-burden to users.”
Jaya Chahar, Founder & CEO of Trade Fantasy Gaming (TFG), a young player on the block shares similar sentiments. “We haven’t cut any marketing spends, and in fact, would be spending two times more. However, we have a laser focus on driving good ROI with these expenses. We have used influencers for our campaigns, delivering good results for us. We are quite big on digital media marketing and are also planning activities with Jio to maximise our reach. Our spending stands at around INR 2.5-3 crore on pure performance marketing campaigns. Having said that, smaller and mid-size companies are the ones who are suffering the most because of new GST rules,” she says.
According to Shradha Agarwal, Co- Founder and CEO of Grapes, most brands are trying to find unique ways to attract customers while they assess their marketing spends. “It is quite possible that they will be undertaking initiatives to leverage the IPL games to ride the momentum and create visibility as much as possible among the target audience. But in the pursuit, they will be reconsidering their spends, and adopting cost-effective strategies as much as possible. In order to exercise optimal outcomes, there are high chances that brands might resort to influencer-led content or referral campaigns to tap the enthusiastic audience.”
The top players are maintaining their IPL spends, while some are even increasing, indicating that the industry is quite confident of managing their businesses despite the GST shocker. However, it would be interesting to see if they will be able to maintain this stance in the coming days as well.
