Cricket World Cup 2023 To Boost Advertising & Consumer Spending

After a 12-year break, India will be hosting the Cricket World Cup (CWC), and the anticipation continues to rise not only among cricket lovers but also in the advertising and marketing sectors as well. 

Unlike previous editions, India will be the only host nation for all the CWC matches, potentially providing favourable timings for viewership, which could translate into a significant increase in ad revenues for both television and digital platforms.

Karan Taurani, Senior Vice President at Elara Capital predicts, "The CWC 2023 would generate around INR 20-22 billion in ad revenue when considering TV and digital platforms combined. This substantial revenue increase is attributed to several factors, including 1) free ad supported offering on digital, 2) the favourable match timings, allowing viewers to catch the first half of the game on over-the-top (OTT) platforms.

Additionally, cricket fans will be delighted to learn that CWC matches will be available for free to all mobile users on the Disney+ Hotstar app.

In terms of advertising growth, the television sector is expected to see a compound annual growth rate (CAGR) of approximately 6 per cent in comparison to the previous CWC edition in 2019. However, the digital medium may witness a more significant upswing, with a projected CAGR of around 21 per cent compared to 2019 levels.

Historically, the CWC has resulted in higher same-store sales growth (SSSG), with an increase of around 3 per cent in the CWC quarter for companies like JUBI due to an enhanced food delivery experience. This time, other food categories such as burgers, fried chicken, and biryani are also expected to perform well, driven by the broader reach of online aggregators.

In addition to food, the alcoholic beverage (alcobev) industry is expected to benefit from the CWC as well. "Beer volumes, particularly premium brands like Corona, Heineken, Bira, and Budweiser, are expected to see substantial growth as they hold a significant on-premise share of approximately 30 per cent," shares Taurani. Spirits, particularly scotch whiskey and upper prestige brands, may also witness volume growth due to their higher on-premise share, estimated at around 40 per cent. Overall, whiskey and beer volumes are projected to increase by 4 per cent to 6 per cent during October and November, coinciding with the CWC.

While cricket-related advertising is likely to thrive during the tournament, it could strain TV advertising for non-cricket segments. Several consumer tech companies, including those in edtech, fintech, foodtech, and e-commerce, have shifted their focus toward profitability, resulting in reduced ad spends. This shift has affected the ad spend growth on TV and digital platforms.

As the advertising landscape adjusts, traditional verticals like FMCG, Auto, and Telecom are expected to fill the void left by these new-age players. Still, GEC-based players such as Zee Entertainment Enterprises and Sun TV may experience a mild strain in Q3FY24 due to advertising spends being diverted to cricket-related content. 

Nonetheless, the convergence of the Cricket World Cup and the festive season is expected to have a significant impact on advertising and consumer consumption, benefitting key players in the food delivery, alcobev, and advertising sectors.