India's Reliance touts 'brain mapping' to lure IPL advertisers after Disney merger

Many small businesses and company executives attended Reliance’s February seminar in the southern tech hub of Bengaluru to be pitched one-on-one with IPL ads described as being more affordable than ever.

A Reliance ad rates booklet showed packages started at $17,000, but wellness startup owner Anita Devraj, who attended the seminar, said, “I find it cheaper to advertise on Instagram and YouTube.”

COSTLY RIGHTS INVESTMENT

Before their merger, Reliance and Disney spent roughly $3 billion each to bag IPL streaming and TV rights for the period from 2023 to 2027, and billions more on ICC cricket and other leagues.

But the heavy investment caused pain, with Disney India later describing the ICC rights as “onerous” and causing an estimated loss of $1.42 billion.

However, Reliance sees the IPL as key to luring advertisers, given the sport’s popularity, and consumers who may stay on to subscribe to other content, such as HBO movies or Bollywood hits, said the first company source.

To overcome the Indian antitrust body’s concerns with cricket rights and win clearance of the merger, the companies committed not to raise ad rates to an “unreasonable level”.

This year, Reliance has raised IPL streaming ad rates by up to 25%, according to a Reliance executive and documents drafted by one of its Indian media agencies, the Media Ant.

Packages at lower rates are offered by media agencies which buy ads in bulk from Reliance to sell to clients. While Media Ant’s website offers IPL packages starting at 500,000 rupees ($5,800), YouTube ad packs start at just 10,000 rupees ($115).

Streaming is becoming mainstream but competition is stiff, Uday Shankar, the vice-chairperson of the Reliance entity, told McKinsey in an October interview.

“You’re competing with global players: Google and Meta,” he said. “Most of digital advertising revenue goes to these two.”

Reliance’s growing focus on challenging U.S. streaming tech is evidenced by pitch deck pictures of people wearing headsets and heart rate monitors to track neurons for a “brain-mapping study” comparing how engaging its IPL ads were against rivals.

It said the results showed the “focus”, “engagement” and “memorability” of the ads were up to four times greater than Meta’s Instagram and Google’s YouTube. The two firms did not reply to requests for comment on the Reliance assertions.

“No platform has more engaged viewers than YouTube,” Google’s own “brain-imaging study”, with participants from Britain and Germany, concluded last year.

However, Reliance cannot hope to beat the reach of YouTube, with nearly 500 million active users in India, while touting neurons can only take you so far in the ad market, said Daoud Jackson, a streaming analyst at Informa TechTarget.

“You aren’t going to win an argument in a board meeting next year by pointing at a brain scan, you’ll win that market by pointing at the profit and loss chart.”

(Reporting by Munsif Vengattil and Sai Ishwarbharath B in Bengaluru, Aditya Kalra in New Delhi; Editing by Clarence Fernandez)