Ad interrupted: When a cricket match ends too soon, what happens to spot ads?

More than a loss of money, brands may experience a loss in value for campaigns, but provisions for compensation can offset it through strong contracts with broadcasters, say experts

by Nilanjana Basu
Published - October 17, 2023
5 minutes To Read
Ad interrupted: When a cricket match ends too soon, what happens to spot ads?

Last month, when team India bowled out Sri Lanka for just 50 runs, they finished the game almost five hours before slot time. On October 14, a similar feat was repeated by the team when they easily vanquished Pakistan with a lot of time to spare. While such wins are celebrated by the cricket-obsessed nation, does it irk advertisers when a match is shortened, like the IPL final this year?

We spoke to experts to understand what happens to the spot advertisements on digital and cable that have been placed by brands and advertisers to get audience views during important matches. Do brands who align with the World Cup to gain increased visibility during the cricket season short-changed in such situations? 

Industry players suggest that when a match is cancelled, or shortened due to an unforeseen situation, advertisers usually get a different slot for their ads during a different match or show, which may lead to a loss of value for campaigns by brands. However, most contracts include provisions for compensation, offsetting financial impacts for advertisers.

The fate of spot ads

Due to the nature of the game, sometimes these situations are unpredictable. Ashish Shah, Founder & CEO of Vertoz says, “When disruptions occur, brands may experience a loss of value rather than an immediate financial loss. Advertisers typically allocate a specific budget for their campaigns, and interruptions or unforeseen circumstances may affect the campaign's effectiveness but may not result in a direct financial loss. The budget allocated for advertising is usually planned in advance and may not be shifted elsewhere, especially if the interruption is beyond the control of the advertisers.”

Speaking about the concept of ‘make goods’ in advertising, Mitesh Kothari, Co-founder and Chief Creative Officer, White Rivers Media says, “When rain disrupts a game, the planned spot advertisements usually take a rain check. But, there's a silver lining for advertisers. Brands do not necessarily lose money when their spot advertisements are interrupted or cancelled due to rain. They've got contracts with broadcasters that spell out how they'll get compensated if rain plays a spoiler. This means that they’ll have the opportunity to reach the same number of viewers with a little something called ‘make goods’ or MGs. Yes, they've got backup plans lined up to hit the same audience. Plus, they use other marketing channels, such as social media or digital advertising, to reach their target audience. With these contingency plans, they weather the storm and keep their marketing campaigns shining.”

Sayak Mukherjee, Founder/Director at Brandwizz Communications also believes that scheduled spot ads are affected during such unforeseen circumstances. He explains that when such a situation arises, broadcasters fill the gaps with alternative content like replays of crucial moments, commentator analysis or pre-recorded stuff. “The idea is to keep the audience engaged and not turn off the channel.”

“Most advertising contracts have clauses accounting for such disruptions. Brands lose some immediate visibility during the match or event, but broadcasters try to compensate for the loss by offering additional airtime or later broadcasts. So, there might not be a direct financial loss.” Mukherjee adds.

Brands could also get their money back, but that is usually the last resort broadcasters turn to. Karan Taurani of Elara Capital opines that advertisements are built on a slot basis. In case the slot is not played if a match is not played or rain interrupts it, the advertiser doesn’t end up losing money, but the broadcaster does because from a monetization angle, it pulls the overall ad revenue down.

“Brands don’t lose money. They could be given the money back or if it is placed somewhere else in some other show or match. Giving money back to the brand is the last resort as most of these have got long-term contracts and give lumpsum amounts. The pricing of that slot is also priced basis of that. So, whenever the billing happens, if the match is interrupted, they will not be billed for that amount.”

Contingency plans by advertisers and broadcasters

Taurani says that in such situations, many agencies have contingency plans. Some of the advertisers also end up paying lesser amounts for more slots, so that the entire amount is not gone in one go.

According to Shah, contingency plans for unexpected events during major sports like the World Cup are often limited. “While advertisers and agencies may have general crisis management strategies, specific contingency plans for disruptions during such high-profile events may not be extensively developed. The unpredictable nature of certain events and the real-time nature of live sports make it challenging to implement detailed contingency plans. Advertisers may need to adapt and respond on a case-by-case basis, considering the unique circumstances of each situation.”

Mukherjee sees that brands and agencies often plan extensively during major events like the World Cup. They have plans for interruptions, like backup alternative content ready to be played during long delays. “Brands also negotiate with broadcasters for additional airtime for significant disruptions. However, there is no direct impact on the brand, as it is more about the association that the brand encashes across multiple channels during the entire campaign duration.”