ARE BRANDS PLAYING TO WIN?

BY IMPACT Staff

As KPMG-CII report values the sports sponsorship business at Rs 5,190 crore, we find out whether marketers are doing enough to leverage sports properties and how best they can build their brand through sports

BY ALLAN DSOUZA
 

With a staggering growth of 12.5% in 2015, the sports sponsorship business is valued at Rs 5,190 crore as estimated by a recent report on the business of sports, brought out by consulting firm KPMG, in association with the Confederation of Indian Industry (CII). While there are many factors that contribute to this growth, on-air sponsorship of sports properties has been the biggest of the lot. With 52% of the total revenue generation, on-air sponsorships added a massive chunk of Rs 2,690 crore to the sponsorship pie. On-ground sponsorships were the second biggest contributors, followed by team sponsorships, franchise fees and endorsements. But, are brands doing enough to leverage sports properties? We talk to experts to find out if there is still an unexplored arena, a vacuum to be filled and how best brands can build equity when associating with sports.

MAKING SPORTS PROFITABLE  FOR BRANDS & ADVERTISERS

Brands have for decades linked their names with sports (predominantly cricket) in the country, and are famous for spending big monies on sponsorship. Starting from the 1987 Reliance Cricket World Cup, where India’s biggest private conglomerate bought the complete tournament rights for a little over Rs 4 crore, to present day mammoth spends on properties like the Indian Premier League (IPL), Indian Super League (ISL), etc, brands have come a long way to leverage sports as a marketing medium. However, there could be many avenues that can still be explored to make sports sponsorship a profitable business model for brands.
 

Sam Balsara, chairman, PMG and Chairman, Madison World, draws a parallel between sports and the advertising industry. “The Indian advertising industry in the last 29 years has grown from Rs 1,000 crore to Rs 50,000 crore. For sports to garner investment, it has to be perceived as a profit-making opportunity by brands, and there is nothing ugly about it,” he says. Substantiating Balsara’s comment on making sports a profitable model for sports, Karan Ahluwalia, President & Country Head, YES Bank, says, “If there is some money being invested in a sport today, it is looked at from a brand-building perspective, where a brand name is getting visibility, which eventually is leading to not just the promotion of the sport, but also the brand associated with that sport.”

Talking about the gates that sports open for brand-building, Nitin Kukreja, President and Head of Sports, STAR India, says, “The level of engagement that sports provides is unparallelled in comparison to any other genre. The kind of appeal a brand can build through any sport is immense, and brands are gradually realizing that value, which is eventually cementing brand associations into partnerships in the true sense of the word. Hero’s association with ISL as title sponsors and Barclays’ association with the English Premier League (EPL) are lasting connects that brands can have with a very involved consumer base.”
 

The KPMG-CII report highlights the transition witnessed by the sports sector, where the government has accorded industry status to sports infrastructure in February 2016, to attract investments from the private sector, thereby taking sports beyond just CSR activities. While IPL has been India’s most dominant domestic sporting league in terms of attracting the attention of brands, viewers, advertisers and broadcasters alike, other sporting leagues are catching up too. “The ISL is the third largest globally watched football league after the EPL and La Liga,” says Praful Patel, MP and President, All India Football Federation (AIFF).
 

SPORTS AS A SUSTAINABLE  BUSINESS VENTURE FOR BRANDS

Hitherto, the industry has been plagued by a myopic vision adopted by brands, where immediate returns are the top consideration for investing in a sport. While the world’s most watched sports league, the EPL had just one title sponsor in Barclays for 15 years, India’s biggest cricket festival, IPL, has already changed three title partners since its inaugural season. What started as the DLF IPL in 2008 became Pepsi IPL and is now finally Vivo IPL, all inside the timeline of a decade.
 

While Jay Mehta, owner of Kolkata Knight Riders (KKR) amusedly says, “Get a celebrity like Shah Rukh Khan, who’s a brand magnet as a partner,” it is Venky Mysore, CEO of KKR who gives context to the different revenue models that  franchises can create to raise sponsorship. Using KKR as a case study, Mysore stresses on the significance of content marketing as a lucrative revenue stream.  “We work with 22 brands today that want to be a part of KKR and are ready to pay a premium for it. We have a web series called Inside KKR that over a period of time with increase in viewership has caused many brands to associate with us,” Mysore adds, emphasizing on the need to create fresh content for a franchise to stay relevant all year round.
 

There are umpteen examples of brands collaborating with sports to accelerate their marketing prowess. Chinese smartphone entrants in India have actually entered a race to amass as many eye-balls as possible through the IPL. With Vivo at the top as title sponsors of IPL, Gionee and Oppo are also loosening their purse strings for the tournament. “As a young brand, it is imperative to create a bond with existing and potential customers. That was the idea behind the IPL title sponsorship. The association proved extremely fruitful. Being the title sponsor helped us gain a huge brand recall across the country and connect with the youth,” says Vivek Zhang, CMO, Vivo India. Vivo, it is estimated, paid around Rs 100 crore to buy the title sponsorship for a period of two years.
 

LOOKING BEYOND CRICKET,  CREATING LOCAL HEROES

While IPL continues to be the most watched and highest funded domestic sports tournament in India, other sports have caught up, attracting not just viewership, but tangible growth on the financial scale. On-ground sponsorship in Kabaddi increased by a colossal 300%, taking the revenue generated by its broadcaster and investor, Star India to Rs 45 crore, which is expected to reach Rs 70 crore in the fourth season of Pro-Kabaddi League (PKL). Similarly, on-ground sponsorship for football grew by 91.6% earning approximately Rs 100 crore for the patrons of ISL.
 

Besides franchise owners, even non-cricket sportspersons such as Saina Nehwal, Mary Kom and Sania Mirza have stood to win big by reaping 40% of the total endorsements showered on non-cricketers in 2015. “Before we become a nation that enjoys playing various sports, we have to become a nation that enjoys watching different sports,” says Sam Balsara on the growth of non-cricketing sports in the country.
 

ISL had clocked a cumulative TV viewership of 429 million in its inaugural season, which further grew by 26% the following season. PKL pulled 435 million viewers in its first season, which only grew by 20% and 35% in the following two seasons.  While India is a late-comer in adopting the concept of leagues, it today has 11 operational leagues, out of which nine were launched in the last three years.
 

CREATING A FANBASE AND GETTING BRANDS TO PARTNER

Whether it’s the sale of merchandise, or increasing engagement across platforms, a loyal fanbase determines the interest of brands in a particular sports franchise. Talking about the opportunities created by a loyal fanbase, Vita Dani, Co-owner, Chennaiyin FC, says, “For local brands, local fans matter a lot. At Chennaiyin FC we have special fan boxes inside the stadium, where fans get to interact with celebs such as Abhishek Bachchan and MS Dhoni who are closely associated with the club. This has led to many native brands such as Leo Coffee, Vasanta Bhuvan and Global Hospitals, among others, associating with us.”
 

Like all other strong business models, getting a partner to invest holistically in a tournament and club is much more viable and welcoming to franchise owners. Answering a question on the feasibility of shared revenue model, where a brand is as involved as the franchise owner in building a club, Vita Dani says, “Associating with a brand is a relationship and like every other relationship, each stakeholder can always benefit from the other and vice versa. This season, we have Lloyds as one of our sponsors, and they have Shruti Hasan as their brand ambassador, which really works to capitalize in the South market.” 

Most sponsorship deals are cracked at the last minute, which leaves little time to devise a strong marketing plan, but club owners believe that this trend is about to change as brands are getting more conscious about long term benefits of such relationships. “More than putting in money, it’s also a lot more about activations, and generating visibility through other marketing exercises that add value beyond monetary measures,” adds Dani. Building on Dani’s thoughts about relationship building, Indranil Das Blah, CEO, Kwan Entertainment and Mumbai City FC comments, “A sponsor that participates in the activation and planning process of a club is definitely better than a sponsor that just adds monetary value. As a club, we are very clear that we will go with an active sponsor that is involved in ATL and BTL activations, over a sponsor that is just giving us the money.”
 

Talking about long term sustainable partnerships between brands and sports, Vinit Karnik, Business Head (Entertainment, Sports and Live Events), GroupM says, “A brand needs to invest for at least 5-10 years in sports to start getting returns from it. Pepsi, Vodafone and Hero are the only brands that have stuck with sports for a long time.”

LEVERAGING ON POPULARITY  OF INTERNATIONAL PLAYERS

One of the primary reasons the IPL has garnered phenomenal media coverage and its ad spots are always full is the pool of domestic and overseas players that participate in the league. Replicating a similar strategy, other sporting leagues such as ISL and the International Premier Tennis League (IPTL) are also adding marquee players such as FIFA Golden Boot winner Diego Forlan, and Grand Slam champions Roger Federer and Rafael Nadal to their team rosters. 
 

Getting sportspersons as brand ambassadors is another remunerative model corporates have been using since the formative days of advertising. Dwayne Bravo’s Champion anthem post the West Indies victory at the T20 final became an Internet sensation with over 20 million hits on YouTube and other social media channels. Commenting on Skore Condoms’ association with Bravo and Chris Gayle, Vishal Vyas, Head of Marketing, Skore Condoms says, “To cater to the young Indian, we had to be associated with what they are connected with. IPL and sports seemed like a great fit with Skore condoms. Our all new range of premium condoms is called the ‘Champion series’ and Gayle and Dwayne are undoubtedly the true champions.”
 

 SHOULD THE GOVERNMENT BE INVOLVED IN SPORTS AT ALL?

India has a Cabinet portfolio for the Sports Ministry, but to the dismay of many sports experts, including Harsha Bhogle, the Government hasn’t done enough to cement the growth of sports in the country. “Sports needs love, and I don’t think the government is in the business of love,” declares Bhogle, expressing his dissatisfaction with the Government’s efforts to develop and nurture sports at the grass roots levels. However, Indranil Das Blah has a suggestion - the Central and State governments could work in tandem with corporate powerhouses. “The Government can work towards facilitating infrastructure like creating land for stadiums and academies, along with ensuring the right subsidies for coaches and staff. Corporate India, on the other hand, can be more forthcoming with providing the cash to sustain sports initiatives,” says Blah. 

THE EMIRATES CASE STUDY OF BRAND-BUILDING SUCCESS

If there is any brand that has successfully merged sports sponsorship with brand building, it’s got to be Emirates. Emirates invested prudently in global sporting events such as football, rugby, cricket and motor sports. The brand’s involvement in club football extends from Arsenal to AC Milan, Real Madrid, Paris Saint-Germain. Estimated at Rs 2,150 crore, the company also has a football stadium in its name. Apart from Emirates, Allianz, ANZ and Etihad are some companies that invest generously in sports infrastructure inside their strongest areas of operations. In the near future, Mumbai’s Wankhede cricket stadium may be the first Indian stadium to carry a corporate’s name on it depending on a deal between the Mumbai Cricket Association (MCA) and DDB Mudra.
 

DIGITAL IS THE WAY AHEAD      

TV may have contributed largely to the success and growth of cricket in India post the 1983 World Cup victory, but it’s digital that is currently paving the way ahead. Rapid increase in Internet penetration and smartphones has enabled Indians to watch sports content online. Star India paid approximately Rs 300 crore for the digital rights of the IPL. Star’s mobile and website application Hotstar logged 100 million viewers during IPL 2016. Digital consumption of sports has also led to the emergence of sports start-ups such as Smaaash Entertainment and Kick that provide an experiential infrastructure to play outdoor sports in an indoor environment in India’s space-crunched cities. Mahesh Bhupati and Yuvraj Singh-backed Sports365.in is another example indicating the surge of sports based start-ups in the country. Commenting on the scope the digital space can provide for the growth of sports, Jaideep Ghosh, Partner and Head (Transport, Leisure and Sports) KPMG India says, “Online consumption, inclusive of digital rights, social media, etc., have increased significantly. Even though cricket still occupies a share of 50-60% across parameters like viewership, other sports are also catching up.”
 

Tags : Impact Feature