Branding through Sports sponsorships

14 Mar 2019

Ever since the eye-popping news of STAR India winning the present Indian Premier League (IPL) 5-year global media rights for Rs 16,347.50 crore broke out in 2017, perceptions about sports sponsorship and branding have undergone a paradigm change. Globally, current spend on sponsorship is roughly USD 65 billion, with most of it allocated to sports as corporates vie to build their brand awareness.

The current Indian sports sponsorship industry, comprising ground sponsorship, team sponsorship, franchise, sportspersons’ endorsement and media spends, is pegged at well over Rs 7,500 crores, with sports related advertising crossing the USD 1 billion mark recently.

Non-cricket sponsorship is rising too, with ISL (Indian Super League) registering a 22% growth. Pro Kabaddi League viewership, encompassing Indian hinterlands, is already rivalling IPL viewership.  Brands continue to buy and invest in sports sponsorships through ad expenditure, especially emerging sports.

Title sponsors of major Indian leagues renewed their present association at over 100% incremental value. Brand building through sports sponsorship in India has taken root as IPL has established itself as one of the top five most valuable global sports properties.

While Television will continue to be the dominant medium of content dissemination, digital streaming with variants such as fantasy leagues will provide brands additional avenues to reach the masses.

A cause for concern that is emerging is the lack of a system to measure sponsorship ROIs comprehensively. Advertisers will need to formulate a sponsorship strategy clearly identifying the target demographics and how to influence their customers decision journey. Some of the matrices they could consider implementing to determine their ROI could include cost per reach; cost of unaided awareness per reach; margins per rupee spent; cost of long-term brand attributes and indirect benefits accruing.

The global sports industry is growing much faster than national gross domestic product (GDP) rates around the world.

Hence, a pertinent question would be how does sports create value? Rights owners, like BCCI, define the structure of professional sports. They create properties like IPL, manage the event and are responsible for generating revenues from matches, media and marketing rights. They create the platform to generate value. Sports sponsorships that pitch brands follow to create further value.   That’s how world football rights owner FIFA is revered and incidentally has more members than the United Nations!

These 4 pillared sport value chains are crucial for sponsors and brands. Reflect for a moment how the abbreviated game of cricket into a “Twenty20” tournament helped shape a format that targeted viewers timings and suited live broadcasting.

Some latest sports marketing trends will surely influence its sponsors and their brands. Digitisation will open entirely new markets as ad messages are being targeted to the relevant interested groups. Sports influencers will be significant swingers of perceptions as also perception around CSR funds being used for promotion and sustenance of sports.

Brand support to sports other than cricket has been encouraging and forthcoming. Strong Indian brands like Amul, Raymond, Edelweiss, Nippon Paints and others supported India’s 800-plus contingent, including 572 athletes, to the 2018 Asian Games! Others like Ola and Tata Motors too are aiding India’s Olympic aspirations as India transitions from being a single-sport nation. Names like Coca Cola, Bisleri, CEAT, Ford, Club Mahindra, Huawei, ITC, Nokia, PUMA and Bajaj Allianz too have been playing stellar roles in sponsoring sports.

Indian brands are creating further opportunities for themselves not only in India but internationally too. Some notables worth a mention includes deals such as Manchester United – HCL; ICICI – Manchester United; Tata – Formula 1; Apollo – Manchester United; Apollo – DVTK; Infosys – ATP; Tech Mahindra – Jacksonville Jaguars; Berger Paint – Russian Football Union (FIFA WC’18); Hero MotorCorp – Hero World Challenge.

With sports viewership growing rapidly in India, sponsorships of sports too will burgeon as an industry.  

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