Reliance Jio’s expenditure on sponsorship deals pegged at Rs300 crore
New Delhi: As the title sponsor, mobile network operator Reliance Jio Infocomm Ltd may have taken over Amitabh Bachchan’s 17-year old iconic game show Kaun Banega Crorepati (KBC) this year, but the LTE service that allows viewers at home to play along through the JioChat application has a lot more in store as far as brand sponsorships go.
Beginning with Colors’ popular reality show Bigg Boss last year, Jio has remained at the forefront of brand sponsorships, picking up programmes like Filmfare, a set of movie awards presented by The Times Group, the Mumbai Film Festival, Pro-Kabaddi League team Jaipur Pink Panthers, and the Rio-bound Indian Olympics contingent in 2016, among others, besides KBC.
Industry experts peg Jio’s annual investment in brand sponsorships at Rs250-300 crore.
The brand also associated with seven of the eight Indian Premier League (IPL) teams this year, advertising either as jersey back or lead arm sponsor, besides investing in a large multimedia presence.
Jio did not respond to Mint’s queries on sponsorships.
What Jio is spending is far higher than the Rs60-70 crore that other telecom companies like Vodafone India Ltd as well as Bharti Airtel Ltd usually spend on sponsorship deals in a year.
But the reasons for Jio’s enthusiasm are obvious.
“Jio is over-investing right now because it is in the early stage of its brand life cycle. All mass brands that are operating in categories where there is a high degree of competition, invest in sponsorships to drive product differentiation and imagery,” said a senior executive of a media buying agency on the condition of anonymity.
“Jio is following the same strategy. Of course the quantum of investment it is putting in is much higher, but it’s required of them to catch up with the big boys like Vodafone and Airtel.”
The person added that compared to older brands, Jio will not really have top-of-mind recall because it’s not a name people have grown up with.
In such a scenario, sponsorships serve three purposes starting with building spontaneous recall.
“It’s a no-brainer, anything which has viewership running into a couple of millions becomes a very attractive property for Jio to look into. Therefore, I think that’s the basic logic they have been applying so far,” said Saurabh Uboweja, founder and chief executive officer (CEO) of brand consulting firm Brands of Desire.
Secondly, they help build proposition and product superiority. For example, strategies like the video calling feature to phone a friend on KBC, demonstrate the strength of the Jio network.
And finally, achieving brand stature and equity in a cluttered market. For instance, associating with multiple IPL teams and their renowned players creates credibility and favourable imagery among consumers.
This year, Jio had also bid aggressively for the internet and mobile rights to the Indian Premier League, offering Rs3,075.72 crore.
However, Star India eventually won the consolidated media rights for both television broadcasting and digital streaming for Rs16,347.50 crore.
“The amount of money they’ve spent on sponsorships is quite huge. The whole point is you have to get the largest number of subscribers in the shortest possible time. So it can’t be a slow-burn strategy,” said Kiran Khalap, co-founder and managing director at brand and communications consultancy Chlorophyll.
“You have to convert people, make them buy the data packages and then increase their usage once they’re addicted to it. To get 100 million subscribers, you have to reach at least 10 times more people. Therefore you would go for the least common denominator in terms of sponsorship, anything which can reach the maximum number of Indians, it’s not a very complicated strategy.”
There are some properties Jio is likely to look at in the coming months, media experts say. For example, Salman Khan’s maiden television production, a show on the life of pre-Independence wrestler Gama Pehalwan for Star Plus starring brother Sohail Khan, besides full-fledged marketing of Bollywood projects, either as digital partners or for in-film placements. But this can’t be a long-term strategy, they add. For one, while Jio has set low expectations with its spate of free offers, it will be imperative to monetize the service at some point after acquiring a sizeable customer base.