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IPL ads: companies pay Sony Rs7 crore to keep out rivals

IPL ads: companies pay Sony Rs7 crore to keep out rivals
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First Published: Fri, Mar 07 2008. 12 34 AM IST

Game on: A file photo of businessman Vijay Mallya, BCCI’s Lalit Modi, actors Shah Rukh Khan and Preity Zinta at the IPL players’ auction. (AFP)
Game on: A file photo of businessman Vijay Mallya, BCCI’s Lalit Modi, actors Shah Rukh Khan and Preity Zinta at the IPL players’ auction. (AFP)
Updated: Fri, Mar 07 2008. 12 34 AM IST
It isn’t just the economics of cricket that the Indian Premier League has changed, but also the economics of television advertising.
Companies that are sponsoring telecast of the Sony Entertainment Television (SET) matches are paying the league’s official broadcaster more than Rs7 crore to prevent their rivals from advertising during the 59 matches.
That’s in addition to the money they will pay the channel to have their own advertisements carried during the telecast.
SET’s decision to go in for such a deal might have something to do with the amount of time it has to sell during the telecasts of the Twenty20 matches (20 overs a side)—2,000 seconds, compared with around 6,000 seconds for a one-day international where each team plays 50 overs—but it has been welcomed by advertisers wishing to cut through the clutter.
Game on: A file photo of businessman Vijay Mallya, BCCI’s Lalit Modi, actors Shah Rukh Khan and Preity Zinta at the IPL players’ auction. (AFP)
Rohit Gupta, executive vice-president, advertisement sales and revenue management, SET, confirmed that Vodafone Essar Ltd and Hyundai Motors India Ltd have signed deals that involve such “exclusivity”. Vodafone is a presenting sponsor of the telecast and SET has signed on one more presenting sponsor whose identity Gupta would not reveal. Hyundai is one of the six associate sponsors of the telecast. The identity of the other five isn’t known.
“The other categories that we are looking at include beverages, motorbikes and credit cards among others,” Gupta said. Coca-Cola and Pepsi, Hero Honda and TVS, and MasterCard and Visa are rivals that have traditionally advertised during cricket telecasts.
“Winning exclusivity is not about blocking rivals. It is about getting adequate media time for yourself,” said Harit Nagpal, chief marketing officer, Vodafone.
However, rival Airtel doesn’t think it is out of the game yet. “There is enough opportunity for us to advertise with IPL. We are currently evaluating other options,” said a company spokesperson.
SET initially proposed that presenting sponsors buy a package of 200 seconds each per match and associate sponsors, 150 seconds each. Gupta said “some advertisers wanted to have an exclusive presence during the matches and they seemed ready to dish out a premium for that. So we offered that they buy extra 50 seconds and we would block the category for them”.
While he refused to share any numbers, a media buyer who has closed one such deal said the fee for presenting and associate sponsors was Rs21 crore and Rs18 crores, respectively. “To secure exclusivity, the sponsors will be paying an additional Rs10 lakh per match, which is nearly Rs6 crore for the extra 50 seconds (across all 59 matches),” he said. He didn’t wish to be identified because he is not authorized to speak to the media.
Sony has priced its regular 10-second ad spots at Rs2 lakh. Regular and presenting sponsors could pay 25-30% more, according to the media buyer. At 25% more, that’s Rs2.5 lakh for 10 seconds, Rs12.5 lakh for 50 seconds and Rs7.3 crore for all 44 matches. The difference between this and the number quoted by the buyer (Rs6 crore) could be due to the bargaining typical of such deals.
“Unlike other cricket formats such as ODI and test matches, Twenty20 format is shorter and action-packed. It doesn’t have room for too many advertisers,” said Gupta. “By opting for 50 seconds more, brands can leverage their presence to the maximum and keep competition away,” he added.
Brand rivalry is not a new phenomenon, and experience shows it gets accentuated during cricket, one of the buzziest properties on television. Coca-Cola and Pepsi, Airtel and Hutch, Hero Honda and TVS Motor, MasterCard Worldwide and Visa International are some rival brands that have often locked horns on the cricket pitch in the past. In the 1996 World Cup Cricket, while Coca-Cola was the official sponsor of the event, Pepsi bombarded the commercial breaks with its cheeky “Nothing Official About It” campaign.
“Having competing brands has always been beneficial for organizers and broadcasters as they are able to pitch brands against each other and wrangle more fee out of them. For brands, however, such rivalry has not proved too constructive,” said Shashi Sinha, chief executive, Lodestar Universal, a media buying agency.
IPL’s 59 matches over 44-plus days begin on 18 April.
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First Published: Fri, Mar 07 2008. 12 34 AM IST