Opinion | Do brands pay too much for Indian cricket team?3 min read . Updated: 07 Aug 2019, 11:08 PM IST
Cricket’s vast reach helps brands build familiarity and scale within a short span
Last fortnight, Bengaluru-based education and learning app Byju’s, owned by Think and Learn Pvt. Ltd, replaced Oppo India as the official sponsor of the Indian cricket team. Byju’s will sponsor the team beginning 5 September up to 31 March, 2022. Its logo will appear on the Indian team jersey, starting with the series with South Africa. The announcement was made by the Board of Control for Cricket in India (BCCI).
Chinese smartphone brand Oppo had a five-year deal with BCCI for a sum of ₹1,079 crore, which was to end in March 2022. It is not clear why Oppo abandoned the deal mid-way even though it thanked BCCI for a “meaningful association" that helped the brand become a household name in just five years of operation in India. Experts say that Oppo’s decision could be purely market-driven. “If a sponsor feels that there is no return on investment (RoI) and there is an exit clause, which compensates both the sponsor and the sponsored, there is no issue," said an executive of Star India, which had also briefly picked up team India sponsorship to promote its brand Star Sports. “But it is also an indication that the Indian economy is not doing well," he added.
Declining to be named, the Star executive said Oppo was probably smart enough to make a course correction. “During the sponsorship period, they would have achieved their desired result, as it was a big cricketing year, and now, they’re cleverly getting out of it. This period is not going to have big cricket tournaments except T20 in 2021," he added.
Indranil Blah, CEO, Kwan Sports, agreed: “Cricket sponsorship is an extremely expensive and risky proposition. It is high risk and high rewards. The company probably felt that they overpaid for the association and decided to course-correct mid-way. Also, since it had a ready replacement in Byju’s, the decision to exit without financial and legal implication must have been an attractive proposition."
Interestingly, established brands such as Coca-Cola or Pepsi shy away from sponsoring the Indian cricket team. “It makes sense for brands which need to create awareness. Brands like Coke or Pepsi don’t need to spend ₹1,000 crore to say I exist," said an executive of a beverage company. “For brands people didn’t know existed, the visibility increases 10x or 15x. With Indian cricket team sponsorship, everybody got to know Oppo," he said. Besides, beverage brands prefer experiential marketing. So, Coca-Cola was the non-alcoholic beverage partner for the World Cup.
Vineet Sodhani, CEO of media audit and advisory firm Spatial Access Pvt. Ltd, said the immense reach of cricket makes it attractive for brands to pick up sponsorships, even if expensive, to build scale and brand familiarity within a short span. Since no other media property can offer the same, it explains the premium. “When the likes of Oppo and Vivo (for Indian Premier League) picked up sponsorships, they were relatively unknown brands. And they were hungry. And we can all see how they became national. Another angle that most of us miss is that besides consumers, there is an equally important community—the sales team and the trade. Such associations and visibility give a lot of boost to the sales team and trade. Confidence starts building among the traders on relatively unknown brands and orders start pouring in," he added. However, at ₹1,079 crore for five years, the team India sponsorship is not cheap. “But the fact that the BCCI has been able to find a replacement in Byju’s at the same price means there is a demand for Indian cricket at that price point. And, if one takes a macro view on sports sponsorships across the world, be it with the English Premier League or FIFA sponsorships, the money Indian cricket seeks for what is considered a religion among 1.2 billion people in India is a fair ask," Blah said.
Clearly, associating with cricket in India isn’t for the faint-hearted. Like any sports sponsorship, the success of the association is largely dependent on the performance of the team, which no one can control or foretell. “However, sponsoring the Indian cricket team over a period of 3-5 years is a safer bet than sponsoring a Cricket World Cup for instance, since one bad game and elimination from the tournament could result in tremendous losses. Also, brands realize that just paying BCCI a hefty association fee isn’t going to work without huge marketing spends around the association," he said. It’s only if you have deep pockets to activate the association that you should take a look at Indian cricket.
Shuchi Bansal is Mint’s media, marketing and advertising editor. Ordinary Post will look at pressing issues related to all three. Or just fun stuff.