Since its launch in 2008, the Indian Premier League has emerged as one of the biggest sporting leagues in the world. Duff and Phelps, a global valuation advisory, estimated IPL’s brand value to be worth a whopping Rs 47,500 crores in 2019. For marketers catering to Indian audiences, the IPL season is almost as sacrosanct as the festive season during which marketers spend most of their budgets.
Hence, IPL has always attracted the bulk of cricket sponsorships from brands which are keen to capture the mindshare, almost overnight, of the discerning Indian consumer. Experts have highlighted that the Indian Premier League sponsors can establish themselves in the minds of consumers across a variety of demographics within a span of 50 days.
Startups and IPL
An interesting highlight of IPL 2020 has been the emergence of startups as sponsors. Historically, IPL’s title sponsors have included well established brands such as DLF and Pepsi. Vivo which came on board in 2018 is a subsidiary of BBK electronics which owns other brands such as Oppo, OnePlus and Realme. Vivo itself is a leading mobile brand catering to the consumer market in India with an impressive market share of 17% as on 2020Q2. Despite the five year contract signed in 2018 between Vivo and BCCI, the latter had to drop the former as a title sponsor for IPL 2020. One would have expected traditionally large brands which play in the Indian consumer market to bid for the spot of the title sponsor.
However, Byju replacing Oppo as the Indian cricket team’s official sponsor in 2019 was a premonition of things to come. BCCI started receiving bids from unicorns such as Dream11, Unacademy and Cred. It was rumoured that Tata Sons would also throw their hat into the right, but that didn’t happen.
Ultimately Dream11 won the bid by offering Rs 222 crores, albeit for only this season, whereas Unacademy and Cred were later onboarded as official sponsors for about Rs 120 crores each. Other new age firms such as PayTm, boAt and Myntra were also roped in as IPL2020 sponsors. They struck multibrand deals ranging between Rs 10 crores to Rs 15 crores with IPL teams.Startups have also tied up with the broadcast sponsor, Star India. These include PhonePe, Khaatabook and Swiggy.
Is this the beginning of a new trend?
For startups propelled by the almost never ending flow of private equity/venture capital funds, growth is the key to survival. Most startups begin to scale up by spending heavily on digital media marketing to generate customers and earn revenues. Digital media marketing activities are cheaper and offer efficient ROI attribution. But there is a limit upto which market share can be gained by continuing to promote on digital platforms.
But being associated with IPL is much more than just gaining eyeballs. It is also about making a powerful statement of intent. By getting on board as an IPL sponsor, a startup is able to deeply imprint its brand recall and be regarded on par with established names within a short period of time.
Yet, experts feel that this could be just a one time trend due to the sponsorship opportunities being available at a discounted rate. Apart from larger startups such as Paytm, Byju or Dream 11, the others may find it difficult to continue investing in future editions of IPL especially if their growth is largely due to external funding rather than profitable cash flows.
The sponsorship landscape also keeps changing as the earlier editions of IPL witnessed traditional consumer brands such as Pepsi, Hero Honda, DLF, Vodafone and Airtel being the leading sponsors followed by Chinese brands and now start ups. It is possible that after a couple of years, there might be an entirely new cohort of firms participating as sponsors.
The bottomline remains that getting involved as a sponsor in the IPL can catapult a brand into being a household name within a couple of months. Alternatively, a brand may have to invest significant resources in multiple marketing activities across several years to achieve this status. Well funded start-ups that are hungry for growth from booming sectors such as digital gaming or edu-tech would have realised that from a purely ROI perspective, being an IPL sponsor would be a calculated risk.