afaqs!

Branded Metro stations to be a reality by 2013

By Surina Sayal , afaqs!, Mumbai | In OOH News | April 19, 2011
With IMG Reliance being brought on board as consultants for naming rights of the Rapid Metro Rail in Gurgaon, the new marketing tool is set to take off in the country.

The Rapid Metrorail Corridor in Gurgaon, which will be completed by 2013, is looking at branding the station names, which means these stations could be called by the brand and not just by the name of the place. For instance, if Airtel, LG, or Samsung bag the rights for these stations, it will be called an Airtel station or a LG stations or a Samsung station.

On offer for brands at the Rapid Metro in Gurgaon thus, are full naming rights for the RMGL Line which will have a minimum term period of 10 years. Therefore, the line will be known as 'Brand name' Line.

The Rapid Metro Rail Corridor (RMRC) will have six stations - Sikanderpur, DLF Phase-II, Belvedere Towers, Gateway Tower, Mall of India, and DLF Phase-III. Of these, three stations (Sikanderpur, DLF Phase-II and Gateway Tower) will be sold with full naming rights (for example, 'Brand name' station), and the remaining three stations will be sold with semi-naming rights ('Brand name' at Belvedere Towers or 'Brand name' at DLF Phase III). The right for the same will awarded for a period of 10 years.

For this, Rapid Metrorail Gurgaon Limited (RMGL) has hired IMG Reliance (a joint venture between IMG Worldwide, the global sports, fashion and media business group, and Reliance Industries that was formed in 2010) to become its sole non-fare revenue consultant for the Rapid Metro Rail in Gurgaon. The agency will handle all aspects from concept development to project completion and will be responsible for servicing deals over the term.

Also of the five trains that will run on these routes, four trains will be sold with full naming rights ('Brand name' train), which will have a minimum term period of three years. The fifth train on the network will not be sold, but will be dedicated to socially responsible initiatives, in line with RMGL's focus of being a responsible public service for the community.

As the network is still in the 'build' stage, brands that acquire rights will be able to contribute to the look and feel of how infrastructure is built. Corporate colour schemes and the look and feel of a brand can be integrated into the construction.

The process for the purchase of rights is through a competitive Request for Proposal (RFP), which is available on the Rapid Metro Rail site (www.rapidmetrorail.com). IMG Reliance has invited bids for assets that will be accepted between April 25-May 23, 2011. The bids will be opened after May 23.

Sanjiv Rai, managing director and chief executive officer, Rapid Metro, says, "Rapid Metro will be state-of-the-art in all respects. As a commercial rights holder, we aim to provide a unique marketing platform for our partners and we will work with them to maximise return on marketing objectives for the long term."

When it comes to the project size and costs, while IMG Reliance chose not to divulge these details just yet, it informs that the objective is to significantly improve upon the revenues that would normally be raised through traditional commercial structures for public transport networks (advertising and retail).

Internationally, IMG has also worked, and in some cases, is currently working on, metros in Dubai (Roads and Transport Authority or RTA), the Paris Metro, Madrid
Metro and Metro C in Rome. Other cities such as Chicago, San Diego and Boston in the US, and Toronto and Montreal in Canada are also trying the same route.

Such branding opportunities are not restricted solely to the metro stations. In London, a stadium is branded as Emirates Stadium, the rights for which were bought for 100 million pounds, for a 15-year period. Similarly, Barclays Bank has the naming rights to a sports and entertainment arena, now known as the Barclays Center, in New York, USA, which it procured for $ 400 million for 20 years.

Back home, the Sahara Group has obtained rights for the upcoming international stadium at Gahunje in Pune and it is now called the 'Subrata Roy Sahara Stadium' after its founder. Its naming rights package in perpetuity has been acquired for Rs 203 crore.

Discussing the potential of naming rights as a marketing platform, an IMG Reliance spokesperson says, "Naming rights is set to emerge as one of the most powerful and effective platforms for branding opportunities. It gives brands the chance to interact regularly with a significant set of the target audience as marketing becomes more experiential."

The company points out that naming rights is quite different from advertising. The main difference is that while naming rights offers a long-term investment, advertising offers only short to medium term investments. Also, with naming rights, clear investment expenses are known from Day One, that is, it allows for fixed costs, whereas with outdoor advertising, the expense fluctuates as per the market.

It also allows a brand permanent presence in an area or asset with the company brand name and logo firmly integrated, and becoming a key component of a public asset within a community. Advertising offers variable presence, and the ability to continue or increase advertising presence is not guaranteed.

The metro project, currently under construction and scheduled to be completed and operational by 2013, was awarded by the Haryana Government to the consortium company of Infrastructure Leasing & Financial Services (IL&FS) and DLF in mid-2009. This is India's first privately operated metro project, and is expected to cost more than US$200 million.

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