Cricket's attractiveness to business was never in doubt. That potential reached dizzy heights this World Cup with multi-crore Rupee business and over 125 million viewers tuning in.
Cricket is no longer just a game. It is big business and strategies are woven around it months in advance. Consider the World Cup. With so much riding on the event, the matches featuring India were spaced out (in the preliminary stages) to run for a month so that marketers and advertisers could manage their interests. With 127 million viewers tuning in, the event generated business worth Rs.5,000 crore.
'Sport is business,' warned Lamar Hunt, progenitor of World Championship Tennis and his words equally apply to cricket. Mega sports events are not a new phenomenon, especially with cricket which has several versions of the game proliferating in recent years. For instance, other than the ICC World Cup, there is the Twenty-Twenty World Cup and the Champions League in the international space. In this special, afaqs! Reporter decodes the business of cricket.
BOWLING OVER MARKETERS
Many companies invest in the World Cup, despite the huge amount of financial commitments, expecting to create a hugely favourable outcome from such an involvement. That includes an expected increase in profit as well as a positive rub-off from the advertising. It is for this reason that ICC has eight brands on board as partnering or associate sponsors. A brand like Castrol, for instance, reserves up to 30 per cent of its annual marketing budgets for the cricket season. It also has a cricket academy initiative which it feels will help connect with the youth, who will be driving more vehicles in the future and have a better recall with the brand's World Cup association.
"The fact that the World Cup happened in India was a big event from a viewership perspective and that's why marketers are interested. And with the Indian team performing well, we have got the return on our investment," says Sanjay Behl, Head-Marketing at Reliance Communications. The scale of the event and its interest amongst Indians augur well for brands and marketers. Sponsorship opportunities allow companies to connect their brands with the world's most recognized sporting event.
"We feel that the World Cup is a tremendous opportunity for us to leverage in terms of our image as also our sales. And the IPL starting soon after the World Cup did not take away anything from the efficiency of the World Cup," says Sandeep Singh Arora, EVP, Marketing, PepsiCo.
On-air sponsors, hospitality sponsors, travel sponsors, communications sponsors, on-ground sponsors and many more are monetising options adopted by the ICC which added to the scale of commerce around the World Cup 2011. This way, the tournament attracted a complete group of industries with interests that are not compromises yet, each gets to be the sponsor and, possibly, the upper edge. If one witnessed the manufacturers of Vuvuzela laughing all the way to banks due to the huge sale of their trumpets during FIFA World Cup 2010, the cricket World Cup witnessed team merchandises scale a new peak.
Sport as a business is not a novel concept. Football clubs, especially in the UK, are listed companies and run as any other business. Arsenal and Tottenham are listed on the London Stock Exchange. And the popular and iconic Manchester United was a listed club till 2005.
Closer home, the IPL is all about businessmen sensing an opportunity to profit from the game's craze among a growing mass of people with high spending power. With teams backed by hardcore businessmen - Mukesh Ambani, Vijay Mallya and N. Srinivasan, there has to be an opportunity to be encashed. That they have thrown millions into the ring only proves the potential of the business of cricket.
The game is the product, players the assets and the spectators inside the stadium and television viewers the market. Revenues will come from in-stadium advertising, player endorsements, entry tickets and TV rights making it a complete business proposition. It is not inconceivable that a few years down, the IPL teams will make an initial public offer (IPO) and get their stocks listed as is the case of any other business.
Idea Cellular spent about Rs. 40 crore in ad campaigns while Vodafone allocated a budget of Rs. 75 crore for the World Cup. Sony India earmarked a budget of Rs. 100 crore and another consumer goods manufacturer LG had a budget of Rs. 70 crore for the World Cup. While the benefits from the campaign and advertising during the World Cup is yet to emerge, some of the sponsors and associates were able to cash in on the gains. "Focused marketing efforts allowed us to bring a lot of new users to Yahoo! and with the relevant context and a superior product experience, it enhanced Yahoo!'s brand appeal," says Nitin Mathur, Senior Director, Marketing, Yahoo! India.
It would be foolish to refute the fact that the World Cup is an ideal platform to reach out to the target audience. It is a national event filled with passion when marketers and advertisers can expect to get undivided attention from viewers which got further fillip when the Men in Blue won the cup. The entire event has been a game changer for all the brands associated with the event. The concept of sports events as a business, especially cricket, is well documented and effective. And sponsorship holds good in establishing effective and efficient advertising strategy.
What works for the business of cricket is the product fit, brand equity and image fit between the event and sponsoring company which is evident from the way the IPL has taken off despite the shortened version and extreme localisation of the event.
The other factors that play an important role are the event period, sports type and its popularity that moderates in transferring business association and gains. It is for this reason that some of the biggest names from India Inc are going the whole hog to make sure that their message reaches the consumers.