SPECIAL REPORT

The sports marketing business in India is accelerating. Here is the full scorecard.

FAST LANE

IN THE

INSIDE

SPECIAL REPORT
Issue 3 I September 2008 Focus on

SPORTS MARKETING
Brands and marketers take heart. The Asia-Pacific and India are the next high growth areas for sports marketing. A report on what marketers should look at when they want more bang from their buck while marketing through sports.

Spends on sports marketing will touch $110 billion by the year 2009. Is India ready?
100

From local events to truly international ones, India is staring a growth phase in the face. What is in it for brand marketers?

75

50

25

Throwing the Gates Open

LEAD

109.1

110.9

92.3

96.1

99.4

95.9

2004

2005

2006

2007

2008

2009

2 3

Source: PWC Global marketing spend in $ billion; Includes gate revenues, rights fees, merchandising, sponsorthips, internet, mobile satellite and other rights packages

Much to Do
Sports associations, agencies and marketers have a big role to play.

4 5 6

04 14

Eyeballs Game
Viewers are spending more time on sports channels than before.
40 30 20 10 0 8.30 2006 11.91 14.14

MEDIA MIX

Deferred Revenue

SPORTS
All figures in MM.SS

2007

2008

Source: TAM Peoplemeter System

STAKEHOLDERS

Agents of Opportunity

08

Learning Curve

Game Boy

73 per cent of active gamers prefer to go for the sports genre than other modes.

More than the money involved, the IPL has a few marketing lessons too.

THE IPL

What It Taught Other Marketers

Sports

18

73%
OTHER SPORTS

Big Ticket Events

The Commonwealth Games and the Cricket World Cup hold promise for Indian marketers.
OUTLOOK

ONLINE
Log on to afaqs.com to download this Special Report

This is Not Cricket

10

On the Big Stage

22 03

B R A N D R E P O R T E R I S P E C I A L R E P O R T SEPTEMBER 2008

ESSAY

THROWING THE GATES OPEN

FOTOCORP

Pitching it local. Mumbais dahi handi competitions are million-rupee affairs. Note the Airtel Govinda ringtone hoarding.

04

SEPTEMBER 2008

BRAND REPORTER I SPECIAL REPORT

SPORTS MARKETING By

M Venkatesh
Inputs by Chumki Sen

While other developed countries have a mature sports marketing industry, Indias is just taking off. Heres the score.

A VERY DIFFERENT BALL GAME NOW

Sports marketing has come a long way since the 1870s when tobacco companies in the US made cards of baseball players photos and inserted them with packs of cigarettes

Squash player Saurav Ghosal has a very matter-of-fact approach to his career. The yardstick for success is different for different sports. A cricketer could probably become a national hero after scoring just one hundred, but as a squash player, I would probably have to win the World Open to get the same attention, he says. Last month, Abhinav Bindra proved that observation to the hilt. With just one shot, Bindra had marketers and brands falling over themselves announcing their intent - if not an actual desire - to back shooting as a sport. Bindras agent, Latika Khaneja of Collage Sports Management, was, however, more circumspect. In various interviews she hoped that corporate India would now inject more sponsorship cash into sports other than cricket. The same happened - on a smaller scale since they didnt have high-flying agencies managing them - with Vijender Kumar and Sushil Kumar. But the fact is that one no longer has to explain that the two represented India in boxing and wrestling in the Olympics. I am looking forward to the current medal winners. Bindra, Vijender, Sushil also make good youth icons in the coming times, says Akshay Mehrotra, head, marketing, Bajaj Allianz. The company, which roped in Vijender as a brand ambassador, had sponsored the IPL winner, Rajasthan Royals. According to Ramanujam Sridhar, CEO, brand-comm, I feel that industry and marketers are only looking at the low-hanging fruit and that sems to be only cricket. The attention, Ghosal and other non-cricket sport stars seek, is not just that of the spectators. They would love to catch the eye of corporates. However, the winner of the British Junior Squash Open in 2004 and the bronze in the Doha Asian Games, two years later, is happy that he has managed to get sponsors such as India Cements, Veedol Lubricants and the Shri Ram Group. The danger of attempting a report on the sports marketing business in India is that it ends up looking at cricket. But then, cricket has its nose much ahead of any other sport in India. Of the estimated Rs 2,000 crore sports marketing business in India, close to Rs 1,800 crore goes into cricket!

As a definition, sports marketing means applying marketing principles to market sports (including sportspersons, teams, leagues and the sport itself) and marketing of non-sports products using sport. In India, says Hiren Pandit, managing partner, Group M, ESP we are learning , the latter and are yet to master the former. The round-up According to Pandit, the sports marketing business in India is growing much faster than it is worldwide. Compared to the global average growth rate of 5 per cent, it is growing by 20 per cent a year in India. However, in India most of the sports marketing spend comes in the form of sponsorships and advertising during sports events. According to estimates from Group M, the global sponsorship business is pegged at $38 billion (Rs 152,000 crore). Indias share of this is just Rs 1,200 crore. GroupM also estimates that 60 per cent of the total sports marketing business generated in India is from broadcast fee and television advertising while endorsements and onground activation account for 20 per cent each. Sports marketing has come a long way since the 1870s, when tobacco companies in the US made cards of baseball players and inserted them with packs of cigarettes in order to try and boost sales or develop brand loyalties. Today, sports marketing is a very different ballgame indeed. According to a PricewaterhouseCoopersFICCI Report on the media and entertainment industry, the global sports market, which is worth $96 billion, consists of the following components gate revenues for live sporting events; rights fees paid by radio broadcasters, broadcast and cable TV networks, and TV stations to air those events; merchandising, which includes selling products with player likenesses or with team logos - and other intellectual property; sponsorships, which include naming rights and payments to have a product associated with a team, league, or event; and internet, mobile, satellite and other rights packages associated with sports events. Add TV advertising to that, and sports marketing business shoots up to $545 billion (Rs 21,80,000 crore). Competition in the media distribution market, according to PwC, is fuelling demand for TV rights fees. Mobile and online rights are boosting the market in the US, EMEA (Europe, Middle

B R A N D R E P O R T E R I S P E C I A L R E P O R T SEPTEMBER 2008

05

ESSAY
BIG BUSINESS
100

75

50

25

109.1
2008

2004

2005

2006

2007

Source: PwC-FICCI Report on Media & Entertainment, 2008; Global sports marketing spend in $billion; Includes gate revenues, rights fees, merchandising, sponsorthips, internet, mobile satellite and other rights packages

110.9
2009

92.3

96.1

99.4

95.9

MOVING AHEAD POWERFULLY

As global sports marketing spends rise, it is the Asia-Pacific region that will propel the growth in the next four to five years

East, Africa), and the Asia-Pacific. Companies are also making lucrative sponsorship deals and are paying premiums for venue and event naming rights. Everyone benefits. The Beijing Olympics will fuel growth in AsiaPacific in 2008, and Canada will benefit from the 2010 Winter Olympics. While the host countries will receive the principal revenue increases from these events, TV and other rights fees will expand in all regions. Sponsorships and associated merchandising will also drive sports spending. Late off the blocks In India, revenue streams are slowly moving away from just TV. A long way behind global counterparts, it is only recently that sports marketers in India moved beyond player endorsements and management. The advantage, says Anita Nayyar, CEO, MPG India, is that we can take the best practices from established markets and dovetail it with the local culture and needs. MPG is a part of the Havas Group that has a sports arm called Havas Sports with clients like Avesthagen, Radico, Wipro and Voltas. Just how serious Havas is about sports was indicated when, last month, in order to strengthen its sports marketing arm, it appointed Anand

The advantage is that we can take the best from established markets and dovetail it with the local culture and needs.
ANITA NAYYAR MPG INDIA

Yalvigi as general manager for Havas Sports India. Yalvigi has spent time in Network Sports and VGC Sports as business head. An added advantage is that Yalvigi has played 29 Ranji Trophy matches and has a great working relationship with players like Rahul Dravid, Yuvraj Singh and Harbhajan Singh. That game again. Like many others, does Havas too prefer a cricket-centric approach? Says Nayyar, We can certainly see other sports picking up in popularity. Soccer, tennis, hockey, Moto GP and golf come to mind right away. One has to look at other sports simply because of the excessive clutter and high costs involved in a cricket-only strategy. Brands that are looking to associate themselves with a sport need to look at some factors very seriously before taking the plunge. Does the association help communicate the core values and the proposition of the brand? More importantly, is the linkage being leveraged in an effective manner? That is why most brands probably find it easier to jump on the cricket bandwagon. Also, in India, most brands spend money on airtime or syndicated columns. Other routes are mostly left unexplored. GroupM another agency that is talking sports seriously. It believes that a good sports marketing strategy ensures that the long-term objectives of a brand are achieved. Says Darshan M, senior business director, GroupM ESP It is crucial that , you are addressing where you want to be rather than where you are. He goes on to give a football allegory. In soccer, the player most likely to score is the one who will run to where the ball is going to be and not run to where the ball is. Some of GroupMs clients are Nokia, P&G, Pepsico, Barclays, Hero Honda, Ford, ICICI and Nike. The biggest kick for the stakeholders lies in the fact that while sports marketing is maturing in a lot of countries, it is just about starting in India. The opportunities, therefore, will be large and many.

06

SEPTEMBER 2008

BRAND REPORTER I SPECIAL REPORT

THE STAKEHOLDERS

AGENTS OF OPPORTUNITY
Not only are Indian marketers and brands learning what sports marketing is all about, they are also investing in it. And helping in their quest are sports marketing agencies.
Nearly a year-and-a-half ago, Mike Rich, CEO, GroupM, ESP who was , visiting India was asked by The Brand Reporter what exactly sports marketing meant. If only I knew, came the surprising answer. He went on to explain: For me, sports marketing means how you can use something that people are passionate about, sensitively, and reach a commercial end, for a brand and its objectives. Treat it insensitively, he warned, and the brand runs the risk of seeing an extensive negative fallout. For sports marketing agencies and brand marketers, that is the bottomline. And for that, they have to understand what sports marketing means. In their book, Strategic Sport Marketing, authors David Shilbury, Shayne Quick and Hans Westerbeek, define it as a Social and managerial process by which the sport manager seeks to obtain what sporting organizations need and want through creating and exchanging products and value with each other. In India, does what a brand do in the sports marketing arena agree with its communication objectives always? Unfortunately not, says Pandit of Group M, in most cases. Sometimes it is because the chairman is passionate about a sport. But there are exceptions. Goal! Kingfisher Airlines brand values are lifestyle and fun aimed at the youth who are trendy. It is looking at the creme de la creme. Says Vikram Malhotra, GM, marketing Kingfisher, Youll find that the brand is not associated with SEC C and D. For sports we are associated with tennis, F1 and polo. It is what you do with the sponsorship that matters. We took the sport to the consumers. Kingfisher sponsors the Kingfisher Airlines Tennis Open. We decide everything - right from the colour of the court to special promotions. And we get a larger return on investment, says Malhotra. Organised by Globosport, it is slated as Indias biggest international tennis event with stars such as Lleyton Hewitt and Marat Safin participating. Sports like tennis, football or golf are three times more effective than cricket when it comes to ROI, declares Anirban Das Blah, CEO, Globosport. In a spectacular move, last year, the Vijay Mallya-owned brand pushed its way into Formula 1 racing by buying out Spyker, the floundering racing company. The Indian flag on Force India cars driven by Giancarlo Fisichella and Adrian Sutil struck the right chord with Indian viewers. Kingfishers identification with the sport and the fans identification with the brand and the sport was total. How tough is it convincing clients to invest in sports other than cricket? Venu Nair, president, South Asia, World Sports Group (WSG) believes that it is not very tough, since mature clients understand the need for different sports to appeal to different target audiences. The agency has a tie-up with Dentsu. Does that help WSG? Dentsu is a strategic investor and works closely with us on understanding, valuing and investing in sporting properties for their portfolio of clients across Asia, says Nair. Darshan of GroupM has a point to make. The approach is not to decide on the sport first. Once we have clarity on what the brand stands for and what it wants to achieve, we decide on the choice of sport. That becomes vital since unlike developed markets where there are three to four iconic sporting activities, India has just one. Points out Shashi Kalathil, the former CEO of Neo Sports, in England, for instance, there is cricket, soccer and rugby. Australia has cricket,

Some Indian companies take to sport marketing because the chairman is passionate about sport.
HIREN PANDIT GROUPM

08

SEPTEMBER 2008

BRAND REPORTER I SPECIAL REPORT

SPORTS MARKETING

It is what you do with the sponsorship that matters. We took the sport to the consumers.
VIKRAM MALHOTRA KINGFISHER AIRLINES

A MATTER OF QUID PRO QUO

Brand marketers and sponsors can only sponsor and support the individual or the team. They cannot select a team that can win. That is left to sports organisations. And they do need a hand

tennis, soccer and athletics while in the US, basketball, tennis, ice hockey and golf rule. One long adventure Total Sports Asia (TSA) has tried out many innovations. It has six offices in Asia. Consider one of its big initiatives for football in India Futsal. The game is an indoor version of football (permitted by the FIFA). The name is derived from the Portuguese term, futebol de salao which means playing football in a large room. TSA, which manages star footballer Baichung Bhutia, organised the TVS Futsal Championship in 2005. A five-a-side event, it had 358 teams fighting for a prize money of Rs 3 lakh across 19 districts in Bengal and Kolkata. TSA is attaching great importance to India. A few months ago, it appointed Suvrangshu Mukherjee, a former revenue head of IMG, as the managing director for Total Sports Entertainment India Ltd. Mukherjee will be based in Delhi. Bajaj Allianz is a company that is keen on other sports too. We look at sports marketing as a popular connect, says Mehrotra, head of marketing. The attractive Indian sports marketing scenario has brought in quite a few foreign players to join the gang of Indian ones to help companies like Bajaj Allianz. Apart from Globosport, Total Sports and Havas Sports, there

are agencies such as IMG (an old hand), WSG, Percept Talent Management, Ogilvy Sport, and TNQ Sponsorship. Most of them, however, are more comfortable with managing sportspersons and advising them on which brand to go with. However, before the brands and the marketers step in, the sport has to attain the requisite popularity. According to Pandit, there are two levels where developments have to happen. At a management level, there is a huge need for professionals, managers, coaches, medicines and physios. At a marketing and packaging level there is again a lack of experience and professionalism. How many people running sports associations have the requisite expertise to do it? he asks. Sports organizations Brand marketers and sponsors can only sponsor and support the individual or the team. They cannot select the team, a winning team. The marketing of the sport is best left to the various organizations - with a little help from the corporates. That is where a sports organization comes in. A sports organization has to depend on its staff and their expertise of coordinating marketing strategies. Take the various sports bodies in India and their communication. There is hardly any site that has a career opportunities page. Indian Hockey Federations website hasnt even changed the name of its president or secretary general. The All India Football Federations site is better with an Employment tab. Most requirements are, however, administrative in nature. Though, to be fair, it is looking for a CEO, whose responsibilities include event management, sponsorship, commercial activities of the league and developing professional clubs. One hopes it got the response. Contrast this with USNBAs (National Basketball Association) website. One section is dedicated to hiring. We are more than the game of basketball, it starts off and goes on to list the entire range of positions vacant. The initiative has to come from the associations. For all that, sports management, as an academic course, is gaining currency in India. Institutes like Mumbais NMIMS (Narsee Monjee Institute of Management Studies) have introduced courses in sports management. It is up to the sports associations to find their way to glory.

Sports like tennis, football and golf are three times more effective than cricket when it comes to ROI.
ANIRBAN DAS BLAH GLOBOSPORT

B R A N D R E P O R T E R I S P E C I A L R E P O R T SEPTEMBER 2008

09

OTHER SPORTS

THIS IS NOT CRICKET

COURTESY: INDIAN RUGBY UNION

There is enough space in sports other than cricket for marketers to be licking their lips in anticipation of good returns. But why arent they?
The Indian rugby team is ranked 81st in the world (there are 95 teams) by the International Rugby Board. Rugby has - hold on to that seat been played in India for over 100 years now. Probably the only good thing that can be said about the countrys performance is that it has moved up three ranks over its February rankings (rugby rankings change every week). The top three teams in the world are New Zealand, South Africa and Australia. Most people know about these giants. But India as a rugby heavyweight would possibly classify as a daydream. On the other hand, it may not. Last month, an under-14 rugby team from Orissa played out its skin to register victories against seasoned state and territory teams in Australia. Fluke? Surprise, surprise, the Kalinga Institute of Social Sciences' under-14 rugby team based in Bhubaneswar, Orissa, won last years under-14 International School Rugby World Cup in Britain. The teams Australian tour was sponsored by the Export Import Bank of India (Exim Bank). Does that mean rugby will draw sponsors and marketers? Nobody is sure, though it could make sense going by what Blah of Globosport has to say. Own a platform. Dont go the advertising way. Marketers look at the high TRPs of cricket and put their money there. But ask who sponsored the Abu Dhabi cricket tournament (it was DLF, by the way) and no one will remember. The Stanchart and Hutch marathons have great recall on the other hand, he says. Globosport, a Bangalore-based entertainment consultancy firm handles celebs like Sania Mirza, Narain Karthikeyan and Saina Nehwal. On the Globosport website, its sports page poses this question: Have you ever spent Rs 20 crore on sponsoring a cricket series in Malaysia which no one remembers? Exhorts Blah, Use the sport across multiple formats. According to him some of them are contests (it is a Rs 100 crore business now), events and activation (of the Rs 400-500 crore in consumer-led activation, Rs 100-130 crore comes from sports). Just endorsement does not make sports marketing. Compared to rugby, football is on surer ground. Oliver Kahn, the German goalkeeper, played a farewell match in Kolkata where Bayern Munich met Mohun Bagan. Sponsored by Bengal Peerless (it spent Rs 10 crore), a full-house of 1.2 lakh fans in the stadium gave him a rousing send-off. Kahnt get any better, screamed banners in Kolkatas Salt Lake area.

OWNING THE PLATFORM

Just endorsement does not make sports marketing. Bring the sport to the consumer

10

SEPTEMBER 2008

BRAND REPORTER I SPECIAL REPORT

SPORTS MARKETING

Whats the game plan? But why cant it actually get better for Indian football, or hockey, for that matter. The problem lies somewhere between public acceptance and sponsor disinterest. Even prime minister Manmohan Singh got into the act. A few weeks ago, Singh confessed in an interview that he was not a great fan of cricket and instead appealed to the sports ministry to pay more attention to other sports like hockey and football, which he felt had greater significance to the ordinary people of India, than cricket. There is initiative at the grassroots level. Consider the Indian Youth Soccer Association (IYSA) that was set up in Delhi eight years ago. Sponsored by Ambuja Cement and supported by Godrej, Reebok and Bajaj, the IYSA programme saw 3,000 children participating over seven seasons. Why hasnt Indian football seen the kind of reception clubs in Europe have? Says Arup Das, trustee, IYSA, Clubs in India are not proactive about developing fan bases and building infrastructure. They only concentrate on trying to get the team to win. Football is a business across the world, not in India. Another major factor, according to Das, is that a number of Indian clubs are named after the corporates that run them, not after an area or city as in the rest of the world (with some exceptions like Juventus). So they have few supporters. This is changing with the emergence of teams like Viva Kerala, FC Mumbai and FC Pune, he says. Sadly, the IYSA programme was suspended

because of the lack of long-term infrastructure and funding support. Wins like the one at the AFC Challenge Cup bode well for India. It is a tournament for emerging Asian football nations. India beat Tajikistan 4-1. It kindles interest. Exposure to foreign influence should be a big help in this. Bayern Munichs visit was just for starters. Reports in the newspapers in the UK say that the English Premier League club, Manchester United, is seeking to expand its commercial interests in India. Man U, as it is known, feels India is one of the last significant untapped markets for football in the world. Announced its CEO, David Gill, just before the teams tour of South Africa, recently that gaining a commercial foothold in India was a priority. United is likely to play a friendly in India, soon. Of Man Us estimated 333 million followers worldwide, 20 million live in urban India, more than half of whom are said to be core fans.

STRAIGHT FROM THE MOUSE

What gamers play

73%
Sports

55%
Action

36%
Racing

Action, but Hockey is a game played on a 100 yard by 60 yard field with every player except occasionally the goalkeeper running the field. In football, too the action is all around the field. In cricket, however, more happens in the 22 yards separating the wickets, than elsewhere, with some players not even working up a sweat. Hockey was a game that India ruled over for more than 80 years. But it was cricket that made business sense to everyone involved. After winning a World Cup title and eight Olympic gold medals, Indian hockey went into tailspin after 1980 from which it hasnt recovered yet. Despite the shellacking it gets, it was hockey that kicked off what is known as the private sports league with the Premier Hockey League (PHL). A collaboration between the National Hockey League and ESPN STAR Sports, PHL saw light of day three years before ZEE TV and Subhas Chandra came up with the Indian Cricket League and BCCI unleashed a cricket extravaganza called Indian Premier League (IPL). The PHL teams had names like Chandigarh Dynamos, Hyderabad Sultans, Maratha Warriors Bhutia (left) with young fan: The right encouragement and Bangalore Hi-fliers with foreign

32%
Adventure

30%
Puzzle

28%
Role Playing

16%
Educational
Source: The Knowledge Company

COURTESY: IYSA

B R A N D R E P O R T E R I S P E C I A L R E P O R T SEPTEMBER 2008

11

OTHER SPORTS

FROM ONE SPORT TO ANOTHER

Winning ways: Xerox s (left) Hole-in-One Challenge at the Johnnie Walker Classic Golf Challenge was a huge draw. Oliver Kahn (right) applauding the spectators at his farewell match in Kolkata

players in the sides. But in terms of size, cricket leads, followed by golf and football, says Venu Nair, president, South Asia, World Sport Group (WSG), a sports marketing agency which with Sony, is a media partner for IPL. So there is life beyond cricket? Certainly, says Darshan of GroupM. Earlier this year, I have had clients use golf very effectively. Currently, I am working on a cycling-based property for another client. Darshan cites the example of Xerox and its use of golf at the Johnnie Walker Classic Tournament where, for the first time in a golf tournament, an Audi was on offer in a competition for spectators. Visitors who played the game had the chance of winning the car. It got great response from visiting celebs, decision makers and dignitaries apart from great PR and media coverage. For Xerox, which was targeting the CXO (CEOs, CTOs, CIOs and the like) community, it made sense. Sponsoring a sport is as important as sponsoring a player, though corporates find the latter easier. Sponsoring a player doesnt end by

hiring him as an endorser. For individual games like squash, the player needs sponsorship from companies for the physiotherapist and the fitness trainer. That leaves him with time to get on with his game. It is difficult for a squash player because squash is not a very visual sport yet. It does not come on TV everyday and it hasn't captured the imagination of the masses, points out Ghosal. The player hopes to add a senior World Open crown to the juniors title and address that shortcoming. The same problem exists in chess. If it hadnt been for Vishwanathan Anand being the world champion, things would have been bleaker. Boxing in India hasnt had its Rumble in the Jungle moment yet. However, the lads from Bhiwani, Haryana came pretty close to it in Bejing. Names like Akhil, Vijender and Jitender could achieve star status post-Beijing. But will any of the boxers get a Don King type of promoter? King followed up Rumble in the Jungle (Muhammad Ali-George Foreman, October 1974) with Thrilla in Manila (Ali-Joe

SOME UNIQUE CHARACTERISTICS OF SPORTS MARKETING

The market for sports products and services Sport organizations compete and cooperate. Partly due to the unpredictability of sport, and partly due to strong personal identification, sport consumers often consider themselves experts. The product Sport is invariably intangible and subjective. Sport is inconsistent and unpredictable. Marketing emphasis must be placed on product extensions rather than the core product. Sport is publicly consumed, and consumer satisfaction is invariably affected by social facilitation. Sport is both a consumer and industrial product. Sport evokes powerful personal identification and emotional attachment. Sport has universal appeal. The price The price of sport paid by the consumer is invariably quite small in comparision to the total cost. Indirect revenues (from television) are often greater than direct operating revenues (gate receipts). Pricing is often decided by what the consumer will bear rather than by full cost recovery. Promotions Widespread exposure of sport has resulted in a low emphasis on sport marketing and, often, complacency. Due to the high visibility of sport, many businesses wish to associate with sport. The distribution system Most sport products are produced, delivered and consumed simultaneously at the one location. The exceptions are sporting goods and retail and broadcast sport.
Source: Strategic Sport Marketing by Shilbury, Quick and Westerbeek

12

SEPTEMBER 2008

BRAND REPORTER I SPECIAL REPORT

FOTOCORP

SPORTS MARKETING

sport, it is more of philantrophy, he says. Many Indians are passive viewers. They dont play a sport unless it is on the MAHESH RANKA computer. According RELAY WORLDWIDE to a survey, Leisure and Entertainment Trends 2008, conducted by Frazier, October 1975). Indian boxing sorely The Knowledge Company, an amazing 73 per cent of active gamers (for whom gaming is needs something like this. That seems unlikely. among the top five leisure activities) said that The failure of sports marketing in India is that it hasnt been able to drive up community their preferred gaming genre is sports. participation or develop regional (or local) Another problem is that of media coverage for heroes. Except for a few sports. Take football, other sports. Clearly, the lack of media to nonsays Mahesh Ranka, president, general manager - cricket coverage is still a key issue though one India, Relay Worldwide, the sports marketing must say and applaud the efforts taken by media division of Starcom. there are only three pockets recently to promote and cover other sports, says that follow football very well. What is not coming Nayyar. It is over to the medium now and how out is a lot of people following a sport. Though they enrich the sports experience for the fans corporates like Apollo and Bharti do nurture a and brand marketers.

Football has only three pockets that follow it. What is not coming out is a lot of people following a sport.

SPORTS HAVE TO PERCOLATE BETTER

The failure of sports marketing in India is that it hasnt been able to drive up community participation or develop regional (or local) heroes

Sportz Consult creates & manages innovative sports properties & events that cater to marketing, employee engagement, client entertainment needs of companies, brands and associations.
& THEN

THE MEDIA AND THE MIX

DEFERRED REVENUE
Television still dominates the way sports is brought to the viewer. As technology gets better, the monetary stakes become higher and higher.
FOTOCORP

A perfect platform: two celebrities and a brand

THEY ARE WATCHING MORE SPORTING ACTION

Sports channels are witnessing more stickiness compared to news channels.

In their 1988 book, Sports for Sale, David A Klatell and Norman Marcus described the intrinsic value of sport programming in this way: ...In many respects, sports may be the quintessential television programme format, taking fullest advantage of the role TV plays in our daily lives. Sports on TV have visually attractive elements splashy colours, attractive locations, motion and movement galore There is drama, tension, suspense, raw emotion, real anger, unvarnished joy, and a host of other responses. Most of all you are watching real people compete for real, as unsure of the outcome as the viewer... That explanation holds true even after 20 years and TV, as the medium still works. That is a big reason why networks are willing to pay large fees to obtain exclusive rights to broadcast a competition. Fees are decided upon after the
NEWS CHANNELS

sports bodies calculate the projected advertising sales and profit is derived from the exclusive broadcasting of the event. The value is determined by a system of measurement that takes into account the popularity of the programme - in terms of how many people watch it. Visually attractive Zee Sports which has the rights to the Indian Cricket League (shared with Ten Sports) signed a $70-million deal for the rights to the domestic matches of the I-League in football. Neo Cricket, a pay channel from Nimbus Communications has the rights to telecast all domestic and international cricket matches played in India. It also has the rights to broadcast the Tour de France for two years starting this year. Recently, ESPN edged out
SPORTS
All figures in MM.SS

HINDI MASS
All figures in MM.SS

All figures in MM.SS

40 30 26.92 20 10 0 2006

40 34.51 32.40 30 20 10 5.19 0 2007 2008 2006 7.72 2007 6.92 2008

40 30 20 10 0 8.30 2006 11.91 14.14

2007

2008

Note: Figures for 2008 are from Jan-May; Source: TAM Peoplemeter System; TG: CS 4+ years; Markets: All India; Analysis: Average time spent (in minutes:seconds) by the Universe for 15 weeks

14

SEPTEMBER 2008

BRAND REPORTER I SPECIAL REPORT

INDIA

VS

AUS TRALIA

NO.1

L I V E & E X C L U S I V E

only on

GETTING THE ACTION HOME

DD Sports ESPN Euro Sports Neo Cricket Neo Sports Neo Sports Plus Star Cricket Star Sports Ten Sports Zee Sports

All sports All sports All sports Cricket All sports All sports Cricket All sports All sports All sports

Ten Sports for telecast rights of FIFAs international events (including the 2010 World Cup) to be shown in the Indian subcontinent. The just-launched STAR Cricket is a 24-hour sports channel that is looking for business. The SonyWSG acquisition of the telecast rights of the IPL for 10 years at $100 million is historic now. Broadcasters need not just broadcast. Interestingly, ESPN (in the US) invented a term called X - or Extreme - Game. Now, it is completely owned by ESPN. It is the one of the most interesting properties the broadcaster has, points out Ranka of Relay Worldwide. The eyeballs matter too. Because advertisers rush in when the channel has an attractive proposition. According to AdEx India, a division of TAM Media Research, cricket garners 48 per cent share in terms of sports advertising followed by soccer and wrestling. The marketer is bullish about sports but is largely driven by an eyeballs measure, says Nair of WSG. Today, sport programming has new platforms like the internet and digital TV. Movies and multiplexes too have got into the act with live sport shows. Mobile platforms lend themselves to sports coverage as through live streaming and interactive gaming. Darshan of GroupM has his doubts about newer media. Digital and mobile platforms have not been used beyond score updates and downloads. Live streaming, interactive gaming are yet to take off. Contests and fantasy leagues are slowly taking shape but nothing significant has happened, yet, he says. The internet gives tremendous flexibility to marketers in accessing their target audience. Among the advantages it offers are: global access, interactivity with fans and customers, development of niche sports, huge potential for

revenue generation and the opportunity to promote the brand. Going, going, gone As sport continues to fascinate one and all, it is no wonder that advertisers are making a beeline to parade their wares before an audience that is waiting. More than 1.4 million watched the IPL final. Even more watched the Olympics. The selection of the media platform depends on each media options strength and the sports peculiarity. While advertising on TV makes perfect sense for very popular sports, niche ones like polo or squash would be better off if advertised in magazines. Radios strength lies in the fact that it has a young audience. Newspapers can be used to target select local markets. Sports organizations are using the internet more often now. A website also enables the sponsor to provide a link to its site from the organisations site. Broadcasting aside, sponsorships are one of the most visible elements in the sport promotion mix. Image creation or improvement, media relationship marketing, increasing sales, brand positioning, targeting new market segments and developing new distribution channels are some of the goals that the sponsor of an event or a sportsperson looks for. Sponsorship is pretty well-developed in India. The idea of sponsorship is to let both the sponsorer and the one being sponsored benefit. Each of them has to assist the other in reaching their respective goals. According to the IEG Sponsorship Report, a greater proportion of the 2008 sponsorship dollars will go to sports properties. In North America, for example, sponsorship spend on sports will form 69 per cent of the total sponsorship spending in 2008. Compared to 2007, sport sponsorship spending in North America will grow by 16.7 per cent to $11.6 billion. Europe will follow with spends rising by 10.4 per cent. The Asia-Pacific region is closing the gap rapidly. In 2008, Asian companies are expected to spend $9.5 billion, a rise of 25 per cent over last year. In India, the IPL provides a startlingly successful case study of an event getting the right promotion mix click for marketers and the sports organization too. What did IPL do right that the others can learn from?

Digital and mobile platforms have not been used beyond score updates and downloads.
DARSHAN M GROUPM

16

SEPTEMBER 2008

BRAND REPORTER I SPECIAL REPORT

1060

Rs 8,980/-* Rs 13,480/-*

866

IPL

IPLT20.COM

WHAT IT TAUGHT
IPL demolished myth after myth as the gladiators fought out three-hour battles every night for 44 nights. Is there a lesson in this for marketers?
It is ironical that an American was the first person to learn a few things from Indias Premier League (IPL) Twenty20 cricket carnival. It helped that the citizen of Antigua and Barbuda (he holds dual citizenship) is also a billionaire. One fine day in June, this year, Sir Allen Stanford, landed at the Lords cricket ground in his helicopter and flourished a box which had $20 million in it. Horrified purists cringed, but Stanford was there on business. Flanked by Sir Vivian Richards and Sir Garfield Sobers, he promptly announced a 50 million pounds (Rs 350 crore) winner-takes-all competition called the Stanford Super Series. The tournament will be a T20 affair between England and Stanford team of Stars drawn from the West Indies. other sports like basketball and athletics (Usain Bolt, Beijings double gold medalist, is one famous example), the West Indies legendary exploits on the cricket field are drying up. Stanford then went on to announce that an English Premier League (EPL) for cricket on the lines of the IPL would be set up. IPL administrators seem happy with it as long as it does not clash with its next season. The spectacular success of IPL has spawned innumerable case studies. But is there a lesson in this for other sports? It is hard to believe that a game which originated in England would see an Indian revolution. But the IPL hit the doubters for a six. It was all about good times. It was a perfect blend of the game, the celebrities and the entertainment that left people analysing it even two months after the IPL has ended. Some reports said that the IPL committee employed economists to structure its leads so that revenue is maximised. The players, the marketers, the administrators, the spectators and the broadcasters happily embraced a format that took up less of their time. Each match spanned just about three hours.

Kiss of life Stanfords plans were not a knee-jerk reaction to the IPL. He ostensibly wants to revive cricket in the West Indies. As more and more youngsters and cricket players - turned their attention to

18

SEPTEMBER 2008

BRAND REPORTER I SPECIAL REPORT

SPORTS MARKETING

STAR CAST AND THE PRINCIPALS

No team wanted to skimp on costs. Heres how they spent their money and how they performed

mover held all the cards. Why? One of the foremost reasons is put forward by the FICCI-PwC Report on Media and SUNDAR RAMAN Entertainment. Not only, said IPL the report, did the BCCI set up IPL directly in competition with Big names and even bigger money took the ICL, it studded it with three times the prize stage as arch rivals like Ricky Ponting-Saurav money, an official status that allows IPL players to Ganguly, Shane Warne-Graeme Smith and Glenn play international cricket and a forward linkage McGrath-Virender Sehwag paired up in the same with a T20 Champions League. More importantly, team. According to a report released by India its franchise model pits one club against another Infoline, the IPL will bring in Rs 1,190 crore and is more market-friendly than ICLs single every year, generate TV advertising worth Rs 650 employer model, which requires distribution of crore a year, get sponsorships (both team and employees into separate teams to devise a contest. central) worth Rs 290 crore a year, gate receipts of When IPL called for an auction the response was Rs 175 crore a year as well as stadium advertising tremendous from film stars to industrialists and of Rs 80 crore a year. How did it all start? even a media rights company went into the bidding with a vengeance. The ICL, on the other The differences hand, picked its players and placed them in various The unique idea of the league form of cricket teams. The killer-instinct was missing. came from the Indian Cricket League, promoted The second thing that the IPL did was to by Subhash Chandra of the Essel Group to help approach the entire project as something that the cause of regional, fringe players who had little could generate as much interest on prime time hopes of making the national team. ICL was as a soap or a reality show would have done. It considered as the rebel cricket and was not worked since most GECs (general entertainment recognized by ICC. ICL, which started off as a channels) witnessed a dullness creeping into 50-over tournament quickly jumped on to the their programming. The IPL package was custom T20 bandwagon. But with the rich BCCI made for prime-time television. The camaraderie (estimated revenues Rs 650 crore in 2006), the between players who had hitherto been ICL had little chance of sharing the limelight considered arch rivals, the presence of star team once the IPL kicked off, even with the owners and their nudges, winks and hugs international cricketers in its ranks. The second- contributed. The show as well as the sideshows

The credit for IPLs success goes to the ownership and structure of the teams.

RAJASTHAN ROYALS
OWNER Emerging Media FRANCHISEE FEES $67 million MOST EXPENSIVE PLAYER Md. Kaif

CHENNAI SUPER KINGS

OWNER India Cements FRANCHISEE FEES $91 million MOST EXPENSIVE PLAYER MS Dhoni

KINGS XI PUNJAB
OWNER P. Zinta, N. Wadia & M. Burman FRANCHISEE FEES $76 million MOST EXPENSIVE PLAYER Yuvraj Singh

DELHI DAREDEVILS
OWNER GMR FRANCHISEE FEES $84 million MOST EXPENSIVE PLAYER Virender Sehwag

MUMBAI INDIANS
OWNER Relience Industries FRANCHISEE FEES $111.9 million MOST EXPENSIVE PLAYER Sachin Tendulkar

KOLKATA KNIGHT RIDERS

OWNER SRK & Juhi Chawla FRANCHISEE FEES $75.09 million MOST EXPENSIVE PLAYER Saurav Ganguly

BLORE ROYAL CHALLENGERS

OWNER UB Group FRANCHISEE FEES $111.6 million MOST EXPENSIVE PLAYER Rahul Dravid

DECCAN CHARGERS
OWNER Deccan Chronicle FRANCHISEE FEES $107 million MOST EXPENSIVE PLAYER Andrew Symonds

$ 675,000

$ 1,500,000 $ 10,63,750 $ 833,750

$ 11,21,250 $ 10,92,500 $ 10,35,000 $ 13,50,000

1st

FINISH

2nd

FINISH

3rd

FINISH

4th

FINISH

5th

FINISH

6th

FINISH

7th

FINISH

8th
19

FINISH

Source: IPL Website

B R A N D R E P O R T E R I S P E C I A L R E P O R T SEPTEMBER 2008

IPL

Patriotism factor! Spot the Indian players here?

IT PAID OFF
For a first-time event, the Indian Premier League raked in enough to send analysts into raptures. Profits are expected to soar every successive year.

became as popular as Parvati or Tulsis sarees and were Kodak Moments. The IPL also tackled the marketing, finance and personnel management challenges quite adroitly. Moreover, each team-owner ran it like a business, whose bottomline was performance. Dont perform; get the sack - even if you are the CEO. Mallya sacked the Bangalore teams CEO Charu Sharma after a string of disappointing performances. Khan of the Kolkata Knight Riders decided to send back some players because he wanted to cut costs. Showing the money As per TAM Media Research, a cricket series can reach almost 60 per cent of Indias population but
All values in Millons

REVENUES
3000 2500 2000 1500 1000 500 0 Year 1 Year 2 Year 3 Year 4

Franchisee Fees

Broadcast Fees

Central Sponsorship 2968 2063

2968

531 260
Year 5 Year 6 Year 7 Year 8 Year 9

600
Year 10

EXPENSES
5000 4000 3000 2000 1000 0

All values in Millons

Profit

Prize Money

Umpire & Officials 5091

3509

200 50
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9

400 140
Year 10 Source: India Infoline Research

the stickiness surfaces only when India (the country) is playing an important match. That wasnt the case with the IPL which had a fair sprinkling of unknown names from foreign countries and the countrys image was hardly at risk. In such a situation, why did Sony take the risk (it along with sports marketing and management agency WSG won the broadcasting rights at a staggering $1.03 billion - around Rs 4,000 crore for 10 years) of spending so much? The amount includes $108 million (nearly Rs 424 crore) for compulsory promotional spends. Says Sneha Rajani, business head, SET Max, We saw potential in the format. We have traditionally positioned cricket as an international event which takes up a lot of time of our lives. The next stage for us was to see how to expand in the market we have. IPL was tailor made for us. Max is a movie channel and here was cricket in a 3-hour format. It was only a logical extension of what MAX stands for. SET Max reportedly sold 10-second spots at Rs 2.5-3 lakh. Telecom service provider Vodafone grabbed the on-air presenting sponsorship for Rs 25-30 crore (Rs 250-300 million). Associate sponsors on SET Max - Godrej, Hyundai, CocaCola and Max New York - reportedly paid around Rs 18-22 crore each. Standard Chartered Bank sponsored the action replay and is said to have paid around Rs 11 crore (Rs 110 million). According to Sundar Raman, CEO, IPL, even though they were confident of success, the rate of success has surprised even the IPL organisers. He attributes the success to The ownership and structure of the teams. It was the best form of cricket and entertainment. Winner Rajasthan Royals (it was the least expensive team at $67 million) main sponsor is Bajaj Allianz. Says Akshay Mehrotra, marketing head: Although sponsorship associations cannot be quantified, this association has been very special for Bajaj Allianz. Not only does it symbolise a winning team but follows the success that we have been able to achieve in insurance. Ranka of Starcom has a few points on why IPL was the explosive success it turned out to be. First, it started off on a scale that would make an impact. Secondly, they got the specialists - like IMG and Raman - involved very much in advance. Thirdly, the marketing was PR-led and what was put forth in terms of rights selling was TV rights. Finally, it was efficiently marketed to consumers, he says.

20

IPLT20.COM

SEPTEMBER 2008

BRAND REPORTER I SPECIAL REPORT

Viswam Sports
presents
2020 Indian Corporate league

The corporate teams from six cities in India will fight in 20-20 matches for the Corporate India Championship Trophy.

Phone: +91 98669 33364 | Email: thalakola@gmail.com Website: http://www.premiercricketleague.com

OUTLOOK

ON THE BIG STAGE

COURTESY: COCA-COLA

Indian sports marketers will have their Shuang moments. But they have to work towards it.

Beijing 2008. Coke, the global sponsor of the Olympics, set up 25 Shuang Zones across China as a way to connect more potential consumers to the brand and its Olympics partnership. In Chinese, Shuang means complete physical, emotional and spiritual refreshment. Many of the experiential centers were set up in high population areas - like malls - and offered visitors the chance to watch the Olympics on giant LED screens, sample Coke products and have their photo taken with the 2008 Olympic torch. As at every Olympic game, the soft drink giant introduced a logo as well as new packaging. The objective? Coke wanted to turn its Olympic sponsorship into consumers. More than two million people visited the experience centers across China. As a marketing exercise, Coke couldnt have asked for more. For the participants too, there was excitement in store.

Coke had the Chinese lapping it up

set up a vertical to provide IT services to the global sports industry. It is now the official services provider for the FIFA World Cups, 2010 (South Africa) and 2014 (Brazil). In order to advertise its services, the Hyderabad-based company also announced that it would promote a football event for 4,000 college teams. It will sponsor the tournament for 10 years. Fever pitch Efforts like Satyams ensure a continuous flow of talent and public participation. That should attract investors, especially when the games are televised. The television industry is gung ho. The average time spent on sports channels by viewers went up from 8.3 minutes in 2006 to 14.1 minutes in 2008 (January-June), higher than on news channels. The corresponding figures for the latter went up from 5.2 minutes to 6.9. The game is afoot. According to estimates by PwC-FICCI, global spends in sports marketing (not including TV advertising and food concession revenues) will rise from $85.8 billion to $110.8 billion in 2010. This year will see the Asia-Pacific region registering the fastest growth rate of 20.8 per cent to reach $17.1 billion. India has two of the biggest events in the worlds sporting calendar coming up in the next three years. In 2010, New Delhi will host the Commonwealth Games and a year after that, the country will be co-hosting the Cricket World Cup. That itself should set the marketers smacking their lips.

ALL SET TO ZOOM FORWARD

As more international sports marketing agencies set up shop in India, things will change

Sealing it Here are some deals that happened during Beijing 2008. According to the Sports Business Journal, United Airlines agreed to renew its sponsorship of the US Olympic Team, signing an agreement to be the official airline of the USOC (United States Olympic Committee) for the 2009-12 quadrennial. Virgin Mobile, wants double gold medalist, the Jamaican sprinter Usain Bolt to be the face of new broadband service. Australian television network, Chanel Seven, has signed a two-year contract, estimated to be worth $800,000, with swimming champion Stephanie Rice. Contrast this to what happened with Indias winners. Apart from the usual cash award announcements, no company has come out in favour of Abhinav Bindra, Vijender Kumar (barring Bajaj Allianz) or Sushil Kumar. But as more international agencies set up shop in India, things will change. Indias contribution to global sports marketing comes in different ways. Consider Satyam Computers case. Last year, the company

22

SEPTEMBER 2008

BRAND REPORTER I SPECIAL REPORT

After its tremendous success in Delhi...

Now Coming to Mumbai (September 19th, 2008) & Bangalore (September 26th, 2008).
For partnership queries contact Sakshi Kohli at +91.120.4077837 or sakshi.kohli@afaqs.com.

Infinity Optimal Solutions Pvt. Ltd., is a Delhi based Sports and Leisure Management Company dedicated to the promotion and development of sports and sporting talent in the country. Our integrated approach comprises of providing broadcasters, media agencies, corporations, sports federations and government with recognizable and proven sports properties, content and events solutions. We are dedicated to the cause of providing innovative and creative solutions for our principals in expanding their business. our services include
Content Development Event Management Athlete Representation/talent upgradation Marketing & Promotion of Events rights management tv production

IOS manages mr.vIJENDER SINGH THE OLYMPIC BRONZE MEDALIST AND INDIAS NEW YOUTH ICON exclusively FOR MORE INFORMATION LOG ON TO : WWW.IOSINDIA.COM
INFINITY OPTIMAL SOLUTIONS PVT. LTD. A1/231 SAFDARJUNG ENCLAVE ,NEW DELHI-110029,INDIA TEL:+91 11 46018571/72/73 FAX: +91 11 46018574