Cricket has historically been a great platform for marketers to connect with target audiences, as the game’s popularity and reach to a billion-plus people is second to none.
When the Indian Premier League (IPL) was announced back in 2008, it was regarded as a sponsor’s paradise, with its assurance of instant visibility to brands. Brands, in turn, poured millions of dollars in sponsorships; either with the central league or with individual franchises or both.
The league is structured in a way that brands can either sponsor a team directly or can sponsor the league as a whole.
In Direct sponsorship structure, sponsors associate with individual franchises and put their logos on jerseys, helmets, training kits, boundary boards in home-stadiums, etc. Indirect sponsorship is done via BCCI, as the league title sponsor, associate sponsors, umpire sponsor or strategic timeout partner.
The direct sponsorship revenue forms about 25% to 35% of a team’s revenues. In general, franchises can rope in about 12-15 sponsors per season.
While, popular franchises, such as Kolkata Knight Riders, Mumbai Indians, and Chennai Super Kings, can land up to 20 sponsors. Top franchises, such as CSK, MI, and KKR, can earn around ₹80 to ₹100 crores from sponsorship, whereas bottom teams such as RR and KXIP can earn between ₹45 to ₹60 crores; and teams like RCB and SRH earn between ₹60 to ₹70crores.
In Indirect sponsorship, brands tie-up with BCCI to advertise their brand name with IPL, as the league’s title sponsor, associate sponsor, umpire sponsor or strategic timeout partner.
Brands bid to become the title sponsor of the league or for the associate sponsorship slots for the league.
Dream11, the present title sponsor of the league, is paying BCCI an amount of ₹222 crores for the naming rights of IPL2020. TATA, Unacademy, and CRED are the associate sponsors of IPL, paying BCCI between ₹40 to ₹50 crores each for the slot. CEAT is paying BCCI ₹30 crores to become the Strategic Timeout Partner of the league, while Paytm is paying ₹28 crores to BCCI for the Umpire sponsorship rights.
Although IPL is an attractive marketing platform, brands do look for various aspects to gain efficient visibility under their budget. Before sponsoring a team they have to answer various questions, such as the purpose of sponsorship, target audience for the brand, to whom their product caters to, their budget.
Sponsorship is done keeping various aspects in mind, such as the regional aspect. If a brand has a reach in one particular state of the country, then sponsoring the local team makes much more sense.
Chennai Super Kings is sponsored by brands such as Muthoot group & Nippon Paint, which are based in Tamilnadu. If a firm based in Tamilnadu or West Bengal and sponsors a team from another state say Rajasthan Royals, then there is a high chance that the decision may backfire. Whereas a brand such as INOX (currently sponsoring RR) or Colgate can sponsor any team as they are present across the country.
Brands that are not bounded by regional boundaries can sponsor teams like RR & KXIP, whose sponsorship rates are lower than other clubs and will provide a high return on investment.
Another aspect is the fan following or the social media presence of a team or its players. Teams such as MI, CSK, KKR, and RCB have a bigger fan following due to the presence of star player and their achievements on the pitch.
MI has won IPL 4 times, CSK has won IPL thrice, and KKR has won IPL twice, while for RCB it is mainly due to the presence of high-profile players since they are yet to win the title. Virat Kohli being the most followed Asian celebrity on Instagram is one of the main reasons for RCB having such a large fan base. Sachin Tendulkar and Rohit Sharma for MI, Dhoni & Suresh Raina for CSK, while for KKR, the King of Bollywood and team owner-Shah Rukh Khan is the main crowd puller.
Brands want to connect with these teams because of their fan following.
Team following also increase through fan engagement. The teams which engage their fans the most have the higher following which in turn helps them in earning more through sponsorship.
For instance, RCB runs an engaging short comedy video series online, throughout the IPL named as “RCB insider with Mr. Nags” while CSK has allowed fans inside their home stadium even during their practice matches since 2018, giving them a chance to see their star players.
Brands also connect with a team because of their players having an individual contract with them, and they don’t want rival brands to use their contracted players by sponsoring the team.
For instance, MS Dhoni is the Brand Ambassador of Gulf Oil India. If any rival brand signs a deal with CSK, then Dhoni may have to advertise for them as well. To avoid such a situation, Gulf Oil sponsors CSK every year. Similarly, Virat Kohli owned Wrogn sponsors RCB, so that no rival brand in that category can sponsor RCB and use Kohli for their marketing purpose.
If the pandemic is ignored, then IPL 2020, which was about to start in March, expected a 25-30% growth in direct sponsorship amount that the teams would have received.
For the brand to make the right sponsorship choice, they should keep all the above points in mind, along with carrying out the market research. If done properly, it will assist them in taking better investment decisions, which in turn may give them maximum ROI.
By Aashish Jaju
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