The verdict is out even before the first match of the International Cricket Council (ICC) World Cup 2011 has been played. Since the launch of the Indian Premier League (IPL) in 2008, cricket pundits have been holding forth whether the three-hour, Twenty20 format is eclipsing the 50-over game.
But as both formats of the game pad up to clash this year, marketers are clearly biased towards the shorter and more entertaining format. Call it hedging, if you like, but marketers are not betting big on Dhoni and his men in blue. Perhaps memories of the last World Cup are still fresh, when marketers lost big bucks after India was booted out of the game early. From title sponsorships to ad slots, everything is going relatively cheaper for the longer format.
Though some with deep pockets like Nokia, Hero Honda and Vodafone are betting on both formats, others are playing safe by betting on IPL, where there is no risk of Team India being trounced early. Moreover, the 20-20 format is more interesting and glamorous and the 50-over format has lost some sheen.
Thanks to the two major cricket properties, India’s advertising industry is expected to notch up revenues of Rs 36,400 core in 2011 calendar year, 18 per cent more than last year. (Click for the table)
As cricket is India’s most popular sport, it’s an expensive property for marketers to buy. On an average, advertisers spend Rs 2,500 crore a year on cricket properties. While the IPL is expected to see Rs 800-900 crore on ad spends, advertisers will spend Rs 700 crore on ads during the World Cup.
Like most other commodities in India, advertising inflation has also hit advertisers. For instance, 10-second advertising spots for big-ticket final matches in India were sold for Rs 5 lakh in 2008 IPL. Now, the average 10-second spot price is sold for Rs 5 lakh. This is likely to rise substantially for IPL finals and the World Cup finals, if India makes it.
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With fast moving consumer goods, auto and telecom companies reeling under margin pressure and facing intense competition, most are trying to make the maximum impact with available resources. Keeping in mind the moolah linked to India’s place in the tournament, ICC has taken precautionary measures to ensure there is no repeat of 2007. It has changed the format to secure at least a month-long presence of the India team. India will play its last group match only on March 20, a month after the start of the tournament.
Punitha Arumugham, CEO of Madison Group, said, “The outlay for IPL is higher simply because of the number of matches. This year, cricket will attract Rs 2,500-3,000 crore in advertising. Of this, Rs 1,500 crore will be in IPL and World Cup.”
Hero Honda, one of the largest corporate promoters of sports in the country, has unleashed a slew of marketing activities around the World Cup. It is organising a tour of the ICC Cricket World Cup trophy so that fans can actually get to see it for themselves.
According to Anil Dua, senior VP (marketing & sales), Hero Honda Motors, “Taking a Victory Lap at an international cricket match, that too at an ICC Cricket World Cup match, is any cricketer’s dream. And, Hero Honda is playing the catalyst in helping young, budding college cricketers realise that dream. It’s our own unique way of not just raising a cheer for the game of cricket but also for the fans, who have made cricket a religion in this part of the world.”
Vismay Sharma, director, consumer products division, L’Oreal India, said, “It needs to be seen whether the country can absorb three months of cricket. Today, we are among the top 10 advertisers in India and have chosen to go with IPL, as the viewership of women has been going up consistently.”
Godrej Consumer Products has decided to stick with IPL. Tarun Arora, executive vice-president, Godrej Consumer Products, said, “The World Cup is for cricket-seeking audiences and there is an element of risk involved on account of Team India’s performance. We chose IPL as most of our brands are family-oriented. IPL today is an established media property and delivers the impact.”
Apart from more entertaining and popular, the risks are significantly lower in IPL. For instance, the World Cup will have 49 matches, while the IPL will see 74 matches. But the downside in the IPL is the fatigue factor. If India wins the ICC World Cup, advertisers who bet on the longer format, and evidently cheaper one, will have the last laugh.
As the total advertising pie has gone up this year due to the two tournaments, this has ramifications for general entertainment channels (GECs). With these tournaments occupying mindspace for three months, advertising and television rating points of other channels will be impacted. According to Abneesh Roy of Edelweiss Capital: “Hindi GECs plan to restrict the viewership loss by launch of new programmes, hit movies, programmes on IPL, repeat programmes on off peak hours. Many sectors which advertise heavily, like FMCG, auto, consumer durable, telecom, are facing huge margin pressure, which means some slowdown likely in ad spends.”