Saturday, June 28, 2008

IPL -2008. A Businessman's Guide

Q. What were the key factors that contributed to the success of the IPL?
A large part of the success of the IPL is due to the promotional efforts behind the same. Nearly Rs 190 crores was spent in promoting the event.
BCCI and IPL spend Rs 40 crores in promoting the event this year.
Sony WSG has committed to advertising Rs 456 crores over 10 years (Rs 45.6 crores per year). This was through its channels and some through other media.
Franchisees are likely to put in Rs 94 crores each through their local sponsors and on their own
Format of the game also played a role. Teams were evenly balanced and the outcome was unpredictable at all times. This was done through the upper and lower limits fixed on salaries.
Close matches mean better viewer ship and recall. T20 has higher probability here due to the nature of the format and the fact that the teams are evenly matched.
The mix of foreigners to nationals ensured a high caliber turnout and local relevance. The 4:7 ratio was a good mix of international and local appeal.
The use of auctions and the exposure in the media generated hype which made it a front page event. The highlighting of the auctions and the millions invested, made for a great news story, never mind Gilchrist admitting to “feeling a bit like a cow”!
Controversies also ensured front page coverage, be it the cheerleaders and their clothing or the lack of it, Sreeshant vs Harbhajan or SRK vs Ganguly or Warne vs Ganguly, it kept the interest alive.
The BCCI leveraged its clout to get the current national players to participate and calendered the event to ensure that some of the key international players also joined in. The school vacations and the summer evenings ensured a captive audience at home and at the stadium.
The total money invested was apportioned to all stake holders to ensure a win win situation, be it players, TV channels, franchisees or even the viewers. Everyone made money and it was in effect a Paisa Vasool League!!
Q. What’s in it for sponsors/advertisers given that it’s a 45 days a year brand?
The IPL is a great platform for advertisers as it gives access to nearly the entire C&S households during the course of one season, never mind that it is only 45 days.
The advertising opportunity is also less cluttered as against similar sporting events like football where ads tend to be in a cluster at the beginning or end since there are few breaks in play, save the half-time.
While the Test format has hardly any takers now, the one day international is cluttered and stretched over a longer time frame. There are 6,000-7,500 secs of commercial time in ODI’s as against 2,000 -2,500 secs in T20. The proportion of the event watched by the viewer on an average is much higher for T20 as against the ODI and therefore a lesser probability of a spot being missed. In fact, AMAP data indicates that time spent watching the match was higher for IPL matches as against the recent ODI (Kitply –India Pak) 73 mins to 88 mins for IPL.
Unlike the international ODI’s, there is no risk of the Indian team loosing out and loss of interest. Franchisee loyalty is minimal and fickle at best. The viewer is known to ‘switch loyalties’ and seems to root for specific players ( Sachin, Dhoni, etc) and is interested in contests between specific players( Shoaib vs Sachin, McGrath vs Sanath, etc). Therefore, there is less risk of a repeat of the World Cup recently, when the exit of the Indian team resulted in a loss of ratings and interest. This also means that the advertiser is well advised to go with the event itself or more than one team or player as an endorser, since the format allows this and there is no risk. Kingfisher, Reebok, Adidas have all done this with good results.
The viewer ship in the semis and finals is at least 2 TRP’s higher on an average. This means at least 2 to 3 million more viewers and greater probability of being seen since stickiness/ time spent is much higher for the last leg (89 mins vs 40 mins). This needs to be evaluated against the rates which are naturally higher for spot buys with rates being hiked to almost 10 lakhs per 10 secs for the finals.
Sponsorship should be clubbed with on screen advertising as it has great multiplier effect and reminder value. Sponsoring contests within the format helps ensure returns for association with the tournament.
Exclusivity is being offered by the Channel and the ground sponsors will have the first right from the next season. Pepsi may rule over Coke given the ground rights it has. Advertisers may gain by looking at a full package with a heavy burst for the 45 days and flighting subsequently as against a minimal number of spots which does not cross the threshold or provide the minimum effective frequency and OTS (opportunity to see). It should be great for launches and to those with major innovations which require high OTS, as also those seeking to establish a national footprint quickly.

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