IPL - 2008. A Businessman's Guide

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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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IPL 2008 -A Businessman's Guide

Q .Why was the ICL not as successful as the IPL?

• The ICL is owned by Subash Chandra who owns the ZEE Network which is a media conglomerate.. Zee and IL &FS put together a corpus of Rs 100 crore for this event.

• The Indian Cricket League started in November 2007 with 6 teams playing the league in Panchkula, Chandigarh. It then had a 50 over edition in January 2008 which was played at Mayajaal ground in Chennai. The latest edition was in March 2008 which saw 8 teams playing in Hyderabd and Gurgaon. Apart from league teams there are also ‘national teams’ playing against each other. Though the format is similar and the game is the same, the ICL has not generated as much revenue and interest for a variety of reasons:

– Players make or break this game and having access to the best in the business is key to attracting viewers and fans. ICL therefore upped the ante and paid Rs 30 to Rs 60 lakhs to 60 “no –namers” or domestic players at a total cost of nearly Rs 30 crores. It then signed up “brand players” for almost Rs 3 crores per head and for almost 10 such players had to put up another Rs 30 crores. The total spend of Rs 60 crores on players, did not get them the talent they really wanted with a lot of players opting out after accepting.

– ICL is not recognized by the BCCI and ICC. Players of this league were blacklisted by the BCCI, resulting in litigation on grounds of unfair trade practices. As a result, most of the talent in the country have been out of the ICL footprint and play in the IPL which is a competitor to the ICL, as it turns out. BCCI also raised players fees by 40% to counter the ICL challenge of a fee of Rs 36,000 per match .

– The ICL has a lot of players from overseas who have not been blacklisted by their national cricket authorities and therefore continue to play in ICC matches. However, IPL has confirmed that it will not allow any ICL player from any overseas Board to compete in the Champions League which it to be held in September among the top leagues of various countries. The strength of the ICL, which has been international players of repute, will now be threatened.

– ICL is hampered by the cricket calendar. The first season of the ICL was cannibalized by the Indo- Australian series and the Harbajhan vs Symonds controversy actually generated interest in the series and drove viewer ship and coverage in media. It is likely that the next season, scheduled to be held in the UAE may be affected by the Champions League which is scheduled around the same time. While IPL had the summer school vacation, ICL has not been able to get the prime calendar spots.

– ICL has spent nearly Rs 20 crores in promoting the event but has not got the sustained hype and interest that the IPL has managed. The TRP ratings of the ICL have been around 1 to 1.5 range . While the IPL has been on the front page much before the league began and has franchisees who by themselves have raised the eye ball count and the stickiness factor, ICL has had no stars who have been able to do it for them save for Kapil Dev, who heads the League. The ICL has also not been able to capitalise on its foreign players in the media sweepstakes.

– Sponsors therefore have been low profile and include the title sponsor Edelweiss Capital, the Mumbai ICL team sponsor Dabur Glucose, Bharat Student .com which the sponsor of the Hyderabad team and Pioneer Urban which sponsors the Delhi team.

– .Gate revenues are not high in the League since the best venues were blocked by the BCCI. However, the ICL still has access to the Eden Gardens and with help from the Railways (Minister L.P. Yadav blessing the event) they have reasonably good venues. Local advertising has been limited and with the absence of local ‘brand’ players, attendance has been lukewarm.

– The ICL needs to lobby with international bodies and using the UAE as a launch pad may work out, given that the in the past the Sharjah Cup was a success. Some savvy PR ideas would help keep the brand alive and salient and generate the interest in the event. Consumer contests and cross promotions with high TRP programs in its bouquet could help ICL. Movies on cricket are awaiting releases and a collaboration cannot revenues and definitely will drive gate collections in the UAE.

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CASE STUDY: WHY DID THE FIRST MOVER CAME LAST? ICL vs IPL

USING THE 5 FORCES FRAMEWORK OF MICHAEL PORTER

http://mayanmuse.blogspot.com/2008/06/icl-vs-ipl-why-first-mover-came-second.html

READER RESPONSE:

http://mayanmuse.blogspot.com/2008/06/ipl-few-frequently-asked-questions_26.html

 QUICK PROFILE

Mr. Vinod Natesan, Proprietor of Mayan Consultants International, is a post graduate of the Institute of Rural Management Anand. In the 19 years in the industry, he has been associated as a marketing consultant with the World Bank and NDDB, has serviced ITC, Procter & Gamble Unilever and Telco accounts while working for FCB, Lowe and Leo Burnett. He headed the Mumbai branch of PSL McCann Erickson, winning numerous creative awards like the Clio for work done on the Guestline Hotels and the Mahindra brands. In 2000, he joined, JWT as Assoc Vice President & Strategy Planning Director on the De Beers account and was part of the team that won the Effies and the Subash Ghoshal trophy for the Nakshatra launch. In 2002, he shifted to the Middle East and has been handling marketing assignments with retail groups like the Landmark Group, with Tourism promotion bodies in Tunisia and with tourism related authorities in Kerala. His last stint was with the Emirate of Ras al Khaimah, where he set up the Tourism Office and the Media City and left it as the Head of Operations, RAK Investment Authority. He has also been a visiting faculty in most of the management institutes in Mumbai since 1996.

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IPL- Paisa Vasool League?

There has been some debate among the consultants as to whether one should invest in the IPL, also known as theIndian Premier League (snidely referred to as the Indian Paisa League).

I believe the TRP's would be high given that it is the vacation season and with the mercury on a high, people may prefer the entertainment and excitement of a cricket match to anything else.

In the battle for the drawing room remote, husbands and kids will prevail. Moms too wont mind a goodlooking pathan and goras running around. Not to mention that SRK and his glam brigade would be in the camera once in a while. Also helos to know what the cheerleaders were wearing or not wearing...and dancing. Its a lot like jhalak dikhla ja ..no pun intended.

The quality of play and skills are world class ... given the money paid.

I don't think regions are important. People like or dislike players and their mode of playing. Its the player that matters. Still in doubt? Sachin is an example. He can get TRP's rising when he gets going. And not just from Mumbai. I think its the quality of the contest that matters. Evenly matched teams, the world's best talent, well timed schedule, it certainly is exciting. There is also no risk of "India loosing" and everyone loosing interest.

For summertime brands its the perfect opportunity.

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