ICC CWC'11: Rs 2,000 crore, not out

With the ICC World Cup and IPL 4 in the same year, cricket’s share in television ad pie is expected to go up to 20 per cent.

e4m by Pallavi Srivastava
Updated: Mar 8, 2011 1:35 PM
ICC CWC'11:  Rs 2,000 crore, not out

Cricket in India has always been big and it’s getting bigger by the day. As per TAM data, cricket dominated television viewership with up to 17.6 crore viewers in 2010 (C&S 4+ across India). It has also been one of the biggest drivers of revenues for the TV industry. Industry reports suggest that in 2010 approximately Rs 1,300 crore of TV advertising was spent on cricket. This is a good 13 per cent share of the TV ad pie of Rs 10,530 crore. Also, cricket spends on TV in 2010 were up by 20 per cent compared to 2009. In fact, as an ad revenue generator, cricket (on TV) is bigger than mediums like radio, outdoor, internet and cinema. This speaks of the strength of cricket as an advertising platform.

Revenues from cricket in 2011

Estimates suggest that cricket advertising accounts for 85 per cent of the total sports ad spends on TV. And in 2011, cricket is expected to have an even larger share of the TV ad pie because for the first time two biggest cricketing events the World Cup & IPL are falling in the same season.

Honey for the marketing bees

Shashank Srivastava, Chief General Manager, Marketing, Maruti Suzuki, says “We spend 30 per cent of our total TV advertising budget on sports and cricket spending alone accounts for 27 per cent. In other words, cricket is 90 per cent of our overall sports advertising on television.”

Another example is Hyundai which spends its entire sports budget on cricket, in India. The marketing team of the company plans to spend Rs 200 crore over the next five years on marketing for ICC related cricket and 70 per cent of this will go to TV.

In 2011, the spends on cricket related advertising on TV is expected to go up by 50-60 per cent to cross Rs 2,000 crore, thanks to big ticket properties like the ICC World Cup and IPL. India playing cricket (including IPL) will be over 200 days this year. And thus, in the next 12 months cricket’s share in the TV advertising pie is expected to go up to 20 per cent. Many brands have already announced an increase in their marketing budgets for 2011, due to the busy cricket calendar. Take for instance Castrol which is spending 25-30 per cent of its advertising budget for 2011 on World Cup alone. The Korean consumer durable giant LG too has increased its annual marketing budget for 2011, by 15 per cent, mainly to associate with the World Cup and IPL-4. The company will be spending Rs 40 crore on a multimedia campaign for the World Cup while another Rs 30 crore for IPL.

Sony is another brand betting big on cricket. It has allocated Rs 100 crore towards a multi-media campaign, including ATL and BTL activities, to promote high definition TVs. The company also roped in Dhoni as the brand ambassador. This multi-media campaign will include more than 3,000 TVC spots across 19 leading channels, apart from print and outdoor plans for across the country. The company is looking at boosting its top lines in the flat panel TV segment by additional 5 per cent during this cricket season involving the World Cup and IPL 4. Its market share currently is at 35 per cent in the segment. Masaru Tamagawa, Managing Director, Sony India, says, “Sony has chosen cricket to promote ‘high definition’ as it is the most popular sport in India and makes for a perfect platform to bring HD closer to our consumers.”

As per media planners estimates, the ICC world cup alone is estimated to rake in TV advertising monies close to Rs 700 crore and IPL 4 is estimated to rake in another Rs 800 crore. Other important properties to attract some big bucks in 2011 will be the Champions League, India West Indies series and India’s England tour. The India South Africa series in January 2011 is estimated to have clocked around Rs 130 crore.

Rathindra Basu, Senior Director, Business Development, ESPN Software, India, says, “The calendar year 2011 is poised to be the biggest in the history of ESPN Star Sports in India. We have four major Cricket tourneys spread evenly across the year – the iconic ICC Cricket World Cup, Airtel Champions League Twenty20, Indian Cricket team’s tour of England, and Indian Cricket team’s tour of Australia. It cannot get bigger than this. ”

The biggest category advertising on cricket on TV is telecom services, followed by automobiles and telecom handsets. Top three TV advertisers (airtime) on cricket properties are all telecom service providers: Tata Teleservices, Bharti Airtel and Vodafone. HLL and Hero Honda are the other two companies among the top five advertisers list on cricket advertising on TV. ESPN’s Basu adds, “More and more advertisers are now looking at sports as an effective medium and we have seen increased presence from energy drinks, sports equipment manufacturers, men’s fashion accessories especially wrist watches and sports apparel.”

IPL vs World Cup

Interestingly, IPL which is in its fourth year is commanding 60 per cent higher ad rates compared to the World Cup. According to market estimates, a 10-second spot during the World Cup is costing around Rs 3.5 lakh, while the same on IPL is priced at Rs 5.5 lakh. As per TAM data, IPL 3 in 2010 got 14.3 crore viewers hooked on to TV. This is much higher than 10.5 crore viewers in the 2007 World Cup. Also, with T20 format getting more popular the ratings for ODI have been falling for the last few years. In 2003, India playing matches got average TVR of 13 to 14. In 2007, this came down to seven to eight. Currently, ODIs have ratings of four TVRs. While non-India matches fell drastically to below 1 TVR. IPL’s average ratings hover at four to five TVRs. The marketers feel that since IPL ensures heavy involvement of Indian cricketers in each match, it is a safer bet compared to World Cup where India will play a maximum of nine games assuming it reaches the finals. Thus, many marketers may prefer to bet their bucks on the T20 format than ODIs.

Eating others’ cake

This increased ad spending on cricket properties takes away share from other genres. The biggest hit is taken by GECs as Hyundai’s Sanjay says, “We completely cut down our spending on GECs during big cricket events.” However, the strength of this blow to GECs has fallen down. Nitin Jain, Director, Domor Communication Consulting, says, “Three to four years back there was a fall of 30-40 per cent in deal inventories on GECs during cricket season, today it has come down to 20-30 per cent.”

Nikhil Madhok, Senior Director, Marketing & Communications, Imagine TV, feels, “Cricket is part of overall competition and that’s how we treat it. A World Cup match involving India is likely to affect everyone since it is a big aggregator but other than that Cricket has a limited impact on us.”

Anil Uniyal, CEO, CNBC-TV18 & CNBC Awaaz, says, “Of course, Cricket does have a dampening effect on viewership levels across genres, especially when India matches are on. But business news, as a genre, has great resistance because of the high involvement levels of viewers and given how closely it’s aligned to people’s professional and investment ambitions. Moreover, since this is the financial year closing and lot of planning for taxes and investments happen, apart from key events such as the much awaited Union Budget, the interest is expected to be high.”

Not everyone seems up for the gentleman’s game though! Many advertisers feel that there is too much clutter on cricket and the cost is too high, hence the ROI is questionable. Milind Bade, General Manager, Marketing, Bajaj Auto, says, “We feel the ROI on high decibel cricket properties is zero. We don’t look at cricket at a specific allocation in our budget. There are enough male affinity channels available on TV which make better investments. Having said that, I don’t mean that we are completely off the cricket ground. We were present on the India-South Africa series in January. The point I am making here is that the valuations of cricket properties have to make sense.”

However, a well-packed 90 days season starting from Feb 19 with the world cup and followed by heavy dose of IPL and other major cricketing events promises a lot of happenings on TV.

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