Startups sidelining big brands as sponsors: Is the trend here to stay?

It all started with IPL 2020 when established brands were sidelined by startups, like Dream11 and Unacademy, to dominate the league in the sponsorship game

e4m by Ruhail Amin
Published: Dec 8, 2020 8:35 AM  | 4 min read

The ongoing pandemic has disrupted the sponsorship landscape like never before. Big brands have taken a protectionist approach when it comes to marketing spends;

While big brands are mostly maintaining a conservative approach to marketing spends, a new breed of sponsors is taking over to fill the vacuum.

It all started with IPL 2020 when established brands were sidelined by startups fuelled by investor money to dominate the league in the sponsorship game.  Dream11, Unacademy, to name a few, rescued the league by pumping in billions of dollars in sponsorships.

While startups have emerged as big sponsors, the question is: how long will this trend continue?

According to Pawan Sarda, Group CMO of Future Group, the new breed of sponsors is not a new phenomenon, categories and brands leading the sponsorship always change every 4-5 years.

“Whenever there is a new category being built in India, brands catering to these categories overpower the sponsorship landscape. We have seen this with telecom to e-commence, and now this is happening with edtech and gaming. Post-Covid, I see brands being built on the digital side definitely taking the lead,” says Sarda.

However, Geetu Bhatnagar, Head Marketing, Oracle India, believes that though 2020 has disrupted the entire sponsorship model, there would still be large sponsors that would dominate this landscape in next six to eight months.

“I would agree that startups have some ready cash with all the funding that they have. However, in India, this phenomenon is more of a short-term vision.”

According to Bhatnagar, large brands have to balance out the marketing dollars and investments, and in large organizations, marketing dollar reduction is the first thing that happens in a crisis. 

“If you look at Super Bowl, NFL or any other sponsorship option globally, it’s still the large brands. Even the Olympics is sponsored by Toyota. I would say large sponsorships over long term would still be the bigger brands, which could be over next six to eight months.  They will be back with a bang,” added Bhatnagar.

There is no doubt that the ongoing pandemic has fundamentally changed the way we behave, shop, entertain and transact. Even the digital transformation has been accelerated and is reaching the grassroots like never before. However, does that mean digital-first companies will dominate the sponsorship landscape?

Ketan Desai, Chief Operating Officer, GREY Group India, is a firm believer of this trend. He says, “The new-age sponsors of big events, sports franchises will be those that have a technology story. It will be in areas such as education, payment gateways, online gaming. These brands will want to catch eyeballs quickly and get the first mover advantage. I see marketers with a brick and mortar model taking a backseat when it comes to sponsorships in the coming years.”

While 2020 definitely has not been a year of spending, it has been about smart spending on different touchpoints where customers/audience are consuming more content.  IPL 2020 was one such option, but where would big brands go in this period of few big-ticket events and what will the sponsorship scene look like as we move forward?

"If you talk of upcoming Edutech and gaming startups, these emerging brands/categories need high top-of-mind (TOM) given the phase of growth they are in, as it immediately translates into website traffic/ leads/ even actual business for them (and helps them deliver on their business plan against which the funding came in/ will come in). Juxtapose this with an established brand like Tata or Reliance or Airtel and you will see that they do not have a need to make big media investments," says Shariq Ali, Marketing Consultant, Bare Knuckled Promotions.

According to Harish Bijoor, Founder, Harish Bijoor Consults Inc, the sponsorship scene is divided into two. The haves and the have-nots.  The haves are categories that thrive despite the pandemic blues. These are typically categories that are digital, edtech platforms, payment gateways, gaming platforms, OTT players and more.

“What's down on the see-saw are food and drink categories, premium FMCG, cosmetics and luxury. Even this shall pass”, adds Bijoor.

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