Why Sports Sponsorship Matters for Your Brand?
Picture the excitement of a major sporting event. The stadium is buzzing, fans are cheering, and athletes are showcasing their skills. Amid this electrifying atmosphere, one aspect that stands out prominently is the array of brands and sponsors associated with the event and the teams. This is where the fascinating journey of sports team/franchise sponsorship begins.
Sports sponsorship is not just a mere association between a sports entity and a brand, it is a strategic alliance that benefits both parties. For brands, it’s an opportunity to reach a wide and engaged audience, enhancing their visibility and forging a strong emotional connection with consumers. For sports team & franchise sponsorship, it provides crucial financial support, enabling them to invest in talent, infrastructure, and growth initiatives. In this guide, we will dive into various aspects of sports sponsorships.
Understanding the ABCs of Team/Franchise Sponsorship
Team sponsorship in India involves commercial agreements where brands support sports teams or leagues in exchange for marketing benefits. These benefits can range from brand visibility on team merchandise and stadiums to being featured prominently during televised sporting events. This form of sponsorship represents a strategic alignment between brands and sports entities, leveraging the emotional connection and loyalty of fans.
Historically, sports sponsorship in India was more focused on individual events or tournaments. However, with the increasing commercialization of sports, particularly with the rise of leagues like the IPL, there has been a significant shift. The GroupM ESP Sporting Nation Report 2023 highlighted this growth, with sports sponsorship spends reaching an impressive INR 5907 Cr, a 105% increase from the previous year. This growth is attributed to factors such as the expansion of the IPL, the addition of new teams, and the increasing popularity of other sports leagues.
Differences between Team Sponsorship and Team Ownership
The Indian Premier League (IPL) is a prime example of a successful sports league that utilizes various business strategies, including team ownership, team buying, and sponsorship. Each of these aspects plays a crucial role in the league’s financial ecosystem and offers different benefits and opportunities for stakeholders.
|This involves brands associating with teams or the league through financial support for marketing purposes. Includes jersey branding, stadium branding, and player endorsements. It is a strategic investment for increasing brand visibility and awareness.
|Chennai Super Kings sponsored by TVS Eurogrip, Gulf Oil, and others.
Delhi Capitals sponsored by JSW, Green Panel, and DP World
|This involves purchasing the rights to own and operate an IPL team. Owners manage the team, handle player acquisitions, and oversee marketing efforts. They benefit from revenue streams like broadcasting rights, sponsorships, ticket sales, and merchandise sales.
|Mumbai Indians owned by Reliance Industries (Brand Value: $83.00 million).
Royal Challengers Bangalore owned by United Spirits Limited (Brand Value: $68.00 million).
Why Do Brands Go for Team Sponsorship?
The IPL offers rich case studies. For instance, Mumbai Indians and Chennai Super Kings, two of the most popular teams, have seen significant increases in their revenue from team sponsorships. Brands align with these teams to capitalize on their large fan bases and media coverage.
The IPL has also offered substantial advantages to its sponsors. Short-term sponsorships have proven to be mutually beneficial. For example, Vivo, the title sponsor for several seasons, reported a remarkable increase in brand visibility and sales during the tournament period. The brand saw a direct correlation between its sponsorship and a spike in smartphone sales, indicating a successful marketing strategy.
Similarly, other sponsors like Dream11 and Tata have leveraged the platform for widespread brand recognition and consumer engagement. This synergy between IPL franchises and sponsors underlines the dynamic nature of sports marketing, offering lucrative opportunities for all stakeholders involved in this cricketing extravaganza.
Furthermore, the IPL’s overall brand value significantly increased to $3.2 billion in 2023, a striking 80% rise from the previous year, highlighting the league’s growing economic significance. The introduction of new teams, such as the Gujarat Titans and Lucknow Super Giants, further emphasizes the league’s expansion and the lucrative opportunities for team sponsorship.
Current Trends in Team/Franchise Sponsorship
Currently, cricket dominates the sports sponsorship landscape in India, with the IPL playing a pivotal role. However, there is a growing interest in other sports like football, kabaddi, and esports. The IPL itself has seen a variety of sponsors over the years, with companies like Tata, Swiggy Instamart, and RuPay featuring prominently in the 2022 season.
Large Corporates and Established Brands
Big brands like Tata Trusts have shown the way by using sports as a tool for socio-economic development, particularly in underserved areas. Their broad strategy includes grassroots initiatives, strategic partnerships, and a focus on sustainable sports development. This approach aligns with their mission to drive socio-economic progress, making sports sponsorship a strategic fit for their brand ethos.
Emerging Online Platforms
The Indian gambling market, including online casinos and sportsbooks, has seen significant growth. Brands like Dafanews partnering with Nellai Royal Kings for the 2023 TNPL competition an examples of how online platforms can leverage sports sponsorships for brand visibility and consumer engagement. Fantasy sports platforms like Dream11 have also capitalized on this strategy, securing lucrative deals such as the lead jersey sponsorship for the Indian National Cricket Team.
Health and Fitness Brands
These brands find a natural fit in sports sponsorships. Fast&Up’s partnership with Mumbai FC as its official nutrition partner for the Indian Super League season is a prime example. Such partnerships align well with the brand’s message and target audience.
Start-ups and New-Age Businesses
Smaller or newer businesses can leverage grassroots initiatives and public-private partnerships. The Reliance Foundation Youth Sports program, which offers scholarships and support to young athletes, is an example of how sponsorship can be used to build brand reputation while supporting local talent.
Diverse Avenues of Team Sponsorship
Team sponsorship is a multifaceted aspect of the sports industry, providing benefits for both the sponsor and the sponsored entity. Various types of team sponsorships exist, each catering to different objectives and scales of operation.
Title sponsorship refers to a form of sponsorship where the sponsor’s name is integrated into the title of the event or team. This form of sponsorship offers the highest level of exposure and brand association. For example, Vivo first became the title sponsor of the IPL in 2016, replacing Pepsi. This deal was significant, given the massive popularity of the IPL and its reach among cricket fans globally.
Vivo’s association with the IPL significantly increased its brand visibility in India. The IPL’s extensive viewership meant that the Vivo brand was consistently visible to millions of viewers, not just in India but globally. This sponsorship was a strategic move for Vivo to penetrate the Indian market, which is one of the largest consumer bases for smartphones. Associating with a beloved sport like cricket helped the brand resonate with the Indian audience.
Associate, Product or Service-in-Kind, and Technical Partnerships
Associate sponsorships are lesser in scale but still vital, like Dream11’s role in IPL. Through their IPL sponsorship, Dream11 launched targeted advertising campaigns and interactive fan experiences. They have focused on enhancing the fantasy sports experience by integrating real-time information in the live broadcast, such as top fantasy selected players, and providing opportunities for fans to virtually participate in the matches. These efforts have led to increased user engagement and a richer sports experience for their audience
Product or service-in-kind sponsorships involve companies offering their products or services instead of money, while technical partners provide specialized support. An example is about Rajasthan Royals (RR) who had partnered with Red Bull, demonstrating a comprehensive approach to partnerships. This collaboration goes beyond just seasonal performance enhancement and includes player development during the off-season, scouting for new talent, and creating engaging content. The partnership has also involved mental conditioning coaches from Red Bull and grassroots cricketing ventures for talent scouting. These efforts have had a significant impact on the development of players and the broader grassroots cricket scenario, including programs like the Red Bull Campus Cricket and Speedster, which aim to discover fast bowlers
Media, Advertising, and Jersey/Kit Branding Sponsorships
Media and advertising sponsorships are pivotal, with media companies investing for exclusive broadcasting rights. Jersey branding, like Puma’s deal with Virat Kohli, is another significant form of sponsorship, involving branding on team apparel.
An example is for the 2023 season, the Punjab Kings had T10 Sports as their kit sponsor. T10 Sports, a sports apparel company, was responsible for providing the team’s playing kit, which is a crucial aspect of the team’s identity and brand image. Their official kit partner was T10 Sports, and their fan merchandise partners included Fancode Shop and The Arena Shop
The 2023 IPL season saw a diverse range of sponsors and brand partners. TATA Group was the title sponsor, and other major partners included Dream11, Saudi Tourism Authority, CRED, Upstox, RuPay, and Swiggy Instamart. Additionally, media rights were distributed among different broadcasters, breaking the monopoly of a single company.
For example, Star retained the Indian sub-continent TV rights, while Viacom 18’s Jio Cinema bagged the digital rights. This diversification of media rights indicates a strategic approach to maximize reach and revenue
Is it for you? Finding the right Team Sponsorship Fit
Finding the right team sponsorship fit is a crucial decision for businesses aiming to enhance brand exposure and engage with specific demographics effectively. The Indian industry provides insightful examples of how different kinds of businesses can leverage sponsorship opportunities to align with their brand’s ethos and increase visibility.
Tailoring Advice and Ideas for Different Businesses
Choosing a Team/Franchise That Aligns with the Brand’s Ethos
When selecting a team or franchise for sponsorship, businesses should consider
- Ensure the team’s values and image align with the brand’s ethos.
Chennai Super Kings, a prominent cricket team in the Indian Premier League (IPL), is known for its consistency, teamwork, and strong winning culture. These attributes resonate with Gulf Oil’s brand ethos, which emphasizes reliability, high performance, and excellence. The synergy between CSK’s values and Gulf Oil’s brand message is clear, making this partnership a natural fit.
- Choose a team that resonates with the brand’s target demographic.
CSK, with its massive fan base across India and especially in Tamil Nadu, appeals to a diverse and passionate demographic that closely mirrors Gulf Oil’s target market in India. The team’s wide appeal, particularly among cricket enthusiasts who value performance and loyalty, aligns well with Gulf Oil’s customer profile, which includes young, energetic individuals passionate about vehicles and sports.
- Evaluate the team’s popularity and media coverage to maximize exposure.
The Chennai Super Kings are one of the most popular and successful teams in the IPL. Their games are widely watched, both in stadiums and via broadcast, offering significant media exposure. By associating with CSK, Gulf Oil benefits from extensive media coverage, enhancing its visibility. For instance, the IPL 2020 season witnessed a viewership of over 400 million, providing sponsors with enormous exposure.
- Align sponsorship investments with the expected ROI and brand objectives.
Investing in a team like CSK, which consistently performs well in the IPL, offers Gulf Oil a strong return on investment (ROI). The team’s consistent presence in playoffs and finals increases the visibility of sponsor brands. The ROI can be measured in terms of brand awareness, enhanced reputation, and potentially increased sales. For example, during the IPL seasons, Gulf Oil often runs marketing campaigns and promotions aligned with the cricket season, leveraging the team’s popularity to boost its sales and brand presence.
I found the information on Gulf Oil Ltd’s official website and in a news article on Economic Times’ Brand Equity section and several other articles.
Engaging with Specific Demographics
Sponsorship can be a powerful tool for engaging with specific demographics. For instance, the Indian sports industry witnessed immense growth in 2022, with spends on team and franchise sponsorships growing by 105%, indicating the sector’s capacity to engage a broad and diverse audience effectively.
The partnerships are strategically chosen to align with the brands’ target demographics, whether defined by geographic location, age group, lifestyle, or specific interests like cricket or football. This demonstrates the effectiveness of sports sponsorships in engaging with particular segments of the population, enhancing brand visibility and loyalty within these groups.
IPL: Indian Premier League
Muthoot Group with Chennai Super Kings: The Muthoot Group, a major financial corporation based in Kerala, has been a long-standing principal sponsor of Chennai Super Kings. Their logo prominently appears on the team’s jersey, increasing brand visibility across a diverse audience.
JK Lakshmi Cement with Rajasthan Royals: JK Lakshmi Cement, a prominent cement company, has been associated with Rajasthan Royals. This partnership has allowed the brand to strengthen its market presence, particularly in the North and West regions of India.
BoAt with Multiple IPL Teams: BoAt, an Indian consumer electronics brand, has collaborated with several IPL teams including Mumbai Indians and Royal Challengers Bangalore. This partnership has enhanced their brand recognition among the youth.
ISL: Indian Super League
Hero MotoCorp with Multiple ISL Teams: Hero MotoCorp, India’s largest two-wheeler manufacturer, has been a title sponsor for the ISL. This has significantly boosted their visibility and association with sports beyond cricket.
Apollo Tyres with Chennaiyin FC: Apollo Tyres, a leading tyre manufacturer, partnered with Chennaiyin FC. This partnership was aimed at strengthening Apollo’s presence in the Southern market, especially in Tamil Nadu.
DHL Express with Mumbai City FC: While DHL is an international brand, its partnership with Mumbai City FC was aimed at strengthening its local engagement and market penetration in the Mumbai region.
As sports continue to be a unifying force in India and around the world, the potential for sports team and franchise sponsorship as a sports marketing tool is immense. Whether it’s aligning with a team’s values, engaging with fans through digital campaigns, or leveraging the emotional connection that fans have with their teams, the opportunities are as diverse as the fans themselves.