Sports Sponsorship and EdTech : Everything you need to know

The intersection of EdTech and sports sponsorship represents a dynamic fusion of two seemingly disparate realms: educational technology and the world of sports. EdTech, a burgeoning sector leveraging technology to enhance learning and education, has found an unlikely ally in sports sponsorship. 

This partnership goes beyond the conventional realms of education, entering the arena of sports to tap into a diverse audience base. The synergy between these domains lies in the shared values of discipline, teamwork, and skill development, creating a unique opportunity for EdTech brands to align with the excitement and passion associated with sports. Sport advertising in Sports Sponsorship and EdTech merges promotion of athletic events with educational technology, offering comprehensive insights and engagement.

The concept explores how educational technology companies strategically leverage sports sponsorship to not only promote their offerings but also connect with a broader audience on a platform traditionally dominated by entertainment and athleticism.

Why Sports Sponsorship and EdTech?

EdTech brands and sports make for a perfect match in advertising due to the synergies between the two industries, catering to a diverse audience and leveraging the universal appeal of sports. Here’s a brief overview of why this combination is so effective:

1. Wide Audience Reach:

Sports enjoy a massive and diverse fan base spanning demographics, ages, and geographies. By aligning with sports, EdTech brands can tap into this broad audience, reaching potential learners of all backgrounds and interests. Both sports and education heavily involve the youth demographic. EdTech brands, targeting students and young learners, can connect with this audience through their shared enthusiasm for sports, creating engaging and relatable advertising content.

2. Positive Brand Associations:

Sports are often associated with values such as teamwork, discipline, and perseverance. Associating an EdTech brand with sports helps create positive brand associations, emphasizing qualities like dedication and continuous improvement that resonate well in the education sector.

Sports are deeply embedded in cultural conversations, creating opportunities for EdTech brands to integrate seamlessly into relevant discussions. Whether it’s leveraging major sporting events or aligning with sports trends, EdTech can stay culturally relevant through this partnership.

3. Digital Presence and Innovation:

Both EdTech and the sports industry thrive on innovation and technology. EdTech brands can showcase their digital platforms and learning solutions during sports events, aligning with the modern and tech-savvy image associated with sports entertainment.

4. Event Sponsorship Opportunities:

EdTech brands can explore sponsorship opportunities during sports events, providing visibility and brand recognition. Whether it’s sponsoring a team, a tournament, or incorporating educational elements into sports broadcasts, such partnerships create memorable and impactful advertising moments.

Emergence of a Trend 

Cricket, the undisputed king of sports advertising, continues to attract a significant share of ad dollars, with one in three being invested in the cricketing arena. The surge in advertising expenditures in 2020 was notably propelled by emerging sectors and EdTech ruled, and even poised to maintain their momentum in the current year. 

According to Sandeep Goyal, Chairman of Mogae Media, a prominent marketing and communications agency in Mumbai, these new-age industries have become the driving force behind the advertising expenditure (adex) landscape. As a prime example, EdTech giant Byju’s made a substantial investment of ₹400-500 crore in advertising, underscoring the robust growth and financial commitment within these sectors.

In fact, in 2021 Unacademy announced its involvement beyond the IPL, stating that the company is actively engaged in initiatives related to the Olympics and various partnerships centered around branded content across diverse sporting events.

The surge in demand for online education during the pandemic significantly boosted EdTech brands, leading to a notable increase in their advertising expenditures. With people turning to digital learning platforms for remote education, EdTech companies sought effective channels to showcase their offerings. Advertising in sports emerged as the optimal choice due to its extensive reach, alignment with current trends, and the positive association sports hold.

IPL & EdTech Brands: A Winning Partnership 

In the year 2020, the Indian Premier League (IPL) experienced an unparalleled surge in sponsorships, particularly from the ed-tech sector, featuring prominent brands such as Byju’s, Whitehat Jr., Upgrad, and Extramarks. Amidst a backdrop of the pandemic and notable shifts in consumer behavior, the IPL emerged as a beacon of joy in a nation fervently passionate about cricket. 

1. Byju’s

Byju’s stands out as a brand deeply entrenched in cricket, especially in its notable affiliation with the IPL. Beyond being merely associated with the IPL, Byju’s held the prestigious title sponsorship for Star Sports’ Cricket Live during the latest season. Coinciding with the commencement of the IPL, the company introduced its latest offering, Byju’s Classes.

This association proved highly beneficial for Byju’s, with industry reports revealing a remarkable surge of 2.3 million new users and a substantial 19% increase in combined web and mobile traffic post the IPL. Additionally, WhiteHat Jr., an entity under Byju’s umbrella, marked its debut in the IPL, strategically leveraging the cricketing spectacle to enhance global brand awareness and foster growth.

2. upGrad

In the 2020 IPL season, upGrad, another ed-tech company, marked its inaugural major sports collaboration by partnering with Star India. The company sealed a deal to showcase its latest television ad campaign, strategically aiming to raise awareness not only in metropolitan areas but also across tier I, II, and III markets. The campaign film, titled ‘SirfNaam Ki Nahin, Kaam Ki Degree,’ gained significant traction on social media platforms such as Twitter and YouTube at the beginning of the IPL, setting a positive tone for the season.

This strategic move by upGrad proved highly successful, as the company recently announced an impressive 100% growth since the commencement of the fiscal year. The campaign’s outcomes also debunked the common misconception about advertiser saturation during IPL broadcasts. upGrad witnessed a remarkable 146% surge in daily downloads since the IPL, with 69% of these downloads occurring during the tournament. The brand added a substantial 7.4 lakh users during the IPL, experiencing a 1.5x increase in its average daily downloads.

The Gradual Downfall

Sportswashing- Byju’s: The Untold Story

Byju’s, recognized as the world’s most valuable EdTech company, prominently showcased its brand logo across football grounds in Qatar as an official sponsor of the FIFA World Cup 2022. Despite this extensive international exposure, the company, facing recent reputational challenges and reported financial difficulties, is leveraging the World Cup as an opportunity for reputation recovery and potential income generation in new global markets. This strategic move unfolds amidst ongoing controversies surrounding human rights abuses during the preparation phase for the tournament.

Being a sponsor of the World Cup represents a significant strategic investment for Byju’s as it endeavors to expand its brand globally, aligning with its future objectives. Notably, on the advertising boards along the pitchside, the Byju’s brand transforms to showcase the tagline ‘The Future of Learning,’ positioning itself alongside renowned global brands such as McDonald’s, Budweiser, Coca-Cola, Visa, and others. 

Transitioning from prior engagements in cricket sponsorship in India, Byju’s reportedly allocated $30-40 million to secure its position as an official sponsor of the 2022 tournament, marking a historic milestone as the first EdTech brand to feature prominently at World Cup matches.

On the other hand, Byju’s has been facing a growing wave of criticism, with detractors alleging the company engages in ‘toxic’ targeting of low-income families, employs high-pressure sales tactics, utilizes misleading advertising, and exacerbates pre-existing educational inequalities.

Adding to the challenges, Byju’s recently deferred its financial reporting by 18 months, citing significant financial issues, including reported non-payment by investors.

Through its sponsorship of the World Cup, Byju’s is positioning itself as an aspirational global brand, strategically fortifying its financial stability and paving the way for sustained long-term growth. Sometimes, many of these sponsorship agreements serve not only to attract consumers but also investors. Being a FIFA sponsor elevates a company’s global standing. In the case of Byju’s, the objective is more about attaining international credibility as a financial brand rather than solely an educational one.

Perception

EdTech brands appear to view sports as an avenue to enhance its ‘reputational capital.’ Media and communication researcher Michael Skey suggests that major sports events, like the World Cup and IPL, serve as opportunities for both states and brands to improve their reputations, a phenomenon known as ‘sportswashing.’

Investing in prominent sports tournaments provided EdTech brands with the chance to establish positive associations and gain international visibility, deflecting attention from negative perceptions. The accumulation of reputational capital is crucial for attracting investor interest. This strategy involves enhancing their reputation while diverting attention from internal company issues, all the while benefiting from market advantages of the sport

These developments raise concerns about how major EdTech companies have been exploiting contentious opportunities to secure global reputational capital, market expansion, and profitability. Concerns were raised by consumers that if education is considered a fundamental human right, EdTech firms should commit to being ethically correct in their work culture, not just profit-driven entities pursuing investment and financial gains at any cost.

Incurring Losses

The edtech sector in India witnessed a notable upswing during the COVID-19 pandemic due to school closures and the widespread adoption of online education. However, the year 2022 posed challenges for the industry, characterized by a decline in funding, increased scrutiny of business models, and widespread layoffs.

PwC’s Startup Deals Tracker – CY22 highlighted a substantial drop in venture funding for edtech startups in India, plummeting from $4 billion in 2021 to $1.8 billion in 2022. Significantly, this funding level even dipped below the figures observed in 2020 when the total investment in edtech reached $2 billion. 

Additionally, PwC’s findings indicated a decrease in the number of funding deals within the edtech sector, with only 52 deals recorded in 2022 compared to the previous year’s 88.

The limited funding available in the edtech sector has noticeably impacted its involvement in sports sponsorships and advertising. With less financial support, many edtech companies have had to either scale back or completely stop participating in sports-related sponsorships. Sports sponsorships often require substantial financial commitments, making them susceptible to the financial challenges faced by edtech firms. 

The considerable costs associated with advertising in sports, such as logo placements and event endorsements, demand a strong financial foundation, which becomes challenging with reduced funding. As a result, the funding decline in the edtech sector not only affects core organisational activities but also extends to marketing and brand promotion.

Sports Sponsorship Don’t Always Work for Startups: BYJU’s

Byju’s, the Indian edtech company with Qatar Investment Authority (QIA) among its investors and valued at $22 billion following a $250 million funding round, faced significant criticism when it signed Lionel Messi as a brand ambassador in November. The move drew backlash, especially as it occurred just a month after the company laid off at least 2,500 employees. 

Recently, the co-founder of the Bangalore-based firm confirmed the early termination of its multimillion-dollar sponsorship for India’s national cricket teams. Additionally, reports indicate that Byju’s does not plan to extend its agreements with the International Cricket Council (ICC) or FIFA, the governing body for soccer.

Byju’s initially soared to prominence, leveraging the immense popularity of the IPL and strategic sports sponsorships, solidifying its position as a major player in the edtech landscape. However, the company encountered a significant setback due to a combination of funding challenges and a growing wave of consumer withdrawal. Despite the initial success, the edtech giant had to reevaluate its advertising strategy in sports. 

The decline in funding, coupled with a negative public perception stemming from reports on a toxic work culture, mass layoffs, and allegations of an unethical approach to education, prompted Byju’s to reassess its marketing approach. As a result, the company made the decision to step back from sports advertising, highlighting the delicate balance between financial sustainability, public perception, and corporate responsibility in the evolving narrative of the edtech industry.

Can EdTechs Make a Comeback in Sports?

Byju’s and upGrad, once touted as promising EdTech startups, faced significant challenges that led to their setbacks, largely attributed to a lack of effective strategies and future planning. Byju’s, particularly, heavily relied on its online avatar during the pandemic, focusing predominantly on the immediate needs without a comprehensive vision for the future, rendering it vulnerable. 

EdTech experts are emphasizing on the importance of sustainable growth and prudent resource management. While some major players in the industry faced failures, it is crucial not to let those instances dictate the narrative for others in the business. 

Byju’s, despite being a decacorn, garnered attention for mis-selling and overly aggressive marketing of its courses. This approach, coupled with the promotion of guaranteed placements which was quickly adopted by a few other startups, raised concerns. The struggles faced by Byju’s have served as a cautionary tale for others, urging a more cautious approach and discouraging overpromising or expecting unrealistic growth rates. 

Today, companies are adopting a more measured and strategic stance. Meanwhile, Unacademy’s withdrawal from the IPL, a move driven by its evaluation of the benefits, exemplifies the nuanced relationship between sports and EdTech. Despite challenges, the shared values of discipline and a comprehensive approach make sports and education synergistic, contributing to a more considered approach in the industry.

Conclusion

At present, there is a diminishing interest among investors in edtech companies. Nonetheless, those involved in the industry view this as a phase of recalibration rather than a definitive conclusion. Their perspective is grounded in the fundamental belief that education is an essential necessity rather than a luxury or comfort, suggesting that the current subdued investor interest represents a temporary adjustment rather than a permanent downturn.

This scenario sets the stage for a potential resurgence of both established and emerging players within the EdTech industry. The collective aspiration for these brands to reemerge in the sports landscape must be based on ethical standards, meticulous planning, and enhanced financial stability. 

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