IPL Sponsors Look for Lower Spot Advertising Rates

By Community | February 29, 2012

Key sponsors of the Indian Premier League (IPL), including the Godrej group, Videocon Industries Ltd and Emirates, are renegotiating contracts at lower spot advertising rates and even threatening to drop their sponsorship if their demands aren’t met.

Videocon, for instance, is negotiating with broadcaster Multi Screen Media Pvt. Ltd (MSM)—which telecasts matches on its channel Set Max—for 35-40% lower spot advertisement rates during prime time, but could settle for 25-30% less.

“We will take a call on whether we would remain a sponsor during prime time on matches where KKR (Kolkata Knight Riders) is not playing,” said Anirudh Dhoot, director, Videocon, who has a three-year sponsorship contract with KKR. “Additionally, we will spend another Rs1-2 crore on corporate stadium boxes for tickets for the main matches,”

An IPL insider, who did not want to be identified, said Emirates had terminated its sponsorship of Kings XI Punjab. Emirates didn’t say whether this had happened.

“This year we are still under discussions and our plans are yet to be finalized,” said an executive at Emirates who did not want to be identified.

Emirates was one of the main sponsors of Kings XI Punjab last year. It has been associated with the team for two years and also advertised during prime time in the third edition of IPL.

“A lot of the advertisers are looking for lower cost of sponsorship or lower rates per 10-second spot. We have to wait and watch who blinks first,” said Punitha Arumugam, chief executive officer, Madison Media Group, a media buying company.

For the Godrej group, IPL has been an important platform, including a corporate rebranding in the first edition in 2008. Its social media exercise Gojiyo.com was showcased in 2009, reality show Godrej Khelo Jeeto Jiyo in 2010 and consumer connect initiative Godrej Power Play in 2011.

In 2010 alone, the firm spent more than Rs50 crore ($1million) on IPL. But this year, the group is undecided about its participation.

“We are currently evaluating our media plans for the year and haven’t yet taken a decision on the IPL sponsorship,” said a Godrej spokesperson.

Rohit Gupta, president, network sales, at MSM, denied that his company was renegotiating advertisement rates. He said they have gone up marginally to Rs5-5.25 lakh for a 10-second slot and insisted that rates would not be cut.

“The IPL rating had gone down last year because of the World Cup, with some months of intense cricket, but we expect it to go up this year. The buzz will return,” said Gupta.

IPL teams also said they weren’t too perturbed as their sponsorship deals were all long-term ones.

“Wariness among advertisers always seems to happen at the beginning of every season,” said Raghu Iyer, chief executive officer of the Rajasthan Royals. “A couple of weeks closer (to the tournament), everyone wants in. There is concern to some extent, but once Sachin (Tendulkar) gets his 100th hundred, all these will go out of the window.”

Dhunji Wadia, president of advertising agency Everest Brand Solutions, agrees. “IPL is arguably the biggest sports event in the country. It has the power to bring the entire country to a standstill,” he said. “I expect all the cynicism to vanish the moment the tournament begins.”

Chennai Super Kings has only one slot to be sold, according to Rakesh Singh, joint president, marketing. “We don’t want to sell our spots at a lower price, (we sell) only to people who are paying top dollar,” he said.

by Ismail Uddin