- As IPL’s bio bubble breaches and two players Varun Chakravarthy, Sandeep Warrier test positive for COVID-19, BCCI has suspended IPL for this season.
- Experts tell us about the impact cancellation of India’s biggest sporting tournament and advertising extravaganza can have on our brands and the media industry.
While the recent spike in COVID cases has brought our country to a grinding halt and forced every sporting activity to be either postponed indefinitely or cancelled, IPL continued, becoming an escape from the grim reality for many. It was acting as a bandaid on our wounds -- temporary yet effective.
IPL is also one of the biggest advertising carnivals and this year, reports indicate that more brands have invested in the tournament. According to TAM Sports, average ad volumes during the first 22 matches of IPL 14 grew by 2% compared to IPL 13. Tally of categories grew by 10%, whereas count of advertisers and brands decreased by 3% and 9% respectively in IPL 14 than IPL 13.
When brands started buying ad spots on IPL and bidding on the sponsorship deals, the COVID cases in India were going down and the economy was improving. Advertising agencies usually work on their IPL pitches for at least two months and spend many sleepless nights executing their ideas. Media planning and buying agencies also wait for IPL to buy the best deal for their clients.
However, the situation is getting severe with each passing day. Given the gravity of the pandemic in India, there has been an ongoing debate on whether IPL should be pulled down. Now, after a few players have tested positive and the bio bubble has been breached, BCCI has decided to suspend IPL. We reached out to experts to understand how cancellation of IPL can impact brands.
Vani Gupta Dandia, Founder, CherryPeachPlum Growth said cancellation might add to consumers' anxiety.
"I understand there are a lot of us in dire circumstances but canceling IPL doesn't help people get well. It's a welcome distraction from the otherwise grim news we're inundated with. Cancellation will also cause further anxiety and fear - we need some markers of normality. Lives, livelihoods, and mental wellness are all important in equal measure," said she.
Lloyd Mathias, Business Strategist and former Marketing Head of PepsiCo, Motorola and HP APAC said, “The continuation of the IPL amidst the pandemic is questionable now, given that the secure bio bubbles have been breached. But even aside from this breach, the continuation points to a certain disregard for the suffering and misery millions of Indians are facing.”
A Duff & Phelps’ report had recently said that the value of the IPL Ecosystem was estimated to be impacted by nearly $1 billion only due to cancellation and without capturing the impact of the economic slowdown that might follow. Last year too, the pandemic had made a dent on the league. The IPL Ecosystem’s value plunged by 3.6% to Rs 45,800 crore during season 13 from Rs 47,500 crore IPL 2019.
The report further said that this was largely due to Vivo pulling out of the title sponsorship deal, additional costs involved to create a secure bio-bubble environment, lack of gate receipts, etc. The individual franchisees also saw a reduction in their brand values in 2020 compared to 2019, largely due to reduced franchisee-related sponsorship revenue, loss of gate receipts, reduced food and beverage (F&B) revenue, and certain teams’ on-field performances and off-the-field issues. The new sponsor, Dream11, had entered at a steep discount, and the IPL had to take a hit of Rs 218 crores in sponsorship revenues in 2020.
However, Mathias reminded us that BCCI insures IPL.
“If the IPL does get called off at this stage it will certainly hurt financially, but remember the BCCI is a very rich body, and this financial loss is an insignificant price to pay in comparison to the larger catastrophe all around. Also, insurance may help cover part of the damages, suffered by the teams, the sponsors, and the broadcaster,” said he.
Star Sports has roped in 18 sponsors and over 100 advertisers across multiple brand categories and many small businesses have invested a large amount of their marketing budget on IPL this year.
BCCI has also gone all out in its bid to host IPL this year. According to media reports, BCCI is slated to earn Rs 3,500 crore in advertising revenue from the 2021 season. Star charged around Rs 8 to 10 lakh for a 10 seconder last year. Star has previously charged brands Rs 25 lakh for 10-second slots during the India vs Pakistan ICC World Cup match and between Rs 16 to 18 lakh for other World Cup matches. In comparison, the IPL ad charges are still reasonable but the rates are among the costliest for a programme in the country.
So, how badly will this hurt Indian brands?
Karthik Srinivasan, Social Media Expert and Independent Brand Consultant, answered, “I don't think the brands, per se, would be impacted, not at least in terms of branding. They are already hugely affected in terms of demand, and sales, because the 2nd wave has washed over everything else.”
Three days before IPL began, the number of positive cases in India had crossed 1,25,89,067, and the death toll stood at 165K -- and it was growing with each passing day. Harish Bijoor, Brand Guru and Founder, Harish Bijoor Consults Inc said that brands would have analysed every situation before the tournament began.
Bijoor said, “The pandemic is all about uncertainty. IPL and its fixtures are part of this uncertainty. Yes, brands will have their plans tampered with, especially with IPL money outlays kept in mind. However, the important point is that health comes before everything else. The bubble has burst to an extent. The bubble format of IPL has been breached with yesterday's incident. Brands have to grin and bear it. In reality, nothing is a surprise anymore. Brands have visualised this possibility, and it has been factored into plans for sure.”
Vani Gupta Dandia, on the other hand, shared how months of hardwork will go down the drain if IPL is canceled.
"After 2020 a lot of pent up demand was expected to manifest in 2021. After a disappointing 2020, advertisers were betting big on IPL. Spots were booked early this year, when there was hope of the COVID pandemic ending in 2021. IPL in particular brings the house together- everyone loves cricket. Annual plans and quarterly targets are constructed around the spurt in demand expected from the advertising spends on IPL. So cancellation at this stage will mean desperate scrambling to rework the media plan, besides losing time."
Experts we spoke to said whether IPL continues or not, brands should reconsider advertising during what is possibly one of the worst calamities we have faced in recent times.
Srinivasan highlighted how ad spend will be a smaller wound but rebuilding reputation might take eons.
“The brands continuing to advertise happy, nice things to buy would, at one point, seem utterly insensitive and out of touch. So, in a way, IPL being cancelled is perhaps for the best for these brands, despite the money being invested. After all, reputation is more important than money in the long run, and the brands being presumed to be insensitive and out of touch with the horrendous reality unfolding in our country, is far worse for them,” said Srinivasan.
Mathias also said that functional advertising can wait.
“It would be wonderful if the IPL uses its reach and financial muscle to amplify and help people. Teams, sponsors, cricket stars can come together and pledge part of their incomes to support this humanitarian disaster. This will also help reduce the valid feeling of the IPL’s tone-deafness, to the misery all around. And yes, for brands the best thing to do in the present circumstance is to help with relief in any way possible – from financial, procuring much needed medical supplies, to using their media assets to amplify SOS and help messages,” said Mathias.
*Article updated at 1:15*