Vivo has pledged Rs 2199 crore to ensure its most noticeable presence in the IPL over the next five years. Rupee 439.80 crore per annum to be precise. But, did the Chinese smartphone brand realize what all IPL properties the money could have bought.
Is the amount committed a wise spent. Yes. The Chinese proverb “Cheap things are not good; good things are not cheap” will make you believe. Vivo has found values in the IPL as its growth driver. The Good thing for the brand, which it will not find cheap for any value.
Did the brand show a desperation to offer the kind of values that have come as a pleasant surprise for the recipient too? The Board of Control for Cricket in India, while putting the base price at Rs 120 crore did not expect more than 25% evaluation on the minimum base price.
“Initially, we thought the bid for the next five years should close at around Rs 700 crore to Rs 750 crore. But when three-four mobile brands bought RFP documents, we did realize there will be intense fight in that segment. That was the time, we speculated the successful bid to be in the range of Rs 180 crore per year. Can you believe, Rs 1,430 crore second highest bid by Oppo would have also taken us by surprise. Rs 2200 crore, that we won’t event dream of, forget about a wild thought,” says a BCCI official. “We are calling it a Chinese jackpot,” he laughs.
In aggressive sports based marketing approach, the Chinese big ones have failed to realize the potential of GEC platforms. “I will not like to comment on their strategy. Vivo has displayed a consistent growth trend. This may be attributed to the VIVO-IPL connection. However, for 400 crore (rupees), you can be across all media in the country throughout the year. This will include prime time slots on the news channels topping BARC charts, titles of all mega GEC shows like KBC, the Kapil Sharma show, Khaton ke Khiladi, Big Boss, so on an so forth,” says a veteran Media Buying professional. “Please don’t quote me. It will create a conflict of interest. Vivo are not my client”
What Vivo has committed may further be evaluated in perspective, based upon what the money could have bought in the IPL. The Rs 440 crore could buy all team’s title sponsorships, along with a bagful of value added deliverables for as many as four years. From franchisees perspective, this amount can acquire players for seven teams. It could have bought more than twice the total IPL inventory on STAR Sports’ digital media platform Hotstar, or ensured that every third IPL commercial space on host broadcaster Sony belonged to the brand.
“The one number that will haunt Vivo for its VIVO-IPL title rights over the next five years is the difference between Rs 2,199 and Rs 1,430 crore! Many will question the logic of this investment for sure as the common holding back-end company,” says Harish Bijoor, brand and business strategist and founder director at Harish Bijoor Consults Inc.
“The thought is a simple one. There is a big synergy between IPL cricket and the smartphone. The potential of upgrades and replacement for Vivo is huge. Vivo sees IPL eyeballs to be focused eye balls for category. Therefore this big gamble. Well this money is justified if Vivo can cobble together revenues that are multiple of five on this investment.”
Bijoor is right. Those who had the pressure of securing the bid “at any cost” will now be stressed and accountable for that Rs 769 crore difference.
“It is a big commitment. There can be repercussions. Market has seen a glimpse of those repercussion in the Vivo-IPL deal,” says Ashish Chadha, sports business veteran and Chief Executive, Sporty Solutionz.
Team sponsorship in Indian cricket, according to ESP Properties’ SPORTING NATION IN THE MAKING – IV report, has been Rs 429.4 crore in year 2016, a growth of 25.85% over the previous year. This further puts Vivo’s path-breaking bid in perspective.