July 2010
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Commonwealth Games yet to excite sports marketing firms


The Commonwealth Games (CWG) are only a few months away, but clients of sports marketing agencies do not appear to be queuing to get a slice of the advertising pie.


There are multiple opportunities in terms of sponsorship sales, sponsorship activation, ticketing, corporate hospitality, ceremonies, athlete management, advertising and communications, and new media. However, Hiren Pandit, managing partner of GroupM ESP, says, "None of our clients has shown any interest in the Games so far. Post-Games, there will be some sports celebrity projects, but not on a large scale."


Indranil Blah, sports head, Kwan, concurs, "The Commonwealth Games have been surrounded by many controversies, including political interference and being over-budget. This has kept companies sitting on the fence." Blah says his agency has received queries from a mobile handset manufacturer, a mobile operator and an FMCG company to gauge marketing opportunities during the Games. But nothing has been finalised yet. "Once the event draws nearer, companies may seal the deals," says Blah.


The Games committee is targeting almost Rs 1,600 crore from brands participating in the Games alone. If it is able to exploit new media, like the recent deals by IPL with Youtube (Google), vRock and July Systems, it can expect business well in excess of Rs 2,000 crore, say analysts. Yet, only two companies have confirmed their association with the Games — Coca-Cola, which is the official beverage partner, and Hero Honda. The remaining comprise public sector units like the National Thermal Power Corporation, Air India, Indian Railways and Central Bank of India.


Agencies see more opportunities in corporate marketing accounts than sports celebrity management. "In India, only cricket celebrities sell. Recall, Abhinav Bindra- and Vijender Singh- endorsed marketing assignments...ads went off within six months of the signing," points out Blah.


Moreover, while corporate marketing deals fetch an agency 10-15 per cent commission of the deal, celebrity management gives them only 5-10 per cent of the signing amount, which is not huge in case of non-cricket celebrities. Agencies also believe the Organising Committee (OC) has not been very active in marketing the Games as it was more occupied with infrastructure issues. A separate division dedicated to marketing opportunities would have helped, they reasoned. IPL, for instance, has a separate team to handle marketing deals.


Another reason is that the sponsor rates are considered exhorbitant considering the return on investment (RoI). The OC, for instance, has categorised sponsors as lead partners who will get sponsorship worth Rs 100 crore each, while partners would get Rs 50 crore worth of sponsorships each.


An executive of an agency, not wishing to be identified, argues, "If you compare the rates with IPL, IPL3 charged Rs 25 crore for ground sponsoring, which is way below the Commonwealth Games rates. Besides, IPL gives great value. In case of the Games, there’s no clarity on exposure it will give to the sponsors." He adds that the management committee must re-package the deal to increase RoI and attract private companies.


In other countries, companies avail opportunities thrown by such events in large numbers. Rajesh Aggarwal, president, Dentsu India, says, "The recent experience at the Vancouver Games has clearly shown the potential of large format sports events to connect with the population of the host country."

 

 
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