Pepsi plans Rs 150-cr IPL splash to take on Coca-Cola

21 Feb,2013

By Ratna Bhushan


PepsiCo is spending almost Rs 70 crore on top of its title sponsorship deal of the Indian Premier League to bag almost all possible on-air and on-ground sponsorship and branding deals for the upcoming T20 tournament.


The US beverage and snacks maker has signed a Rs 50-crore deal with Multi Screen Media, owners of SET Max channel, to become one of the two presenting sponsors of the event, and will cough up another Rs 16-18 crore to become drinks partners of all eight IPL teams expect Mumbai Indians.


Overall, it will be spending almost Rs 150 crore, or Rs 3 crore per day, on the 50-day tournament in what is seen as a strategy to block out arch rival Coca-Cola from the most lucrative sporting event in the country. In November, PepsiCo had bagged title sponsorship of IPL for five years for Rs 400 crore, or Rs 80 crore per year.


Homi Battiwalla, senior director, marketing (colas, juices and hydration), at PepsiCo India, justified the huge investment, saying IPL is ‘the most relevant property’ in the season. “There’s a lot of opportunity to maximise the valuation… we are optimistic we will generate much more value over what we have invested,” he said.


Experts said while the strategy of blocking Coke in peak summer season will surely help PepsiCo in branding and consumer connect, PepsiCo may be over-spending on a tournament which has been seeing declining ratings over the past two years. Also, it will have to back the plan with aggressive marketing strategy to make the most of it.


“This could be the revival of the cola war,” said Basabdutta Chowdhury, CEO of Platinum Media, a division of media buying group Madison World that buys media for Bharti Airtel and ITC. “Though IPL coincides with peak season time for beverages, the investments are huge and will have to be backed by a robust marketing plan,” she added.


The IPL will be played between April 3 and May 26. Navin Khemka, managing partner at media buying firm Zenith-Optimedia, said Coca-Cola may still buy advertisement spots. “I am not sure if they can be blocked off,” he said. As a presenting sponsor, PepsiCo will get a major share of advertising time on Set Max, which will telecast the matches live. Coca-Cola can buy limited ad spots at about 15% higher rates than what Pepsi-Co paid.


An official directly involved with the developments said PepsiCo has bought 210 seconds of advertising time per match out of a total of about 2,500 seconds of ad time per match. PepsiCo’s Mr Battiwalla said: “The broadcast sponsorship allows us a very strong play of our portfolio. We are working on a series of customised innovations with MSM to maximise our association with the broadcaster.”


Apart from its drinks brands, including Pepsi Cola, lime-lemon drinks Mountain Dew and 7Up, Mirinda orange, Aquafina water and Tropicana juices, PepsiCo will promote its snacks brands Kurkure, Lays chips and Aliva biscuits through IPL.


It is also in advanced stages of negotiations with eight IPL teams to tie up as pouring rights partner, while Mumbai Indians already has a deal with Coca-Cola.


With every team charging anywhere between Rs 50 lakh to Rs 2 crore for pouring rights and team activations, PepsiCo will end up paying close to Rs 16-18 crore to the teams.


Coca-Cola was also in talks to buy pouring rights for the nine IPL teams, but opted out because it believes the valuation doesn’t justify the asking prices, a person aware of the beverage maker’s plans said.


“Coca-Cola is minimising its association with the IPL and instead is looking to maximise branding activities outside of the IPL,” the person said. A Coca-Cola spokesperson declined to comment on the IPL association.


Pouring rights gives a beverage maker exclusive rights to serve its beverages in the team’s home stadiums. The individual team rights also allow it to take space on T-shirts and jerseys of teams and advertise on perimeter boards at the stadium. Pouring rights is not a central sponsorship, and deals have to be inked individually between teams and interested companies.


Meanwhile, Rohit Gupta, president of MSM, said the broadcaster expected 20% growth over last year from IPL. “We have 8-10 presenting sponsorship slots in addition to ad spots,” he said.


This despite on-air rates having been cut this season by about 15%, in line with declining viewership. Data by TAM Media Research shows that the first 60 matches of IPL last year recorded average ratings of 3.27, down from 3.39 in IPL 4 and over 4.0 in the first three IPL tournaments.


MSM has released a marketing campaign for the IPL with Bollywood director Farah Khan, and this season, the tournament will be simultaneously telecast on all MSM channels – Set Max, Sony Six and Sony Six HD.


Source:The Economic Times

Copyright © 2013, Bennett, Coleman & Co. Ltd. All Rights Reserved


Post a Comment 

Comments are closed.

Today's Top Stories