Will Pepsi change the IPL game?

Our Bureau Mumbai | Updated on November 24, 2017

Pepsi has changed the game, of Indian Premier League (IPL). Not just by bagging the title rights for the next five years and shelling out 60 per cent more than earlier sponsor DLF, Pepsi has also restricted competitor Coca Cola with limited ad spots.

Could Coca Cola win this match though, given the downtrend in IPL viewership?

Pepsi paid the BCCI Rs 396.8 crore for title sponsorship rights for the next five years. Earlier in 2008, DLF had shelled out Rs 250 crore to purchase the title rights.

Even as marketers debate that Pepsi has paid too high a price, given that viewership for the IPL has taken a drubbing in the last three seasons, in its game of one upmanship with Coca Cola, Pepsi is to utilise the platform and spread its message across all media.

Apart form its beverages portfolio, Pepsi is to leverage its packaged snacks brand Kurkure, Lays and Aliva through IPL.

“The deal restricts Coca Cola to such an extent that it can now buy only limited ad spots at a rate that is 20 per cent to 30 per cent higher than what Pepsi has to pay,” said a media planner.

An official in the know at BCCI, who spoke to Business Line on the condition of anonymity said, “DLF had acquired the rights for Rs 200 crore for a period between 2008 and 2012 and was required to pay Rs 40 crore per year, while Pepsi has paid about double that of DLF at Rs 79 crore per year. Pepsi has also signed a Rs 50-crore deal with MSM (Multi Screen Media, formerly SET India) to become one of the two presenting sponsors and will spend another Rs 16-18 crore to be the drinking partner of all teams except Mumbai Indians.”

Pepsi is also spending Rs 70 crore to take all possible air and on-ground sponsorship and branding deals for IPL, the official said.

Though Pepsi's sponsorship is set to add some extra fizz to the cola wars, could the biggest benefactor be Coca Cola, given the massive slide in eyeballs?

A viewership trend of the past IPLs have shown that the matches are losing eyeballs. TRPs (television rating points) have been declining since the past two years. As per TAM, TRPs for IPL5 stood at 3.27, for IPL4 it was 3.39, while TRPs for the 1st, 2nd and the 3rd seasons were 4.81, 4.17 and 4.65, respectively.

Moreover, a FICCI-KPMG report notes that sports genre viewership declined by 26 per cent in 2012, and that there was a proportionate decline in sports channels’ ad revenues as well in 2012.

The report adds that one of the main reasons for the decline in sports ratings and hence sports ad revenues, was the muted response to IPL5.

“Rationalising of rates by IPL will help get more advertising but, since the first quarter of this year, ad spends have not been very encouraging, IPL revenues can increase only if TV advertising spends pick up,” said an official with a media buying agency, who has booked ad sports.


Published on March 28, 2013

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