A marketer’s dream gone sour.163 crore losses

Dismal World Cup Showing by Men-In-Blue Hits Corporate Biggies With Over Rs 163 Crore Losses

THE Indian team’s loss to Sri Lanka at Trinidad Friday night, virtually throwing men-in-blue out of the reckoning for the second-stage in the ongoing ICC World Cup, has upset many a marketer’s neatly laid out business plans, big time. India’s dismal showing in the Caribbeans, a source of much heartburn and anxiety amongst advertisers has clearly turned into panic now. Marketing and media plans are being furiously reworked to salvage big spends around the World Cup, and long faces abound across some of corporate India’s marquee names — Pepsi, LG, Reebok, Visa, Nokia, Videocon, Hero Honda, Hutch, Samsung et al. According to Mindshare, a media buying agency, India Inc’s losses would tot upto over Rs 163-crore. And this just on the Rs 350-400-crore advertising monies that they had committed with the official broadcaster, Sony Entertainment Television (SET). Mindshare’s estimates are based on the premise that viewership for the rest of the World Cup matches, sans India, will drop as much as 50%. “Advertisers are now talking about the loss in profits. We are looking to strike an amicable resolution with Sony on this issue,” says Manish Porwal, managing director, Starcom India (West & South), another big media buying firm. With majority of viewers gone, and a sense of being let down amongst the few die-hard game fans who may still continue to follow the goings on, clearly this wasn’t a scenario anyone provisioned for. India’s early exit is bad news for all four ICC’s global sponsors — Pepsi, Hutch, Hero Honda and LG —all with big India businesses, and still bigger plans around the World Cup cricket in a cricket crazy country. Cola major, PepsiCo, one of World Cup’s four global sponsors, has decided to pull out its gung-ho on India ‘Ladega To Jeetega’ ad campaign. “The campaign has lost its relevance. We are taking it off and will replace it with some other Pepsi campaign,” said Rohit Ohri, managing partner, JWT, Pepsi’s ad agency. In fact, Pepsi had hinged its sales strategy for the coming summer season around World Cup Cricket and therefore tailored a lot of its forthcoming advertising around India’s progression at the tournament, all of which will now have to be replaced with product-centric, generic ads. Reebok India, another big advertiser on SET for the World Cup, on the other hand has decided to totally shift its focus away from cricket, for now. “Viewership could come down drastically. Things could bounce back with the Indian team beginning to perform once again (after the World Cup), but we will focus more on fashion-related advertising for now,” said Subhinder Singh Prem, MD, Reebok India.

Looking for other events

The durables industry, which was pinning hopes on World Cup to push sales, is already searching for other events to ride on. “Sales will be impacted for a couple of days since sentiments are down. But overall we will hope to achieve our targets from other consumer promotional activity. For example, we have a promotion planned around the festival of Baisakhi next month,” said R Zutshi, deputy MD, Samsung India. “Yes, our sales will be impacted, but we hope people will still see some matches,” says Videocon MD Venugopal Dhoot. Such is the disappointment with India’s imminent exit, that not even SET would be spared from this sudden downturn in business fortunes. Mindshare estimates that SET would have seen revenues gallop another 16%, if not more, had India made it to the Super 8. When contacted by ET, Rohit Gupta, EVP, ad sales, SET, said that only 5% inventory for the six India matches would get hit with India losing to Sri-Lanka. Nimbus Communications, the adtime seller for public broadcaster Doordarshan is more categorical. “Though there have been no cancellations as yet, we’re awaiting the result of the Bermuda-Bangaldesh match (Monday, March 26). And if it becomes clear that India is indeed out, we’ll replace the six India matches with other key ones, which will mean a clear drop of 40-50% in ad rates,” said Harish Thawani, Chairman, Nimbus. Brands such as Pepsi, Visa and Reebok, would be most impacted with India’s exit as they had to now scrap all their cricket theme ad campaigns. Infact, it could backfire to have Sachin, who is being used heavily by ITC or Dhoni, brand ambassador for Videocon, at this point in time. “Any brand which has Sachin or even Dhoni would have a negative fallout at least for the next couple of weeks considering the consumer sentiments,” says Sundar Raman, MD, Mindshare. But other global sponsors such as Korean chaebol, LG considers its 7 year long contract with ICC worth $35 million as an investment on a global level, “It is a worldwide investment for us and it’s not like the non-India matches don’t get any viewership. There is always a risk involved in cricket,” says Girish Rao, VP, sales & marketing, LG India. Such is India’s (business) hold on the game that even the cricket’s governing body will be sorry that Team India crashed out so early in the tournament. ICC’s losses are also estimated to be huge considering the significance of India in the scheme of things as far as sponsorship deals are concerned. Close to three-fourths of ICC’s revenues come from the Indian sub-continent, and with neither Pakistan nor India in the fray, it would have a negative impact on ICC’s global sponsorship deals, talks for which are currently underway. The ICC had hiked the per sponsor fee to about $60-70 million per sponsor, for the eight-year period between 2007-15. “This loss will impact future deals since sentiments on Indian cricket are very low,” said Basabdutta Chowdhury, COO, Madison Media Plus.

Courtesy: EconomicTimes
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