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Pepsi's 'strategic' IPL exit

News, 22 October 2015
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MUMBAI: The scandals that have regularly surrounded India Premier League cricket were the headline reason for Pepsi ending its sponsorship of the tournament but several marketers have argued that the brand had already achieved its objectives and wanted out.

Earlier this week Pepsi withdrew as IPL sponsor after three years of its five-year contract, for which it bid Rs 397 crore. And while it did not specify its reasons for doing so, the widespread assumption has been that it no longer wished to be associated with an event that has seen players and team owners accused of betting scams and banned from future participation.

But Sai Narayan, head/brand, PR & social media at insurance portal Policybazaar.com, described it as a "smart move", suggesting to Exchange4Media that "the task of the brand, which was to ride on the biggest reach property, IPL, was pretty much done".

"Pepsi has become well established through its association with IPL," he said, adding: "If you notice, Pepsi is also associating with other sports."

The soft drinks giant may invest some of the money saved from its early exit from the IPL contract – an estimated Rs 160 crore before adding in ad spending during the competition – in fast-growing and popular TV sports like kabbadi and football.

As another senior marketer commented: "Sticking with the [India Premier] League would result in spends being parked on the league instead of being used more wisely for the brand."

He also doubted that marketers would be deterred from using the IPL: "It continues to be one of the most watched events in India and brands will flock to it."

The truth of that is evident in the speed with which IPL organisers have put a new sponsor in place, with Chinese smartphone brand Vivo picking up the slack.

Narayan noted that it made more sense for newer brands to ride on the back of the country's most popular sport.

"An e-commerce brand sponsoring India cricket will give it instant reach," he said. "The value it will generate for such a brand will be much more than what they would have spent."

Data sourced from Exchange4Media; additional content by Warc staff

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