Indepth: Ground realities of sports sponsorships growth in transformative times

The sports segment grew 11% in 2023, as per FICCI EY 2024 M&E report. However, media spends declined by 1% and comprised 48% of the segment’s revenues as compared to 53% in 2022.

The report further reveals that sports sponsorship revenues grew by 24%, with Cricket playing a pivotal role in driving sponsorship growth, contributing to 79% of the overall sponsorship revenue, while emerging sports constituted the remaining 21%.

Enabling this growth was the busy schedule of the Indian men’s team, which participated in 64 international games, encompassing the Cricket World Cup, World Test Championships, and the Asia Cup.

Overall endorsements witnessed a robust 24% growth in 2023.

536 brand endorsement deals took place across various sports in 2023, reveals the FICCI-EY report, of which 436 endorsements, contributing to 87% of value, were attributed to cricket.

For decades, cricket has reigned supreme in the realm of Indian sports sponsorships. Its massive viewership and passionate fan base make it a natural magnet for brands seeking national recognition. However, a new wave is crashing onto the shores of the sports sponsorship market, bringing with it a shift towards diverse sports.

Growing fan base of Kabaddi and more

Take kabaddi, for example. This fast-paced, adrenaline-pumping sport has enjoyed a meteoric rise in popularity thanks to professional leagues and televised matches. Brands are recognizing its potential to reach specific demographics, particularly young adults, and are increasingly associating themselves with kabaddi teams and leagues. Similarly, football has witnessed a surge in popularity, particularly among the younger generation, making it an attractive avenue for sponsors seeking to connect with this specific audience.

This diversification is driven by a data-driven approach that transcends mere viewership numbers. Brands are now utilizing analytics to consider factors like social media engagement, fan demographics, and brand fit. This allows for more targeted partnerships and a higher return on investment.

Furthermore, sponsorships are no longer confined to simple logo placements on jerseys. Brands are adopting engaging activation strategies like fan contests, interactive experiences, and co-branded merchandise to create deeper connections with the audience. Additionally, digital marketing integration plays a crucial role in amplifying the reach and impact of sponsorships. Brands leverage social media platforms, influencer marketing, and online content to extend their reach beyond the stadium and engage with fans across digital spaces.

This evolution extends beyond just maximizing brand recognition. An increasing number of sponsors are focusing on grassroots development by partnering with programs that nurture young talent in emerging sports. This creates a long-term association with the sport, fosters loyalty among young athletes and fans, and contributes to the overall growth of the sport itself.

Finally, environmental consciousness is also playing a part in shaping the future of sports sponsorships. Some sponsors are seeking partnerships with environmentally conscious teams or leagues, reflecting a growing societal concern for sustainability.

It is a fact that the Indian sports sponsorship landscape is undergoing a dynamic transformation. As consumer preferences evolve and technology opens new avenues, brands are adapting their strategies to reach diverse audiences and create authentic connections with fans. This shift towards niche sport sponsorships, data-driven approaches, engaging activations, and socially responsible partnerships is likely to continue, paving the way for a more dynamic and impactful sports sponsorship ecosystem in India.

Dynamic and diverse

The sports sponsorship landscape has become more dynamic and diverse. Brands are adapting to the evolving preferences of fans and leveraging new data-driven approaches to maximize the impact of their sponsorships. There has been an increasing focus on niche, non-mainstream sports, changing the dynamics of sports sponsorships and partnerships.

Sports sponsorship in India has undergone a significant transformation over the years, moving beyond traditional sports like cricket to embrace a diverse range of sports such as kabaddi and football, observes Saurabh Arora, Chief Commercial Officer, Punjab Kings.

This evolution, adds Arora, reflects a broader shift in consumer preferences and the growing popularity of non-mainstream sports. “The landscape of sports sponsorship now offers brands opportunities to engage with a wider audience and tap into new markets. By diversifying their sponsorship portfolios, companies can reach different demographics and enhance their brand visibility. This shift highlights the need for strategic planning and adaptability in sponsorship strategies to align with changing trends and capitalize on the evolving sports culture in India,” he says.

The landscape of sports sponsorship has evolved massively in the past few years, especially post-pandemic, says Shubhangi Gupta, Co-Founder, SportVot.

“With new leagues and tournaments coming up for various sports including Kabaddi, football, volleyball and even Kho Kho, new avenues have opened up for marketers to take their brands to the consumers. The popularity and success of these leagues certainly have shown promise to the brands’ investments, and that has translated to a more open-minded approach from marketers to invest in non-traditional, niche sports not just at the professional Tier -1 level but also at the grassroots, domestic level. With these games being live-streamed, brands now have a better way to gather clear and true understanding about the popularity of the sport within the masses. The live streaming of these games has provided a certain sense of legitimacy for brands to invest and support these niche sports, especially at the local level,” says Gupta.

New parameters

With the increasing diversity of sports events and formats, advertisers and marketers adopt new parameters when it comes to selecting sports properties. And a lot of factors influence their choices in the dynamic and competitive sports sponsorship market.

When selecting sports properties to sponsor, advertisers and marketers consider the popularity of the sport, target audience demographics, brand alignment, exposure opportunities, sponsorship objectives, and the size and duration of the sponsorship deal, says Saurabh Arora.

According to him, factors influencing their choices include the rise of non-cricket sports like football, kabaddi, and badminton, the growth of sports culture in India, the increase in matches and tournaments, and the availability of television and digital broadcasting platforms for wider visibility.

“As Punjab Kings, when signing sponsors, we focus on creating strategic partnerships that align with our brand values and resonate with our target audience. We aim to engage with sponsors who share our commitment to promoting sports diversity and supporting emerging sports properties beyond cricket. By collaborating with sponsors that complement our vision and values, we enhance our brand visibility, engage with a wider audience, and create meaningful connections with fans across different sports platforms. Our sponsorship decisions are guided by a deep understanding of the evolving sports landscape in India and a dedication to fostering long-term partnerships that benefit both our franchise and our sponsors,” says Arora.

Shubhangi Gupta feels that the availability of choice is itself the biggest USP while onboarding the brands. According to him, the sheer scale at which sports events are taking place in India currently and with each one having its own distinct audience/ community has been a key factor for brands to invest. “But speaking more specifically, the geographies that these tournaments cover has a significant impact on brands’ decision-making process, because investing in certain sports properties help them get to target or reach out to their desired geography/region in a more customised or personalised manner. Another parameter driving the decision is the viewership and the size of the community.”

Return on investment

In light of the evolving sports landscape, it is important to understand the key factors that determine the return on investment (ROI) for sponsors and advertisers. The measurement and assessment of ROI has changed over time, especially with the proliferation of various sports events and platforms.

Saurabh Arora reckons that the return on investment (ROI) for sponsors and advertisers in the evolving sports landscape in India is determined by various key factors. These include, he explains, the popularity of the sport, target audience, demographics, brand alignment, exposure opportunities, sponsorship objectives, and the size and duration of the sponsorship deal.

“To help sponsors measure ROI, we utilize various metrics and methods, such as media value estimates using Yougov reports, brand awareness surveys, lead generation tracking, customer loyalty assessments, and social media engagement metrics. We also consider factors like target audience demographics, brand alignment, exposure opportunities, sponsorship objectives, and the size and duration of the sponsorship idea. By analyzing these factors comprehensively and utilizing methods like marketing mix modeling, social media listening, consumer market research, and holistic ROI calculations, we help sponsors make informed decisions for future investments,” says Arora.

Recently, brands have started to realize the impact of sports, not just in terms of ROI but also awareness at the local level, says Shubhangi Gupta. “We lately have been educating brands on how you have to look at sports not from a sponsorship lens but mainly from a 360 degree campaign which is also driving impact. Now, brands are gradually realising that the impact of supporting sports or sports people is not just instant returns but is a long-term investment for creating a mark in the minds of the common man.”

The implications

The overall financial investment in sports sponsorship has grown over the years, with new trends emerging in terms of the amount of money allocated to different sports properties. And there are implications these changes have for the sports sponsorship industry as a whole.

According to Saurabh Arora, the overall financial investment in sports sponsorship in India has experienced significant growth over the years, reaching $2.7 billion from $1.3 billion just five years ago.

He observes that cricket remains dominant, accounting for 85% of the total spends, with emerging sports like football, kabaddi, and marathons also seeing increased sponsorship investments.

“The rise in cricket endorsements is attributed to a higher number of matches and the addition of new teams, while endorsements from other emerging sports have also increased significantly. Factors driving this surge include the growing sports culture in India, the rise of non-cricket sports leagues like the IPL and ISL, the increase in matches and tournaments, and the availability of television and digital broadcasting platforms for wider visibility. The shift towards digital platforms for sports advertising is also notable, with digital ad spends on sports rising by 112% to Rs 2,045 crore in 2022. These changes reflect a revolutionary transformation in the Indian sports ecosystem, offering brands opportunities to tap into the passion and loyalty of Indian sports fans through strategic sponsorship investments,” Arora concludes.

“Lately, with live streaming being possible at the domestic level, we have seen a shift in investments in sports, not just from a brand perspective but also from an investment perspective in sports-related enterprises. Otherwise, which other grassroots-focused startup, apart from SportVot, do you see being funded by such esteemed investors? Certain brands and agencies have also started to explore opportunities to maximise their reach via domestic sports. I feel slowly brands will be benefiting massively by taking on the opportunities that grassroots sports has to offer,” says Shubhangi Gupta.

In conclusion, the landscape of sports sponsorships in India is experiencing a dynamic evolution that transcends the traditional dominance of cricket. As new sports gain popularity and audiences diversify, brands are adapting their strategies to engage with fans more authentically. With increasing investments and changing metrics for measuring ROI, the realm of sports sponsorship is poised for continued growth and innovation, offering brands ample opportunities to connect with audiences across a wide range of sports platforms. As the sports sponsorship ecosystem continues to evolve, strategic partnerships that align with brand values and resonate with target audiences will be key to driving long-term success and impact in the Indian market.