Why sports marketing has worked so well for BYJUâ€™s & new age digital brands
Edutech player, BYJU’s has bailed out OPPO as associate sponsor for Team India and has acquired the sponsorship rights until March 2022. BYJU’S will now be seen on the Indian Team jerseys from the September 2019 South Africa Home series onwards.
With this association, the brand has allocated a major portion of its marketing budget for the year 2019 by betting on cricket, India’s beloved sport. Continuing with its association with Shah Rukh Khan, BYJU’S ad blitz during the ICC CWC 2019 garnered the most brand recall during the tournament.
BYJU’s is not the exception, we are seeing new age digital brands from across the board investing heavily in sports marketing. Paytm, Uber, Dream11, Acko General Insurance, GoDaddy, TikTok, PaisaBazaar.com and PolicyBazaar.com, too, are major players who have invested ad monies into cricket sponsorship or marketing. Dream11 has also tied up with Vivo Pro Kabaddi League 7.
BYJU’s is in the next phase of its growth, having raised $150 million in funding earlier this month, thus raising the valuation of the company to $ 5.7 billion. They recently inked a partnership with Disney and are gearing up to launch in the US market, according to media reports. The company reported in 2018 that they had had 15 million users and 900,000 paid users, making them the biggest edutech start-up in the country.
Now, this start-up has turned into a Unicorn company and has established itself as a household name; and what better platform to achieve this than cricket?
In past interactions with Adgully, spokespersons from BYJU’s and PolicyBazaar.com & PaisaBazaar.com have revealed their spends on sports marketing.
“We will be spending 15 per cent of our marketing budget on the ICC Cricket World Cup 2019. Our product is visual and we want the parents to understand how early learning will make their children better learners for life in about 30 seconds. Advertising on TV has always helped us with customer acquisition, that is, increased downloads. From the time we launch, we measure the ROI of our ad campaigns, through downloads, subscriptions, etc. We are very paranoid about the performance of an ad; if we see it performing well, we are ready to invest. In terms of mediums, we have seen that TV, when used simultaneously with social media, amplifies our ROI,” said Mrinal Mohit, Chief Operating Officer, BYJU’S - The Learning App.
“Sports are a high reach medium for us. Within sports we obviously look for all India playing matches – be it IPL or non-IPL. We also consider non-India matches, bilateral series or others which come at a very efficient cost and you still have a core audience still watching it. At the Group level, for Policybazaar.com and Paisabazaar.com up to 30-35 per cent of the spends are blocked towards sports. I am speaking about FY2018,” said Sai Narayan, Associate Director and Head of Marketing, PolicyBazaar.com and PaisaBazaar.com.
Giving some insight into BYJU’S strategy, Indian sports commentator and Director of Pro Kabaddi League, Charu Sharma explained, “BYJU’S in its current stage is trying to expand its signature, its communication, its visibility, because they could easily afford it for the next 3 years. Cricket is India’s most sporting product and it saves them from the hard work, analytics, research required to invest in other sports platforms which have potential but need a kickstart.”
For Sudhir Kumar, Director – Offline, DCMN India, the strategy has been implemented keeping in mind India’s cricket viewing audience. “BYJU’s has become the next unicorn of India. They have a valuation of almost Rs 38,000 crore. They know that associating with cricket will grab maximum eyeballs,” he said.
While OPPO leveraged cricket to establish itself as a trusted local player in India, BYJU’s does not have that requirement, noted Gautam Surath, Senior Vice-President, Starcom India. He further observed, “Cricket, no doubt, enjoys a lot of euphoria and consumer attention, and BYJU’s will have the benefit of scale. But did it not have that already? The fact remains that it is already an established household name. The popular line – ‘The Learning App’ – and their use of a Bollywood celebrity have made them the de-facto choice in the online education space.”
Accounting for IPL 2019 sponsorship, booking big name film star SRK for its advertisements during ICC CWC 2019 and becoming Team India sponsor, BYJU’s has spent crores in deals and promotions during the first half of 2019. Will this deliver the RoI for the brand?
Value of Sports Sponsorship
Pranesh Misra, Chairman & MD, Brandscapes Worldwide, opined that this deal will fuel BYJU’S next expansion phase. “Everyone knows that sponsoring cricket Team India costs serious money, but at the same time gets phenomenal eyeballs. The fact that BYJU’S can afford it, gives the perception of a big and successful company. They have a scalable, digitally delivered model, which means, for incremental business they could be operating at margins higher than 90 per cent. Cricket reaches a majority of students and their parents, so it is a great audience fit. BYJU’S will recover this investment in a few months and grow rapidly over the next 12-24 months. It is a fabulous decision,” he commented.
Charu Sharma explained the mindset of evaluating sports sponsorship deals and said, “There is no doubt that any company keeps revaluating its expenditure on marketing or communication. OPPO has good right to seal some payouts for the Team India jersey that has either served its purpose or is an expense they would like to allocate on other things. It depends on the company. Even when Pepsi bought rights for the Indian Premier League, they were very expensive. So, OPPO might have thought that this deal has lost its value.”
According to Sudhir Kumar, BYJU’S has 90 per cent market share and their association with cricket is to be credited for their success. “Led by cricket, sports sponsorship is increasing day by day by almost 40-50 per cent. For one and a half years, they were associating with every cricket series, so it was time to make a larger investment. They have signed a 5-year deal, which will cut across boundaries. Their past associations have helped them realise that if they have to do wonders, they will have to associate more closely with the sport. This category is almost dominated by BYJU’S, leaving no room for other players. This association will provide them with the next level of engagement.”
Starcom’s Gautam Surath opined that brands need to leverage sports sponsorship deals to a greater extent. “While team sponsorship is a strong property, it is critical that brands select it for the right reasons. Brands exiting before their contract expires gives a negative connotation to the sponsorship. More importantly, brands who associate with Indian cricket officially need to do more than just be a logo on the jersey. They need to find ways of taking that association to greater heights and supporting the Indian team in far deeper ways. Else it’s really a missed opportunity,” he advised.
Jagdeep Kapoor, CMD, Samsika Marketing Consultants, added here that such associations bode well for the future of young Indian brands. According to Kapoor, “It is a refreshing change for bringing in an Indian brand which is young and is for the young. A growing youth brand always helps to rejuvenate any sport. It touches the lives of many students, like cricket touches many young lives. The brand equity will go up due to the wide audience, celebrity engagement, and association with the most popular sport. This will instil the desire to learn and get educated in India and what’s making it happen is an Indian brand.”
According to Sharma, “This is going to show that other brands are willing to participate in growth story of Indian sports. I think many other brands feel that if this brand is getting the value in the sports world then even, we should also invest in it at whatever level we can afford.”
Continuing further, he observed, “The basic problem is that a lot of brands tend to be hesitant about investing in the world of sports because they see only the top level and are not adventurous enough to associate with a sport at the lower level, because they feel that there is not enough visibility or value. I think the monies you spend at the lower level give you more value, because through sports sponsorship you are basically becoming a partner in the development and progress story of the country. Sports are a visible, beneficial, and globally appreciated platform that cuts across all barriers.”