Category: MAM

MUMBAI: As India‘s cricket board is trying to clean up its biggestcricket-entertainment property, there are still questions looming over the business model of the Indian Premier League (IPL). The addition of two teams has only added to the financial woes as the overall brand value of the IPL has eroded.

The IPL is valued at $3.67 billion, down 11 per cent from $4.13 billion a year-ago, as there are dark clouds raised over governance policies, according to BrandFinance India, the company which specialises in brand valuations. 
 
“The IPL juggernaut has hit a speed breaker with an erosion of $460 million of its long-term value. As costs like players‘ wages rise, the early commercial success of IPL will be tested and the honeymoon is well and truly over,” BrandFinance India MD M Unni Krishnan said.

The IPL branded ecosystem’s long–term sustainability is being subjected to a “stress test” from various forces. IPL’s sustainability will, thus, largely depend on infusing governance policies to align all the stakeholders towards win–win relationships and thereby preserving the value in the long run.
 
The BrandFinance report noted that much of the brand’s initial value was built through a range of attention getting activities, which now needs to be consolidated through values driven patronage across all stakeholders.

The report chalked out various factors on which the business model as a whole will be dependent. These are:

• Ability to institutionalise governance processes to safeguard IPL’s ability to inspire trust flows across stakeholders which will sustain the business model’s cash flows.


• Prudent financial management and corporate discipline to ensure commercial success at an individual franchisee level as costs like player’s wages shoot up.


• Nurture and establish new, or improved, revenue streams so that franchisees can leverage their popularity through more diverse merchandising or new income streams.


• Retaining the engagement levels with current and potential fan bases even as young Indians get exposed to new game formats and interest in other sports.


• Stickiness of sponsors who may have more options. Initial enthusiasm could wane in the light of IPL’s own economic performance.
  The report, however, conceded that despite all the challenges, the IPL has remained a robust asset. “Its owners face a choice. Either they can reform the system inside out or face a meltdown in the not so distant future,” the report cautioned.

At a broader level, the IPL is emblematic of Indian commercial and sporting prowess to the world. Oddly enough, the IPL also represents the dark microcosm of an epidemic of corruption and short–term frenzy to make a fast buck which has swept India like an avalanche over the last year,” the report added.

IPL Franchises:
The combined trademark value of all the eight franchisees for 2011 is pegged at $355.22 million, slightly higher than $333.35 million in 2010.
 
 
BrandFinance, which took the eight original eight teams into consideration, categorised the teams into three brackets. The ‘breakaway brands’ consisted of Mumbai Indians, Chennai Super Kings and Royal Challengers. BrandFinance said that these franchisees seem to have worked out the secret sauce of sporting success. “Consistency and coherence across various dimensions of cricketing and marketing excellence along with governance holds the key,” it said. (For valuation, see the table).

Mumbai Indians has made significant gains due to meticulous focus on nurturing a core team under Sachin Tendulkar, strong fan engagement efforts, sponsorship and merchandising. What makes it stand out is also the strong commitment to use the platform for the larger good like “Education for All’. It is not a mere coincidence that all the three ’breakaway brands’ are owned by large business houses, the report noted.

Meanwhile, Kolkota Knight Riders, Delhi Daredevils and Deccan Chargers are the “middle of the road brands”. They are in a state of flux and seem to have lost their balance in key areas of cricketing excellence aka the product.

The third in the category are the “Stragglers” and consist of Rajasthan Royals and Kings XI who have their work cut out in getting their houses in order.
 

MUMBAI: Direct response marketing company, Guthy-Renker, has roped in OMD as its media agency-on-record (AOR) for digital and print Media.
 
OMD India MD Jasmin Sohrabji said, “We are excited with this win and the opportunity to work with an established global brand. We look forward to strengthening Guthy-Renker’s presence and visibility in India.”
 
The appointment is across all Guthy-Renker brands including Proactiv and other future brand launches.
 
OMD will be taking over the company’s media responsibilities with immediate effect.
 

VARCA: Brands need to maintain continuity in their communications as consumers don’t like changing their minds.

“It takes an effort for the customers to change their minds and marketers can’t afford that. Continuity comforts the consumer. Albeit, continuity goes beyond just the logo and includes tone of voice, presentation et al”, said The Engine Group president Robin Wight.
 
Marketers should use the latest advancements in science, technology and brain-mapping techniques to comprehend how consumer minds work.

“Brain always saves energy for the most important things and it has nothing to do with marketing. Humans are rationalising, and not rational, creatures.”

Wright was sharing his experience on the latest advances in brain science and how it will impact marketing in the coming times.

Detailing his knowledge on neuroscience he said, “Consumers are in two minds most of the time. One is the genetic mind which works on the reflex system and the other is the cognitive mind, which is the thinking and feeling system. So marketers need to not just address the right brain, but also when the consumer is in the right frame of mind.”
 
Wight claimed that most of the times marketers end up targeting the wrong mind. “Just like customers, even marketers are in two minds it seems,‘ he joked.
 
He asserted that science can help creativity flourish. By using technology, marketers can know exactly how and why a campaign would fail. “Using technologies like functional Magnetic Resonance Imaging (FMRI), we are able to read people’s minds and evaluate campaigns.”

He urged marketers to understand the difference between promotion and persuasion. “As marketers, we should not just promote but also persuade the customers to change his mind”, he said.
 

VARCA: Advertisers need to wake up to the new mantra: Community engagement.

In today‘s age and time, consumers don‘t really need advertising; they crave for education, knowledge, experience, information, engagement and excitement.
 
“Advertisers need to show the consumers what the ad stands for rather than simply tell them of it. With the advent of Internet, every brand has got the opportunity to become touchpoints for millions. Engagement is the new frequency,” said Contagious Communications president India region Neeraj Nayar.

Promoting communities is the key. Clarifying this thought, Nayar touched upon Pepsi pulling out $20 million from the US Super Bowl in 2009 and instead investing it in a social media campaign. “This was a big change for a company that has spent $142 million on Super Bowl spots over the last decade and has shown commercials at the game for the past 23 years,” he elaborated.
 
Nayar also cited the example of Levi’s ‘Go Forth’ campaign, in which the brand decided to go back to its roots by aiding the city of Braddock. “Levi’s was facing stiff competition from Diesel and Gap. But after this initiative, the brand got enormous exposure and consequently became more profitable.”

He stated that ads shouldn’t look like an ad — only then are they good ads. “People readily don’t like ads. What normally happens is that during commercial breaks, the costumer is bombarded with ads; this shouldn’t be happening. We should create networks of the unacquainted and delight our customers.”
 
 Nayar considered the current state of advertising to be similar with a quote from AA Milne’s ‘Winnie The Pooh’: “Here is Edward Bear, coming downstairs now, bump, bump, bump, on the back of his head, behind Christopher Robin. It is, as far as he knows, the only way of coming downstairs, but sometimes he feels that there really is another way, if only he could stop bumping for a moment and think of it.” He urged advertisers to do away with the conventional ad model and be more creative.

Nayar underlined the importance of thinking “365” i.e. 365 days and not 360 anymore, “One has to think editorially and engage the consumers real time. Projects, not campaigns, give real meaning and magic to communication.”

“The consumer says, tell me—I forget, show me—I remember and involve me—I understand,” he elaborated.

Volkswagen’s Piano staircase and Speed camera lottery were other great examples of people engagement, acknowledged Nayar.

“Give something to people that they want to talk about. Think what’s in it for them. Look at things from their perspective. In the age of digital revolution, one has to lean out of the frame,” Nayar stated.

Nayar concluded his talk by strongly favouring innovations and experimentation. He declared, “I am part of the 5 per cent club. We should invest at least 5 per cent of our budget on experimentation. Be more Silicon Valley and less Madison Avenue.”

His final advice: “Be useful, relevant and entertaining. Don’t be afraid of taking risks.”
 

VARCA: The task of brand managers is to create cultural movements while the concept of USP is not relevant anymore, industry thinkers said.

While addressing the crowd at the Goafest 2011 summit, StrawberryFrog account director Jake Baldridge said that one should always start with a brand purpose and then tie it to an idea on the rise.
 
The next step would be to find the cultural relevance of the brand and then work from inside out. Baldridge said the concept of USP is not relevant anymore and advertisers should get rid of it.

But choosing this path may not be easy at all times. Someone has to take the initiative, without the fear of being ridiculed or being called stupid, Baldridge said.

In his opinion, brands can speak, lead, curate and sponsor a mass movement though “only an idea with the power to ignite passion will achieve these.”
 
He showed a video where a man without any fear starts dancing. Initially, people make fun of him but then start joining him. Eventually, people would laugh at someone who doesn’t join the leader.

Hence, taking initiatives can be challenging, Baldridge cautioned, but it may be highly rewarding as well.

Baldridge also shared a video where a movement has started for the love of Mother Nature. In this video, people are encouraged to be more sensible towards the resources at one’s disposal such as land, water and food.
 
The video’s message called for being “smart against dumb”.

This can be no different from starting a cultural movement. Baldridge said, “And what is cultural movement its nothing but a group of people coming together around an idea to create change.This is how StrawberryFrog works and creates monumental brands.”

He amplified the importance of the first few followers. “The success of the movement depends on them; respect them and treat them as equals.”