Why Do Companies Invest So Much in Sports Advertisements?

Over the last few decades, sports marketing has firmly established itself as an integral part of marketing. There is no existing definition for sports marketing. However, it is explained as a specific application of marketing principles and processes to advertise sports and non-sports products through an association with sports. It can also be described as a service through which either a physical product or a brand name is endorsed.

The design and concept of sports marketing is to meet the needs and desires of the consumers through an exchange process. The traditional four ‘P’s of marketing – Product, Price, Promotion, and Place are employed along with the four extra elements of the sports marketing mix – Planning, Packaging, Positioning and Perception. These types of sports promotions involve a variety of sectors of the sports industry like broadcasting, advertising, social media, digital platforms, ticket sales and community relationships.

Sports Advertisement Popularity in Numbers
Reasons to Invest Heavily in Sports Marketing
What Do Companies Require From Sports Advertising?

Sports Advertisement Popularity in Numbers

In 2021, the Indian Sports Industry spends surpassed INR 9500 crores. It was an echoing comeback for sports sponsorships and media deals, which had dropped severely during the covid struck year of 2020. Sports celebrity endorsement spends grew by 11% with a total of 444 brand endorsement deals in 2021. It was also the year of the Olympics which increased the Emerging Sports Athletes’ endorsements by 79%.

Prashanth Kumar, CEO of GroupM South Asia observed - “2021 was a year of a major comeback for the sports industry. Not only in sports but we saw growth in sponsorships, endorsements, and media expenses in 2021. This year will also be a good re-start point for brands to invest in sports properties since sports will see a rise and will in-turn deliver ROI to brands. Apart from this, we even saw esports gaining significant traction and there was a major rise in the number of gamers in the country. Properties like PKL, ISL, etc. are also seeing a major rise in followers which goes to show that India is heavily invested in overall sports from an interest and inquisitiveness standpoint. As for cricket, we are seeing a growing interest by Foreign private equity giants investing in Indian cricket which is proving that Cricket will continue seeing a huge surge in India and with 2021 getting cricket back on track, we are seeing 2022 racing ahead, aiming to cross INR 10,000 Cr mark.”

2021 saw heavy media spends in sports as broadcasters played a central role to bring consumers and brands closer. Household penetration of television and technology has been crucial in the growth of sports appreciation by the masses. This has resulted in television becoming the largest medium for viewers culminating in an overall ad expenditure of INR 5051 crores – a growth of over 59% from 2020. The digital ad expenditure grew to touch INR 965 crores.

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Reasons to Invest Heavily in Sports Marketing

Sports marketing is about using the content of sports to assist the marketing efforts. Apart from professional sports, sports marketing is a large part of college athletics, minor leagues and alternative sports. It can take many different forms as sports is watched on a variety of platforms. Television networks sell airtime during sports events, teams sell advertising space inside the stadiums to marketers wanting to purchase billboards and other print advertisements, and famous athletes sign contracts as celebrity endorsers and lend their image to brands.

One of the main reasons for brands to invest heavily in sports marketing is to piggyback on the popularity of athletes and the loyalty of their fans. It gives brands and companies a captive and ready audience to advertise their products.

Sports also add value to a brand by creating a unique position in the mind of the consumer. This is especially advantageous in a market that is rife with stiff competition. Smaller companies benefit immensely from improved awareness at local or regional levels.

At its highest levels, sports involve medals, world records and global awareness. This is a ready stage for global brands that want to associate themselves with excellence and ubiquity.

What Do Companies Require From Sports Advertising?

Sports advertisements and sponsorships are used by companies and brands for a variety of reasons and objectives.

Brand / Corporate Awareness

This is to expose the name in front of the consumer so that he or she will recall it favourably when exposed to other focused marketing messages.

Brand / Corporate Image

This type of sponsorship is focused on creating a particular style or niche for the brand or the company. It allows the brand to distinguish itself in the market and paves the way for premium pricing.

Customer Relations

Anyone in marketing understands the importance of building good customer relationships. Sports sponsorships are an excellent avenue to open a dialogue with other companies as well as showcasing their worthiness as a global player and a trustworthy business associate.

Employee Relations

Sports sponsorships foster pride and loyalty within the employees. This helps to retain and attract staff.

Community Relations

This is the philanthropic side of the company that can be showcased through sports sponsorships. It highlights the company’s readiness and willingness to invest in society’s future and well-being.

Different companies have different needs from sports sponsorships.  However, the commonality exists in the quantifiable contribution to the brand. It also allows for media coverage and exposure, by creating opportunities for newspaper photographs and television images, showing logos or banners.

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Conclusion

Companies and brands use sports to reach a certain segment of the population. However, the only real qualification for using sports advertising is a product that has mass appeal. Hence, it is extremely important for any marketer to understand the relevance of the product that is being marketed to the audience.

As a marketing tool, sports advertising is highly effective. It is dependent on the company or the brand to utilize this tool to its maximum advantage.

FAQs

What is sports marketing?

Sports marketing is a type of marketing that uses sports for advertising. This kind of marketing simply focuses on promoting products and services by taking advantage of sports events and teams to reach the audience.

Why do companies invest in sports marketing?

Companies invest in sports marketing for many reasons. These include:

• Brand Awareness
• Brand Image
• Stronger Customer Relations
• Better Employee Relations
• Community Relations

What are the key areas of sports marketing?

The key areas of sports marketing include sponsorships and endorsements. In sponsorships, the brands offer funds to sports events and teams for the brand's promotion and in endorsements, the brands approach sports celebrities to act as their spokesperson.