Dream 11 – Dutch Uncles

Start-ups Now Account for 10% in India’s Advertising Expenses

DU Desk — Tue, 04 May 2021 11:35:04 +0000

From Shah Rukh Khan becoming a teacher in Byju’s new ad highlighting after-school learning to Pankaj Tripathi showing Kirana store owners ease of doing business on Udaan app, Indian start-ups have been all in with their advertising spend.

Be it Indian Premier League (IPL) on a TV Channel, an episode of your favourite show on an over-the-top (OTT) platform, a fitness video on Youtube or casual Instagram scrolling, you cannot ignore the growing number of ads by start-ups that are ruling the break time.

Nothing New, Yet Unusual: What Changed?

It is not new for start-ups to go aggressive with advertisements in attracting and retaining customers in their growth stage. Back in 2015, we saw a huge surge in ad spends by e-commerce start-ups like Myntra, Flipkart and Snapdeal as the industry boomed. This trend picked up pace over the years with start-ups riding a particular industry boom (e-commerce, e-retail, edtech) each year, putting in big cheques in advertisement.

This number was expected to rise in future. However, something has been unusual in the past one or two years, especially post pandemic. According to media buyers’ estimates, start-ups now account for 10% in India’s advertising expenses. The overall ad spend may hit Rs 80,000 crore in 2021. This means 8,000-8,500 crore (10%) has come from new-age companies. No doubt, the surge was expected, but not to the level of 10%.

Besides developing a big advertising appetite, the start-ups have gone a step further and overshadowed big brands across many platforms. What happened in the past one year? Let’s find out.

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Byju’s spent Rs 400-500 crore in advertising in 2020 while gaming firm Dream11 spent Rs 350-400 crore and My11Circle spent Rs 150-250 crore.

A Strong Backing: Funding Galore

The lockdown threw a curve ball at a lot of industries. Start-up industry was one of them with fewer deals and comparative less funding. Having said that, investors poured in $9.3 Billion into the Indian start-ups in year 2020 alone with some of the largest venture capital firms doubling on Seed and Series A deals. Big funding deals were seen for start-ups such as Byju’s, Unacademy, Zomato, CRED, Delhivery, Razorpay, Vedantu and Cars24 along with ballooning valuations.

This momentum refuses to slow down. Barely four months into the current calendar year and the sector has already birthed 10 unicorns (11 in 2020) with $4.4 billion funding in the January-March quarter of 2021.

This spells one major change. The curve ball thrown across sectors by pandemic was caught well by the new-age tech/digital start-ups, who are today in demand more than ever. This is their opportunity to grow.

Strike While the Iron is Hot!

Now what happens when you have large investment, fast- growing revenue potential and an addressable base? You look to invest in brand equity and go all in to capture the user base and create a brand recall, especially when the space becomes extremely competitive and digital (Lockdown).

This is in complete tune with flush of funds from venture capitalists. Following the pandemic, outdoor/below-the-line advertisement has become extremely limited, leaving the choice limited to digital mediums. Now, since the choice is limited with everyone flocking to the same medium to capture the screen time, companies are looking to associate with high-profile (expensive) properties for aggressive marketing and advertising.

Who will step up? The one who needs to (growing stage, competition, user base) and very well could (deep-pocketed investors) during these times i.e. start-ups.

Sports Leagues + Festive Season: Cherry on the Cake

Apart from usual ad mediums like television, OTT platforms, social media and websites, start-ups splashed cash like never before on sports league-IPL, Indian Super league (ISL) and Pro Kabaddi League (PKL)- which come as a one time opportunity in a year for companies to create a recall. This is especially significant during Covid times. The IPL also coincided with festive times.

Looking at the advertising budget of some of the top start-up- Byju’s spent Rs 400-500 crore in advertising in 2020 while gaming firm Dream11 spent Rs 350-400 crore and My11Circle spent Rs 150-250 crore, as per a Pitch Madison Advertising report. Other new breed of sponsors include PhonePe, CRED, Paytm, Dailyhunt and Khatabook, Acko, WhiteHat Jr, Policybazaar, Netmeds and Upstox.

Given the thriving revenue, funding and valuation numbers of start-ups (digital, edtech platforms, payment gateways, gaming platforms, OTT players) amidst the current state of affairs, the 10% ad spend figure will continue to jump further.

The post Start-ups Now Account for 10% in India’s Advertising Expenses appeared first on Dutch Uncles.

Dream11 is Official Partner in IPL 2021: What can Start-ups Learn?

Aakash Sharma — Sat, 20 Mar 2021 02:30:08 +0000

After almost two decades of prominent sponsorships for cricket, the big companies have moved aside to allow Indian start-ups to take over the sponsorship labels. Indian start-ups are offering to be an IPL sponsor to increase their brand’s acclaim and market share in the country. IPL Title Sponsorship is the ideal opportunity to expand a brand’s global presence.

Dream11 opened great doors in the title IPL Sponsor race for start-ups

For IPL 2021, Dream11 has reappeared as the official tournament partner. Although Dream11’s attempt to retain the title sponsorship of the Indian Premier League failed when Vivo returned to the league, it still has given a way to other newly formed Indian companies and start-ups to enter the major leagues. The primary fantasy company will continue to register as the Official Fantasy Partner at IPL 2021.

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Start-ups investing in India's unifying religion that is cricket have shown that marketing is not just about making money. It's also about making your presence felt in the market.

Vivo’s stumble as IPL sponsor

In 2020, when anti-Chinese rhetoric rocked India, Chinese smartphone brand Vivo pulled out of the IPL. When Vivo pulled out of IPL 2020, it transferred the IPL sponsorship rights to interested parties. The fantasy sports platform Dream11 and EdTech giant Unacademy were the first Indian start-ups to obtain rights for the first time in the more than ten-year history of the IPL tournament.

The Board of Control for Cricket in India (BCCI) had to terminate the Rs 440 crore per year contract with the Chinese smartphone giant. The outcome of the Vivo-IPL deal was sparked by anti-Chinese sentiment across the country following the China-India conflict in the Galwan Valley in June 2020, when Chinese troops killed 20 Indian soldiers.

Vivo has yet again captured the Title IPL Sponsor

In 2020, Dream11 and Unacademy presented their sponsorship bids to Vivo. Dream11 became the title sponsor of IPL 2020 and reserved a place for itself in the “Outstanding Sponsor Category”. In 2021, however, Dream11 will not be the title sponsor, but the official fantasy partner for IPL 2021.

Dream11 tried to retain the title sponsorship of IPL 2021 and even made an offer to Vivo. But Vivo did not implement the agreement because the annual price of Rs 250 crore for sponsorships rights was far below its expectations.

Start-ups are investing heavily in IPL Sponsor race

In addition to Dream11, BCCI has also tied up with Unacademy and CRED as official partners. Tata Motors has completed its three-year relationship with IPL and is expected to renew its contract. Upstox, the digital stockbroker start-up, and online investment platform Groww, also became official partners of the Indian Premier League (IPL) 2021. It is clear that cricket remains the best choice for the marketing strategies of start-ups.

According to the Pitch Madison advertising report released in February 2021, educational technology company Byju’s advertisement budget was between Rs 400-500 crore last year, while Dream11’s was between Rs 350-400 crore.

What avenues have start-ups opened for others to follow?

Start-ups investing in India’s unifying religion that is cricket have shown that marketing is not just about making money. It’s also about making your presence felt in the market. IPL sponsorship is an excellent opportunity for businesses, either new or established, to expand their global reach.

The Indian Premier League is the most successful cricket league in the world. More than 70 games are played in 50 days, and international and Indian cricketers compete against each other every day wearing jerseys with business’s labels on them.

With the eyeballs of hundreds of millions of people fixated on the TV and OTT platforms that stream live matches, sponsor businesses get exactly what their brand needs to produce an image that viewers can relate to and feel connected with. In essence, IPL offers a variety of investment opportunities to make it relevant to brands of different categories, and that is why start-ups are roping in on the opportunity.

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