Wipro, once the third largest Indian IT services company has not had a good few years. Senior executive departures, organization restructuring and the latest financial numbers have not helped Wipro to maintain its position in the ever competitive IT services marketplace. So, it came as no surprise to hear Wipro’s CMO laying out the company’s plans to look at tie-ups with sporting companies / events especially in emerging markets like Australia. [Video here]
Wipro’s plans of tieing up with sports companies are in definition similar to what Mahindra Satyam did during the FIFA 2010. Erstwhile Satyam had secured the IT services contract for FIFA (managing ticketing systems etc.) and also sponsored the event. There are mixed reactions in terms of the ROI from the sponsorship but in my view, it did help the company get some much needed visibility and positive press in a time when there was nothing going Satyam’s way. However, Mahindra Satyam has secured the IT services contract for the 2014 FIFA as well!
Wipro is following the same concept and wants to gain visibility in emerging markets especially Australia. These emerging markets offer huge market potential but are relatively less competitive than the market in US. So, to catch the eyeballs of one and many, co-sponsoring a big sporting event in the region might play out well for Wipro from a marketing perspective.
There is also huge potential in terms of striking a IT services deal with sporting companies as they have a significant outlay of IT infrastructure. Even as the CMO pointed out the primary focus on Australian market, he hinted at a global approach wherein the company might look to extend their strategy of sporting event sponsorships in the US, UK etc. as well.
Sporting events are no-doubt a marketing / advertising haven and the billions there events receive in sponsorship amount tell the story loud and clear. However, majority of the companies sponsoring these events have a consumer led focus in terms of product / service offering. FMCG companies, financial companies etc. are regular sponsors at most sporting events since the sporting event provides them the perfect platform to reach out to the target audience. There are other companies like IBM etc. who spend significantly on sporting events even though there maybe no direct target audience connect. However, these companies have significant marketing budgets and can often afford to co-sponsor.
Putting this in the context of Indian IT service companies, I feel it a little hard to digest. A pure sponsorship play wherein the company spends money to only sponsor the event and get visibility does not sound like value for marketing dollar spent for the simple reason that the target audience connect is negligible for the most part. However, if the sponsorship comes with a IT contract, then it might make sense to negotiate in pricing and instead opt for getting a co-sponsorship.
What are your thoughts on companies like Wipro using sporting events to market themselves and acquire visibility in emerging markets. Is the significant sponsorship costs recoverable?
This is a good move by Wipro. First-off, Wipro is still the 3rd largest in India. Second of all though it could be CMO who announced this it clearly shows that marketings is an integral function of Strategy. Firm where Strategy and marketing fall under one common head actually come out with innovative marketing ideas that later feed into strategy. I am not sure if this is the case in Wipro.
Having said this, what Wipro is doing is not innovative but it is a demonstration of intent to enter an “emerging” market with drum rolls. I mean in a country like Australia sponsoring sports is like sponsoring a Ganeshotsav in Mumbai :) the idea let people relate you with what they like the most.
When it comes to recovering the money, Marketing is measurable and Wipro would not promise big buck spending without getting a promise of getting bigger bucks. Satyam sponsored FIFA and they got back more than they could ask for i.e. trust but unfortunately trust cant be measured (unless you put a marketing spin behind it :D )
What is surfacing as a trend these days is that in order to win major deals, the kind that Wipro is interested in, the buyer should “know” the provider and getting air-time through these sporting events is a great approach.
Only time will tell how this fares but the performance should not be a measure of how effective are such marketing activities rather it should be a measure of how well Wipro can execute this
Its time invest money so big companies with big capital trending to new era .