TCS sees a big opportunity in sports sponsorships. Here's why

For a while now, Tata Consultancy Services (TCS to the world at large) has been engaged in sports sponsorship. Unusual for an IT company you might imagine, whose primary business is B2B. This is the entity that is the software part in the salt-to-software term used to describe the Tata Group. This prized jewel is the second most valuable in India in terms of market capitalisation.

Early this month, TCS inked a deal with British racing team, Jaguar Racing, to be the title partner for the upcoming 2021/22 ABB FIA Formula E World Championship. Now, the team will be known as Jaguar TCS Racing. This multi-year partnership, the statement said, "will create a dynamic platform that will drive research and innovation while steering towards advanced concepts and electric vehicle (EV) technologies. TCS will leverage its leadership in technology transformation and experience working with premier players in the EV value chain, to help Jaguar TCS Racing become a catalyst for electrification, pushing towards low carbon emissions and sustainable mobility."
It also made a key mention of "the creative use of data and insights from the racetrack to shape the wider growth, development, and transformation of the entire electric vehicle ecosystem".

Interestingly, TCS replaced Panasonic, a name in consumer electronics a clear B2C player), who signed on in the 2016-17 season and remained till last October.

To many, the decision to sponsor marathons across many parts of the world (New York, London from 2022 being the most prominent ones apart from Amsterdam) or now the deal with Jaguar may confound classic marketing logic.
Also, this does not come cheap either, with media reports estimating that TCS will spend over $300 million on marathons over the next eight years. According to Balu Nayar, former MD of IMG, one of the world's largest sports sponsorships organisations, there are multiple aspects to this.

"Sponsorship, in general, is done to enhance a brand's image amongst its key constituents. Speaking specifically of sports events, it could help adrenalise a brand, giving it more electricity and relevance," he explains.

To Nayar, marathons in general, are different from almost all other sports because "the world's best take part (like in every sport), but so do thousands of ordinary people, including people facing many challenges, and just participation and finishing is a symbol of pure human spirit and endeavour."

Just the number of people and the accompanying captive audience in a marathon is great for any brand and TCS is no exception. Ambi Parameswaran, founder, brand-building.com, thinks it makes sense for TCS since the other sports are quite crowded.

"Besides, TCS with its line of business is likely to have clients across the world participating in it. Marathons have a brand fit in terms of a long-term solution and denoting a symbol of resilience. It is a significant global platform to push your brand," is his rationale.

On the B2B debate, Nayar maintains the association can be used "for powerful employee engagement programmes with its customers, which can be enduring and incredibly differentiated." From an investment point of view, the outgo is still a very small proportion of how TCS's overall revenue.

Parameswaran points to the strategic advantage by way of data that will come TCS' way through the Jaguar association. "Overall, these are good and effective ways to amplify the brand," is his opinion. Of course, one logic is just the need to link a company like TCS with anything that is in the high-tech area. It could just mark the beginning of more such associations.

Also read: TCS enters Formula E, to be the title sponsor for Jaguar Racing