The Press, June 2006
World Cup soccer is dominating the sporting landscape, even in rugby-mad New Zealand. As predictable as England talking up their chances and then choking, is the debate that will ensure over the marketing side of the World Cup. Is the estimated €700 million being spent by sponsors' value for money or just corporate indulgence?
15 main sponsors are behind Fifa's festival of football, including Yahoo, Budweiser, Coca-Cola, Adidas, McDonald's, Gillette and Philips. Each of these companies reportedly paid around $US35 million to become an official sponsor. While this might sound an enormous sum, for Coca-Cola it represents about 0.15% of their 2005 revenues. For a New Zealand company turning over $NZ35 million annually it would be equivalent to a $53,000 investment.
The exposure the World Cup's backers will receive is immense. One billion people are expected to watch the final of the 2006 tournament on July 9 in Berlin. The cumulative television audience is forecast to top 40 billion viewers across more than 200 countries.
Big ticket sports sponsorship is becomingly increasingly common in New Zealand. According to the Ministry of Foreign Affairs and Trade, Emirates Airline's sponsorship of our 2007 America's Cup challenge is estimated to be a whopping US$50 million. Media reports have put the Adidas sponsorship of the All Blacks at $NZ100 million over its multi-year term, with even minor sponsor Lion Nathan shelling out $NZ4 million to attach its Steinlager brand to our national team.
Are these investments worth it? Could they be investing shareholder funds in activities that show greater return? Pundits weigh in with confident opinions on both sides of the debate but there is no way to comment on a company's sponsorship without knowing the answers to a few fundamental marketing questions. These are the same answers needed to judge the effectiveness of any sort of promotions - whether its tradeshows, blogs, PR, adverts, mail outs etc.
The first fundamental is what is the objective of the sponsorship? Is it building awareness of a brand, or maybe trying to get people to better appreciate an already well known name. US telecommunications company Avaya, a sponsor of the 2002 event and the current World Cup, wanted to establish awareness of its new identity as a spin-off of the better known Lucent Technologies. Coca Cola on the other hand is one of the best known brands on the planet, and wants to generate greater loyalty and attachment to its name through its support of soccer.
Second is the sort of people the promotion would target and how that fits with your chosen markets. As an upper class sport in the US, Avaya saw soccer as a good avenue for reaching chief executives and information technology managers. It is also the dominant sport in the developing economies where fast developing mobile telephony markets offer Avaya a lot of opportunity
Next is the fit with the story you are trying to tell. Is your brand built around being easier, better, faster, smarter etc for the customer? For example, if your brand is all about 'speed' then you are more likely to back the speedway than the croquet. Coca-Cola's positioning has always been around being the "real" thing, the original choice. An association with one of world's oldest and most loved sports events is a good fit.
Equally important is assessing what other activity can be used to maximize the investment in your promotion. The big name sponsors at the World Cup will be spending huge amounts on parallel campaigns - advertising, billboards, prize promotions etc. On a much smaller scale, you can make more out of something like a tradeshow by doing some direct mail to attendees beforehand, or achieving some well timed publicity in associated trade magazines.
Lastly, but most importantly, is what measurements can be put in place to measure the success of your promotion. If you can't establish some sort of measure don't bother. Measuring the level of exposure (through signage, direct coverage, publicity, websites etc) generated by a sponsorship like the World Cup is a sophisticated science these days. Sponsors will expend huge effort on these measures and how they translate into shifts in brand awareness and ultimately sales. On a smaller scale, simply having a specific offer in your advertisement to generate a response, or tracking the response rate for a direct mail can help gauge the real return on your investment.
A local sponsorship success story is Vodafone New Zealand. It is involved with the New Zealand Warriors, netball and soccer teams and the extreme sports festival X-Air. They did some smart things like dropping the fairly elitist Bell South (now Heineken) tennis open in favour of the blue collar sport of rugby league, at a time when mobile phones were becoming a mainstream consumer item. Their efforts have paid off, when Vodafone entered the NZ market in 1998 (by purchasing Bell South) it had 2% brand awareness, by 2000 this had increased to 98%.
So is sponsorship a worthwhile promotional tactic? As with any marketing question the answer lies with the customer. Unless you have clarity around your chosen market (your ideal customers) and how your brand should be positioned with them (your unique promise to them), you can't assess the value of sponsorship, whether it is the local kindergarten or one of the world's biggest sporting events.