Will Brands Continue To Sponsor the FIFA World Cup?
The World Cup is the most-watched television event on Earth. FIFA, the world football governing body, reported that 715 million people watched the 2006 final game. That makes it the biggest single-event sporting competition in the world.
The 2014 FIFA World Cup in Brazil is expected to attract the attention of 3.2 billion people worldwide, totalling to 770 billion minutes of attention, making it one of the world’s premier corporate sponsorship opportunities.
A 30-second ad on prime time television in the United States cost about US$25 per thousand viewers. Based on this rate, FIFA could potentially generate about US$23 billion in revenues from just TV ads, billboards and sponsorships in a month. This does not include ticket sales, which are mere fraction of the total revenue.
What’s the price for attention?
So how much are brands be willing to pay to get in on some of that undivided attention?
Adidas, Coca-Cola, Emirates, Hyundai Motor Group, Sony and Visa have long been FIFA’s partners, which reportedly cost somewhere between US$25 and $50 million a year.
Brands like Budweiser, Castrol, Continental, Johnson & Johnson, Moy Park (an European organic food producer), Oi (a Brazilian telecom company) and Yingli Solar (a solar panel manufacturer) have signed on to be FIFA’s World Cup sponsors. These second-tier sponsors pay in the range of US$10 to 25 million per year.
For those watching the games in the stadium, this means there will only be Budweiser beer served.
And for brands with lower budgets, they are relegated to the third tier of sponsorship, worth US$170 million, but limited to Brazil only. This group is primarily made up of Brazilian brands like ApexBrasil, Centauro, Liberty Seguros, Wise Up, Garoto, Itau, FIFA.com and Football for Hope.
Overall, FIFA generated US$404 million solely from marketing rights of this year’s World Cup, in 2013. That makes up 29% of its annual revenue.
Is this a good strategy?
Is there an increase in profit for these brands who had made the investment? By having their logo plastered around the stadium and appearing on TV screens, may not be as effective as it used to be anymore.
According to Tim Schlick, managing partner at Schlick & Co., a Hong Kong-based strategy advisory company told International Business TImes, “Sponsoring around super events like the soccer championship has become a battle for attention. Having a logo on the wall alone does not do anything for brands anymore.”
The money used for the sponsorship perhaps can be better spent more effectively. According to media analytics, Unruly in a Bloomberg report, five of the top 11 most-shared online football advertisements are of brands that did not become a FIFA or World Cup sponsors.
Where’s the ROI?
Is the official partnership standing worth it? Will the millions of dollars spent on sponsoring the world’s biggest sporting event be returned in sales growth?
The ROI will vary according to brands and the nature of business. For example, a giant like Coca-Cola will most likely benefit from higher sales during this period (with only Coca-Cola being sold at the event), and also longer term value, such as brand awareness and loyalty.
However, for brands like Yingli, which is an emerging brand selling solar panels from China, the ROI may not be as significant nor immediately attributable. Breaking in to the South American market may take more than one sporting event to achieve.
On the other hand, for Adidas, who has long been a sponsor of FIFA, the sponsorship may be losing its benefit this year. It’s long-time rival, Nike, who is sponsoring the Brazil national team has been gaining much better mileage and buzz this World Cup, without even being a primary sponsor.
According to Sarah Wood, Unruly’s co-founder, producing an ad that goes viral can “be worth more than a sponsorship.”
Who takes the road less travelled?
With the advent of digital marketing, some brands have taken another path to market their brands without paying FIFA a single cent.
For example, Nike did not fork out the money to FIFA but they managed to create a lot of buzz with their “Risk Everything” campaign that features well-known football players without any direct references to World Cup or FIFA – just great timing.
The traditional formula of sponsoring global events may not be working as well as before. Here are other successful ads by non-official sponsors that have been circulating the Internet throughout the World Cup fever.
- Kia Motors
With the help of Victoria Secret’s model, Adriana Lima, Kia released a series of football-theme advertisements.
- Beats by Dr Dre
Featuring Brazil superstar, Neymar, Beats joined the World Cup fever to promote its headphones.
- Bavaria Brewery
In 2010, the Dutch-owned Bavaria Brewery successfully launched an ambush marketing campaign before the match between the Netherlands and Denmark. The company employed hundreds of young women wearing skimpy dresses in the company’s colour of orange, resulting in these women being ejected from the stadium. This stunt prompted a lot of controversy that gave the brand loads of free media attention.
With some of the more successful campaigns run by non-official sponsors this World Cup, it is to be expected that more brands will start reconsidering whether a direct sponsorship is worth it. Whether they choose to be a sponsor or not, it is undeniable that football has the ability to unite and emotionally connect with audiences from all over the world – thus making it a great platform for any brand to connect with an audience.