SPORTS MARKETING: Scoring HIGH Returns

Richard Davies suggests that, if managed properly, a brand's association with a sport can deliver increased sales, as opposed to simply eating away at the marketing budget.

Millions of pounds and thousands of man-hours are spent each year by advertisers and their agents ensuring that their advertising messages reach the right people at the right time, via the right channel and in the right environment. With advertising in general, the consequences of getting this wrong can - in extreme cases - be dramatic, but more often than not they are pretty transient. If an ad goes out at the wrong time, in the wrong type of TV programme, it's over and done with in 30 seconds and largely forgotten.

Yet the consequences of getting a sports sponsorship programme wrong can be significantly more damaging - most sponsorship contracts last longer than 30 seconds. Even if all the research shows there is a good fit between the profiles, motivations and attitudes of those who follow the sport and the target group of the brand in question, if the association doesn't look or feel right, it is often marked down as a failure.

This is most evident when a brand has, based upon little more than instinct and gut feel, little or no clear relevance to the sporting property it associates itself with. A recently cited example is Pizza Hut's one-season flirtation with Fulham Football Club, which led one supporter to comment: "If you've got a rubbish logo and you get it on the kit, you just look stupid." Beer and burgers seemed to fit football, but not pizza.

For the many who view sponsorship and sports marketing as one and the same - and both simply as an extension of the advertising industry - the brand fit and communications effect are where the measure of whether a sponsorship is successful or not begins and ends. This rather blinkered view shows a lack of appreciation of the difference between simple sponsorship and true sports marketing in the wider sense. The smarter operators realise there is often a significant commercial advantage to be gained through developing the right type of associations with sporting properties. And in many instances, the real financial value of these commercial benefits can outweigh the brand awareness, appreciation and consideration gains that "normal" sponsorship can deliver.

For years, Benetton was widely derided for what was seen by many as a dubious involvement with Formula One. In 1986 the clothing company purchased the Toleman F1 racing team, renaming it Benetton in the process. "What relevance does a woolly jumper company have with F1?" the doubters wailed. On the face of it, not a lot, but for Benetton the move secured a 15-year association between the brand and the stylish, colourful, aspirational (and expensive) world of F1.

This association was achieved at virtually zero cost; TV rights funds, other sponsors and suppliers of the team meaning that Benetton simply underwrote the venture. In the end, the team was sold to Renault for a sum reputedly ten times the price Benetton paid to purchase it.

British American Tobacco - albeit for different reasons relating to the restrictions on promoting tobacco - adopted a similar approach to F1, setting up the BAR Honda team. In addition to having its brands firmly established as an integrated part of the sport, BAR can benefit from a share of F1's TV rights money and prize funds. And, if the Benetton experience is anything to go by, it has an appreciating asset on the balance sheet rather than a debit under the section relating to marketing costs.

Elsewhere in sport, companies that previously would have been mere sponsors, handing over cheques in exchange for mobile signage, are securing valuable commercial rights as part of their overall sponsorship deals. Vodafone, through its relationships with Manchester United and Ferrari (secured for a combined rights fee in excess of £70 million), generates enormous brand awareness through shirt front and car side presence. These associations are then leveraged through collateral advertising and promotional actions based around the teams and personalities. But, as a critical part of the deal, Vodafone has secured from the teams exclusive and highly prized content to drive customers to its 3G services.

Whether Vodafone's strategy of building its brand via sporting associations and driving revenue through related exclusive content provision works remains to be seen. But what of the 80 per cent of UK football fans who are passionately opposed to Manchester United? Would they be more likely to sign up for the service from 3, which is based on a relatively low-key £40 million deal with the whole of the FA Premier League? So which is the more successful sponsorship in this context?

Criticism also rains down from the ad community on the usual suspects when it comes to football sponsorship - the sports and leisure-wear manufacturers.

However, these companies also derive enormous financial returns from technical supplier contracts with clubs and associations, as a glance at the most recent World Cup and the South Korean and Japanese supporters decked out in their national team's shirts will testify. The value to Nike of replica kit sales derived from contracts with Arsenal, Barcelona, Manchester United, Brazil and so on, allied to the heightened brand awareness and appreciation that each deal delivers, more than compensates for the fees paid to the rights holders.

The decision over whether a sponsorship is right must be made on a multidimensional level. Of course it is about leveraging consumer passions to the long-term benefit of brands and their value - this is the visible side of the business. But before scorn and derision is poured on sponsorships and associations that don't entirely meet the lofty criteria of the brand aesthetes, it could well be worth standing back to consider what the less visible elements of the deal bring to the sponsor's balance sheet.

Become a member of Campaign from just £45 a quarter

Get the very latest news and insight from Campaign with unrestricted access to campaignlive.co.uk ,plus get exclusive discounts to Campaign events

Become a member

Looking for a new job?

Get the latest creative jobs in advertising, media, marketing and digital delivered directly to your inbox each day.

Create an Alert Now

Partner content

Share

1 Job description: Digital marketing executive

Digital marketing executives oversee the online marketing strategy for their organisation. They plan and execute digital (including email) marketing campaigns and design, maintain and supply content for the organisation's website(s).