Wide open goals for sponsors

2 March 2006 - Barny Stokes - Marketing Week World Cup Special 06

The football World Cup in Germany would appear to be the perfect vehicle for reaching a global audience, but what do sponsors really get for their money, and has FIFA finally tackled the problem of ambush marketing?

When the England team walks out for its first game against Paraguay this summer in the 2006 World Cup, the players will be wearing an Umbro strip. When the whistle blows, the teams will kick off with an Adidas ball, while the stadium will be filled with spectators who have paid for their tickets using a MasterCard.

Sponsorship can prove highly effective and the World Cup is widely acknowledged one of the best sports marketing platforms available. But experts warn it is not without its problems.

FIFA divides its commercial partners into three categories: official partners, of which there are 15; official suppliers, of which there are six; and official licensees. The official partners for Germany 2006 are: Adidas, Avaya, Budweiser, Coca-Cola, Continental, Deutsche Telekom, Emirates, Fuji, Gillette, Hyundai, MasterCard, McDonalds, Philips, Toshiba and Yahoo!. Individual deals vary, but for between $30m and $50m they have secured global marketing rights to use official FIFA trademarks in any market in the world. They are guaranteed exposure at all the tournament's pitch-side boards, a presence in official print and online publications, and are included in official direct mail campaigns. They also get hospitality opportunities and preferential access to broadcast airtime around the event. By contrast, official suppliers can only use the FIFA trademarks in Germany, while official licensees can use the trademarks but do not have any right to associate their corporate brand name with the products. The value, FIFA says, is in the "increase in a product's attractiveness" which results from association with the organisation's brand.

Despite the cost of being a partner, FIFA points out that few sporting events offer the global reach of the World Cup. According to its own figures, 28.8 billion viewers watched the 2002 tournament in more than 200 countries around the world, while the final game reached at least 1.5 billion viewers. As such, the benefits in terms of brand exposure are obvious. "This is the largest sporting event in the world," says Jeremy Nicholds, commercial director at MasterCard Europe. "So if your aim is simply exposure, then this has enormous potential- in fact, if it were just a case of exposure, of the power of sponsorship versus the cost of advertising, then sponsorship would win every time." However, N icholds is careful to stress that simply securing a major sponsorship deal does not guarantee a successful return on a brand's investment. Rather, the effectiveness of sponsorship depends entirely on what a brand's objectives are. "For MasterCard it is particularly useful," he adds. "Our customers are actually the banks and clearing houses who process the payments. So not only can we improve our business-to-business relationships, we can also drive revenue by running campaigns that encourage the service users - the card holders to pay for tickets using their cards."

It's a point on which observers agree. Many accept that MasterCard has been particularly adept at integrating its sponsorship programme into its marketing mix, pointing to its "tickets for the game, priceless" campaign, created by McCann Erickson, as being very effective. Sponsorship experts also agree that to suggest brands become involved in sponsorship for the media exposure alone, is too simplistic an analysis. A brand like Coke, they point out, hardly needs to raise its profile. Instead, many say that the effectiveness of a sponsorship deal depends not only on what a brand's objectives are, but also on how it intends to measure its success in meeting those objectives.

Andy Muggleton, managing partner of sponsorship consultancy Generate, points to the four main reasons why brands undertake sponsorship deals: to raise awareness; to educate consumers about a new product; to boost sales; or to maintain a customer relationship. Muggleton adds that when sponsoring an event like the World Cup, sponsors need to factor in both the "tangible" benefits of the association - the physical value of the media exposure, the tickets and corporate hospitality - and the "intangible" benefits - the emotive effect generated by association with the World Cup, which, he argues, has a positive effect on purchasing behaviour.

Many experts stress that a brand's goals and its methods for evaluating them need to be clearly thought out before embarking on any deal. "It's about whether the package meets a specific set of business objectives," says one senior sponsorship industry source. "MasterCard might look at the number of new cards issued, or whether the banks show a preference for its sys tem. Hyundai might look at all its dealerships and see if the number of people taking a test drive has risen."

Whatever a brand's goals, though, experts stress that sponsorship, and particularly sponsorship of an event the size of the World Cup, is a minefield, and not always properly understood by brands both in terms of evaluation and activation. In particular, there are two serious problems: how to get yourself heard, and how to stop your rivals from drowning you out.

Firstly, the structure of 15 partners makes it extremely difficult to get your message across. "It will be very difficult to achieve any sort of cut through in Germany," says Brian Greenwood, UK chief executive of sports marketing agency Prism. "This is the biggest event they've had for years so everyone will want a piece of the action and there will be a tremendous amount of [marketing] clutter around the event."

Aside from the sheer number of messages, Greenwood also points to problems with category overlaps, which could result in wrangles over which sponsor owns which space. "Toshiba may be the official IT partner, but Philips is the official consumer electronics partner," he says. "So Toshiba will be restricted in its ability to demonstrate the multimedia capacity of its note books in showing live images, and may feel it can't leverage its rights effectively." It's a problem that Greenwood stresses is only likely to get worse as sponsor categories continue to blur, particularly in the telecoms and IT sectors. It is an issue that FIFA has sought to address. For the period 2007 to 2014, it has cut the number of top line sponsors to six, each paying $300m, which most agree is a sensible move. "It was really just a question of there being far too many sponsors to get significant cut through," says Phil Carling, a former commercial director of the Football Association and now head of football at sports marketing agency Octagon. "The commercial side was originally set up to manage exposure on perimeter boards, so 15 was fme. Now it's a much broader marketing platform." However, the broadening of the platform has also led to the other main, and most controversial, problem with sponsorship: ambush marketing.

For rival brands without an official deal, an event offering the opportunity to communicate with billions of consumers is simply too good a marketing opportunity to miss. In fact, it's a tactic that brands like Nike have turned into an art form. At the Atlanta Olympics in 1996 the sportswear giant not only bought up all the outdoor poster sites surrounding the venues, it set up its own rival "Nike Village" next to the official Olympic one. It employed similar tactics at Euro 96, the Sydney Olympic Games in 2000, and at the 2002 World Cup in Japan and Korea, where it worked particularly hard to undermine Adidas's official sponsorship of the event with its "Secret Tournament" campaign. The latter proved so effective that after the games an OMD "snapshot" poll showed that 22 % of UK consumers thought Nike was the official sponsor, compared withjust 19% who knew it was Adidas.

"There's no gentleman's agreement," says Ivan Pollard, a partner at the Ingram Partnership who worked on the Nike account during his time with ad agency Wieden and Kennedy. "Why should the rest of the marketing community stand aside and let the sponsor and organiser agree terms for everybody?"

It is a point that sharply divides the sponsorship industry. Shaun Whatling, associate director with strategic sponsorship consultancy Redmandarin, describes ambush marketing campaigns as some of the "most creative in the industry", and is reluctant to condemn the practice outright. "There's no doubt about the potential of events like the World Cup, but the relationship with a partner like FIFA can be limiting," he says. "Some of the large properties feel like a safe bet for a global brand, but it can turn into activation by numbers - the magnitude and scale of the property can kill off the sponsors' own self-expression."

Whatling also points to potential problems with exploiting the only tangible asset FIFA is offering - the trademarks - which are easier to use for some brands than others: "While it's easy to see the benefit for a company like Coke using them on a soft drinks can, it's a lot harder to estimate what value they add to a plasma TV or a PC."

FIFA insists it is cracking down, and maintains its "rights protection programme" has been specifically designed to stop any infringement of the trademarks its partners have paid so handsomely for. In particular, this year exclusion zones will be put in place around tournament venues to stop "unofficial" brands buying up outdoor poster sites. It is a move observers expect will prove reasonably effective. "In the past brands could get away with murder," says John Taylor, who negotiated the FA's first sponsorship deal with Littlewoods, and who is now chairman of sports marketing agency Sports Impact. "They could buy up outdoor poster sites, run public relations campaigns near tournament venues, you name it. But now FIFA is much more savvy, now there's much more protection."

Aside from the top line deals, experts stress there are ways for brands to capitalise on the inevitable football fever set to sweep the nation this summer. They can, for example, sponsor the national team, back a player, or buy airtime around the event. But even further down the chain, practically any association with football is likely to be successful, as the minds of the fans will be so focused. "Use a St George's flag in your campaign and consumers are likely to make the mental connection with the World Cup, as will any football-themed ads," adds Taylor. "It's a very grey area. There's nothing to stop you promoting football as a sport."

Muggleton agrees, pointing to the creation of events, such as private World Cup screenings, as an effective tactic, provided brands are careful not to use the protected trademarks or phrases in their promotional material. He also suggests looking for new categories and spaces to exploit, such as using new media platforms to sell ringtones or player statistics, for example. "It's about intimation without stepping over the line," he says. "It's about finding a way to tie your brand in with England's progress and capitalise on national pride."

All of which begs the question, is it worth it? Time and time again, post-event polls consistently show poor sponsor awareness, so why bother? It is a debate that looks set to rage on. "Does the public think badly of ambush marketing, or will people value your execution by how it affects them?" asks Whatling. "I suspect they'll judge official and unofficial sponsors alike - on how well they've have connected with them."