HOW THE FIFA WORLD CUP SPONSORS CAN BE VICTORIOUS

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1 HOW THE FIFA WORLD CUP SPONSORS CAN BE VICTORIOUS The benefits of By Professor Dominique Turpin - June 2010 IMD Chemin de Bellerive 23 PO Box 915, CH-1001 Lausanne Switzerland Tel: Fax: info@imd.ch

2 This summer the 2010 FIFA World Cup will dominate the media headlines. Anyone with even a passing interest in sport or current events will almost inevitably find themselves watching, listening to or reading about the achievements of the world s best footballers. For a number of major brands, the chance of grabbing a share of this global audience s attention at the same time is a unique business opportunity. Companies such as Adidas, Coca Cola, Sony and Visa have signed up to sponsor the event or already have a partnership arrangement with FIFA. The advantages of sports sponsorship One of the clearest advantages of sponsoring major sporting events is that companies can still reach broad demographic audiences something that is becoming more difficult in our increasingly fragmented media landscape. Other advantages include sport s competitive, friendly, and dynamic nature; its emotional involvement; and its connection with positive values such as tenacity, good sportsmanship and team spirit. Most marketers choose sports sponsorship as a way of linking their brand with these positive values, but it can also be an effective way of raising brand awareness. For example, in the late 1980s, Visa s brand awareness in Asia was low compared with the Americas and Europe, but after it sponsored the 1988 Olympic Games in Seoul it increased significantly in Korea, Japan and Taiwan. Had it tried to build awareness incrementally, country by country, it might still be trying to become the universally-recognized name that it is today. Sponsorship is not the same as advertising Companies aiming to get the most out of their sponsorship of the World Cup, or indeed any other sporting event, need to do far more than slap their logos on players shirts or the stadium s hoardings it should not be treated as just another form of outdoor advertising. Sponsorship involves a commercial exchange with a variety of parties, each pursuing their own objectives. Especially for the sponsor, sponsorship is about meeting its overall marketing objectives, and thus should not be seen in isolation from other communication tools. The first step is to ensure that the event fits both the brand s values and the target audience s interests. The power of sponsorship lies in building or enhancing perception through transfer of values from the property to the brand, but this will only work if the selected property fits with both the brand and audience. It is also useful to choose an event that will allow the brand to build long-term partnerships; as with traditional marketing, frequent changes will simply confuse consumers. IMD - HOW THE FIFA WORLD CUP SPONSORS CAN BE VICTORIOUS Page 2/5

3 Most companies believe that sponsorship is just getting the rights to a property, and that most do not then take full advantage of that property. This is a sheer waste of companies resources, because the full value comes not from obtaining rights but from what a company does with the sponsorship. The sponsorship should be exploited across all relevant communication mediums, with consumer and trade promotion, advertising, store merchandising and so forth. That means budgeting accordingly. Typically, leading companies such as Shell, Carlsberg and Visa have a ratio of 1:2 or 1:3 between rights and activation fees. Measuring results If you spent $12 million on a sponsorship, surely you would want to know whether it is working or not? Measuring returns from sponsorship is difficult, but definitely not impossible. By systematically defining the objectives and putting in place quantitative and qualitative targets and measures, companies can judge whether or not a sponsorship has worked. Most scepticism about the value of sponsorship arises because of a lack of clarity around objectives and inadequate systems for measuring results. This is, in turn, one of the biggest deterrents for potential sponsors. Measuring sponsorship should be viewed as taking a set of quantitative and qualitative criteria and then forming an opinion on whether it is working or not. The first step is to be clear on the marketing objectives. Without this clarity, organizations won t know what to measure. The second step is to understand how sponsorship benefits soft factors such as employee motivation and pride. For example, UPS decided to sponsor the Tour de France specifically to motivate its French employees. They calculated that sponsoring this key French event would help build employee motivation and pride. While it is difficult to measure employee pride quantitatively, all managers know something is working when they see employee enthusiasm and commitment translating into improved performance. We have identified a number of key measures against which a sponsorship arrangement s success should be measured: Quantitative Top of mind awareness Market share movements in the selected geography Research results in relevant target audience and with respect to competition, covering image; prestige, shift in relevant attributes; brand preference; and increase in purchase intention IMD - HOW THE FIFA WORLD CUP SPONSORS CAN BE VICTORIOUS Page 3/5

4 Satisfaction surveys of customers, consumers and employees Qualitative Media opinion Consumer/customer enthusiasm Observers feedback Employee motivation Once organizations collate and analyze this information they will get a strong idea of whether or not a sponsorship arrangement is working. For this analysis to be effective, however, they must put measurement systems in place and involve appropriate experts from the outset of the project, rather than trying to define and measure objectives retrospectively. There will only be one winning football team at the World Cup. But the sponsors of the World Cup that can maximize their association to the event will be best positioned to pull ahead of their respective competition and also come out on top. Dominique Turpin is the Dentsu Professor of Marketing and Strategy at IMD. He is the Program Director for the International Seminar for Top Executives. IMD - HOW THE FIFA WORLD CUP SPONSORS CAN BE VICTORIOUS Page 4/5

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