How to be successful at sports sponsorships

A close friend of mine is a seasoned marketer with solid blue chip company experience and holds a senior position internationally. However, despite his professional success, he says his dream job would be to manage the marketing department of Manchester United FC. (The company he works for has sponsored the Dakar Rally for years.) Another friend of mine is a senior manager at Emirates Airline, which sponsors a good number of sports teams around the world, including Arsenal, Real Madrid, PSG, and AC Milan. Too bad, he is a Liverpool fan (Liverpool has not won a trophy in over a decade, but that is a separate discussion). Liverpool FC has a sponsorship deal with Standard Chartered Bank (SCB). Of course I have a friend working at SCB, who is a Chelsea FC fan. Chelsea has been sponsored by Samsung. I don’t have any close friends working for Samsung and the link breaks here.

Sports sponsorship is a fascinating field for people with a passion for both marketing and sports. Not to be confused with celebrity endorsements such as Usain Bolt and Nissan, Ronaldo and Toyota or Roger Federer with Rolex, sports sponsorship is rampant in almost every country and sport. From football clubs to tournaments, like IPL and Barclays Premier League, billions of dollars are spent by companies on sports sponsorship. Someone somewhere strongly believes that it is working and worth it.

From 2003 to 2011, global marketing spends grew by 41%, from $342 billion to $483 billion and in the same period, investment in sports sponsorship grew by 88%, from $26 billion to $49 billion.

This includes mega events such as the FIFA World Cup and the Olympics as well as individual teams and players. It spreads across various industries, busting the myth that it is only relevant to some categories. In the last 10 years, beverage companies (Coca-Cola, Pepsi), restaurant chains (McDonald’s, KFC), banks (Barclays, Faysal Bank), electronics companies (Samsung, Acer) and airlines (Emirates, Etihad), have all made hay while the sun was shining.

The FIFA World Cup deals start at $100 million, Manchester United’s most recent shirt sponsorship deal with Chevrolet cost $600 million and Nissan paid $250 million to be the official automobile brand at the 2016 Rio Olympics. These brands are paying for global property that will reach huge audiences. At a local level, sponsorships require a much smaller investment; a four million euro investment with UEFA for the Europa League sponsorship guarantees a regional media and marketing platform that reaches primetime evening TV audiences for nearly 10 months.

Considering the gigantic funds involved, one would expect sports sponsors to have quantifiable data to base their ROI. Wrong. Industry research shows that about half of the US companies involved in sports sponsorship do not have a system in place to measure the ROI comprehensively. According to Ron Schneier, GM, Nielsen Ventures, the measurement of all sports sponsorships are based on guess-estimate.

“Is the value of home plate five times or three times greater than the value of the right field wall?” Schneier asks in his article (Keeping score of sports sponsorships) in Forbes magazine in December 2004 (onforb.es/1Lxa3qh).

Emirates Airlines and sports sponsorship – A success story

“When we first sponsored Chelsea FC in 2004, there was a lot of confusion in the UK about Emirates,” says Ashfaq Shah, formerly Communications Manager at Emirates and now head of Corporate Sales.

“Our researches showed that customers thought Emirates was the UAE and not an airline. Interestingly, that also gave birth to the slogan ‘Fly Emirates’.”

Shah considers the strategy to have been successful, primarily because there was a clearly set objective – to increase awareness about Emirates Airline in new markets.

Marketing has evolved and thinking patterns need to change. If your brand is relevant to sports sponsorship, go for it; relevant being the operative word here.

Although Pepsi and Gatorade have always been relevant, I am not sure whether 20 years ago an airline or a bank would have been considered as relevant for sports sponsorships.

According to Shah: “even today, by global standards, Emirates is not as big as Delta, Lufthansa or United, so it made sense to gain market share from European carriers by turning Dubai into an attraction for European travellers and encouraging people from the Middle East to visit European destinations via Emirates.

And the common passion between Europe and the Middle East is football.”

With a footfall of 47 million passengers annually, Emirates ranks 12th in the world, with the top three airlines accounting for over 100 million passengers in 2014 (Source: The Economist June 2015). When Emirates started sponsoring football clubs in Europe the numbers looked very different from what they are now.

As Shah says:- “we operated six flights a day to the UK in 2004; today we have eight flights a day just to London and they include six A380 flights, which carry more passengers. In fact, today we have a daily capacity of 3,822 passengers to London which in 2004 was more than a week’s capacity to the same destination.”

Emirates’ football sponsorship came after cricket. Emirates’ relationship with the International Cricket Council (ICC) dates to 2002 when it signed a deal with the ICC to sponsor the Emirates Elite Panels of Umpires and Match Referees. This gave the airline entry into cricket playing markets in Australia, the Caribbean and the UK.

As of today, Emirates supports 85,100 jobs (Source: Emirates Group Annual Report 2014) in the EU, offering 21 unique non-stop flights from European destinations to Dubai and 199 routes that are unique one-stop connections via Dubai. The revenue per employee has risen from $1.72 million to $1.93 million. After the success of the sponsorship venture with Chelsea, Emirates entered into sponsorship agreements with Real Madrid (Spain), AC Milan (Italy), PSG (France), Hamburger (Germany), and Olympiacos (Greece).

What Pakistani marketers can learn from Emirates

Firstly, dare to be different. Get out of the 30 second spot trap. Marketing has evolved and thinking patterns need to change. If your brand is relevant to sports sponsorship, go for it; relevant being the operative word here. Although Pepsi and Gatorade have always been relevant, I am not sure whether 20 years ago an airline or a bank would have been considered as relevant for sports sponsorships. Secondly, pay attention to the execution. Emirates did their homework. They had a clear objective of breaking into a market which had high volume but a low share for Emirates. They sponsored a sport which had a common link between the people of both regions. They chose the vehicles (Clubs) that would give them range across different European destinations and lastly, the implementation of their strategy was good.

If we compare Faysal Bank’s T20 sponsorship in Pakistan cricket, here is how it might look like.

Objective – a mid-sized bank, trying to gain consumer reach in mass segments. Avenue chosen – the most popular sport in the country, with regional teams competing against each other. So far so good. The question is whether the execution was good enough. Although I do not have access to the numbers, considering that the sponsorship is a regional one, Faysal Bank should increase its footprint within those regional hubs in terms of both consumer and corporate banking. For example, given that some of the matches are played in Lahore, with three to four teams from Punjab, sponsoring this event must be followed up with the opening of new branches in Punjab, primarily driven by Lahore. (Although Faysal Bank is Punjab focused with 10 branches in Lahore, six in Faisalabad and four in Sialkot, many of those branches were acquired during the RBS takeover.)

According to David Wheldon, the former Global Director of Brand at the Vodafone Group, and now Head of Brand, Reputation and Citizenship at Barclays (both of which have invested heavily in sports sponsorship, with the latter being the sole sponsor of English Premier League),

“I certainly spent all of the 1980s thinking sponsorship was a waste of money, a chairman’s indulgence not capable of driving brand engagement, brand equity or all the things that I now know sponsorship to do very powerfully. I am a total convert to sponsorship as a marketing platform.”

By being creative, brands can develop new and cost effective sports sponsorship opportunities. Take hockey in Pakistan as an example. Although the current state of Pakistani hockey is pretty dismal, this means that any sponsorship of hockey will come at a rock bottom price and one must not forget that hockey has strong sentimental value among middle-aged consumers. A national level brand, taking up the task of reviving Pakistani hockey can boost its popularity among the younger generation as well. Here I am thinking about Ufone and MilkPak. Did someone say, “not relevant to my brand?”

Sami Qahar is a Dubai-based Pakistani looking for excuses to write. Aurora gives him a few.
sami.qahar@gmail.com

Correction: An earlier version of this article stated that Roger Federer endorses Tag Heuer. This has now been changed. The error is regretted.