Sport tackles new frontiers

When FIFA President Sepp Blatter announced in December last year that the 2018 and 2022 World Cup tournaments would be played in Russia and Qatar respectively, it was a surprise to many football fans but not to the bookmakers.

This decision continued a trend: where China led in 2008, the other BRIC countries are following. Between 2014 and 2018 Russia and Brazil will both host the Olympic Games and the World Cup, the two mega-events in sport which reach a TV audience of three or four billion with several hundred million watching the most popular live broadcasts. India has already put on the Commonwealth Games, co-hosted the Cricket World Cup and may submit an Olympic bid. And as Qatar proves, it’s not only the BRIC countries that are getting involved. Formula One has also been making a determined effort to appeal to new markets recently, adding races in Abu Dhabi (2009), Korea (2010) and India (2011). The planned race in Austin, Texas in 2012 can even be classed as expansion into a new market given Formula One’s patchy record in the USA.

However, global expansion also increases risk. The 2011 Bahrain Grand Prix was cancelled at short notice due to political unrest, and attempts to reschedule it were met with strong opposition. High profile sports events can be disrupted in any country but sponsors and broadcasters will be wary about committing investment if they perceive significant political, economic or reputational risk.

For a growing sponsorship industry and other stakeholders in sport, these new frontiers present both a challenge and an opportunity. New markets are challenging because the global HQ and local managers may be unsure about how to make the most of a major event, especially if the sport is unfamiliar to local consumers. On the other hand, successful sports sponsorship could give a brand a real boost in an important territory.

Sponsorship can help achieve a number of objectives ranging from enhancing the brand or the organisation’s reputation through to business development and building relationships. The internal communications opportunity is often a significant factor too. Although the emphasis and approach will vary by country, the majority of major sport sponsors are mass-market consumer brands.

Government relations objectives tend to be a higher priority for sponsorship in those emerging markets where strong political connections are essential for business success.

The fundamental appeal of sport sponsorship is that major events provide an effective way to reach a large audience at the moment when they are pursuing one of their own interests through media channels (or actually at an event). Naturally, sponsorship innovates in step with the media industry – mobile apps are in vogue this year as sponsors seek new channels to counter the decline in audiences for individual TV stations.

A few global brands with sponsorship experience, such as Coca-Cola (an Olympic partner since 1928, believe it or not) will have significant local market presence and expertise virtually everywhere. However, the same may not be true for other brands of Western origin which are still feeling their way in emerging markets. Even if they are familiar with sponsorship, they may need local expertise to make it relevant. By contrast, ambitious local market brands may be looking at sponsorship for the first time, eyeing the potential for international promotion.

Sponsorship activity which works in one part of the world may not be right in another. In its marketing campaign for the Beijing 2008 Olympic and Paralympic Games, McDonald’s changed its well-known slogan to “I’m lovin’ it when China wins”, in an appeal to Chinese national pride. Adopting a similar strategy, the Canadian elite athlete training programme before the Vancouver 2010 Winter Games was called “Own The Podium” but it faced criticism from some commentators who took offence at the name.

In summary, the fact that major sports events are gravitating to emerging markets presents new opportunities for brands. Successful sponsorship programmes in the countries where the major events will take place in the coming years will combine international best practice and local market understanding to create a carefully tailored approach.

So, what should brands be doing now to prepare to take advantage?

1) Look at your brand’s objectives in emerging markets and consider whether sponsorship could help, especially if countries such as Brazil and Russia are relevant to you

2) Put together a team that combines sponsorship expertise and in-depth market knowledge to research the options

3) Consider whether your brand could provide an important value-in-kind product or service to a sports event. If so, the organisers will welcome you and there will be a logical way to promote the association

4) Recognise that Olympic and World Cup organisers restrict sponsors to a very specific exclusive category. If you need more freedom another sports property may be a better option

5) Think about your competitors’ objectives – would it worry you if they sign the deal?

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