Hollis Sponsorship Bulletin

According to a news report from Bloomberg, Sony Corp.’s European head of soccer sponsorships has said that the electronics manufacturer is still analysing its sponsorship of the World Cup as the sport’s governing body probes allegations of corruption in its executive committee.  Sony’s official partnership contract runs until the 2014 World Cup.
Speaking at the International Football Arena conference in Zurich, Sony’s Toby Shaw said that the investigation into the bidding for the 2018 and 2022 events “isn’t great” for companies in discussions about supporting the tournament and that FIFA’s sponsors would prefer to associate themselves with the World Cup rather than the organisation itself, he said.
“We don’t say we’re a partner of FIFA. We say we’re a partner of the World Cup,” Shaw told delegates today at the International Football Arena conference in Zurich. “We concentrate on whether it’s right for our business going forward,” Shaw said. “We are still evaluating the last World Cup.”

It’s not just the handful of teams who are now enjoying success at the World Cup.  Some of the world’s leading brands are battling it out for dominance in an event that is being watched in over 200 countries by a cumulative global audience estimated to be a staggering 26 billion. 
For the first time at the World Cup moving electronic perimeter advertising for the sponsors is being used, reports sponsorship specialists brandRapport.  Each of the World Cup’s six partners, eight sponsors and five local sponsors have their brands displayed in 30 second slots on the LED boards during each match.  The partners – Coca-Cola, Emirates, Visa, Hyundai, Sony and adidas -  each receive exclusive branding which can amount to eight or nine minutes per match while the sponsors appear in pairs – McDonalds with Yingli Solar, Budweiser with Castrol, Continental with Mahindra Satyam and MTN with Seara.  The local sponsors all appear on the boards together.
This new system guarantees a specific amount of exposure for all the brands during each match.  However those brands that happen to be showing when each goal is scored receive significantly greater benefits.  The goals are of course the most repeated and most widely shown part of each match and as the tournament progresses each goal becomes more important as do the benefits to the sponsors who are visible when they are scored.  Also certain key goals will be shown for years after the tournament has finished.
After the group stages and round, of the last 16 matches a total of 123 goals have been scored in the tournament.   FIFA Partner Coca Cola has been on show for 15 of the goals.  Close behind Coke with 14 is the boards showing the joint branding of sponsors MTN and Seara. Visa is next with 13 goals, Mahindra Satyam and Continental have been on show for 12 goals and adidas for 11.  David Villa’s winning goal for Spain against Portugal was scored while the Coke branding was on show which took Coke into the lead.  However, had Frank Lampard’s disallowed “goal” been awarded in the match against Germany, MTN and Seara would have joined Coca Cola in the lead with 15 goals. Only goals scored during normal time and any extra time period have been counted. 
Three of the partners are using the World Cup platform to promote more than one of their brands.  Hyundai shares its exposure with its sister company, Kia Motors, Coca Cola gives over exposure time to its sports drink Powerade and Budweiser showcases a number of the brands in the Anheuser Busch portfolio depending on which teams are playing.  For example, Brahma Beer appears when Brazil are playing, Hasseroder when Germany play and Quilmes when Argentina are in action.
 After the 2006 World Cup, there was criticism of the sponsorship structure which saw 15 main sponsors shared among the limited amount of branding space offered by a static perimeter board system.  What FIFA has done is to open up the categories, limiting the number of elite “partners” to just six. 
However, it is the eight sponsors that comprise the next tier that are perhaps the most interesting in terms of what we can expect in the future – Mahindra Satyam, an IT service provider from India, Seara, a Brazilian food manufacturer, Yingli Solar, the Chinese Solar Energy specialists and MTN, the African mobile communications company.  Major companies and brands are developing fast from economies outside of Europe and North America and are specialising in sectors which are new to the World Cup and they have clearly identified the event as the way to launch their brands globally.
Another great commercial battle between adidas, Nike and Puma is also hotting up.  Adidas is, of course, an Official FIFA Partner, but both brands have kit supplier/sponsorship agreements with many of the teams in the competition and both will be hoping that teams carrying their brand will be competing in the final on July 11th.  At the start of the tournament adidas had 12 teams wearing its kit while Nike had 10.  Puma who had the 2006 World Champions Italy had seven teams including four of the African nations.  The hopes of Adidas now lie with the German and Spanish teams, Puma with Uruguay and Nike with the Netherlands.
Commenting on the commercial aspects of the tournament, brandRapport’s Director of Football, Richard Thompson said, “The Football World Cup has established itself as the stand-out global sporting event  for commercial partners.  The passion and levels of interest in all the matches are unrivalled and the fact that sponsorship revenue for this year’s tournament is up 80% on Germany 2006 speaks volumes for the demand from companies and brands to be part of it”.

A poll by reputation auditors Echo Research has shown that the British public may well be uncertain which companies are sponsoring the tournament. Respondents were clearer, however, about sponsors’ motives, understanding they are driven by hard-nosed targets, such as TV coverage and selling product, rather than any commitment to any softer issues.
Echo’s Group CEO, Sandra Macleod, remarked “these findings show that, as the tournament gets underway, sponsors have much work to do to raise awareness of their role in the World Cup, and to convince the British public that they are motivated by a genuine concern for the host nation and for football and its supporters, as much as by commercial gains. Should confusion in these areas continue as the World Cup unfolds, sponsors will not realize the brand and reputation benefits that sponsorship should bring”.

Conducted the day before the FIFA World Cup opening ceremony on 11 June, the 1,005 adults polled across Great Britain struggled to correctly identify eight World Cup sponsors and partners (Coca-Cola, McDonald’s, adidas, Sony, Visa, Budweiser, Emirates and Hyundai) from a list of well-known brands. Coca-Cola was the only company to be correctly identified as a sponsor by more than half of those polled (57%) and Hyundai by the least (10%).
Nike was incorrectly identified as an official sponsor by 30% of those polled – more than identified adidas, an actual sponsor (29%). Carlsberg was also incorrectly identified as a sponsor by 23%, not far behind the 28% identifying actual sponsor Budweiser.

When asked to select reasons why a company would sponsor the World Cup, 81% agreed it was “to get their company name or logo on TV” and 50% “to sell more of their products within South Africa”.
Thirteen percent agreed it was “because they care about football and its supporters”; nine percent “because they care about issues of health, fitness and wellbeing” and seven percent “because they care about South Africa and its people”.

With the debate over the pros and cons of alcohol sponsorship rarely out of the industry and mainstream news, the European Sponsorship Association (ESA) continues to take an active role in consulting with and representing the industry at local and European government level. It has recently reported the findings of its large-scale survey of rights holders to the EC, and the industry is now awaiting to hear in the autumn from the Director General for Health and Consumers, who has been taking evidence and consulting on all sides of the debate.

The big question, of course, is whether the issues of alcohol sponsorship and binge drinking are inter-related, and whether the industry can survive calls for external regulation. Is it facing European-wide legislative control, as happened with tobacco marketing, or will responsible marketing, codes of practice and co-operation with local governments ensure its survival?

Last year, the beer sector contributed some US$565m to the total global sponsorship investment pot, ranking it the fourth highest sponsoring industry in terms of investment (source, TWSM). Indeed, the beer brand, Budweiser was ranked the fifth largest sponsor in sponsorship commitment, pouring a reported US$131,250,000 investment into its sponsored activities. This positioned it above brands including BP, Emirates, Sony and O2.

Unsurprisingly, with sponsorship investments of these proportions, the alcohol industry has been keen to protect its position and investments. At a time when latest figures show that 24% of adults in England are classified hazardous drinkers and the cost of alcohol related harm to the NHS is £2.7 million, brands have taken significant voluntary steps to promote responsible drinking, and in some instances, to use their sponsorships as a vehicle for conveying messages of sensible drinking.

For example, for any new football team sponsorship deals, alcohol branding on children’s replica shirts is now not allowed by the drinks body, The Portman Group. Indeed, some brands were a step ahead of the timing of such prohibitions, with Carling, sponsor of both Celtic and Rangers offering children’s replica shirts without branding before the restrictions were implemented.

Alcohol brands have also been active in joining with the UK Government on social sponsorship campaigns. For example, the UK Dept of Transport’s THINK! campaign joined with Bacardi Martini, to support the brand’s PR link, using Michael Schumacher as an ambassador, with a joint promotion of responsible drinking at Grand Prix.

Elsewhere, Carlsberg was seen to use its UEFA football sponsorship to convey a responsible drinking message: ‘Carlsberg supports fair play on and off the pitch. Please drink responsibly’ within stadia and on fan park cups. Tennants, the owners of the T in the Park music festival, gives half of its signage free to the Drinkaware Trust, as part of their social responsibility programme.

But will these voluntary steps be enough to stave off legislative intervention? The EC is looking very closely at the issue through its Alcohol and Health Forum, the objectives of which include the creation of an action plan to protect children and young people, investigation into scientific evidence, and to consider self-regulation as a means to increase responsible commercial alcohol communication and sales.

As part of ESA’s commitment to the Forum, and in conjunction with Comperio Research, its wide-reaching survey of European rights-holders was conducted to gain insight into practice and attitudes towards alcohol sponsorship. ESA was keen to discover the extent to which rights holders hold concerns over alcohol sponsorship, together with the extent of any measures, voluntary or otherwise, in place to regulate such activity and protect these important revenue streams.

The results clearly indicate that many rights holders have their own internal procedures to set the nature and extent of their partnerships with alcohol brands, and do not wish for additional legislative control. Many assess alcohol sponsorship on a case-by-case basis, with some banning it along the lines of unsuitability or the target age of their audience.

The majority of respondents indicated that they would prefer to self-regulate their partnerships under guidelines by an industry body, such as the European Sponsorship Association, rather than an external body unrelated to the marketing sector or through legislation.

Restrictions on alcohol sponsorship, or more critically, a blanket ban would see many rights-holders struggle to fill the void left by alcohol brands’ investments. Indeed, around half of the organisations surveyed, said they would be affected if legal restrictions were imposed upon alcohol sponsorships; significantly more for those with current alcohol sponsorship deals.

As Jennifer Davies, Development Director of the Philharmonia Orchestra puts it: “For UK arts organisations that are experiencing diminishing subsidy and a critical reliance on a limited pool of private donors, alcohol sponsorships can make the difference between a successful fundraising campaign, or one that does not cover its costs. And private fundraising is key to an arts organisation’s survival.”

So, what does the future hold for alcohol sponsorship? Can the drinks brands and the rights-holders who rely upon their support, steer a mutually responsible path to ensure its survival free of legislative control? Will the current approach of the EC, which is encouraging self-regulation to see if this helps address the problem, prevail, or will national governments decide to impose their own legislative restrictions?

The industry, in particular the rights holders, as well as the sponsors themselves, need to be vigilant in ensuring that alcohol sponsorships are professionally managed. Not only must they guarantee that no promotions are made to under 18 year olds and that all advertising, giveaways, sales and hospitality are managed to the highest level of control, but they must also take positive steps to promote responsible drinking. Abiding by voluntary codes of practice and imposing their own self-regulations, and by managing events so that there are no alcohol-related incidents, is the best way that the industry can demonstrate their awareness of the issue and their responsibility towards it.

Helen Day, Head of European Policy, ESA

[1] Statistics on Alcohol, England, 2009, The Health and Social Care Information Centre

For further information, or to find out more about ESA’s Policy Group, please contact ESA via office@sponsorship.org or telephone +44 (0) 208 390 3311, or contact Helen Day at helenday@sponsorship.org

The global advertising market is set for a rocky 2009 – but there are signs that some blue-chip sponsors see value in marketing their way through the current recession.

EDF, for example, has just announced it will be renewing its sponsorship of ERC-controlled European club rugby tournaments, the Heineken Cup and European Challenge Cup. A four-year extension to the current deal means EDF will now back ERC until the end of the 2012/2013 season.

Explaining the rationale for the renewal, EDF communications officer Dominique Lagarde said the partnership with ERC provided “a powerful communication platform to generate positive brand exposure and to organise quality hospitality programmes in key European markets”.

This week also saw Mastercard renew its sponsorship of UEFA’s Champions League until the end of the 2011/12 season. Underlying the desire among big brands to hold on to top properties, Mastercard Europe’s president Javier Perez said sponsorships were a critical component of Mastercard’s marketing approach. Heineken, Sony and UniCredit have already signed up as CL partners for the 2009-2012 contract.