The FIFA World Cup 2014, scheduled to kick off on Jun 12 in Brazil, will provide marketers with a dream opportunity to push their brands. Four billion fans are expected to tune in on television and a multitude of digital and social media channels.
During this month-long sporting event, an estimated 500,000 soccer fans from across the globe are expected to travel to Brazil. Obviously, it will be a big boost for the hoteliers, restaurants, retailers and tourist hotspots. A total of 12 Brazilian cities will be hosting the world’s largest soccer event that comes every four years. These provide an added incentive to even the non-official partners to up the ante for advertising and marketing.
FIFA’s Sponsorship Strategy
To capitalize on this huge money-minting potential, FIFA has a three-tier sponsorship structure. The first tier consists of the FIFA Partners, followed by the FIFA World Cup Sponsors and the National Supporters for each FIFA event.
The FIFA Partners include The Coca-Cola Co. (KO - Analyst Report), Adidas AG (ADDYY - Snapshot Report), Hyundai Motor Co. (HYMTF), Emirates Airline, Sony Corp. (SNE - Analyst Report) and Visa Inc. (V - Analyst Report). These six companies have the highest level of association with all FIFA events and support the development of the sport from the grassroots to the top level.
The FIFA World Cup Sponsors comprise Budweiser – the beer brand of Anheuser-Busch InBev SA/NV (BUD - Snapshot Report), Johnson & Johnson (JNJ - Analyst Report), Castrol – the motor oil and lubricants firm owned by BP plc (BP - Analyst Report), McDonald's Corp. (MCD - Analyst Report), Moy Park – the food company owned by Marfrig Global Foods S.A. (MRRTY), Continental AG, Brazilian telecommunications giant Oi and Yingli Solar – the photovoltaic brand of Yingli Green Energy Holding Co. Ltd. (YGE). The sponsors in this category have exclusive rights for brand association, the use of selected marketing assets and media exposure, as well as ticketing and hospitality offers.
The final tier of the National Supporters allows local companies to promote themselves in the domestic market. These include Brazilian Trade and Investment agency Apex-Brasil, leading sports retailer Centauro, confectionery manufacturer Garoto, Banco Itau (ITUB - Analyst Report), insurance company Liberty Seguros and language school WiseUp.
With such a formidable line-up, FIFA is expected to rake in at least $4 billion in sponsorships and television rights from this event.
The Vast Playing Field
Conservative estimates have revealed that the FIFA World Cup will be equivalent to having the Super Bowl every day for over a month. About 108 million people reportedly watched the Super Bowl in 2013, while 3.2 billion watched the last FIFA World Cup with 715 million watching the finals alone.
In order to have a significant TV presence in all the soccer games and related coverage, about eight companies have paid $600 million on an aggregate to premier Brazilian TV network Globo. This translates to $75 million per sponsor, which is almost comparable to 20 thirty-second Super Bowl spots for each marketer. The sponsors include Ambev S.A. (ABEV), Coca-Cola, Banco Itau, Johnson & Johnson, Hyundai, Nestle, Oi and local retailer Magazine Luiza.
Globo will offer each marketer a minimum of 1,120 video insertions, including 451 thirty-second TV commercials, 359 vinhetas, and several quick mentions with visuals when announcers talk about World Cup games. Vinhetas are 5-second commercials created by Globo that showcase four marketers at a time and are shown at the beginning and end of soccer games, and during commercial breaks and other programs.
On the other end of the spectrum, social media and mobile marketing platforms provide another lucrative option to marketers. Social media like Twitter, Inc. (TWTR), Facebook, Inc. (FB), and Google Inc. -owned YouTube offer an emotive and interactive platform for fans to interact and share experiences. According to Twitter, the 2012 Euro Cup final alone generated 16.5 million total tweets from a viewing audience of just under 300 million, while the last soccer World Cup final drew more than twice as many viewers. Consequently, they provide a huge potential for integrated branded content to reach millions on a real time and generate enormous publicity.
The participating soccer teams and individual players also attract global audiences. National team jerseys and merchandise churn additional revenues for these sponsors. Coca-Cola, one of the most solicited brands for sponsorships, is an official sponsor of soccer teams like Argentina, Chile, Uruguay and Ecuador. The other most prominent sponsors include Adidas, Claro – a part of America Movil S.A.B. de C.V. (AMX - Analyst Report), Gillette – the well-known brand of The Procter & Gamble Company (PG - Analyst Report), and dairy producers SanCor.
Last but not least, digital billboards, posters and banners across the cities and around the stadium give advertisers another opportunity to fight through the clutter and reach the target audience.
Despite the possible avenues for minting huge money, there lie some inherent risks. First, broadcast advertising opportunities are limited in soccer matches -- it is played in 45-minute continuous halves with the only commercial breaks coming at halftime.
Secondly, with FIFA commercial partnerships sold out years in advance to the actual event, it becomes difficult for companies on the outside to cash in on the live action. Finally, marketing costs among competing brands are often too high to earn a profitable ROI.
The Game Changers
With limited options to exploit commercial spots on television via live coverage, the focus has steadily shifted to social media and mobile platforms on smartphones, tablets and other handheld devices. Even players like Messi and Christiano Ronaldo, who command a significant fan base, provide a much-needed boost through their product endorsements or through brand logos.
To further extend the shelf-life of this sporting event, marketers are also organizing contests and brand promotions through freebies, mementos and other interactive engagements. This can even turn the most novice spectators into active campaigners for the sporting event as well as for the brand itself.
It is too early to predict whether such efforts will actually reap synergistic benefits from this marketing blitz. The guaranteed winners from this event, however, are surely to be FIFA and the games’ fans.