Marketing is moving fast. Everything is changing – virtually in front of our eyes – with new rules written even before the ink has dried on the old ones.
A perfect storm of factors are converging to drive this pace of change. Social media is having a profound effect on what consumers expect from brands and how they want to interact with them.
New devices, unlimited bandwidth and the ability to be constantly connected all combine to give brands a range of new opportunities to engage with their audiences. This is leading to the convergence of the real and the digital worlds and a deep interconnection between all marketing channels and touchpoints.
But even when everything else is changing, the things that people love stay the same. That’s why sponsorship, as a route into people’s passions, is more important than ever.
As 2013 moves into full swing, we are delighted to share our perspective on the big trends that will be driving the sponsorship industry – we hope that you find them interesting and thought-provoking. Most importantly, we hope that you will use them to help create brilliant sponsorship campaigns.
Analysis of industry data suggests that the F1 ecosystem raises over £1b per year from sponsorship. This includes Team Sponsors and Suppliers (ranging from £100m for the big boys to £20m for the smaller teams), F1 Partners (around £25m per year in cash or Value in Kind from each of the 6 global partners) and Race Sponsorship (around £10m for each of the races with title sponsors plus trackside advertising).
To put that into context, the London 2012 Olympic and Paralympic Games raised around the same amount (£750m from domestic sponsors plus around £250m contribution from the IOC for TOP partners) – but that was for a 4-year cycle.
So here’s a question: Given how much is spent on it from some of the world’s leading brands, why is F1 Sponsorship not at the leading edge of sponsorship thinking and activation?
It’s fair to say that F1 is ahead of the game in virtually everything else it does. So surely F1 Sponsors should be cleaning up at the major sponsorship industry awards. In fact, over the past 5 years, an F1 sponsorship has won only once out of a possible 47 SIA awards (Vodafone’s Best Sponsorship of a Team or Individual in 2009). Case studies from F1 should be inspiring sponsors in other sports. Here at Synergy, we should regularly be showcasing examples from F1 in the ‘What We Love’ section of Synopsis. But this just isn’t the case – at least not to the extent that one would expect.
Don’t get me wrong, there are some great pieces of activation in F1 (I’ll point out some of them later), but as a whole, F1 sponsorship is pretty uninspiring.
Having run the Reuters sponsorship of WilliamsF1 from 2000 – 2003 (yes – I agree – it was nowhere near ‘award-winning’!), I thought I would have a go at answering that question based on my own personal experiences.
1. Most Formula One sponsorships are B2B
Reuters primarily used F1 for B2B relationship building. A quick scan of F1 sponsors shows that over 40% have significant B2B businesses. There is little better than F1 if you have a relatively small number of high-value, global customers who you reach through targeted sales and marketing programmes. Travelling around the world to all the key markets, Formula One and Paddock Club™ are the absolute gold standard of corporate hospitality. With this being the focus of the brands’ activation programme, it is little wonder that it remains unseen by the mass audience, award panels and the Synopsis editors.
The activation challenge for the B2B partners, however, is to create the most compelling brand stories and event experiences to attract their audience. Because the fact is, especially in the small markets, most of the B2B sponsors are going after a very similar audience, in some cases exactly the same people.
2. There is too much focus on brand exposure and logos on cars and not enough on activation
Whenever brand exposure is such a critical part of the sponsorship package, it is easy to rely too heavily on it at the expense of all the other things you can do with the sponsorship. I absolutely hate the “media value” figures that are at the heart of so many F1 sponsorships. However, it is easy to measure and as long as the media value is bigger than the cost of the sponsorship, brands can be tempted to think “job done”. In comparison, Olympic sponsors can’t rely on any media value to justify their sponsorship. That’s why they have to work much harder and be far more creative with their activation.
A knock-on effect of this over-emphasis on media value is the fact that it can lead to an under-investment in activation. Typically, the rights fee is so high (because brands are paying for the exposure) that there isn’t enough left over for activation. I’m not a big believer in any rule-of-thumb ratios, but the proportion of rights fee to activation spend when I was at Reuters is definitely not going to make it into any how-to textbooks. I suspect this isn’t unusual for F1 sponsors up and down the Paddock
3. The calendar gives you no time to plan and develop great campaigns
The F1 season is relentless. The first race is in early March and the last race is in late November. In between is a never-ending cycle of travelling and managing the day-to-day execution of race weekends. Everyone goes on holiday during the 4-week summer break and at the end of the season, which then leads into Christmas. Trust me, if you want a year to fly past, get a job in F1.
Which basically just leaves January and February to do any sort of campaign development. But even those months tend to be dominated by tactical planning for the season ahead. There just isn’t the time to think about a season-long campaign or a brilliant piece of activation.
Another challenge is the global scale required by an activation campaign. Japan, Abu Dhabi, Britain, the US and Brazil have very little in common with each other from a marketing perspective. So as an F1 sponsor you are sort of in limbo between creating and delivering a global campaign that doesn’t quite work in loads of markets and developing local campaigns which feel a bit ‘small’ and short term.
4. The F1 community is too closed
There are some great people who work in F1. However, it needs more ‘churn’.
For example, when I needed a sponsorship agency, everyone I invited to pitch was effectively a specialist F1 agency. I understand why most sponsors do that, but it leads to a form of ‘groupthink’ where new ideas are thrown out in favour of “what we did last year” or “what we do with our other clients”.
This happens up and down the paddock. If an F1 team needs a new Account Manager, they are likely to hire someone from one of the other teams. If a brand needs an F1 Sponsorship Director, they are likely to hire someone who has done a similar job at another sponsor. If an F1 agency hires a new Account Director, they typically hire someone who already has F1 experience.
The danger of this ‘closed’ community is that it loses the fresh influences and perspectives that drive creativity.
I know it’s tough (I’ve been there myself) but I think F1 sponsors need to be braver and set the bar higher for their activation campaigns. The benchmark should not be: “we want to create the best F1 sponsorship campaign”, but rather “we want to create the best sponsorship campaign”. And to do that, I think that it is critical for sponsors to look for inspiration outside the very small world of F1.
The point of this blog is not to say that there are no good F1 activations – because clearly there are some great examples.
My point is simply that given the number of world-class brands who are sponsors in F1, the amount that they invest and the possibilities of F1 as a platform, there should be far more ground-breaking activation programmes than there are.
Some of our Favourite F1 Activation Case Studies:
Johnnie Walker – Step Inside the Circuit Series
Johnnie Walker extended this campaign with some experiential activity in Travel Retail environments but at its core was some great behind-the-scenes content, from Monte Carlo (below), India, Singapore and other races
Using a special online configurator, consumers in each country could create bespoke designs of the drivers’ race suits. The drivers wore the designs during qualifying for each race, while the best two designs as voted by the audience were worn on the Sunday during the Brazilian Grand Prix. Boss also did a good job of connecting this activation to their social media and retail channels:
In exchange for a donation to charity (which Red Bull matched), consumers could upload a photo which was then put on the car for the British Grand Prix.
Vodafone – Drive to the Big League
Vodafone introduced this initiative at the British Grand Prix in 2010 which offered one of their small business customers the chance to put their logo on the car for the British Grand Prix. Vodafone have taken it to a whole new level in India now, where they have combined it with a Dragons Den style TV programme to select the winner – watch it – it’s brilliant!!!
A revealing statistic from an interview with the IOC’s Marketing Director Timo Lumme in this month’s SportBusiness:
‘The sheer volume of [London 2012] sponsor activity presented challenges, particularly for the team responsible for signing-off on the use of Olympic marks and imagery. This time around they had to deal with 25,000 different partner activations, that is more than double the number for Beijing.’
More than double. And this despite Beijing 2008 having 12 TOP sponsors to London’s 11.
Assuming that Timo is only talking about TOPs, that works out at an average of around 2,500 activations per TOP for London 2012 versus an average of around 1,000 for Beijing 2008. Remarkable. Why did this happen and what conclusions can we draw?
London 2012, in marked contrast, presented no such issues, with many sponsors, for example Coca-Cola’s ‘Move To The Beat’ campaign, making London the thematic centrepiece of global campaigns. Result? Far more sponsor activity around London than around Beijing.
We concluded that for the first time social media would be one of the Games sponsors’ key activation channels, which was subsequently borne out by the explosion of social activity during London 2012. This would seem to be the second major factor behind the upweight in TOP activation.
3. Procter & Gamble. New to the TOP programme for London 2012, P&G created a veritable storm of activity around the Games, to the extent that at times it felt impossible to avoid. Crucially, however, in this context, they activated not just around the P&G corporate brand (the strategy for which I’ve written about before, for example here and here) but globally across 34 of their brands.
Although it seems clear that all of the TOPs upped their game between Beijing and London, when you consider the scale and diversity of P&G’s effort, it’s impossible not to conclude that this was the other key factor that drove the step-change in TOP activation volume.
Think you know the slogans and straplines of the London 2012 sponsors and organisers? Did you even know them in the first place? Well, here’s your chance to test your knowledge – and the effectiveness of a lot of heavyweight marketing.
We’ve created this (entirely unofficial) crossword featuring the IOC, IPC and LOCOG slogans, and the campaign straplines of the Games’ global and domestic tier one sponsors.
View and download it here and test your knowledge. And if there are a lot of London 2012 experts in your office, why not challenge them to a speed test?
We defy you to complete it without Googling (especially 19 across and 22 across).
But when you do, you’ll find you have not just a completed crossword, but a London 2012 word cloud.
In the London 2012 closing ceremony, Brazil enjoyed the traditional eight minutes accorded to the Games’ next hosts to symbolise the handover from London to Rio and present the spirit of Rio 2016 to the world. It was a great show with some Brazilian music and sports stars, and the overall reaction was very positive. Yes there were clichés like samba and carnival, but they also created a great mix of Brazilian traditional and modern culture elements.
The spirit of the Rio Games evoked by Rio's section in the London 2012 Olympics Closing Ceremony (Xinhua/Photoshoot)
Those eight minutes marked the passage between the events, and now the Olympic flag is officially with Brazil. For us it’s time to look to the past, London 2012, to create the future, Rio 2016. What can we learn from the results to use in the next four years?
Sarah Menezes on the podium after taking judo gold for Brazil at London 2012
The silvers and bronzes also created new Brazilian heroes. Esquiva Falcão and Yamaguchi Falcão, two brothers, won silver and bronze in Boxing, and Adriana Araújo took bronze in the women´s Boxing. Those were the first medals in boxing since 1968 for the country. Yane Marques’ bronze medal in the final event of the Games was another great surprise, as the Modern Pentathlon is virtually unknown here.
"Silver tasted like iron". Brazil's footballers are distraught after losing to Mexico in the London 2012 football final
Back to marketing, there is a clear path for sponsors to look fondly to other Olympic sports, besides Football. Other team sports, for cultural reasons, have an enormous potential. Volleyball is the second most popular sport. Basketball was big in the past and is rising again. Handball and Rugby are growing fast. And our London 2012 medallists also point the way for brands to sponsor less traditional sports like Gymnastics, Boxing, and Modern Pentathlon. And finally there’s acres of white space for companies prepared to embrace the unknown, and take ownership of sports that are almost non-existent in Brazil such as Hockey and Badminton.
Be brave, Brand Brazil!
Bruno and Guilherme are partners at Ativa Esporte, the Brazilian sports marketing consultancy which is Synergy’s partner in Brazil.
Having been slightly underwhelmed by certain pop-up venues away from the official Olympic events, a visit to the Mizuno Performance Centre was met with a certain level of trepidation. On approach, the grubby windows of the building did little to attract passing footfall, and it was only through strained eyes that the extensive Mizuno window displays could be made out. This seemed a shame and a missed opportunity, yet we were greeted inside by friendly staff decked out in striking purple uniforms. They directed us up the Mizuno-adorned stairs to an exhibition room that was filled with staff but noticeably short on visitors.
The concept behind the ‘Mizuno experience’ was first hand consumer involvement with the brand. This was achieved through three sporting tests, each performed wearing a different set of Mizuno footwear from their new ‘Seiei Collection’. The football and handball challenges involved measurements of accuracy and speed; we were issued with a pair of boots for football and, perhaps slightly unnecessarily, a pair of trainers for the handball. Nevertheless, all the footwear received unanimous nods of approval for lightweight feel and comfort. The technology raised the challenges above other similar, simpler experiential events and it was the athletics experience that represented the most impressive area of the centre. We were each handed a pair of Mizuno spikes and invited to record our quickest times over 20 metres on the custom-made indoor track. Accurate times were recorded and replays of the sprints were shown on surrounding widescreen TVs.
Away from the challenges, an exhibition showcased Mizuno’s Japanese heritage, whilst the VIP rooms provided the brand’s athletes and corporate guests with a place to unwind, away from the Olympic hustle and bustle. Part of this included a Mizuno wall, where athletes had scrawled notes of thanks to the brand for their continued support. It seemed a nice touch and lent the lounges a more personal feel.
Due to Olympic regulations, Mizuno were unable to leverage any of their ambassador assets around the Centre, and instead cleverly relied on sketched sporting artwork on the walls. This presented a slight issue when it came to any of the Synergists naming a Mizuno athlete, which in turn reflected a bigger issue for Mizuno: as impressive as the centre was, do ventures like this provide real value for smaller sports brands when breaking into Western markets so dominated by the larger companies?
The Performance Centre represented a display of how a brand can showcase itself in a simple yet effective manner. The challenges allowed a level of immersion into the brand in a way that did not feel overly gimmicky, and the crisp and clean technological delivery was thoroughly impressive. It was a fine showing from Mizuno through a series of athletic experiences, which, when handled differently, can so often lead to indifference and disappointment.
At the end of last week a couple of the Experiential team took a trip over to East London to see if all the hype around the PUMA Yard is justified, and investigate just how well their campaign is going. We also wanted to see how they have created the experience whilst staying within the confines of the 2006 Olympic Act.
PUMA Yard opened a day after the official start of London 2012 in part of the Old Truman Brewery in Shoreditch. Revelling in PUMA’s sponsorship of Usain Bolt, but with Olympic legislation prohibiting them from mentioning Bolt explicitly, the idea is obvious and simple: bring Kingston, Jamaica to the Heart of London. The sprawling pop-up caters to the crowds with hefty portions of jerk chicken, Red Stripe, Kingston Bowl and Montego Bay Brew. The inside is chock-a-block of yellow, green and black. There is a legacy wall to Bob Marley and a ‘Listening Wall’ full of PUMA sneakers which, by linking up a shoe to headphones, will play a popular reggae song from a particular decade. Plus, if you fancy it, you can kit yourself out in Jamaican-inspired PUMA gear including the Cedalla Marley speciality collection. Polishing off the theme is the constant sound of chilled reggae that permeates throughout the entire space, to really hammer home the Jamaican vibe just in case anyone had managed to miss it!
Within the space there are several interactive essentials which integrate with PUMA’s Social Club ongoing global marketing campaign. The PUMA Social Club is based around everything and anything the ‘After Hours Athlete’ needs to turn the night into a sport. Think ping pong, photo booths, famous DJs and the Bolt Speed Test which gives everyone a bash at challenging Usain Bolt’s 100m record time of 9.58 seconds.
And PUMA haven’t missed the commercial opportunity. No pop-up event is complete without its own unique and engaging shopping experience, and the PUMA Yard is no different. Out in the back yard is the PUMA Quad, an impressive mobile structure made from shipping containers and best known for its appearance at a few Volvo Ocean race stopovers. The Quad overlooks the back yard where there’s a rather large lawn and chill-out area to watch all the Olympics coverage on the big screen.
All in all, the PUMA Yard blew our socks off with ping pong, speed tests, jerk chicken and live Olympics. Does it break LOCOG’s rules? No. It has merely capitalised cleverly on the popularity of one of PUMA’s most valuable assets and created an area that encapsulates PUMA’s ongoing lifestyle campaign. Great work.
Brazilians on Copacabana beach celebrate Rio winning the 2016 Games (AP/Silvia Izquierdo)
As well as the medals Brazil wins, we are naturally taking a big interest in London 2012 to see what we have to follow. We can’t deny, our heads are already in 2014 and 2016!
Brazilians are following London 2012 in a very new way. For the first time in recent history, the Olympics is not being broadcast by Rede Globo over free-to-air TV. For those not familiar with the Brazilian media landscape, Globo is one of the top 4 media conglomerates on the planet, known worldwide for the quality of its delivery. It has also been the dominant media channel in Brazil for decades, regularly attracting huge nightly audiences. Brazilians joke that if something isn’t news on Globo, then it isn’t news at all.
When the London 2012 broadcast rights in Brazil bid were tendered years ago, Rede Record made a daring move, outbidding Globo for the free-to-air TV exclusive rights. This was a huge development in media competition in Brazil, but it came with implications.
Some athletes and sports governing bodies have complained (some more, some less vocally) that, despite alternating in the audience rankings between 2nd and 3rd places, Record’s reach is far smaller than Globo’s. So, in practical terms, London 2012 became less valuable as a marketing platform, so it can be said there is actually less engagement (natural or forced) from the media, and the public, than is normally the case with the Olympics.
Before the Games, Rede Record tried to pacify stakeholders, promising a great broadcast. One week later Brazilians are engaging with the games, but not primarily via Record. On the first Sunday of London 2012, Record ranked only third among free-to-air channels in Sao Paulo with 1.1 million viewers, losing out to Globo, with 2 million, and also SBT, a more popular channel which is famous for importing Mexican soap operas, with 1.3 million. Terra’s free HD broadcast over the web is also helping Brazilians engage with the Games, especially during business hours.
In this scenario, brands are being challenged to create alternatives to enable consumers to engage with the Games. Step forward – social media!
Guilherme and Bruno are partners at Ativa Esporte, a Brazilian sports marketing consultancy which is Synergy’s partner in Brazil.
Public sentiment has naturally followed suit, with sponsors on the end of some fierce criticism. However, the guilty parties have slowly been revealed as the “Olympic Family” – in a nutshell, officials and the media.
This is anything but a non-story, and will undoubtedly be a bone of contention once judgement is finally passed on whether London 2012 delivered on its promise to Inspire a Generation.
The IOC and LOCOG somehow failed to foresee what a contentious issue this would be for the British public; an audience that has an insatiable appetite for attending live sport. We’ll travel to the ends of the Earth, and pay through our noses, to watch our teams and athletes compete.
When the greatest sporting event in the world lands on our doorstep, it’s only natural we want to make the most of it. Which is why the continuous shots of empty seats, as a result of faceless administrators and a complicit media, leaves such a sour taste, and is undermining LOCOG’s claim that London would truly be a people’s Games.
One of the prime objectives of every Olympics should be to maximise attendance at each and every venue. Not only as it gives something back to the people of the host nation, but because it improves the atmosphere within venues which inspires athletes to do amazing things. It makes for a greater presentation of broadcast sport, creates a more memorable image of the Games from which sponsors can communicate their brand messages, and it also focuses both traditional and social media’s attention on the sport itself, which is all anyone really wants.
LOCOG are, to their credit, scrambling to find a short-term solution to satisfy the public demand. However, in the midst of all this, they’ve hung their sponsors out to dry, many of which have had to release public statements to defend their use of tickets. It would have been good to see LOCOG return some value to sponsors by using their marketing programmes and channels to reallocate tickets clawed back, but I can’t imagine there’ll be much sympathy for the sponsors, despite their significant contribution to funding the Games.
How this affects the IOC’s approach to future Games, and Rio 2016 in particular, remains to be seen. Maybe we should accept this is the way it’s always been and always will be, or just maybe this could be a watershed moment that motivates the IOC to place greater importance on the needs and wants of those who ultimately pay for Games.
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