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Brazil 2014 – Synergy’s Sponsorship & Marketing First XI

Germany’s victory against Argentina on Sunday evening signaled the end of what many are referring to as the greatest World Cup in living memory. The attacking football on show led to matches of the highest quality, with many of the world’s top players rising to the occasion and creating magical moments. However, the action on the pitch was not the only source of interest, with the marketing of the event inevitably leading to a number of worldwide talking points. As part of our Synergy team on the ground in Brazil, Reema Babakhan picked out her highlights:

1. Social media showed just how global the World Cup is

In particular, Twitter demonstrated this like never before during this summer’s tournament. Germany’s demolition of Brazil in the Semi-Finals broke the world record for the number of tweets about a single sport event, with 35.6 million tweets sent about the match, while 618,725 tweets were posted in just one minute following the final whistle of Sunday’s showpiece. And the conversation really is global, as neatly illustrated by this Twitter heat map from the Germany v Brazil match.

Away from Twitter, the World Cup Final became the most discussed event ever on Facebook with 280 million interactions during the game, dwarfing the 245 million set by the Super Bowl last year.

2. Suarez’s bite was the ‘Oreo Moment’

Suarez provided brands with a prime opportunity for some tongue-in-cheek real-time marketing. But, as we wrote on the Synergy blog, no brand managed to own the incident like Oreo at the Super Bowl.

3. Watch this space

Hublot’s huge new watch-style subs boards were a real coup, and they became one of the talking points of the tournament. It also highlighted a trend of World Cup sponsors’ unique activations becoming more and more visible with other examples including Bud’s Man of The Match, Coke’s Happiness Flag and McDonald’s Player Escorts. Food for thought for the IOC?

4. Gillette missed a sitter

We like Goal Line Technology, but we loved the free kick spray and, more importantly, we all talked about it. It also spawned hundreds of Twitter virals almost immediately, so why did Gillette take a week to capitalise on it?

5. Cahill’s lucky escape

Some activity is only seen in certain territories. Gary Cahill will be forever thankful to his agent for ensuring that Premier League fans were spared this cracker from Budweiser that aired hourly in Brazil:

6. All over for Sony?

Although no official announcement has been made, rumours are rife that this will be Sony’s last as a World Cup sponsor. A contributing factor to this decision may well have been how well they were ambushed by Beats by Dre, a move that caused such alarm that the headphones were explicitly banned by FIFA. Despite this, and Sony sending every player a pair of their headphones, some of the most talked about players from this summer’s tournament, including Neymar, Luis Suarez and Mario Balotelli, continued to be pictured wearing their Beats away from the stadiums.

The ad for Beats, filmed in Brazil, features the aforementioned players as well as Bastian Schweinsteiger, Daniel Sturridge, Mario Götze and Robin van Persie, and has had more than 22 million views on YouTube. Following Germany’s victory at the Final, it was announced that the full squad would receive a set of 24 carat gold-dipped special edition headphones.

7. Will Emirates ever activate?

One film, Pele in a polo shirt and their hostesses at the Final. Is that it?

8. A ball became a celebrity

The activation of @brazuca by Adidas was probably the sponsor coup of the tournament. With its irreverent posts, the official match ball became one of the must followed accounts of this year’s World Cup, with Zinedine Zidane, Samuel L Jackson and Pope Francis amongst the 3 million people to hit the follow button. Not only that, but the brand sponsors both the German and Argentinian kit, resulting in the first all Adidas final since 1990.

9. Nike still rules as an ‘unofficial’ sponsor

The #riskeverything campaign received unanimous nods of approval, a certain Mr Gotze is a Nike man and they still own the most iconic shirt in football, the yellow of Brazil.

10. But most Brazilians don’t buy Nike shirts

Up and down the bars at Copacabana, on the streets of Sao Paulo, on the beaches of Recife, the yellow shirt is worn, which sounds great for Nike, but it’s rarely the genuine article. The price is prohibitive for many Brazilians, costing almost 1/3 of their monthly salary. In response, some outlets reverted to reducing the costs to combat the endless fakes sold openly on the streets.

11. Social Media has made #gotgotneed even louder

In every school playground and classroom, the ‘got, got, need’ mantra has been spoken for years. This year, that mantra became louder as nostalgic adults also got involved like never before. Social media became a giant global playground for dedicated collectors of the famed Panini stickers. It’s likely this will be a world record year for Panini, especially with Brazil as its biggest market (8 million albums are currently being filled by the host nation alone).

And 3 off the bench…

12. The USA sees the light

Has the US finally fallen in love with soccer? The performance of USMNT certainly galvanised the US audiences, and it is clear that 2014 was the year that Americans finally learnt to fully embrace the spectacle of the World Cup. President Obama was amongst a host of high-profile USMNT supporters to articulate their support for the team through social media. Others included Justin Timberlake, Fergie, Kobe Bryant and Hulk Hogan.

13. Football saved FIFA. For now.

It was all doom and gloom in the weeks and months leading up to the World Cup. The infrastructure was not going be ready, the tournament would grind to a halt, there would be violent protests, and England would struggle to get past the round of 16. The predictions were (almost all) wrong.

Football won. It was so good that FIFA, and even Sepp Blatter, were given a break from the corruption allegations surrounding the Qatar World Cup. It remains to be seen how long that will last.

14. Messi wins Golden Ball (sponsored by Adidas)

Messi also happens to be Adidas’s most high profile ambassador. Coincidence? Perhaps, but the general consensus is that Messi didn’t do anywhere near enough to claim the plaudits this time.

At 1000 Days To Go to Rio 2016, How Does Rio’s Sponsorship Programme Compare With London 2012?

With 1,000 days to go to Rio 2016 just gone, it’s interesting to compare the status of Rio’s domestic sponsorship programme with London 2012′s at the same point back in 2009.

What our research shows is, despite London 2012 being in the market at the nadir of the UK recession, and Rio being expected when it was awarded the Games to successfully leverage Brazil’s booming economy, at this stage Rio is a long way behind London in almost every respect.

 

 

 

 

 

 

 

 

This should come as no surprise. We’ve commented previously about how, after a stunning start in early 2011 with huge finance and telco category deals, Rio’s sponsorship sales programme has gradually stalled along with the Brazilian economy, and now faces big challenges given the ongoing protests, persistently negative PR about the Rio 2016 operation, Brazil’s economy, and Brazil’s ability to stage major – and even minor – events.

Revenue

Last week, in an interview with AP, Rio’s Chief Commercial Officer Renato Ciuchini revealed that the organisation was now targeting $1.3-$1.5 billion in domestic sponsorship revenue, and that $650m (£400m) has been raised to date.

By comparison, with 1,000 days to go to London 2012, we estimate that LOCOG had raised $894m (£552m) of its final total of $1.2 billion (£739m).

In other words, London had raised 75% of its final total, but Rio has raised only 50% of its minimum target and only 43% of its stretch target.

Deal Volume and Value

Rio is also well behind London in deal volume.

With 1,000 days to go London 2012 had closed 23 deals in 23 categories, whereas Rio has closed 10 deals in 8 categories (the Bradesco sponsorship covers both banking and insurance, and the telco category sponsorship was acquired by a joint bid by Embratel and Claro).

Conversely, Rio’s average category deal value, at $65m, is much higher than London’s $38.8m.

But on this point, Rio seems to be confident. Back in August, it slipped out an announcement that it had now sold 50% of its sponsorship packages, suggesting that it envisages doing only another ten deals.

If it sticks to this, Rio will have to average $85m for each deal to reach its stretch target of $1.5 billion, and $65m – its current average – to reach its minimum target.

As its current average is skewed by the huge Bradesco and Embratel-Claro deals, together worth $500m, the jury is very much out as to whether Rio can sustain this given the market challenges it now faces.

Tiers

Rio also lags behind London in all three of the tiers that modern Games Committees use to market their domestic sponsorships.

At the same point in the London 2012 cycle, LOCOG had sold and announced six of its seven Tier 1 sponsorships (BMW was announced a month later, in late November 2009) and six of its seven Tier 2 sponsorships (the seventh, Arcelor Mittal, was announced in March 2010).

In comparison, Rio has three in Tier 1 (finance, telco and automotive) and four in Tier 2 (professional services, beer, packaged foods and dairy products).

But what’s most striking is that whereas LOCOG had eleven Tier 3 deals in place with 1,000 days to go, Rio has only one, with Nike (although oddly, that deal has yet to be officially announced – the Nike logo just appeared on the partners section of the Rio 2016 website).

VIK

I’ve written before about how important value in kind (VIK) is to the Olympic sponsorship model and to Games budgets.

Because the Games are the world’s biggest and most complex peacetime operation, it takes far more to deliver them than pure cash. The Olympic sponsorship model is like a giant joint venture, with both the IOC and the local organising committee outsourcing critical products and services from sponsors, without which the Games couldn’t happen – and that’s why the majority of Games sponsorship in the modern era is delivered in the form of VIK.

As such, all of Rio’s sponsorships to date will have included an element of VIK – some (Embratel-Claro, Nissan, Ernst & Young, Nike) more than others.

But the fact that Rio 2016 has done so few deals at this stage compared to London 2012, particularly at the Tier 3 level which is always heavily VIK-based, means that right now it is having to do two things with important budget, cashflow and delivery implications.

Rio 2016 must be paying cash for vital products and services which Games committees normally use VIK deals to finance, which means that its cashflow and overall budget must be incredibly strained. And it must also have had to delay sourcing other key products and services, with inevitable consequences for its operations and deadlines.

Conclusions

Let me be really clear that, for certain types of business situations, and certain brand categories, Rio 2016 has enormous potential for brands in Brazil.

But right now, Rio 2016 is a sponsorship price-taker rather than price-setter in Brazil. Brands have three very good reasons to be wary about investing, and to exert downward pressure on price.

1. The spectre of a Government bailout looms over Rio’s budget even if it reaches its stretch sponsorship target, as a Rio 2016 spokesman recently admitted to AP. If that happens, there’s little doubt that would see the anti-FIFA protests become anti-Rio 2016 protests, which would be a disaster for the IOC, the Games, and of course the Games’ sponsors.

For an in-depth look at the marketing and sponsorship implications of the anti-FIFA protests, our Brazil team’s blog from June this year is a must-read and includes that point.

2. The IOC’s Gerhard Heiberg had this to say in the same AP piece on Rio 2016:

“I know that some sponsors are waiting to see how things are going to be at the World Cup. Will it be a success? Will it be chaotic? If people feel things are going to be very good for the games, it’s easier to get the sponsors. If people feel things are not going to be 100 percent, they will hold back on the Olympics. First they want to see what’s going to happen with the World Cup.”

Absolutely spot-on – and brave of Mr Heiberg to say so. We are aware of a wide range of name brands in Brazil, who would otherwise be primed to become Rio 2016 sponsors, who are adopting a ‘wait and see’ attitude until after the World Cup.

3. The potential value of Rio 2016 to a brand is inexorably dropping. There’s already less than three years to go until the Rio Games, and every day that passes reduces the potential value to a brand – especially when you consider that, given the Brazilian consumers’ overwhelming preference for football and therefore the World Cup, the first half of 2014 is arguably, for an Olympic sponsor in Brazil, a write-off.

 

#ChangeBrazil: The Implications For Brands & Sponsorship

by Bruno Scartozzoni and Guilherme Guimarães

As Tom Jobim, the great Brazilian musician and composer said, “Brazil is not for beginners”.

When Brazil entered the new democratic period in the mid 1980s, it started to change quickly. Fernando Henrique Cardoso, the intellectual president from the social democrat party, took control of hyperinflation, opened the Brazilian economy, reduced government participation in the economy and started important reforms in order to rationalize the state. This was essential to the next phase, when Lula, the charismatic president from the labour party, created all kinds of social programs, giving power of purchase to poor people for the first time in Brazil’s history.

These elements awoke the Brazilian internal market of people hungry for consumption, and, in simple words, that’s the reason why the 2008 global crisis didn’t hit Brazil as hard as it did the rest of the world. And then, suddenly, Brazil was on everybody’s radar, for successful World Cup and Olympics bids.

 

Now comes the bad part of this story.

Despite the economic progress of the last 20 years, our politicians did not achieve other important goals desired by Brazilians.

In contrast to our status as the sixth biggest economy in the world, our public services, especially health, education and security, are at the opposite end of the scale. Add to this corruption scandals with no prosecutions and one of the most unequal distributions of wealth in the world and you have the full picture.

The Protests

On 3 June a small leftist group called MPL – Movimento Passe Livre (Free Transport Movement) – which campaigns for free public transport in Brazil’s cities, started protests when the new São Paulo mayor announced a R$0,20 (US$0,09) raise in bus, subway and train ticket prices. To start with, most of the population didn’t care less about it, but each day the campaigners managed to congregate more and more people.

The turning point came on June 13, when policemen treated the protesters with disproportionate force, which triggered the population to use the R$0.20 increase as a symbol for something much bigger. It started to represent the poor public services, corrupt politicians, and the threat of hyper inflation. And just like the Occupy Movement and the Arab Spring, social media played a crucial role in scaling the protests and the protest ecosystem: suddenly politics became the only subject that mattered on Facebook and Twitter, which is really new for Brazil.

Coincidentally (or not) it all peaked at the beginning of the 2013 FIFA Confederations Cup.

For some time Brazilians had been saying in a resigned way ‘Imagina na Copa’, meaning ‘If it’s this bad now, imagine what it will be like during the World Cup’. Looking back, with the benefit of hindsight, it’s not surprising this grew into the protests.

The cost of the new and re-built World Cup stadiums had steadily risen from initial estimates and is more than the last three World Cups combined. They are being paid for by public money, in contrast to the promise, when Brazil won the right to stage the World Cup, that they would be privately funded. Add to that that other improvements linked to the World Cup and promised by government like new subway lines will not be ready by 2014, together with the poor reputations of the CBF and FIFA, and you have a time bomb.

It exploded on June 17, with protests in every major Brazilian city, which are now happening every day and night. In the streets and on social media, people started saying Brazil not only wants stadiums, but also health and education to “FIFA standards”.

 

It’s difficult to predict how and when #ChangeBrazil will end. Ticket raises are being cancelled by the minute, and the President has promised new infrastructure investment and a referendum on political reform, but people are going to the streets anyway. It’s the biggest social movement in the country’s recent history, and probably the first one above party political interests. As the population is claiming, it is democratic, mostly peaceful (until now) and beautiful!

The most visible impact of the protests on brands is that some of the protests’ most-used slogans have been adapted from recent brand campaigns.

Johnnie Walker’s ‘O Gigande Acordou’ (‘The giant is awake’) campaign showed the famous Sugar Loaf Mountain standing up and walking. The line was a reference to Brazilians’ commonly-held view that Brazil is a giant sleeping eternally.

Fiat used ‘Vem Pa Rua’ (‘Come To The Streets’) as its line in a football-themed campaign to ambush the Confederations Cup (they are not FIFA sponsors).

And Vick, the cough drops brand, were also trying to hijack the Confederation Cup, by promoting the hashtag #chupaessa (#suckthis) on Twitter.

As soon as the protests started, people h-jacked these brand slogans, all of which became part of the movement, used in placards on the streets, and on Facebook and Twitter.

There are also examples of brands actively using #ChangeBrazil in their communication.

In fact, almost everyone is doing something about it on Facebook, most of them being more conservative, with generic patriotic posts.

Stores near Paulista Avenue, the epicenter of #ChangeBrazil, are using the movement’s elements in their displays. Store owners said that they are trying to engage with the moment and avoid looting.

However, the most interesting #ChangeBrazil ‘activation’ so far has been by Spoleto, a big Italian fast food chain from Grupo Trigo, who license Domino’s Pizza in Brazil. They released a manifesto on their Facebook fanpage, basically saying that they would be opening that space for political discussion, and any brand activation would would be ceased for a week.

 

The discussion in advertising forums is about the possibility of brands taking a clear stand. Should they? Fiat thought it was better to leave the conversation and ended their campaign ‘as planned’ on June 22. Spoleto went the other way.

It will be interesting as well to see which way Brahma will go. The beer brand, which is a World Cup sponsor, was one of the few sponsors meaningfully activating the World Cup association in Brazil, and the only one positioning itself around discussions of the World Cup being good or bad for the country. Last year they released a very emotional and positive campaign telling Brazilians to care less about problems and imagine the party that will take place in 2014. It was a bold move, and divided public opinion.

Will they stand for this message after #ChangeBrazil? It’s another question impossible to predict, but they could broaden the optimistic message. “Imagine the party. Imagine a new (better) country.”

 

 

FIFA, Big Sport and The Protests

As #ChangeBrazil is partly a reaction to the government’s astronomic spending on the World Cup, many in the international media have questioned Brazilians’ attitude to the World Cup (especially) and the Olympics.

In fact, most Brazilians don’t think the World Cup and the Olympics are the problem. Most dreamed about hosting a World Cup again, and the Olympics are welcome too. Winning the bids is a proof that the world is finally taking us seriously, and it’s very nice for everyone’s ego!

The problem is how the events were ‘sold’ to the Brazilian public, the reality of our infrastructure versus the huge spending on the World Cup, and, as David Owen wrote recently, the evident complacency of FIFA and ‘Big Sport’.

As probably everyone in the world knows now, FIFA has got its PR strategy totally wrong in Brazil, notably when Sepp Blatter told protestors that they should not link their grievances to football, whilst at the same time Neymar was so visibly supporting the protests, and Paolo Andre, the former Corinthians player, recalled that football had been used as a tool of mass control in the past, but now it was the people’s turn to use sport to call attention to their demands.

From here, it’s difficult to see how FIFA can recover its image in Brazil in time for the World Cup, which obviously has big implications for all the FIFA sponsors, who’ll now need to re-think their activation strategies in Brazil.

#ChangeBrazil: 10 Action Points For Brands & Sponsorship

 

 

 

1. Brazil’s sense of its identity is changing very fast, and more than ever before, brands – both Brazilian and international – will need to listen to consumers and re-think their positioning and messaging. Brazilian values have always been attached to happiness, being easygoing, hard-working and, of course, the ultimate clichés: samba, beaches and football. This kind of thing still reflects what Brazil is, but June 2013 has changed it, evolved it, and made it much more complex.2. An example is what’s happening now. People still care about the performance of the Brazilian team in the Confederations Cup, but conversations in bars are split between football and politics, and this is new, very new.

3. Now it’s clear that Brazilians are deeply concerned about social issues, which means that brands will need to increase their CSR efforts, especially if they are going to try to wave the Brazilian flag . Those that already have strong CSR credentials have a big advantage: those that don’t have to move very, very fast to have permission to do business in Brazil, let alone marketing.

4. There is lots of white space to integrate sports with CSR in Brazil. We expect to see a big increase in sponsorship of social development programmes and Paralympic sports, for example, but there’s plenty of room in other causes too.

5. CSR campaigns don’t need to be dull. As we wrote recently, there have been some amazing campaigns fusing sport and CSR in Brazil in the last year or so, one of which recently won one of the top awards in Cannes.

6. Celebrities who are out of touch with #ChangeBrazil are a real risk for brands. The untouchables Pele and Ronaldo lost huge credibility with Brazilians after poorly chosen words about the protests – although to be fair Ronaldo’s were said in 2011. Conversely, others such as David Luiz, Dani Alves, and volleyball player Bruno Resende are in the ascendant after stating they were worried about their performance, but that they were proud and concerned about the Brazilians on the streets.

7. Naming rights sponsorship has started to gain momentum this year and looks likely to keep growing. But brands will be wary of the downsides of associating themselves with ‘FIFA’ stadiums, especially the three potential white elephants in Brasília, Cuiaba and Manaus.

8. Brazilians have discovered social media, especially Facebook and Twitter, as the modern Agora, and that has huge implications and opportunities for brands in Brazil, who activate sponsorships very little in social channels compared to traditional media, especially TV.

9. FIFA sponsors will need to work harder than anybody, but especially in social as their fanpages are suffering daily attacks by consumers.

10. Olympic sponsors have a big advantage. They can watch and learn from FIFA sponsors’ efforts next year, and adapt accordingly for Rio 2016. But how long will it be before the protests turn their attention from World Cup budgets and FIFA to Rio 2016′s budgets and the IOC?

 

Bruno and Guilherme are partners at Ativa Esporte, the Brazilian sports marketing consultancy which is Synergy’s partner in Brazil.