Back to the 1936 Berlin Olympics, Adi Dassler, the founder of the now world-famous clothing brand, Adidas, convinced American sprinter Jesse Owens to sport the ‘Gebrüder Dassler Schuhfabrik’ for his race. This is deemed as the first ever sports sponsorship to take place. Now, in 2019, sport is awash with program, shirt, and stadium sponsors. Premier League giants Manchester United topped the table in England last season with shirt sponsors General Motors. By including the Chevrolet badge on the front of their shirts, the Red Devils currently earn returns of £47 million per season.
The whopping figure boasted by the Manchester club is a drop in the ocean in terms of their entire sponsorship deals. Intranational logistics agency DHL, American film studio 20th Century Fox, and watch maker Tag Heuer are just a selection of the other 24 global companies which sponsor them.
The question is, why do these companies contribute hefty sums in players, squads, and tournaments? Does it provide them a return on their investment? In this article, we examine the potential outcomes of major sponsorship, looking at some of the largest deals across the globe.
The energy drink titans, founded in Austria in the late ‘80s, are one of the most successful marketing strategists in the world. Much of their success is owed to the inroads they have made within the sports sponsorship industry. The brand is everywhere in the world of sports, from the New York Red Bulls, champions of the MLS, to Red Bull Racing, ex-champions of Formula 1. Alongside this, they have become pioneers in the extreme sports industry, sponsoring a host of events including the Red Bull Cliff Diving Championships and the Red Bull Quick Sand Race. And what do people need for extreme sports? Energy! What better way to lure people into the appeals of Red Bull, than to throw an event, and give them a free sample — genius isn’t it?
The Austrian giants haven’t just utilised the sports industry as a means of economic benefit. They have also helped distinguish their brand as one which cares about the community in which it blossoms! Billionaire founder of the drinks company, Dietrich Mateschitz, organised an event playing on the motto of the brand, “Red Bull gives you wings,” to show support for victims of spinal cord injuries. Wings for Life, “running for those who can’t”, takes place in 24 countries around the world, and involves a host of Red Bull athletes.
For years, Red Bull existed as one of the only energy drink options. Now, in 2019, with a saturated market that includes major competitors such as Monster and Relentless, the ‘wings’ need to stand out further from the crowd than ever before — and sponsoring events like the space jump, is doing just that.
As of 2019 the Dublin-based brewery is no longer officially linked with the Guinness World Records. However, back in the ‘50s, the awards were established by the managing director of the Irish stout makers. Nowadays, Guinness is more than aware of the market which it needs to be involved in, in order to take advantage of sponsorship saturation. The ‘black stuff’, as it is affectionately known as, has a longstanding relationship with rugby.
The St. James’s Gate brewers grabbed the opportunity by the hands to take on the role of primary sponsor of both the Pro14 Championship and as of 2019, the Six Nations Championship. At each game of the season and the shorter tournament the beer is available from behind the bar. It is also consumed in the terraces, and most fan zones and public houses dotted around the grounds will also host Guinness tents. What they have done, like Red Bull and BMW, is find a market in which they fit. They know they can build a relationship with their customer which goes beyond the initial sale, and one which they can successfully penetrate!
Just do it — why?
In 2017, approximately £48.7 billion was spent on sponsorship throughout the world — a figure that is growing year on year. Do the sponsors reap the necessary rewards to make their investment worthwhile?
Take into consideration the sheer amount of people that tune into a sporting event. Over the course of the Russian World Cup Finals in 2018, more than three and a half billion people tuned into witness the footballing spectacular. To put this into perspective, the current world population sits at around seven and a half billion. In the concluding game alone, one billion people tuned in to watch.
At a major event such as the World Cup, clever positioning of sponsorship can ensure that your brand is being put in front of a worldwide audience. If you happen to be involved as a sponsor at a major international event such as the World Cup, viewers will assume that you are a credible company. This instantly positions you in a good light.
It is also the perfect opportunity to push your product or service. Take a burger joint at a football match for example. Bring along a pop-up stall, sell burgers, and develop a solid client base beyond the event and outside of your main restaurant building. This will increase brand exposure too.
Bavarian Motor Works, unlike their major German competitors Audi and Volkswagen, have decided to stay away from football. Their decision is backed by intense calculations. Audi, who have their own international friendly football tournament held during the summer football break, have always been major sponsors, supplying Spanish giants Real Madrid with a fleet of cars since 2003. On the other hand, VW back their local Wolfsburg side with investment. So why did BMW opt for a marathon and the PGA tour?
Sports marketing strategist at BMW, Friedrich Edel, commented on how BMW and running are linked. Edel notes: “a runner has to be disciplined — endurance and readiness are the key marques of an established runner, exactly like a BMW, which efficiently makes use of its energy reserves”.
BMW’s decision to back the Berlin Marathon begins to make more sense when assessing the German manufacturer’s clientele. One in four BMW owners are predicted to be runners, so showing the customers you are also interested in their passions, helps to build a relationship. Unlike their competitors, who are using a ‘shot-gun’ strategy, BMW are using pin-point accuracy.
In terms of the PGA Tour, of which the manufacturer is the primary sponsor, Eckhard Wannieck, ex-head of sponsoring, commented: “BMW is a premium brand, so we focus on premium sports. Golf is a very dynamic, aesthetic sport which ties in well with the BMW brand”.
The firm, who sell the stylish BMW X5, is a prime example of a company which develops their brand image in a calculated manner. This is interesting considering a recent study by McKinsey found that many brands ‘don’t have a decision-making process in place to decide on sponsorships’.
Above we have detailed just three companies who have entered the world of sport, despite no prior connection, and used their world domination to leverage the success of their own product. However, it’s important to remember that there are thousands of brands across the globe doing exactly the same thing and experiencing a similar ROI!