Here’s another story from about a year ago.
Business is a contact sport
Major sporting events attract billions of people around the world. Major sponsors are lining up to be affiliated with the Olympics, the World Cup, and different world championships in different sports to grab the loyal fan’s attention. And loyalty. And money.
Business and major sporting events have always gone hand in hand. For example, Coca-Cola has supported the Olympics since 1928 and it recently extended its Olympic sponsorship through 2020. The Olympic Games will be the staging ground for a host of new Coca-Cola products in the future as in the past.
In 1952, Coca-Cola was introduced in Finland during the Helsinki Olympics, and back in 2000, The Coca-Cola Company pulled out a bag of old tricks, relaunching Powerade during the Sydney Olympics.
The entire population of the planet gazing into once city, every four years, is just too good an opportunity for Coke, or any savvy marketer, to pass up on.
A cumulative total of 30 billion viewers tuned into the FIFA World Cup 2002. The final game, Brazil against Germany, attracted one billion viewers worldwide. The Athens Olympics in 2004 got four billion viewers all over the world.
And where there are massive crowds, there are advertisers and licensed product manufacturers chasing eyeballs. Despite all the bad publicity, such as doping and gambling scandals, the sports events still have a good image that many companies would want to be associated with.
See, the massive crowds spend massive dollars. According to the Sports Business Journal, the sports business industry is one of the largest and fastest growing industries in the United States, for example, estimated at 213 billion dollars. It is far more than twice the size of the U.S. auto industry and seven times the size of the movie industry.
Of the 213 billion, spectator spending alone accounts for 26.17 billion dollars, of which concessions, parking and on-site merchandise sales are 10.70 billion dollars.
Yes, that’s on-site merchandise. It’s safe to say that the off-site merchandise adds a few billion to the pot.
So, when McDonald’s decides to print the Olympic rings on its takeaway bags, it’s not doing that out of charity. It sure wants to make sure that people think of them as the healthy and sporty company that they are. When Snickers gives out fake plastic helmets at the hockey world championships for the happy fans to wear in the stands, they want the logo to somehow get absorbed through the plastic, into the fans’ brains – so that when they go to the concession stands between the periods, they get the chocolate bar with some nuts in it.
However, without the sponsorships of the major events, some minor events might never get arranged, says Delia Fischer marketing manager at the International football federation, FIFA.
“Everybody is interested in the World Cup, but not so many care about the under-17 tournament. Without the major corporate sponsors of the World Cup, we couldn’t have the tournament in Peru, for example,” she says.
The companies that want to obtain the official merchandise status pay a lot for it. The World Cup of soccer has fifteen official partners (see ”Crackdown on crooks” on page xx) ranging from Fujifilm to Coca-Cola that are paying a basic fee of up to 28 million dollars apiece for their official status. In addition, there are numerous companies that have the license to manufacture official event products.
”For example, German Bertelsmann/Wissen Media/Mohn Media owns the rights to produce print products, such as books, calendars, posters and puzzles and games. Werkmeister GbR makes paper model sheets for 3D stadium,” says Meike Wester, licensing manager at FIFA.
The cycle of sports marketing is almost complete. The fan reads previews, buys the merchandise, and consumes the event and the official suppliers’ products. What’s left is the after-market. That can be found … on eBay. Once the fan has eaten the official Olympic cereal for breakfast, lunch at the official Olympic McDonald’s, attended an event wearing a paper hat with the sponsor’s logo, bought a calendar, sent a couple of official postcards, he’s left with memories. If those memories aren’t enough, he can try to sell it all.
The auction site lists thousands of items under “Collectibles” and “Olympics”. A nice paperboard case for a six-pack of official Turin Winter Olympics Coke: eight dollars. Fifty Shell World Cup scratch cards – unscratched: two dollars.
Maybe you can’t put a price on a memory after all.
What is certain, though, is that sports events attract larger crowds all over the world, attracting more sponsors. Budweiser and FedEx think it’s worth 2.5 million dollars to reach estimated 95 million viewers with a 30-second spot on a Super Bowl broadcast commercial break.
But to get everybody to use your product and save the packaging would be worth even more.
Even on eBay.