Advertisers race to win loyalty of fans

Major sporting events and more celebrity players in Asia are offering huge potential

Despite an uncertain global economic climate in recent years, advertisers have been taking a generally positive attitude toward sports in Asia. Data suggests that, from jewelry retailers to automakers, major brands are doling out millions of dollars on sports advertising in the region.

GroupM, the consolidated media investment management arm of communications giant WPP, says that advertisers in India have spent a whopping 92 percent more in 2013 on sporting events than in 2008. GroupM has based its conclusions on the parameters of sponsorship, athlete endorsement and media spending.

"The total spending on sports advertising has increased from 21.49 billion rupees ($356 million) to 41.1 billion rupees between 2008 and 2013 in India. It depicts the whole story of the region," says Dilip Cherian, founding partner of communication firm Perfect Relations.

The same applies to Asia as a whole. In China, sponsorship accounts for some 48 percent of total sports revenue, according to a PricewaterhouseCoopers study, Outlook for the Global Sports Market to 2015.

Specialists in sports marketing believe that the rise in sponsorship spending reflects the growing wealth and spread of the new middle class in many Asian countries. They say that the huge following of English Premier League and European Champions League football in the region is a good indication of the size of the prize.

According to a recent report by the Organization for Economic Co-operation and Development, the economic outlook in emerging Asia (Southeast Asia, China and India) remains robust over the medium term, anchored by the steady rise in domestic demand.

Real GDP in emerging Asian economies as a whole is expected to grow by 6.9 percent per annum from 2014 to 2018.

"With the expanding economic opportunity, sports events have caught the attention of marketing professionals and advertisers. Global brands are likely to leverage the potential of the situation," says Cherian.

Besides growth in the region, it is the sheer size of sporting audiences that woos advertisers. According to various estimates by Nielsen, a global information company, football is watched by 4.1 billion fans in over 100 countries worldwide. Every four years, the FIFA World Cup alone garners over 1.5 billion viewers.

Cricket, followed in over 25 countries across the globe, is watched by 650 million people, with the Cricket World Cup garnering roughly 200 million viewers.

Nielsen estimates that tennis has 330 million worldwide viewers, ice hockey 250 million, baseball 220 million, basketball 200 million, volleyball 150 million, table tennis 130 million, rugby 125 million and golf 100 million.

Tuning in

A report by the Economist Intelligence Unit, The big league? The business of sport in China, said the opening ceremony of the 2008 Beijing Olympics drew a domestic television audience of 842 million, and more than 100 million Chinese watched the event online. In particular, more than 300 million people in China tuned in to watch Olympic table tennis matches.

Experts, nevertheless, believe it is difficult to determine which sport holds the greatest marketing potential as it requires a definition of who your market is and the requirements of your brand.

However, when it comes to sports marketing and advertising, companies are going beyond mere visibility and reach. The PricewaterhouseCoopers study pointed out that the key motivation for companies is no longer just about maximizing brand visibility and awareness, but also about gaining deeper and more emotional engagement with fans, and even managing the perceptions of the sponsoring company.

"It means more than just buying space on shirt fronts," says Dave McCaughan, managing director of marketing agency McCann Hong Kong and director of McCann Truth Central, Asia Pacific.

"Decades ago we saw the movement of brands from China, Turkey and other developing countries buying sponsorships of teams and individual sports outfits. That was a crude way to gain some recognition," he explains.

"But sports marketing is more sophisticated now. Brands want to associate with the events that appeal to people in Asia as a way to highlight their brand attributes and product offerings."

Sports sponsorship and advertising have become elevated to the corporate strategic planning conversation. They are being discussed in the context of integrated marketing programs that can take advantage of the reach of traditional advertising as well as the emotional and experiential benefits earned through partnerships with sports.

McCaughan says that Asian markets are still very heavy users of celebrity in all forms of marketing. In fact, the use of celebrity is a way of establishing and maintaining brand meaning. He cites US basketball star Michael Jordan as an example, who began endorsing Nike in the 1980s. Now many brands are using celebrities, including Asian athletes, to give meaning to their brand equity.

For instance, it was reported that during the Beijing Olympics, basketball player Dwyane Wade and tennis sensation Serena Williams, both from the US, had interacted quite frequently with the Chinese media and chatted online with Chinese sports fans, to help their brands penetrate the rising Chinese market.

"The key thing is that hosting and sponsoring events brings the opportunity closer to the local markets, allowing for greater engagement opportunities and a truer experience than just watching on television," says Andrew Philpott, regional director of the Asia-Pacific with PRISM (Public Relations & International Sports Marketing), a company that deals with high-profile clients including Nike, Ford and Coca-Cola.

In addition to television advertisements, Coca-Cola's highly successful marketing push during the Beijing Olympics saw the world's largest beverage company hosting a national contest for Chinese artists to decorate giant Coke bottles in ways that reflected local culture and customs.

A dream team of China's star athletes - basketball player Yao Ming, hurdler Liu Xiang and diver Guo Jingjing - were also assembled to take part in Coke's promotions.

When a research and marketing consultancy interviewed Chinese consumers about brands that made an impression on them during the Olympics, 50 percent spontaneously mentioned Coke, remembering specific promotions by the drinks giant.

Philpott of PRISM believes that understanding local culture and nuances is the toughest challenge for brands hoping to become more active in local markets.

Engaging the consumer

Nike, which sponsored the 2013 Shanghai International Marathon, displayed gigantic advertisements and videos of its campaign on the race route which focused on a larger trend emerging slowly in China, women's sports.

Ogilvy Sports China, a specialist team from the global public relations firm, used six short films - telling the story of how tennis has shaped the lives of six disparate Chinese tennis players and enthusiasts - before the prestigious China Open to convey that the brand has the power to improve people's lives in real and dramatic ways.

"Without truly activating a partnership, engaging both internal and external stakeholders, the logo becomes a 'moving billboard'," says Philpott. "Engagement is everything, and as long as the sponsor sets out with this mindset, and enters the agreement suitably armed with the resources and internal commitment to succeed, they are often one step ahead of the pack already."

The sponsorship and advertising pie in Asia is growing, and marketers generally have appetite for significant investments. However, experts say the challenge is to determine the value of sponsorship and to measure its clear reach.

Social media is also changing the name of the game. It has become more important for advertisers to leverage this segment, as young people now are used to consuming content via social media platforms.

Scott Kronick, president and CEO of Ogilvy Public Relations, Asia Pacific, says that traditional branding and engagement opportunities still exist, but more and more companies are finding innovative ways to demonstrate their brand promise through sports.

"Local brands do this to connect with consumers on the same level as global brands," he says. "However, if we get the value and measurement right, we can make sure the execution is flawless. The gold standard is utilizing such sponsorships in new and different ways with social media."

China Daily

(China Daily European Weekly 05/02/2014 page7)