Successful sports sponsorship rests on finding a balance between furthering global ambitions and maintaining regional relevance, says Richard Gillis
How relevant are the Olympic Games to UK consumers? This is the question facing the marketing teams at the UK offices of each of the sponsors of the International Olympic Committee's (IOC) The Olympic Programme (TOP), but only a few will be allowed significant freedom to discover the answer.
The decision to pay between pounds 20m and pounds 40m to sponsor a global sporting event such as the Olympics, Euro 2004 or the World Cup, very quickly becomes a test of the relationship between global strategy and local implementation.
The price of a ticket to sports marketing's top table comes with a promise of vast media audiences at a set time and place. As brands search for their audience against a backdrop of media fragmentation, multi-channel television and advertisement avoidance via personal video recorders, this is something other forms of advertising struggle to match.
This ability to generate mass audiences has meant the price of becoming a global player has maintained its value, bucking the general trend of sports sponsorship. Major event rights holders, such as the IOC and UEFA, are striving to generate greater revenue from a growing list of sponsors.
This has been achieved through increasing the size of the global footprint of events by opening up new territories to the sport in question and thus adding value to commercial partners' investment.
UEFA puts the number of countries taking TV coverage of Euro 2004 at about 200, which is evidence of the emergence of the tournament as a genuinely global showcase. It also puts emphasis on sponsors to ensure the property has a resonance in each of its core markets, thus avoiding waste.
So for multinationals, global sport sponsorship can appear a snip, offering the chance to hit each territory with a consistent message, associate the brand with the excitement of sport and spread the cost of the rights fee across local markets. What, then, can go wrong? Plenty, according to Cameron Day of sponsorship consultancy The Works. 'This summer more money has been spent on marketing through sport than ever,' he says. 'The majority is wasted because sponsors fail to make relevant sales connections with consumers. Those who buy an association with the biggest property of all, the Olympics, are most likely to fail. Such a global event is, by its nature, remote and sponsors rarely make provision for marketing teams at national level, who understand their customers best.'
Nick Walford, managing director of WPP's Performance Sport Entertainment agency, explains that creating a sense of ownership at a local level is the way to achieve return on investment. 'Problems arise when head office decides on the sponsorship of a major property without the buy-in of key markets,' he says. 'This means local teams feel obliged to support a property for which they do not see a brand or business benefit.'
Vodafone's outgoing head of global marketing, David Haines, has used sport as a global branding tool throughout the company's period of international growth. In the past two years, Vodafone has substantially reduced its expenditure on local partnerships in favour of big deals with Ferrari F1, Manchester United and David Beckham. 'When they are amortised globally, they become better value for everyone,' he says.
'We'd rather have a strategic review with all our companies in various markets focused on what our business needs are and what we want to become involved with', he adds. Haines is also clear about the role of marketing departments on the ground. 'We have a strategic framework laying out general themes, but how it is organised locally is up to them,' he says.
The issue of how to make sponsorship fit with local needs is met head-on by the UK marketing team of Visa, a TOP partner since 1986. …