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Businesses tap sports events to promote brands despite risks

A growing number of businesses have been tapping sports events to promote their brands but hidden risks may be involved, especially when something goes awry at the event.

SINGAPORE: A growing number of businesses have been tapping sports events to promote their brands.

However, the question is if there are hidden risks involved, especially when something goes awry at the event.

Singapore Airlines is all set for its new role as title sponsor of the Singapore F1 night race.

In the lead-up to the Grand Prix in September, more campaigns and marketing events can be expected, driving the SIA brand closer to F1 action.

However, title sponsorship carries with it certain responsibilities.

In the case of a recent Singapore cycling event, both organisers and title sponsor quickly expressed their sympathies when a participant died during the race.

"There are two halves to this question,” said Ben Flint, CEO of Asia Sponsorship News.

“If the partners and sponsors… own the intellectual property for that event, say they have created that platform for themselves and they found an operator to do the logistics for the event, then they are the principal and must take more responsibility in the case of anything adverse going ahead.”

“If they are the secondary partner in that, in other words if they have bought into something that exists in the market place already -- they don't own it, they are renting it, they are sponsoring it -- then it is very difficult for them to take a position over and above the principal."

For now, big companies mostly are behind such sponsorships.

However, some say it could be challenging for SMEs to get on the bandwagon.

Mohit Lalvani, founding partner of 1Sports PE. Ltd, said: "Say I am going to be a sponsor at the SEA games and commit half a million dolllars in sponsorship. For a big brand like Nike, Adidas, Reebok, or Coca Cola, my 500 thousand dollars will be matched by a million or million and a half of lateral spends.

“For an SME to do that is going to be hard. Whichever way you look at it, I have to create my own spends to maximise on what I am spending on the sponsorship, so it is a tough play and I don't believe it is an easy play for the SMEs."

Celebrities are also very much a sponsorship target, which also involves risks.

In the case of Tiger Woods, some brands pulled out their sponsorship after he was caught in a scandal.

"I think that's showbiz, isn't it?” said Mr Flint.

“There is always a risk factor with celebrities or teams. You can try and dilute the risk factor by associating with the team and not just one individual, and I know some brands have that written into their marketing code as it were. But you can't avoid every single scandal."

Perhaps, show business in sports could mean a strong brand with a strong brand ambassador, which would ultimately please the audience -- the fans. 

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