The business of branding at the World Cup

The business of branding at the World Cup

Moscow Fan Fest World Cup
Fans watch hosts Russia take on Uruguay at the Moscow Fan Fest. (Photo: Reuters/Tatyana Makeyeva)

SINGAPORE: If past figures are anything to go by, around 3 billion people are expected to tune in to the World Cup going on in Russia. 

That is almost half the world’s population. So, it is no wonder that companies want to be in on the action, paying top dollar for TV commercial slots and pitchside advertising. 

At the last World Cup in Brazil, FIFA is estimated to have earned about US$1.6 billion from sponsorship alone. 

Supporters of the Peruvian national soccer team gather in central Moscow
Supporters of the Peruvian national soccer team, a participant of the soccer World Cup, react during a gathering near the State Historical Museum and the Kremlin in central Moscow. (Photo: REUTERS/Gleb Garanich)

It is a huge investment, so how do companies know whether they are getting bang for their buck?

In this week’s Asia Business First podcast, Lars Voedisch, principal consultant and managing director of PRecious Communications, said there are ways to measure whether your brand awareness has improved during the course of a campaign. 

"Do more people know your brand? Did your sales increase because you have special World Cup promotions?

"Adidas shares dropped after Germany lost its opener against Mexico, because it’s about selling jerseys and shoes," he said. 


Vivo World Cup
Vivo senior vice president Ni Xudong (front R) and FIFA Secretary General Fatma Samoura holding a framed football jersey during an event to announce Vivo's sponsorship of the FIFA Football World Cup in Beijing on May 31, 2017. (Photo: AFP) 

Besides the usual purveyors of kit apparel and boots, an unprecedented number of Chinese brands are making their World Cup debut. 

Regina Yeo, adjunct senior lecturer at the NUS Business School said Chinese companies account for about 39 per cent of sponsorship at the World Cup this year. 

"You see some changes because of the FIFA scandal in 2015," she said. 

"You see some major sponsors pulling out, like Sony, Johnson & Johnson and Castrol. They have what’s known as the brand transference theory of being negatively impacted or associated with FIFA or Russia."

This then has proved an ideal opportunity for Chinese brands, especially since President Xi Jinping's love for football has also given the sport a higher profile in the country. 

"He has ignited this interest and because of the government’s support, you see businesses coming in," said Ms Yeo.

"It’s their way of dipping their toes in the game, particularly with a view that China may bid for World Cup in 2030 or 2034.”

World Cup - Group G - England vs Panama
England's John Stones in action. (Photo: REUTERS/Carlos Barria)

As a result, football fans will be exposed to a range of Chinese brands such as property and entertainment conglomerate Wanda, smartphone maker Vivo, and Inner Mongolia-based China Mengniu Dairy Co, to name a few.

Mr Voedisch explains how Chinese companies can expect to benefit.

“Mongolian milk. You can’t even buy it in most parts of the world," he said. 

"But if you look at the numbers, about 300 million Chinese will watch the World Cup. So some of the advertising power or sponsorship power that Chinese brands put into the World Cup is domestic focused. 

"If somebody like Mongolian milk is seen first by 300 million Chinese on a global scale, it makes it feel like a global, proud brand ... and brand equity goes up.”


Football - World Cup
Soccer Football - World Cup - Moscow, Russia - June 20, 2018 Zomo, Russia's fan from Cameroon is pictured in the metro REUTERS/Carl Recine

If branding can boost a company’s standing, what about that of the host country?

Russia’s image has been marred by years of bad press, ranging from state-sponsored doping in sport, to accusations of interference in foreign elections, suspicions that it poisoned former spies and criticism for supporting Syria’s civil war.

Mr Voedisch said he thinks the World Cup has helped to dispel negative associations for the time being. 

“The tournament right now is rolling, and people are just focusing on the football," he said. 

"All they hear is Russia is hosting and that the games are getting along well. You have full stadiums, everybody’s saying they’re having a great time. 

"The weather so far has been amazing; so it’s that happy-go-lucky image that you get and all the negative topics are kind of disappearing.”

Listen to this week’s Asia Business First podcast here.

Source: CNA/wl