It is here! The FIFA World Cup 2018 is the world’s largest sporting spectacle, and this year hosted by Russia, running from June 14 to July 15. According to Zenith Media, the FIFA World Cup is expected to generate $2.4 billion in advertising revenue worldwide, and about 3.5 billion people across 220 countries will watch.
It will be a somewhat tarnished event of course. First of all, the process by which Russia won the vote is tied in with proven voting irregularities that ultimately cost then FIFA boss Sep Blatter his job, and countless regional association leaders their freedom, as they are now either in jail or being prosecuted.
Secondly, a number of leading countries did not qualify, and in markets such as the US, Italy and The Netherlands, this is cause for ratings and ad sales concern.
And so, many have wondered if the event is “damaged goods” for marketers? And if it is even possible to generate a positive ROI from a scandal riddled event like the World Cup? The answer is “a little” to the first question, and “absolutely, if you work on it” to the second question.
It is no doubt true that FIFA’s brand name has an enormous smudge on it, and that won’t be going away anytime soon. If you recall, sponsors like Visa, Coca-Cola and Budweiser actively lobbied for change in FIFA’s organizational structure and host country selection process during the height of the scandal.
The issue is that while the global football loving population positively hate FIFA, they love football and the World Cup. As stated in the opening paragraph, the World Cup is the biggest global sporting event, beating all other events handsomely, whether it is The Oscars, The Olympics or The Super Bowl.
This is why many brands opt to sponsor the event, a team or individual players, and collectively spend the aforementioned $2.4 billion globally on World Cup related advertising. What baffles me is that there seems to be a perpetual fixation with World Cup official sponsor recognition. At the end of every event, there are studies showing that several non-official World Cup sponsors enjoy sometimes-decent recognition as an official sponsor. Nike vs. adidas, Coke vs. Pepsi, McDonald’s vs. BurgerKing, Mastercard vs. Visa; you get the picture.
“Ah,” says FIFA, “but as an official sponsor you get boards on the pitch, which are seen by the global TV audience.” And this is true. However, do consumers increase their purchase intent by seeing an endless parade of logos (not a brand message!) around a soccer pitch?
Measuring sponsor recognition is mostly a meaningless metric. The ROI of your investment — with or without an official sponsorship package — should be evaluated against real business impact metrics. It is time marketers make a serious effort to calculate the value of sponsorship packages, World Cup or otherwise.
We recognize three categories of sponsorship value:
On-premise value: Any signage or other product presence included at the event/venue/page/etc. Think of stadium boards, menu boards, neons or other branded fixtures. In principle, any commercial inclusion that is not media. Include here on-premise sales as well, if part of the deal.
Off-premise value: Any marketing rights that are a result of the sponsorship agreement (logo usage, content usage, national, regional or local promotion rights, celebrity usage, etc.).
Intrinsic values: All elements of the deal that carry a verifiable value, such as tickets, sky boxes, media space including digital media, VIP programs, etc.
It isn’t always easy to place a numerical value on all of these elements because there isn’t always a rate card.
Equally, you will need to be diligent about how you calculate the real sponsorship cost. If you are doing a deal for three years, you will need to combine the contractual cost of the property plus a best estimate of the marketing activation cost for those three years. And be precise, so include not only cost for advertising, but also cost for developing artwork in a variety of other touch points, such as point of sale/consumption, internal materials, promotional materials, etc.
Don’t forget media cost either. There is an unwritten rule that says you need to invest an equal amount of money in media as you have invested in sponsorship acquisition costs. Personally, I think this rule is a little too generous to media (it was probably invented by media owners).
Once you have all these costs, you can create a simple formula: above the line you place the combined on-premise value, off-premise value and intrinsic value; below the line your acquisition, marketing and media cost. And voila: now you have a true measure of (anticipated) ROI.
If you anticipate, or require, a sales lift from the sponsorship investment, calculate the value of that sales lift as well. In other words, if you are investing 1 million dollars and expect the brand to deliver a 20% lift on the back of that investment, you will need to place the value of that lift above the line, and the cost to generate that lift below the line.
Flock have worked with clients on mapping bespoke cost and ROI models as outlined above and helped to identify relevant data and metrics. If you are looking to improve spend, agencies, ways of working, martech or capabilities, take a look at our Agency Ecosystem Review or contact us here.