It is necessary to consider sport as a business platform and not a visibility platform
The year is a World Cup, but since 2020, Covid-19 has been playing against the organizer of the tournament in Qatar, which will take place between November 21 and December 18. According to sports marketing specialist Amir Somoggi, FIFA had to help federations from several countries, which were left without the revenue from the competition machine. “It was a blow”, comments Somoggi. According to the managing partner of Sports Value, the strength of world football ended up being underfunded and, not for nothing, he raises the possibility of reducing the event’s interval to two years. The search for funds still tries to compensate the dribble of brands that find in the generation of content a smart way to enter the conversation without having to pay millionaire sponsorships. The play is clean, but still needs practice. Next, Somoggi reveals what brands should do to keep the ball away.
What is the tactic to attract investment?
After the World Cups in Korea and Germany, the leap came when FIFA began to look for easier markets to get sponsorships, such as South Africa, Brazil, Russia or Qatar. In Europe, the market is more demanding with respect to compliance issues. There are interests behind it, it’s not just the sport. Sports marketing is used as a tool and not an end. It makes rulers know each other. Sponsors also use sport to get closer. In the case of the Arabs, there is this softness, tourism. But in the case of other nations, it can be pure business. The United States, for example, used sport as a diplomatic tool for big business.
How did the pandemic affect?
FIFA had losses because, in addition to the World Cup and articulations, it takes care of the football of more than 200 federations. She had nowhere to get money, she gave money, and decapitalized herself to avoid the solvency of world football. It was a thud. The proposal to hold the World Cup every two years is because FIFA has realized that it will need to make money. Even so, the projection is to have US$ 6.2 billion in revenue in Qatar in 2022, compared to US$ 5.3 billion in Russia in 2018, and US$ 4.8 billion in Brazil in 2014. TV rights reached US$ 3.127 million in 2018, compared to US$ 2.484 million in 2014. Sponsorships, on the other hand, totaled US$ 1.660 million in 2018 and US$ 1.628 million in 2014. Covid-19 has also made clubs suffer, but each one faces the more or less prepared moment. Real Madrid recorded a million euros in profit in the same year that Barcelona lost half a million. Some come out shattered, others just bruised.
What is the audience potential?
The power of the World Cup’s hyperconnection is gigantic. Finals games can be watched by over 500 million homes worldwide. If you multiply that number by four people in each household, which is more or less the average, you get two billion people. The World Cup in Russia reached an audience of three billion. The business behind it, which is sponsorship, depends on activation, because many brands do not sponsor, but end up associating themselves with the event indirectly. One of the issues that most afflict FIFA is broadcasting rights, the biggest source of income. Linear TV broadcasting is growing because there is still demand for live sport. But when it falls, it will be difficult to stabilize in the same way. Streams buy, but have limited sellability. FIFA knows this. But if you broadcast the Cup on open or closed TV, you won’t be able to talk to people between 18 and 25 years old. It is necessary to consider complementary platforms, which give the chance to reach young people who do not watch television.
How will the 2022 World Cup broadcast be different?
It will be the year of content consumption. I’m curious to see, because the consumption of content has changed, but we have the same model with open TV, closed TV and videos on FIFA’s social networks. Perhaps, social networks like TikTok and Facebook make sense. I would assemble a team of influencers, players and ex-players, for a live entertainment action, in addition to the 90 minutes of the game. The important thing is to promote the experience. The average fan likes matchday, and everything related to backstage, locker room, before the game, what the player ate, in addition to the broadcast; and exclusive content, showing the athlete playing video games with his son, cooking with his wife, going to the pet with the dog. It’s less impactful content compared to the game, but that doesn’t mean it’s low quality, and it’s still possible to take sponsored content. This is a vision that will evolve. Non-sponsoring brands are the majority and will increasingly realize that they do not need to be linked to the event.
Does the market know how to sponsor sport?
You put the brand on the shirt, put a sign on it, and then you have to activate it. At where? Buying media. That no longer exists. Which media will you buy? Instagram, YouTube, Globe? What if the brand doesn’t have the money for everything? That’s where the data driven comes in. Customer acquisition cost, mechanisms and tools will have to be measured daily or monthly. Expensive sponsorships turn into millions of activations, you can no longer risk the investment not returning to sales. Maybe you have to create QR codes, call influencers, make jokes, because humor sells. People aren’t into the sport just to be champions, but also for the fun, which engages, although the conversion is low. The trend in world sport is for the brand to negotiate broadcasts, for example, on its YouTube or website. We are talking about very high quotas. It’s as if the person who logs into your bank account can see Brazil’s game live. Customer acquisition cost, one of the main KPIs in digital, depends a lot on the story the brand will tell. But it’s no use being a mathematician, you need to have a more human vision, and use the power of sport as a brand vehicle.
What is and what is not prohibited?
Ambush marketing is putting a brand in the middle of the broadcast, for example, in the stands, behind the goal, where the camera passes, and it’s a misuse. Now, if the brand takes influencers who have millions of fans, sets up a studio next to a stadium, for example, in Qatar, and produces content 24h, with the sponsoring brands of these influencers supporting the coverage of dinners, clubs and interviewing ex- players, there is no infringement. The football audience doesn’t always need to be connected to the event.
What is missing for Brazil?
Create ROI and consider sports as a business platform and not a brand visibility platform, which does not convert. The internet, studies on activations and measurements of sports properties prove: what converts is quality content. But there are still people counting the TV centimeter, while everyone else is data driven. Only in Brazil remain outdated metrics. You put BRL 10 million in a quota with a return of BRL 100 million in media, and that is considered as ROI. In my calculation, this value corresponds to a third of the ROI, it will only bring a little bit of reality. TV can still reach the wrong audience. There is nothing more assertive than sport. And football is great for that. But management is lacking formality. When we have that, advertising will also go a step further. Football is used a lot as a medium, but it is also a way for the brand not to fall headlong into a management that is often bad. I hope the business law helps. Let’s wait for it to happen so we can celebrate.
How to value a sponsorship?
There is this new legislation from the Sociedade Anônima do Futebol, for the transformation of clubs into companies. In Mexico, for example, clubs are already run by companies, and they don’t sell advertising space on shirts as cheaply as they do here. There, the volume of advertising money is more expensive, the Mexican advertising market itself is more valuable, not least because of the audience coming from the United States. It helps. Of course, a well-run company is worth more. A well-run club has to sell better sponsorship. Flamengo sold much better sponsorships than they do today because, better managed, it’s worth more. However, it is still something short of what it could be.
Will football stop being sexist one day?
Brazilian football is more conservative than Brazilian society itself. This exists in sport, in general, but football is even more archaic, and little in tune with what is most modern. The world of sport, however, beckons to issues of diversity and equality. Idols like LeBron James and Lewis Hamilton already occupy more space than FIFA itself on issues of humanity. Studies show that the space occupied by athletes’ speech is expected to triple in the coming years. It is the idol that produces value relationship today. Those who do not invest in projects with idols will have a smaller impact. Sport initiatives in communities are also gaining more and more space due to the feeling of belonging. The advertising market needs to adhere to this. Brands must build real storytelling. What sells is the authenticity of the story she tells.
Is there a culture shock?
Today, 70% of young people up to 20 years old prefer brands that are socially engaged with their causes. There are athletes who already earn more with Instagram. 72% of young Brazilians have a European team, and the league that has the most penetration in Brazil is the NBA. The younger ones, not even the European team want it. The 16-year-old doesn’t care about football anymore. When brands realize that fans over 40 years old are often in the profile of the reactionary, old-fashioned, they will see that it will no longer be possible to serve this audience, carry this discourse, which makes fundraising abroad unfeasible. We can see more and more clubs turning down certain sponsors because the consumer himself will demand purpose. In motorsport, which has large technical sponsorships, a company used to test its fuel to convey a perception of quality. Today, if it pollutes, it will be charged. What do you do to invest in renewable energy? The questioning persists in the minds of brands that were not prepared for this type of questioning.
