In an article on its website last Tuesday FIFA announced that it will change its sponsorship model for the 2018 and 2022 World Cups in Russia and Qatar by offering regional sponsorship opportunities. The current sponsorship model was put into effect in 2007 and will run through the 2014 World Cup in Brazil.
In the video portion of the article, FIFA marketing director Thierry Weil explained that there are three sponsorship tiers for the FIFA World Cup in the present model: FIFA Partners, FIFA World Cup Partners, and National Supporters. FIFA Partners work with the world football governing body year-round activating against everything from development of the FIFA brand around the world to corporate social responsibility. FIFA World Cup Sponsors are given the rights to promote their brand and the World Cup on a global basis as part of their sponsorship package. National Supporters are companies with headquarters located in the host nation and have rights to promote their brands with the World Cup within the host country.
For the 2014 World Cup in Brazil the companies that fall into the three buckets just mentioned are as follows…1) FIFA Partners: adidas, Coca Cola, Hyundai/Kia Motors, Emirates, Sony, and Visa 2)FIFA World Cup Sponsors: Budweiser, Castrol, Continental Tire, Johnson & Johnson, McDonald’s, Moy Park, pi, and Yingli Solar 3) National Supporters: FIFa.com, ApexBrazil, Centauro, Garroto, Itaú, Liberty Seguros, Wise Up, and Football for Hope. As one would assume, the cost associated with the tiers increases as you climb the ladder closer to being a FIFA Partner.
Under the new model, the first two tiers of sponsorship will remain “mostly unchanged”, according to Weil. The third tier, “National Supporters”, will see the change to the regional model. Instead of 6-8 companies filling the third tier of sponsors, there will be up to 20 companies from five defined regions from around the globe, each with up to four companies: North America, Africa, Asia, South America, and Europe. The top two tiers will still each contain between 6-8 companies, combining for no more than 14 in total to maintain the level of exclusivity that top global brands seek with a partnership at that price tag.
When asked why FIFA chose to change its World Cup Sponsorship model, Weil replied,
The demand is there. Having observed our current structure it became clear that there is an interest from brands in broadening the scope of the National Supporter engagements, not only to cover the host country. The regional approach also offers a more targeted way for commercial affiliates to engage with their target audience, offering companies who do not have the desire or the means to enter into a global sponsorship agreement to acquire rights which cover a significant geographical region. For example a company who is interested in the region of South America can now acquire the corresponding rights and not have to purchase a global package. The value proposition is much stronger.
The move to regional sponsorships for the third tier of FIFA World Cup sponsorships will prove Weil and his colleagues to be pretty smart, and that they were following a larger trend in the customization of marketing strategy. We can find examples of customization all over the consumer sector, and we are beginning to see more and more of this trend bleed over into business to business interactions.
A great example can be seen at the world’s largest company and retailer, Walmart. One of their corporate pushes and asks from their vendors and supplier partners recently is for “Walmart – exclusive” items, or items made by manufacturers just for Walmart. They view it as a competitive advantage to carry items that can be found nowhere else, especially given their price leadership in most markets with their EDLP strategy. Vice Versa, it’s a competitive advantage for the manufacturer to be able to be nimble and agile enough to create these customer-specific products and meet their customers’ needs. Walmart, and others with the same idea, will see those manufacturers as true partners, willing to take chances and grow jointly with them via elevated customer service. The same principle applies to the sporting industry, and in this case to FIFA’s sponsorship model.
Fans and consumers love to see local companies partnered with such prestigious events as the World Cup, or the Olympics for example. In the old model, that sense of pride was limited to the fans of the host nation and those who coincidentally also lived in the same nation as the select few global power brands who were FIFA Partners or World Cup Sponsors. In the new model, fans the world over will be able to feel that sense of pride and connection to the World Cup, which ultimately will equate to an increase in dollars for FIFA as a direct result of this move. It will make the World Cup, the globe’s largest sporting event, a truly global phenomenon, even more so than it already is. When a fan (consumer) can make a meaningful, emotional connection with your brand(s), as a marketer that equates to a win. FIFA will be able to work with its global and regional sponsor partners across the globe to come up with that winning formula for the World Cup starting in 2018 in Russia.
Football clubs have been taking advantage of this model as well for some time now, but we’ve really seen an increase in activity over the last few years, especially in the Premier League. Clubs have recognized the global power and presence of their brand and that they have only unlocked a small portion of the true potential that lies in other markets around the world, such as Asia and Africa. The trick is figuring out how to activate in those markets with their club’s brand in a meaningful way for fans and businesses in those markets.
They simply can not just take existing global sponsors to those regions for a few events and hope that they will be enough. Those global mega brands, like Coca Cola for example, are very important to be sure, but what really will crack the potential for these markets for football clubs are regionally relevant, local companies and brands, which will obviously vary depending on the region of the world you are trying to enter.
This point is important to connect with the fans in these areas to be sure, but it is also a strategy that unfolds nicely to be able to partner with these regional companies and brands. Most of them would not be able to afford to sign up for a global sponsorship deal, as much as they would love the press and visibility for their company or brand. By offering these smaller, regional deals companies and clubs alike can make partnership with their brands much more accessible for these regional players that would otherwise not even be in the conversation. This opens the door to more partnerships, which equates to more opportunity for sponsorship dollars. Obviously, clubs and organizations need to evaluate the equities of both parties involved and make sure that the pairing makes sense, as in any sponsorship or partnership between brands. While it might be a bit more complex of a model to keep track of and to manage for the partnering club or organization, the return will more than make up for the complexity.
FIFA recognized that they were only really taking advantage of this opportunity within the host country for the World Cup with the “National Supporters” sponsorship model. Now, with the 20 new regional sponsorship opportunities all over the world in the new model, they can fully take advantage of this trend in all markets, not just one country.