Brand champions


Wednesday 30 July 2014 by Drew Heatley

SportsBranding_Main

The World Cup represented a turning point in America's relationship with soccer. With nearly 27m viewers, the final between Germany and Argentina was the most watched soccer game in the history of US television – despite the national team not playing. Before their elimination, the US men’s team commanded an audience of nearly 25m for its game against Portugal. The tournament signified the next chapter in a country warming to a sport it previously only saw as a curiosity.

The stars of the show from an American perspective were midfielder Clint Dempsey and goalkeeper Tim Howard. From appearances on the Late Show With David Letterman to a phone call from the President himself, they have seen their brand value rise significantly thanks to their performances in their country’s campaign.

Working with CNN brand expert Hajj Fleming, we’ve determined that an athlete’s brand value is made up of two key components: athletic ability and what we describe as “invisible capital”. An athlete’s invisible capital comprises a number of elements, including integrity, character, identity, trust and personality – and it is crucial to building and growing a prosperous individual brand in sport.

While the quiet Dempsey paints himself as a reluctant star, Howard appears far more business savvy and ready to start nurturing his own brand. He spoke to AdWeek this month about the importance of choosing the right endorsements:

“Sponsorships and marketing are oftentimes pretty short-lived. From a company’s standpoint, they’re often not looking to do tremendously long contracts. They’re always trying to catch the next big thing. I do believe that relationships are important. I always feel that if it works for me and it works for them, if there’s a good rapport, then longer-term relationships… help to grow my brand and the company’s brand. Consistency’s important.”

Managing your brand

Howard’s right: athletes who work hard to build their invisible capital are the ones who succeed in the long term. They can only earn a certain amount through their athletic ability for a finite amount of time; it’s their overall brand value that will help them maintain their status (and their bank balance) long after they retire.

A good example of this is LeBron James, who announced his return to the Cleveland Cavaliers earlier this month. He earns $72m a year and, while $19m of that comes from his salary and winnings as an NBA star, $53m (72%) comes from endorsements as a result of the strength of his brand.

On the other hand, Cristiano Ronaldo – star of Spanish soccer giants Real Madrid and the Portuguese national team – may be one of the highest earning athletes globally, at $80m a year, but two thirds of that comes from his employers. That leaves his long-term future as a global brand in doubt. He doesn’t capitalise on off-field endorsements as much as he could.

Some of the best examples of sports stars building their brand value are those who have been in the game a long time and work with businesses very closely. Tiger Woods and Roger Federer both earn the lion’s share of their cash (90% and 93% respectively) from endorsements outside their sports. Both have been global ambassadors for Nike and have leant their brands to many partners. Federer has worked closely with Gillette and Rolex throughout the years, while Woods has long been associated with blue-chip brands like American Express and EA Sports.

Tiger’s continued success comes despite scandal surrounding his private life a couple of years ago, showing that brands can overcome negative press – to an extent. His annual endorsements are approximately half the £105m he earned in 2007, according to figures from Sports Illustrated. Soccer star Luis Suarez is another athlete showing how brands can weather negative press. Despite his run-in with Italy’s Georgio Chiellini during the World Cup, he secured a £75m transfer to Barcelona and still enjoys a lucrative contract with Adidas. However, the incident did take a chunk out of his earnings, as he lost a smaller deal with online gambling firm 888poker.

Tennis stars Maria Sharapova and Serena Williams are also good examples of athletes who are managing their brands, earning $24m and $22m a year respectively, with endorsements outside their exploits on the court accounting for more than half of their earnings.

Synergy

The relationship between businesses and sport is a well-established one. Aligning with a particular athlete, team or event has long been a strategic play for brands looking to reach lucrative sports-loving demographics. Barclays is the main sponsor of the English Premier League – but while the multi-year deal provides obvious global exposure, the relationship runs deeper: the pair are working on a number of different initiatives away from the weekly activity of the League.

IBM and Wimbledon is a perfect example of the strong B2B thread that runs through most of today‘s sports marketing. IBM supplies technology that powers the Wimbledon Fortnight – as well as the way it’s consumed globally. The company also works closely with the National Football League (NFL), building data centres to help the organisation improve its IT delivery. Partnerships like these may go unnoticed by the average punter, but they’re increasingly important to the sports-marketing mix.

Global investment in B2B sports sponsorship shot up 50% between 1997 and 2013, according to research from OC&C strategy consultants, as companies see the value of targeting potential “business” clients and consumers simultaneously.

Big business

B2B included, sport is one of the most lucrative areas in marketing, set to be worth $55bn globally this year, according to IEG forecasts. And it’s maturing, with new services emerging to help athletes manage and build their brand equity.

US consulting firm Teneo made headlines earlier this month after its sports arm signed up basketball superstar trio Michael Jordan, Kobe Bryant and LeBron James. Teneo, headed up by ex-Nike brand president Charlie Denson, is not acting as an agency for these stars. It offers a range of business services – essentially treating each athlete as an individual business. This approach is illustrative of the market and the global perception of sports stars today.

The Frameworks is now moving into sports marketing, leveraging our 25 years’ experience in business branding to help build compelling identities for athletes that transcend the traditional B2B/B2C divide. The game is changing and we believe we are perfectly placed to help the likes of Dempsey and Howard shape their own brand destiny.

Drew has left The Frameworks.

Categories

  • Sport
  • Branding
  • Brand value
  • Marketing
  • Football
  • Athletes