With the return of the sports industry to offline, the public's expectations for the event have also reached a high point. As a "niche" event in China, the F1 Chinese Grand Prix will take the lead in detonating the whole network in the first half of 2024. Not only celebrities from all walks of life came to the scene one after another, but hundreds of thousands of tickets were quickly sold out just after the beginning of the year. Brands also want to seize the surge in popularity and have made layouts. Lenovo replaced Heineken as the title sponsor of the Chinese Grand Prix, while the team of Zhou Guanyu, China's first F1 driver, was sponsored by Yili's sub-brands Ambrosia and SenseTime. And Zhou Guanyu himself has also successfully "promoted coffee", and brand endorsements such as Dior and Hennessy have received soft hands.
Now the Shanghai Olympic Games qualification tournament is about to start, and the opening of the Paris Olympics is less than 100 days away. These successive sports events will undoubtedly detonate the enthusiasm of the people again, and will also reactivate the brand's "traffic package". So what are brands trying to do sports marketing? How has common sports marketing changed over the past few years? When more and more businesses are rooted in sports marketing, how can brands break through?
Sports events, a super medium for brand diversified marketing
2023 is a year of economic recovery and development, but also a year of resumption of sports events. Large-scale sports events represented by the Chengdu Universiade and Hangzhou Asian Games, as well as "grassroots" events represented by "village super" and "village BA" have landed.
With the launch of these events, sports consumption is heating up in China. Among them, the expenditure of spectators has become an important part of the consumption structure of urban residents in mainland China. The spillover effect of the event has released multi-level and diversified consumer desires. Taking Shanghai as an example, according to the "2023 Shanghai Sports Event Impact Assessment Report" released by the Shanghai General Administration of Sports, a total of 118 sports events will be held in Shanghai in 2023, attracting an on-site audience of 1.48 million people, directly driving consumption of 3.713 billion yuan, and a pull effect of up to 4.753 billion yuan for six major fields such as catering, accommodation, transportation, and tourism.
Where there's traffic, there's a marketing opportunity. Since the 2008 Beijing Olympic Games, sports marketing has gradually attracted the attention of brands. Generally, sports marketing is divided into three categories: the first type is that brands carry out business development, brokerage and advertising through the sponsorship of sports events, activities, leagues, athletes, and teams themselves, among which event sponsorship and athlete endorsement are the most common marketing methods; In the second category, brands carry out advertising, product placement and commercial cooperation on sports event broadcast platforms, and grasp the popularity of events through a combination of multiple types of media; In the third category, brands rely on "rubbing" sports events for pan-sports marketing, and use the spillover effect of events to guide the public's self-driven communication.
With the continuous increase in policies on sports events and the rising craze for national fitness, the commercial value of sports marketing has become more prominent, which can bring high enough returns to brands. According to an authoritative research firm (ISL), the return on sports sponsorship can be as much as three times higher than that of conventional advertising[1]. Especially in terms of brand image establishment and influence expansion, it is immediate. CCTV Market Research (CTR) data shows that after the Asian Games, consumers' awareness of sponsors at all levels has generally improved.
As a result, the 2023 resurgence has seen brands refocus on sports marketing and show unabated support. This was evident in the annual reports of many brands last year. CBNData does not have complete statistics, and in 2023, more than 2 percent of companies will mention sports marketing in their annual reports. Compared to 2022, the number of consumer businesses mentioning sports marketing has doubled. Especially in the food, beverage and beauty care industries, there has been a significant increase in the number of references.
However, it seems that enterprises have jointly chosen sports marketing as a marketing method, but the genes and development stages of different enterprises determine that the original intention behind the choice of enterprises is different. Enhancing overseas influence, conveying positive brand concepts, strengthening brand professionalism, reaching specific groups of people, and demonstrating ESG management capabilities are the main reasons for brands to invest in sports, and sports marketing with high coverage, high influence, and high segmentation can indeed give enterprises the above value.
When companies become "rational", how are they playing with event marketing?
In 2023, due to the impact of the complex macro environment, consumer companies have generally adopted "rational" measures in marketing, and it has become a broad consensus in the consumer industry to reduce the burden and improve marketing ROI. More than sixty percent of listed consumer enterprises have a sales expense growth rate of less than 10%, and forty percent of enterprises have a year-on-year decline in sales expenses. In this context, the common sports marketing model has quietly changed in the choice of enterprises.
The event sponsorship is M-shaped, and street projects have become a "hot search" alternative
Event sponsorship is an important part of sports marketing, and it is also the most expensive way to invest. According to CBN, LVMH expects to spend about $166 million on sponsorship of the Paris Olympics, accounting for 15% of its total annual marketing budget. Qimengniu Dairy and Coca-Cola, the only Chinese dairy sponsors of the Olympic Games, spent US$3 billion to sponsor the 2021-2032 Olympic Games, one of the largest corporate sponsorships in the history of the sports industry.
In the current counter-cyclical market, event sponsorship is showing an M-shaped differentiation. The "top stream" tournament and many smaller tournaments have been able to maintain a stable number of sponsors, and even increase in terms of attracting money. Events with medium influence are faltering on the road to commercialization and face varying degrees of sponsor churn.
Despite the high cost of sponsoring top-level events, these high-impact sporting events continue to attract top companies. For example, in 2022, Chinese companies, including Hisense Group, Mengniu Dairy, and vivo, became the largest sponsors of the Qatar World Cup, investing a total of $1.395 billion in sponsorship fees. The Hangzhou Asian Games held at home in 2023 has become a sweet spot, and sponsors have shown a blowout growth. The official website of the Hangzhou Asian Games shows that 175 sponsors participated, compared with only 52 sponsors for the Guangzhou Asian Games 13 years ago.
With the rise of national sports, small street events such as street skateboarding, street basketball, and road running began to be held in various provinces and cities. Among them, in 2023, 699 road running events will be held across the country, with a total of 6,051,900 participants. It is worth mentioning that in May this year, the four Olympic qualifying events of BMX, freestyle, skateboarding, break dancing and rock climbing will also be held on the banks of the Huangpu River.
In terms of sponsorship, as sports marketing strategies shift from extensive traffic capture to in-depth reach to specific groups, niche street competitions that undertake mainstream event traffic have become an important starting point for in-depth interaction with consumers and brand reputation. Taking street basketball as an example, this event, which is quite popular with sponsors in the United States, has also attracted the attention of well-known brands such as Luzhou Laojiao, Alien Electrolyte Water, and Xiaopeng Motors in mainland China in recent years. At the same time, self-built sports IP has also become a new way for brands to build mass consumer brands. DESCENTE, a sports brand, pioneered its own event IP "Breaking the Wind Forward Riding Race", targeting the target triathlon customers for precision marketing. Liquor brands such as Yanghe Co., Ltd. and Shuijingfang have also successfully created out-of-the-circle sports events and deeply connected with consumers.
Image source: Internet
In contrast, many medium-impact and more hierarchical events are in an awkward position. The Chinese Super League, which was once glorious on the Chinese football map, has been reduced to four official sponsors after three years of baptism in the competition system. E-sports, as a representative of circle-based events, will experience two days of ice and fire in 2023, on the one hand, e-sports will further break the circle through the IP of the Hangzhou Asian Games. On the other hand, esports faces doubts about its commercial value. As the two most influential e-sports events, TI12 and S13 have seen varying degrees of decline in the number of event sponsors.
Behind these mid-range event sponsorship declines is due to rising sponsorship costs, which exceed the expectations of many small and medium-sized brands, and because the main benefit from event sponsorship is traffic exposure rather than direct product purchases, and for brands looking for a quantifiable return on investment, they cannot see real-time marketing benefits. Especially in the past few years, brands have piled up event sponsorship, and in the face of a long list of sponsors, it is difficult for consumers to remember the brands that are behind, which leads to the head brands often eating up the dividends, and the tail brands both losing money and not making money.
The contract between groups and athletes is uneven, and the commercial value of niche sports is gradually reflected
During the 2022 Winter Olympics, Luckin Coffee bet on Gu Ailing in advance and staged a script of "Concubine Xi Returns to the Palace", bringing Luckin back to life, who was struggling on the death line. This marketing case once again demonstrates the enormous business potential of star athletes. It has inspired more brands to be willing to fight big with small and seek opportunities to cooperate with athletes, hoping to create a "life-changer" like Luckin Coffee. Zhou Guanyu, who exploded at the beginning of the year, was bet by Lululemon as early as the beginning of 2023 and announced that he would be the brand ambassador, aiming to help hunt for "high-quality men".
It is worth mentioning that the brands that have joined this "carnival" have gone from daily to rice and skin care products, and from high-end to luxury brands such as LV and IWC, covering many industries such as food, sports, beauty, platforms, transportation, and electronics. Among them, food, sports, beauty, daily use and other industries are the most active.
Image source: Beijing News
In addition, compared with the high expenditure of tens of millions of yuan in event sponsorship, the cost of contracted groups and sports stars is relatively lower for brands. Judging from the recent bidding of national team sponsors, in addition to the average annual listing price of the "ace team" gymnastics team and the "rising star" short track speed skating team exceeding 10 million, the sponsorship fee of most national teams is mostly about 5 million, and the national teams of niche sports such as rowing teams, sailing teams, and rock climbing teams are even more economical, with an average annual listing price of about 1 million.
However, in recent years, brands have been more inclined to invest in athletes in popular teams or events in order to improve their "hit rate". Sports stars in table tennis, diving and other sports are more favored by brands because of their high popularity and stable performance. At the same time, some brands have begun to gain insight into the commercial potential of niche sports, and the commercial value of athletes in niche sports is gradually being recognized by the market, and they choose to cooperate with athletes in skiing, roller skating, rowing, cycling and other sports. It is worth mentioning that although in 2022, the champions of niche sports such as roller skating, rowing, and cycling will not achieve any commercial results, but in 2023, roller skater Guo Dan leads the way with 11 new endorsements.
With the integration of marketing and marketing, the live broadcast of athletes and events has become a new scene of sports consumption
The passion and tension of sports competitions and the natural influence of the IP behind them have sparked a carnival of fans and brands, as well as a craze on social media. In order to maximize the precipitation of traffic brought by sports events, in recent years, major social platforms have begun to set up a full-link coverage of the "pre-game-in-game-post-game" marketing rhythm for the event while competing for broadcast rights. In addition to the event, supporting the development of content IP such as the culture and history of the host city, the daily training and private clothing of athletes, and niche sports has also become the top priority of the platform's work. According to the "2024 Douyin Sports Trend Report" jointly released by CBNData, Giant Engine, Giant Arithmetic, and Douyin E-commerce, in 2024, niche sports will have an eyeball effect, and content such as "She Sports", "Static Sports" and "Go to a City" have also become important hotspots to leverage traffic.
Image source: Screenshot of each company's Olympic marketing plan (from top to bottom, Weibo and Xiaohongshu)
This integration of sports rights and social platforms not only broadens the boundaries of the arena, but also completely changes the way sports IP and sponsors connect with audiences, especially live broadcast, which is a means of instant and in-depth interaction. Therefore, more and more athletes are visiting the live broadcast room, breaking the circle and expanding the stream in the way of "brand/head anchor + sports star" to attract more sports consumers. In 2023, NBA stars and football stars such as Harden, O'Neal, Figo, and Kaka will frequently appear in various live broadcast rooms and quickly accumulate popularity. For example, during the Asian Games, the "big shark" came to Brother Xiao Yang's live broadcast room to wrestle with someone, and the popularity of the live broadcast room quickly reached 1 million, and Brother Yang's own products were sold out within ten seconds. With the opening of the Olympic Games imminent, Mengniu invited well-known athletes such as Deng Yaping and Tian Liang to the live broadcast room, which made the brand activities spread rapidly, and the ticket-giving marketing campaign of "Go to Paris to watch the Olympics and come to Mengniu" has been read by more than 100 million people on Douyin, and the number of discussions has exceeded 10,000.
Image source: Screenshot of Mengniu's official flagship store
When the industry-wide live broadcast room broadcasts differentiated content in the card slot, the live broadcast room with the event IP has become the "upstart" in the live broadcast industry with the play of "IP + top-notch goods + professional anchors". During the 2023 Sudirman Cup Badminton Mixed Team Championships, the live broadcast traffic and revenue of the Kudong Preferred Live Room in the semi-finals hit a new high, and it directly ranked 8th on the Taobao Live Broadcast Hour Transaction List, and the exclusive new racket of the mid-to-high-end badminton brand Yonex was sold out immediately after its launch[2].
How can brands differentiate their marketing by effectively leveraging the event
At present, more and more brands are accumulating strength in advance, secretly arranging, and preparing to capture a new round of marketing highland, and how to break through among many competitors and go out of the differentiated path has become the key for brands to do a good job in sports marketing.
From serving professional athletes, to serving participants, to serving registrants
In recent years, sportswear brands have taken advantage of the strong exposure of athletes' star effects, while also targeting technicians, referees and volunteers around the venue. By providing services to the participants of these events, they will attack from the side and adopt crowd tactics to "brush their faces". In 2023, the Asian Games volunteers who provide various services for athletes and tourists, "Little Green Lotus", have swiped the screen of major platforms, and have successively appeared on the hot searches of Weibo and Douyin, bringing a lot of traffic to the "Little Green Lotus" workwear supplier 361°.
Unlike professional events, which "set a threshold" for brands, the flexibility of popular sports allows more brands to directly root their selling points in the hearts of participants through services. Recently, Estee Lauder joined hands with the 2024 Shanghai Women's Half Marathon to create a marketing campaign of "running a marathon with makeup" around the pain point of sweating and removing makeup. At the same time, the mood for popular sports is hot, and registration for mass events is often saturated. Taking the Xiamen Marathon, the world's first marathon platinum label event in 2024, as an example, the number of registrations has reached a new high, with a total of more than 136,000, while the scale of the event is only 30,000. In 2024, the winning rate of the 2024 Gold Label Half Marathon is as low as 17.1%. These unsuccessful players are often high-potential users that brands want to reach, and how to meet their expectations for the event has become a new entry point for brand marketing.
"Business + Sports" is booming, reconstructing brand marketing venues
With the vigorous development of the sports industry and the continuous innovation of business models, in the context of the upgrading of health, social, tourism, education and other concepts, commercial complexes with "sports +" as the core have risen rapidly in recent years and are becoming a new bright spot in urban development. From the Sports Mall with the stadium as the core, to the professional and segmented sports experience tenants, to the emerging sports scene design, and the combination of sports and outdoor brands and offline communities, these commercial entities that "move" the sports park into the interior are not only indispensable urban functional areas, but also vital sports and leisure gathering places.
Compared with traditional shopping malls, commercial entities that are deeply integrated with sports not only have a powerful tool to attract customers, but also deepen the binding of consumers in space creation and relationship reconstruction, so as to facilitate the manufacture of business opportunities. It's a great place for brands to market sports.
In 2024, sports marketing will continue to soar with the frequent holding of various events and the high enthusiasm of consumers. However, the market environment situation of the consumer industry has not improved this year, and the net profit of more than forty percent of listed consumer companies in the first quarter has declined. Against this backdrop, brands need to deepen their understanding of the changes in consumer demand if they want to keep pace with the sports craze. Because every shift in consumer focus will trigger an adjustment of marketing strategy, and it will also become a new opportunity to promote consumption upgrading.
Cover image source| Unsplash
Written by Lantern Festival
Proofreading|Backlight, Begonia
Resources:
[1] Blue Whale Finance, "622 Marathons a Year, the Bright and Dark Accounts of "Xtep"
[2] Chop Pepper Spicy "Behind the Sudirman Cup Fever Feast, Netizens Poured into the First Sports Live Room on the Whole Network"