According to Rorsted, in 2018 Adidas sales in Russia will stop falling (over the past three years, according to the company, they have halved, now it is 660 million euros) - including due to the World Cup: the company will open stores during the World Cup in areas of attraction for fans. Adidas closed its stores en masse twice: in 2015 - about 160, in 2017 - about 200 points.
The inbound tourist flow to Russia will grow by 300,000-500,000 people, says a representative of the Visa payment system: fans will increase card spending in the country by 10-25%. Alfa-Bank also expects profit growth: new customers will appear, there will be more transactions and acquiring, Oksana Belyaeva, marketing director of the bank, is sure.
Transportation of guests and participants of the championship is organized by the regional sponsor - Russian Railways. This will increase the international recognition of the brand, primarily in European countries connected with Russia by direct rail links, explains the representative of Russian Railways.
In 2018, Rostelecom also became a sponsor. Its core service is IPTV, and sports fans are one of the most important segments of the pay TV audience, a representative of Rostelecom explains: the company expects to strengthen subscriber loyalty with special offers for fans, as well as for bars, cafes and restaurants. How this will affect financial performance, he declined to discuss.
Sponsorship of the 2018 World Cup allows you to directly communicate with audiences around the world, strengthen the emotional connection of consumers with the brand through events both at stadiums and beyond, and in the media, believes the director of legal affairs and corporate relations of Sun inbev (a subsidiary of » Anheuser-Busch InBev) Oraz Durdyev. The sale of beer is one of the components of sponsorship, he continues, in the long run it increases the value of the brand. When asked how the brand's sales will increase due to the championship in Russia, he did not answer.
The competition will increase beer consumption, investment bank Morgan Stanley predicted in a review: fans will increase the market by 2%, this will be the first increase in 10 years. Four years ago, Reuters wrote that the championship in Brazil would increase local beer sales by 1-2%, and with the success of the Brazilian team - by 3%. After the Brazilian championship, AB InBev's beer sales grew by 7% worldwide, recalls Kirill Kulakov, general director of the RMA business school.
The population of Brazil is 70 million more than Russia, Kulakov argues: this is a priori a larger market for sponsors. And in Russia, according to polls, only 53% of the population will be involved in the championship. In Brazil in 2014, there were more than 80% of such people. In Russia, there are completely non-football regions, Kulakov complains: for example, Siberia and the Far East.
The more popular football is, the more attention is paid to major football events, the greater the growth in popularity, brand awareness of sponsoring companies, which leads to an increase in sales both during the events and after them, Oksana Zhupina, head of the Deloitte consumer goods group, agrees: sales are growing due to both the main population, and numerous tourists.
It is easier for companies operating in the consumer goods sector to interest and draw the attention of consumers to their products, in the service sector it is more difficult to do this, since the sales process itself is longer, Zhupina believes. The championship in Russia already affects the sales of sportswear, soft drinks and beer, that is, the sales of such sponsors as Adidas, Bud and Coca-Cola, supported by her Kulakov.
In April 2017, the Financial Times wrote that FIFA had a hard time finding sponsors for the tournament in Russia: international and local companies are avoiding contracts due to large sums and reputational risks. Russia may not be very attractive for sponsors, Kulakov agrees: the crisis in relations with the West also affects business, and after the FIFA corruption scandals in 2015, sponsors do not want to spoil their reputation by associating their name and brand with the association.
What is FIFA
Founded in 1904, FIFA (Fédération Internationale de Football Association, FIFA) today is one of the largest commercial structures in the world of sports with billions of dollars in turnover. The main function of the organization, whose members are 211 national football associations (more than members of the UN), is the organization of international football competitions, including beach, women's, youth and e-football. In total, FIFA is the organizer of 16 international tournaments, the largest of which is the World Cup among men's teams. Since it is the World Cup that generates the main income of FIFA, the organization lives in a four-year budget planning cycle from championship to championship.
According to The New York Times, citing internal FIFA documents, in the current budget cycle, the organization was able to receive $ 450 million more than planned in the budget, thanks to several large contracts concluded with new partners shortly before the 2018 World Cup. The main contribution to the additional income of FIFA was made by Chinese companies. In 2016, the Wanda Group (specialized in development, retail, logistics, etc.) became FIFA's global partner, signing a contract until 2030.
Other sponsors of FIFA in the status of “partner of the World Cup” are Hisense (electronics manufacturer), Mengniu (dairy products manufacturer) and Vivo (smartphone manufacturer). The contracts with them were concluded in 2017 and are valid until the end of the 2018 World Cup.
At the same time, since the choice of Russia as the host country of the 2018 World Cup in 2011, no new company representing Western Europe or North America has signed a sponsorship contract with FIFA. The current Western sponsors: Coca-Cola, Adidas, Bud, Visa, McDonalds had long-term active contracts with FIFA. In 2015, these companies threatened to terminate their contracts with FIFA, demanding the resignation of the head of the association, Joseph Blatter, who was at the center of a corruption scandal. That same year, Blatter was fired and suspended from any football activity for eight years.
Another major budget item that has increased FIFA's revenue over the past four years has been the sale of licensing rights. FIFA's license proceeds rose from $50 million in the previous period to $160 million after signing a contract with EA Sports, the developer of popular esports games. As part of the contract, EA Sports is the host of the FIFA eWorld Cup 2018, the global e-football championship that will take place in August 2018.
How much does FIFA spend
About a third of the money earned over four years, FIFA traditionally spends directly on the World Cup. The organization’s expenses for the 2018 World Cup are $1.948 billion. A significant part of this amount, $627 million (32%), will be paid to the Russian Organizing Committee as partial compensation for the costs incurred. The second major item of expenditure - $ 400 million - prize money to the participating teams, which will be distributed depending on the results achieved. Thus, the world champion will receive $38 million from FIFA. The Russian team, which reached the quarterfinals, will receive $16 million in prize money. The rest of FIFA's expenses include TV production fees, referee fees, development of IT solutions, championship insurance fees, etc.
FIFA's contribution to the organization of the remaining 15 competitions, which are held under the auspices of FIFA over a four-year period (children's, women's, e-sports, etc.), is only $600 million for the budget cycle.
Among FIFA's expenses that are not directly related to the organization of competitions are investments in educational programs and the development of football around the world. Under this article, annual targeted payments to national football federations, training seminars for coaches and referees, the construction of the World Football Museum, etc. are carried out. In 2015-2018, FIFA spent $1.65 billion for these purposes. Almost $1 billion ($891 million) goes to pay for the office, salaries, travel around the world for football officials, etc.
In total, over the period 2015-2018, FIFA spent a total of $5.556 billion, which allowed it to record a profit of $544 million over a four-year period - a record in the history of the organization.
How much did Russia spend on organizing the 2018 World Cup
Russia spent much more than FIFA on organizing the World Cup. The total amount for preparations for the World Cup, indicated in the federal state program adopted by the government to prepare for the 2018 World Cup in Russia, amounted to 679 billion rubles, that is, almost $11 billion at the current exchange rate. At the same time, an additional 850 million rubles. were already after the start of the world championship. According to RBC's source in the organizing committee of the World Cup, this money was allocated at the last moment due to additional wishes from FIFA for the infrastructure of new stadiums, including equipment for VIP boxes.
The main expenses - 551.93 billion rubles. (81.4%) - were associated with the construction of stadiums and training fields, as well as transport infrastructure for the World Cup. Seven of the 12 stadiums that hosted the 2018 World Cup games were built from scratch with federal budget funds. 92 practice fields were also built. In total, their construction cost the budget 150 billion rubles.
The program allocated 352.5 billion rubles for the construction of transport infrastructure, of which 170.3 billion were federal budget funds. In this part, most of all was spent on the construction and reconstruction of airport complexes. Thus, a new Platov airport was built in Rostov. The construction cost amounted to 37 billion rubles, of which 19 billion was invested by the Airports of the Regions company of Viktor Vekselberg. In other cities of the World Cup, new terminals of operating airports appeared and runways were updated.
Part of the cost of preparing for the World Cup was borne by the regions. Basically, their spending was related to the repair of facades, roads, pedestrian areas, sewerage systems, the purchase of new buses, ambulances, etc. In addition, the funds were used to "increase the tourist attractiveness of the region." The most ambitious regional programs for the 2018 World Cup were implemented in Moscow and St. Petersburg, where junctions, bridges and new metro stations were built for the 2018 World Cup.
According to RBC, the total contribution of the regions in excess of that prescribed in the federal program amounted to 205 billion rubles. Russia's total expenses for hosting the 2018 World Cup in Russia amounted to 884 billion rubles. ($14.2 billion).
Championships only for big ones
The general policy of FIFA is to expand the geography of the World Championships, and taking into account the forthcoming increase in the number of participants in the final stage to 48 teams (from 32), the holding of the tournament becomes “only within the power of countries that are very serious in economic terms, or it will be a collaboration of several countries, such as the United States, Mexico, Canada” (chosen as the hosts of the 2026 World Cup), recalls the former Secretary General of the Russian Football Union, Doctor of Economics Anatoly Vorobyov. After Qatar, which intends to spend $200 billion to prepare the next World Cup in 2022, only countries like China will be able to pull the organization of the World Cup, Vorobyov believes.
The question of whether it is profitable to hold the World Cup at all is very complicated: one must take into account not only the cash costs incurred, but also intangible benefits - goodwill, including image dividends, but it is almost impossible to strictly measure them, Vorobyov argues. The main beneficiary will be the tourism industry: “Once the fans have seen Moscow and other cities so attractive, word of mouth will work, many South Americans and Europeans will want to come and see Russia.” “As for the sports component, of course, there are risks that stadiums in a number of cities will become unclaimed, as in South Korea or South Africa, especially where there are no Premier League teams (Saransk, Volgograd, Nizhny Novgorod). The costs of maintaining these stadiums are already known, and it is not yet clear how they will pay off, ”adds Vorobyov.
In 2019, the maintenance of seven regional arenas will amount to from 276 million to 338 million rubles, or 2.2 billion rubles. taken together, follows from the World Cup Legacy Concept Draft published by the Ministry of Sports in April 2018.
Professor of the University of Chicago economist Konstantin Sonin believes that the main benefit of the World Cup in Russia is the increase in fan involvement and the prospect of a long-term increase in interest in football from a wide audience; The $10-15 billion spent on the championship is “a small amount for the economy as a whole”, and “huge fan involvement, disproportionate to costs, is in some ways even more important thing for the development of football than the construction of stadiums and infrastructure,” says Sonin. The big role of the championship is that it sets the standards for the organization of sports events, and the championship in Russia has demonstrated that “everything can be organized in such a way that people come [to the stadiums] not only in Moscow and St. Petersburg, but also in Saransk, Saratov and other cities”, so that football would be visited by the middle class and families with children, etc., the economist said.
And this, in turn, gives hope for an increase in the income of football clubs from television rights and visits to stadiums, the expert concluded.
However, before you start chasing a football fan's wallet, it's useful to understand some of the tricks and pitfalls that you may encounter on the way to creating an advertising campaign. This is primarily about FIFA copyrights, the prohibitions associated with them and the possibilities for circumventing them.
Sponsorship with FIFA
Traditionally, companies that have the right to use the symbols of the world championship are divided into three large groups.
1. FIFA Partners- corporations that have full advertising and marketing rights to all competitions held under the auspices of the association.
In 2018, their list includes such giants as Adidas, Coca-Cola, Hyundai/Kia, Qatar Airways, VISA, Gazprom and the debutant of the current World Cup, the Chinese concern Wanda Group, which signed a contract with FIFA in the spring of 2016.
2. Sponsors of the World Cup- companies that own the rights to everything that is directly related to a particular World Cup.
Traditional sponsors for the World Cup in Russia are Bud and MacDonald’s, electronics and home appliances company Hisense, which has a history of sponsoring the UEFA Euro 2016 in France, and newcomer Chinese smartphone maker Vivo.
3. Regional sponsors. The new model of division of sponsor positions, which came to replace the national sponsors, involves cooperation with four corporations on each continent. According to rumors, the organizers are not doing well with the sale of these sponsorship packages ahead of the 2018 World Cup. Thus, Europe is currently represented only by Alfa-Bank, which, as part of the championship, will be able to offer its services and products to fans.
Who can, and who carefully
Before and during the 2018 World Cup, all of these corporations will be able to freely use the tournament and FIFA logos, official symbols, produce souvenirs, and distribute match tickets as part of their promotions to promote their products. What about companies that cannot boast of sponsorship packages?
The answer is simple - everything is the same, but without piracy and infringement of marketing rights. In its rules, FIFA notes that it welcomes any company's use of the World Cup as a publicity stunt, but makes it clear that consumers should not be misled into thinking that advertisers are sponsoring the tournament.
Balls, gates, stadiums, images of fans and flags of countries - everything associated with the world of football can and should be used. In the end, the lack of official agreements with FIFA does not prevent either Nike or PepsiCo from creating bright and memorable advertising campaigns from time to time, which are in no way inferior to the work of their competitors.
But besides this, for example, you need to remember that if you run a lottery or promotion on the eve of the championship, you will not be able to win tickets for matches. Only copyright holders are allowed to do this.
Another rule should become golden for the owners of bars and cafes, where they traditionally count on good earnings on match days. You can attract fans to your bar counter by any means, but at the same time, there should not be “copyright” materials either in your promotional products or in the design of the bar itself. That is, no one will forbid you to hang an advertising poster announcing the broadcast of the match in the colors of the Russian flag or in the shape of a soccer ball in the window. But if the World Cup logo is drawn on it or official fonts are used, which are also protected by copyright, this will already be a violation.
FIFA vs Dr. Dre
Non-compliance with the notorious FIFA copyrights, oddly enough, often becomes one of the main blunders in advertising campaigns related to the World Cup.
Natalya Belkova, General Director of the Business Communications Agency 4D
However, sometimes advertisers can play on the verge of a legal “foul” using the so-called Ambush marketing, giving viewers the false impression that their brand is among the official sponsors of the tournament. Here, a fair amount of humor, pre-planned actions and even personal agreements with the players are used here.
So, during the 2012 European Championship, Denmark striker Niklas Bendtner was fined 100,000 euros for showing the name of the bookmaker's office, which was emblazoned on the elastic band of his shorts, during the goal celebration. The company, of course, was not among the official sponsors of Euro 2012, and the Dane could hardly have been unaware of this. As a result, bookmakers and the football player himself (who, by the way, is known for a whole collection of other tricks) received their portion of fame.
A similar story happened during the 2014 World Cup in Brazil. The wrath of FIFA then caused the headphone maker Beats by Dr. Dre. On the eve of the World Cup, Beats launched The Game Before The Game with such football stars as Neymar, Bastian Schweinsteiger, Luis Suarez and Mario Götze. Actually, the series of videos itself did not encroach on the rights of official sponsors, but after the start of the championship, the manufacturer found himself in the center of a small scandal.
The fact is that the official sponsor of the World Cup then was Sony, which, as usual, provided all participants in the tournament with sets of their devices, which included headphones. However, some players safely ignored the requirement to use only sponsored products and regularly began to get caught in the camera lenses in Monster Beat headphones. However, as representatives of the corporation said, despite claims from FIFA, such PR only benefited them.
Another example of FIFA fighting Ambush marketing comes from the 2010 World Cup in South Africa. In the second half of the Netherlands-Denmark match at the stadium, 36 young Dutch women of model appearance, dressed in orange dresses, were detained by stewards. Everything would be fine, especially since orange, as you know, is the national color of the Netherlands, but the beer company Bavaria Beer sold just such clothes. At the same time, the only brewer who had the right to advertise at the stadium was Budweiser. Despite the fact that the company logo was not on the dresses, the fans had to continue the evening at the FIFA office, denying accusations of violating marketing rights.
Tverskoye OFAS vs "Afanasy"
However, if we digress from large corporations that have the ability to pay for the hype around such scandals, then in reality, violation of license rights will more likely result in proceedings with the antitrust authorities for you than glory throughout the world.
For example, in St. Petersburg alone, a number of companies were caught illegally using the symbols of the FIFA Confederations Cup in the summer of 2017. Among others, a number of cafes, bars and restaurants fell under the distribution. Some of them used the symbols of the Cup in the design of their interiors, which is forbidden, and the well-known bar chain XXXX was generally caught using the official logo on its website.
Such giants as the Semya retailer, which used the tournament logo to promote beer and chips, and the M-Video chain, in whose stores pirated posters with the Cup symbols were found, also “communicated” with OFAS.
These stories, of course, did not add points to the karma of advertisers, although they were replicated by local media.
The anti-monopolists do not sleep on the eve of the 2018 World Cup either. Thus, in the Tver region, after complaints from FIFA representatives, the Afanasy brewery was involved, which violated the requirements during its promotion.
However, here we must pay tribute to the PR people who, in the hot pursuit of the scandal, launched a whole campaign on social networks based on the confrontation between the “Russian manufacturer” and the “FIFA mafia”. Both bloggers and thematic (football, beer and patriotic) Vkontakte publics were involved in the promotion, where intriguing posts began to appear like: “Football fields are Russian, but beer is foreign. Russian manufacturers who pay taxes to the treasury of our country are not allowed to even mention the upcoming World Cup 2018 with calls to put “likes for ours” and a link to the promotion website.
Prepare a sled in summer and a soccer ball in winter
So, let's say you have studied the rules for using the official symbols of the World Cup, figured out how to avoid unnecessary problems, and are ready to comply with or circumvent the prohibitions. Here are a couple more life hacks that will help make your advertising campaign attractive and memorable.
Seize the moment. Follow what is happening on the football fields, matches with epic scores on the scoreboard, which of the "dark horses" suddenly becomes a discovery and everyone's favorite, and which of the favorites suffers a sudden collapse. And behind other scandalous, funny and strange moments that any World Cup inevitably grows. Follow and use them.
And the sooner the better, because the duration of such trends is short. Remember, for example, how quickly and ironically Audi beat the story with an unopened ring at the Sochi Olympics, and seize the moment too. Social networks will come to the rescue here, allowing to speed up the transfer of information to consumers. And it doesn't matter what exactly you are promoting: booking tables for the final in your pub or banking services.
Another life hack is timeliness. Prepare a sled in summer and a soccer ball in winter. Already now, many advertisers are launching long-term promotions, and every month their number will only grow, reaching the stage of general insanity by the beginning of summer.
So take care of your campaign in advance. Moreover, for different products, this “in advance” may have different time frames. So, it is better to start advertising gadgets, electronics and a number of other goods long before the start of the World Cup.
For producers of soda, beer and various snacks, as well as for owners of drinking establishments, the bill can go up to a week or two, when fans start planning to watch important matches for them. For food delivery services, we are talking about a period from a day to a couple of hours before the start of the match. It is during this period that SMS mailings and advertising in mobile applications and social networks should be activated.
With less than 200 days left until the opening of the 2018 World Cup, it's time to start preparing your advertising campaign in full. Turn on your imagination, do not forget to keep your finger on the pulse of football events and follow the rules of fair play.