The Commercial Case for Sailing Sponsorship
Sports sponsorship is still relatively misunderstood. To many, there is still an idea that sports sponsorship has more to do with the whims of the CEO or Chairman than it does with marketing and communications. The World Yacht Racing Forum, held in Monaco last week opened with a session devoted to the sponsorship of yacht racing.
The session included several presentations from slightly different stakeholders. First up Richard Moore, CEO of sports marketing firm Capitalize who has a more global view about how sailing fits into the bigger picture. The good news is that despite some firms in America being prevented from using TARP money on sponsorship, spending is up 9.1%. $31 billion of the money spent on sponsorship is spent on sport, though only a fraction of that is spent on sailing.
According to Moore, companies that fit with sports sponsorship and who might be looking to spend money can be found in the sports tourism, data storage and utilities sectors.
The perception of sponsorship and how it is measured is changing. Moore draws a distinction between sponsors who are acting as patrons and those who are using the tools to drive business returns. Sponsors are not venture capitalists, says Moore.
He goes on to say that sponsorship is less and less about eyeballs and more and more about using passion to change emotions and habits. In order to achieve the 6 times ROI that sponsors are looking for, sailing needs to focus on its strengths and remember that often the marketing director will not know or care who ISAF is or what a tack or gybe means. To put things into perspective – in France, sailing is not listed in the top 10 played sports.
So what are the strengths of sailing? Well the sport has “dwell time” – events are long and when coupled with hospitality provide a chance for people to talk, network and do business. Sailing also has stories that speak to wide audiences, but more needs to be done to create passion and fans.
Sailing can be a very powerful platform for doing business though. Its not always obvious why a sponsor is spending so much money, especially if they are a B2B brand. The insight presented at the forum by Richard Brisius from the Ericsson Racing Team reminded us of what sponsors are looking to achieve and how to sell to those needs.
The race off the water is as important as the race on the water. One is for first position and the other is for the customer. This means that the activation that sits around the sponsorship is as important, if not more important than the floating billboard. During the Volvo Ocean Race, Ericsson talked used its two boat campaign to talk to 12,667 target groups and 480 organisations.
As well as the activity on the water, there were round table discussions that brought together key players in the industry. Ericsson provided an environment for CTOs and other industry leaders to talk to each other, positioning the company as a leader. For Brisius, any media value was a bonus. As he said “the business is not happening on the boat, the business is happening in the hospitality unit.”
Similar goals are behind why Volvo does the race in the first place. Karin Backlund from Volvo Cars explained in her presentation that ownership of such a global sporting property allows the company to change the perceptions of customers over the long term. The race also helps to build pride in employees around the world, something that many sponsorship hunters overlook.
Volvo is a brand that has done a great job at being top of mind for one word – safety. Perhaps too good a job. The Volvo Ocean Race is a mechanism to slowly move customer perceptions to thinking of Volvo in terms of performance too. The brand values that Volvo shares with sailing are; Safety and the Environment, design and quality, performance and teamwork. Volvo has traditionally been about rationality. The race adds passion and emotion.
At the end of the day (or race) Volvo have to sell more cars, busses or marine engines. The race is global and therefore taps into the diversity of the Volvo customer base. 10,000 Volvo guests can interact with the brand and the footage can be used at other events by integrating the marketing at Motor Shows.
Volvo get a return on investment of 300-400% in terms of brand exposure and 55% of people are more positive about the brand as a result of the race.
The panel that followed the presentations for this session was a little short, but most on stage agreed that the platform served to win hearts and minds, not eyeballs. There is a sense that sailing is still the “wild west” – that rights management and sponsorship measurement are not fully understood.
One figure mentioned was that HSBC recieve over 10,000 sposnsorship proposals a year. That’s a lot of paper and a lot of competition. Those looking for sponsorship need to understand what brands are looking for and tailor their offer accordingly.
Volvo Follow Up Visit to India With Sponsorship of India National Regatta.
The Volvo Ocean Race raised a few eyebrows when it included India in the last edition of the Round the World race. Traditionalists shook their heads and muttered about the Southern Ocean, but those with a more global view saw the move as being essential to build the sport of sailing in developing markets with huge populations. All sports are looking to try and unlock the potential of markets like Brazil, Russia, India and China, the so-called BRIC nations. In India, sports like Cricket have a huge head-start, but those who take the initiative should win out.
Given Volvo’s success in India, it is not a huge surprise to see them, sign on as the exclusive corporate sponsor of India International Regatta, scheduled at Chennai during 1-8 November 2009. Where the company might use sailing in the UK to promote dinghy towing SUVs, the Indian event will be backed by Volvo Buses and Volvo Penta on behalf of the Volvo Group in India.
The regatta to be sailed off Chennai is expected to see more than 150 sailors from across the world racing in the Optimist and the 29er class of boats, which have been recently procured with the assistance of the Ministry of Youth Affairs and Sports, Government of India.
Commenting on the deal, Marketing Head with Volvo, Sohanjeet Randhawa said,
“We have seen a great synergy between our brand and sailing, and the growing popularity of sailing in India makes this a great opportunity for us to partner. We now have a special connect with Chennai city and sailing in India. Volvo Buses with a 100 bus order from Chennai City will soon be part of the city’s development landscape. Volvo Penta on the other hand is one of the most preferred Global brand in the boating industry and as well as in marine commercial and industrial segments. On land, air or on sea Volvo seeks to create value in consonance with its core values of environment care, safety and quality”.
The world’s most followed and toughest ocean race is sponsored by Volvo and the yachts made a stopover at Kochi in December 2008, during its last edition. The next Volvo Ocean Race is scheduled to start from Alicante, Spain in mid/end 2011.
Shankar Narayanan, Managing Director, Asia Growth Capital, Carlyle Group and Chairman Fund Raising & Publicity Committee of the Yachting Association of India said:
“We are delighted to have Volvo come on board as the title sponsor of the event. It is our privilege to have one of the world’s leaders join hands with us and I extend a hearty welcome on behalf of the entire sailing family. I am confident that together we will create a wonderful experience for the sailing enthusiasts and help make this event even bigger in the days to come.”
For more information on how to get to the regatta, and to book your charter boats, visit the event website www.iiregatta.in.
Volvo Ocean Race Stopover Economics – Stockholm
The Volvo Ocean Race continues to deliver huge economic benefits to its stopover ports. Whether this says more about the promotional muscle of the organisers or the latent demand for yacht racing by spectators it is hard to say – perhaps it is a bit of both.
Despite the overall winner having already been decided, the race for 2nd place has given the closing stages of the race another chapter of drama. Sunday’s in-port race saw Telefonica Blue come back from being stranded high and dry on a rock a week ago to winning the day, making the last leg count.
“So many people,” said Magnus Olsson at the end of the in-port race, the skipper of Ericsson 3 waving at the hordes. “There are millions.” Not quite, but the Stockholm race village is on course to beat its forecasted footfall targets, according to the provisional figures belonging to Ola Åstradsson, the port stopover manager.
Åstradsson believes approximately 70,000 people were in the race village for the in-port race yesterday, despite the action taking place nearly 25 miles away at KanholmsfjÄrden. It enabled the overall headcount for the race village to “pass the 400,000 mark”, a significant step towards surpassing the 500,000 target set for the stopover.
“We will pass 500,000,” Åstradsson added. “There is still a lot planned here and we expect to pass our target.”
Not included in those targets, but relevant to the stopover’s wider objectives, were the spectator fleet on the water. Olsson, sailing his home waters, promised the “biggest number of boats you have seen” and, ultimately, Åstradsson’s team think there were in the region of “3,000 to 4,000 boats”.
“Spectacular,” was the summary of Ken Read, the PUMA skipper.
But also for the City of Stockholm, who are funding the event’s presence here to the tune of five million euros. Åstradsson forecast that the local economy will be enhanced by 13 million euros in the short term as a result of hosting the stopover, while the City of Stockholm hopes the stopover will support their long-term goals.
“We have a couple of objectives,” Åstradsson said. “For us as an organisation, the objective is to create the best stopover ever. From the City of Stockholm, who financed this event, the objective is to market the brand of Stockholm worldwide. It’s strictly a business incentive to try to attract businesses, alliances, corporations to Stockholm in the next two decades.
“The city has an ambition for 2030, called Vision Stockholm 2030. The population is going to grow by 600,000 people. If you move 600,000 people they have to work somewhere. Our exercise is to build a brand name, create awareness of Stockholm as a place to base businesses and run high profile events. It is a long-term commitment.”
Little wonder that ports around the world are queuing up to bid for the right to be a stopover in the next race, the look of which is becoming clearer all the time thanks to the organiser’s round table meetings. In Stockholm, Volvo Ocean Race CEO Knut Frostad stated the goal of the organisers of the race is to ‘become the world’s number one sailing event; that’s our ambition.’
How? The steps towards that goal are to
- increase the number and quality of teams in the next edition of the race,
- to increase media coverage with a focus on news and interactive media,
- to develop the race stopovers to a new level of quality.
In terms of stopover cities for the next edition, the list of potential ports has been winnowed from 82 to 34. The quality of the remaining bids is ‘outstanding’ according to Frostad. The critical path for port procurement will see the stopover ports announced beginning in March 2010.
New Volvo Rules Including Changes For Female Crews.
Volvo Ocean Race organisers continue to paint a vision for the future, with the latest in the ’round table’ meetings presented in Galway. There are three pillars that are being used to steer the future of the race – the first element is a technical cost containment and reduction programme, the second, an increase on the value to teams, sponsors and ports involved in the race, and the third is to keep the race seriously attractive to the best sailors in the world.
The latest presentation focussed on technical rule changes to make the race appeal to a larger audience and to limit costs.
VOR CEO Knut Frostad opened the meeting by saying:
“Just like any sailing project the more time we have to prepare ourselves, the better the chances we have of doing a good job,” he said. “Our number one objective is to increase the number of competitors in the next race. We know that we need a larger fleet in the future for the race to be able to reach its full potential.”
“An important element in achieving more boats on the start line in Alicante in 2011 is a reduction of costs and an increase in value for the teams. In the short term, whilst the race is going on and whilst everyone has it fresh in their minds and is focused we have to work on the cost reduction side of the equation. To that end, changes already announced include a reduction in crew members, from 11 to 10, and nearly a 40% reduction in race sails.”
In an effort to encourage female participation, a new rule will allow ‘female’ teams to carry 12 sailors, including the media crew, two of whom may be men. This represents two extra crew members over an all-male crew.
Technical changes were also announced including:
- The maximum weight for the keel fin and bulb will be set at 7,400 kgs in the future. The fin will be required to be solid, with no fairings permitted.
- The weight of the yacht is to be increased so that it may fit into the range between 14,000 kilograms and 14,500 kilograms.
- Headfoils will be banned; headsails will either be set on furlers or with hanks.
- The overall weight of each yacht’s batteries will be reduced by 100 kgs.
- Each Volvo Open 70 will also be required to carry a renewable energy source capable of generating 80 Watts of electrical power.
- No two-boat testing will be permitted until after the ‘race’ boat has been launched, or after a yet-to-be-defined date, which may be as late as the race start.
The next ‘round table’ session is scheduled for 22 June in Stockholm.
Long Term Brand Benefits for Volvo in Galway.
As the organisers of the Volvo Ocean Race continue thier audit of the event and announce changes to the next version, the current race is returning to Europe with the fleet currently in Galway, Ireland.
There is no doubt that the stopover will inject some cash into the local economy, but what does title sponsor Volvo get out of such a visit? Independent.ie asked Volvo Ireleand MD David Baddeley how the race relates to selling cars. Volvo only has about 2% of the market in Ireland which in 2009 is expected to translate to 850 cars!
Mr Baddeley points out that when Volvo began its relationship with the Regatta back in 2007; no-one knew the world-famous Ocean Race would be stopping off in Ireland in 2009, but nevertheless, there are brand-building benefits to the stop.
“…we had to take a long-term view, we can’t just say we’re not going to get anything from it this year so we’re not doing it. People don’t just rush out and buy Volvos after the event, it’s about building something long term.”
Mr Baddeley’s aspirations for long-term pay-offs stem from his hope that an association with the “exciting” sport of sailing will help “update” people’s image of Volvos as being “expensive” and for “fuddy duddies”.
“When we have the cars out there on display at the events, it’s a really good opportunity to interact with potential customers in an environment where there’s no hard sell,” says Mr Baddeley, adding that the people who follow sailing are “very much” Volvo’s demographic.
“We’d expect some pick-up in the later half of the year as people realise that it’s still okay to spend money even though we’re in a recession,” he says. “Volvo has been in Ireland for more than 40 years, we’re here for the long-term.”
As race organisers have shown throughout the event, the local population following the race is one thing, the global following via the internet and other media is quite another. The race will put the city of Galway on the map for many people through media coverage of events over the next week or so.
