What its sponsors expect from the FIFA World Cup

by time news

“Without a doubt, the FIFA World Cup in Russia will provide fewer financial opportunities than in Brazil four years ago,” Casper Rorsted, CEO of Adidas Group (Adidas and Reebok brands), said in a teleconference following the results of the first quarter of 2018. looking forward to this event, it’s a fantastic way to bring our brand to life around the world. “

The FIFA World Cup in Russia (from June 14 to July 15) has three groups of sponsors: partners of the International Football Association (FIFA) – Adidas, Coca-Cola, Wanda Group, Gazprom, Hyundai Motor Group, Quatar Airways and Visa, sponsors of this very championship – Bud, Hisense, McDonald’s, Mengniu, Vivo, as well as a new group – regional sponsors Alfa-Bank, Alrosa, Rostelecom and Russian Railways. According to Forbes, FIFA partners pay it annually $ 25-50 million, championship sponsors – $ 10-25 million. Sponsors interviewed by Vedomosti have differently assessed the impact of the championship on their business.

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 it in areas of attraction for fans. Adidas closed stores in large quantities twice: in 2015 – about 160, in 2017 – about 200 points.

The incoming tourist flow to Russia will grow by 300,000-500,000 people, says a representative of the Visa payment system: fans will increase spending on cards in the country by 10-25%. Alfa-Bank also expects profit growth: new clients will appear, there will be more transactions and acquiring, says Oksana Belyaeva, the bank’s marketing director.

The transportation of guests and participants of the championship is organized by the regional sponsor – Russian Railways. This will increase the international brand awareness, primarily in European countries connected to Russia by direct rail links, explains a representative of Russian Railways.

In 2018, Rostelecom also became a sponsor. Its basic 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 the financial performance, he declined to discuss.

Sponsorship of the 2018 World Cup allows you to directly communicate with the audience around the world, to strengthen the emotional connection of consumers with the brand through events both in stadiums and beyond, and in the media, believes the director of legal affairs and corporate relations of Sun Inbev (daughter »Anheuser-Busch InBev) Oraz Durdyev. Selling beer is part of the sponsorship, he continues, and in the long run it increases brand value. When asked how the brand’s sales will grow due to the championship in Russia, he did not answer.

The competition will increase beer consumption, investment bank Morgan Stanley predicted in its review: fans will increase the market by 2%, this will be the first growth in 10 years. Four years ago, Reuters wrote that the championship in Brazil will increase local beer sales by 1-2%, and if the Brazilian national team is successful, by 3%. After the Brazilian championship, beer sales worldwide at AB InBev grew by 7%, recalls Kirill Kulakov, general director of the RMA business school.

The population of Brazil is 70 million more people 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. There are not football regions in Russia at all, Kulakov complains: for example, Siberia and Dalnik Vostok.

The more popular football, the more attention is paid to major football events, the greater the growth in popularity, brand awareness of the sponsoring companies, which leads to an increase in sales both during and after the events, agrees Oksana Zhupina, head of the consumer goods group at Deloitte: sales grow 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 selling process itself is longer, Zhupina believes. The championship in Russia is already affecting the sales of sportswear, soft drinks and beer, that is, the sales of sponsors such as Adidas, Bud and Coca-Cola are supported by 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 evade contracts due to large sums and reputational risks. Russia may not be very attractive to sponsors, Kulakov agrees: the crisis in relations with the West also affects business, and after the corruption scandals in FIFA in 2015, sponsors do not want to spoil their reputation by linking their name and brand with the association.

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