10 months ago| article
With rising global inflation and economic uncertainty, Campaign explores the opportunities and challenges facing brands as one of the busiest times of the year collides with a major sporting event
Sep 29, 2022 10:34:00 AM | Article | Surekha Ragavan,Alison Weissbrot Share -
This article is part of Campaign's Global Forecast for Q3 2022, published by Campaign Advertising Intelligence.
Despite the current geopolitical situation, soaring inflation rates and the cost of living crisis, media agency Magna has forecast a 9.2% growth in global ad markets, with revenue expected to reach $816bn by the end of 2022.
The Interpublic shop amended its prediction of the growth of the global ad industry in 2022 from 12% at the end of 2021, following a slowdown in the second quarter as a result of Russia invading Ukraine, which has sent energy prices skyrocketing and discouraged trade.
But having the Fifa 2022 World Cup in November and December—when organically there is an abundance of campaigns for sectors like FMCG and retail, and ad rates spike – will see the industry finish the year in a strong position.
However, since Qatar was awarded the World Cup in 2010, the event has been plagued with controversies, from human rights concerns over the poor working conditions in building the infrastructure, to the country’s outright ban on alcohol.
For food and drink brands, as well as retailers, this has posed a unique challenge of whether they should be associated with the tournament and whether they can afford not to advertise during the games, which typically attract large TV audiences.
Virtual ads to target local markets
In Asia, the World Cup is less likely to disrupt seasonal advertising because for the majority of markets—excluding Australia, New Zealand, Singapore and Hong Kong—Christmas is not such a focus.
However, football is immensely popular, and the World Cup is usually a season of mass outdoor screenings, passionate online and offline debates, and copious brand partnerships. This year’s event is expected to be no different.
The chances of an Asian team lifting the trophy may be low, but fans in this region—especially Southeast Asians—are big supporters of European and South American teams and are projected to spend considerably on the team jerseys of their adopted team to lend support.
This year’s World Cup will feature a record six teams from Asia, and Asian brands such as Hyundai Motors, BYJU, Hisense and Wanda Group have already confirmed partnerships with Fifa.
Given the uncertainty surrounding the promotion of alcohol brands in the stadiums, and the fact that the live events are usually associated with raucous parties and booze-filled screenings, alcohol brands have a task ahead of them.
These brands will need to get creative and look for alternatives outside of traditional avenues such as fixed signage, product placements and concession sales, Anthea Chee, SVP of corporate partnerships, Southeast Asia, at sports marketing agency Sportfive, suggests.
She adds that if brands are open to activating their sponsorship rights in new, innovative ways – especially through digital mediums – the impact on sponsorship deals may be minimal.
For example, soju brand Jinro was signed on as an official supporter of the AFF Suzuki Cup 2020 football tournament, held last December. While alcohol ads are restricted in several Southeast Asian countries, the brand was nevertheless able to reach out and engage fans successfully through its digital campaign “Cheers to the [winning team]”.
Chee says: “With technological advancement in broadcast systems, social media and engagement channels, the possibilities to reach out and connect with consumers are no longer bound by physical on-site experiences but have instead extended to the digital realm.”
She remains optimistic that organisers will continue to create great experiences for visitors, with alcohol-free fan festivals, party zones and street carnivals already in the works. “The World Cup experience won’t be diminished and it will still be a football extravaganza like in previous years,” she says.
Khushil Vaswani, SVP, sports lead, at Weber Shandwick, agrees that alcohol brands will simply have to come up with alternative ways to engage audiences. “As people around the world gather around pubs, restaurants, stadiums, parks and even in the metaverse, beer brands must look to leverage the various avenues to directly engage with fans,” he says.
Technology may also help sponsors with in-stadium advertising. For example, in 2018, German side Borussia Dortmund used virtual advertising technology at all 17 of their home matches during the Bundesliga season.
This technology means that the brands on the billboards seen on TV can project different content from what the fans see in stadiums, and more interestingly, the billboards can be adapted by market. This means that brands, slogans and campaigns on billboards can be localised.
With the change in sports consumption behaviours – a shift from traditional media channels to digital and social media; engaging on a second screen before, during and after a match; and interacting with fans in an online community—Chee says brands should continue to create bespoke digital activations that target these consumer trends.
The ways in which fans are consuming content have changed significantly since the last World Cup, Chee stresses. In fact, surveys have shown that World Cup fans are twice as likely to watch the game from the comfort of their own homes than anywhere else. These new alternatives provide a deeper level of engagement for fans through curated data and authentic content, offering a viable opportunity for brands.
“Geo-targeted advertising on broadcast feeds could be another possibility with digital match graphic solutions an easy add-on these days,” Chee adds. “These graphics could be tweaked depending on advertising rules of the countries involved.”
Consumer goods see it as a holiday advertising opportunity
The Fifa World Cup isn’t as big of a cultural cornerstone in the United States as other domestic sporting tournaments, like the Super Bowl or the NCAA basketball championships.
But the timing of this year’s global football tournament – which kicks off on 20 November, ahead of the festive shopping season – is enticing some consumer goods brands to shift their budgets around the games.
In the US, the World Cup will be broadcast on Fox and FS1 networks in English and on Telemundo and Universo in Spanish. Viewers can also stream the games on the Fox Sports App and on Peacock’s premium tier. But because of time zone differences, many matches will air early in the morning for US-based viewers.
To that end, it's not yet clear what percentage of the five billion viewers expected to tune into the tournament this winter globally will be from the United States. But if past years are a guide, just under 15 million viewers watched the 2018 tournament on Fox. (For comparison's sake, the 2022 Super Bowl in February drew in more than 200 million viewers.)
However, the presence of Team USA in this year’s tournament will likely boost domestic viewership – and therefore ad investment – especially if the team progresses far into the tournament, David Campanelli, EVP, co-chief investment officer at Horizon Media, says.
“The fact that team USA is in it makes a big difference,” he says. “That’s generated a lot more interest than in previous years.”
The timing of this year’s event is pushing brands that may not have considered advertising during the World Cup to buy media around the games as a way to promote holiday shopping deals. Team USA plays its first match against England on Black Friday (25 November), a prime opportunity to push deals on the biggest US shopping day of the year.
“It’s fair to say that there are marketers [that] are considering or have bought into the World Cup that otherwise wouldn’t have if it was in the summer,” Campanelli says. “There will be a larger variety of advertisers and products than you would get during the summer.”
US networks will be looking to capitalise on a wider range of advertisers as the price for sports rights continues to skyrocket. Fox and Telemundo paid a combined $1bn for the rights to this year’s World Cup games and will need to make up the difference in advertising revenue.
But sports endemic advertisers are also continuing to invest in the games. Coca-Cola, for instance, is sponsoring the Fifa World Cup Trophy Tour, which will send the World Cup trophy to cities around the world for fans to experience in their home markets.
However, according to Kate Scott-Dawkins, global director of business intelligence at Group M, US, marketers are unlikely to dedicate incremental budgets towards this year’s World Cup games.
“Over the past several years, we haven’t really seen incremental revenue associated with big, four-year events like the Olympics,” she says. “So [budgets might] shift across sellers of advertising rather than being an incremental spend consideration.”
Still, despite steadily declining live viewership, sports is still one of the last mass-reach vehicles for advertisers to get in front of their audiences – and that’s likely enough to entice US-based brands to buy in.
“The bottom line is, higher-profile events are fewer and further between,” Campanelli says. “Sports can be one of them, and the World Cup will likely be one of them, even if it’s not as big as it is in other parts of the world. It’s still going to be a watched event here, so marketers want to capitalise on it.”
'It's a second summer' for European sponsors
Football is one of the biggest sports in Europe; in fact, for the majority of the countries, it is the national sport. And with 13 teams from the region – representing 40% of the final 32 – qualifying for the World Cup 2022, it presents a huge opportunity for food and drink brands.
In the UK, the BBC and ITV share the broadcasting rights for the games. While linear TV has been declining gradually in recent years, major sporting events have brought in record viewers.
England men’s Euro 2020 final defeat to Italy attracted a peak audience of 31 million across both the BBC and ITV. And earlier this year, 7.4 million tuned into the BBC to watch the historic moment the England women’s team won the Euros; while a further 5.9 million streamed it on a digital platform.
But with the World Cup colliding with Christmas, prime time spots for ads have seen media inflation spiral even further. Although ITV recently announced a 20% discount for brands on World Cup games airing on ITV1, for many planning for this period began at least a year in advance, if not earlier.
Data tracked by intermediary R3, which works in partnership with Campaign AI, showed that some of the biggest food and drink brands, such as Coca-Cola—one of the World Cup sponsors, carrying out high-value media or creative reviews at least at year in advance of the tournament.
Greg Paull, co-founder and principal at R3, tells Campaign: “Reviews are always called with a degree of foresight. Aside from uncertainty from the pandemic, this is the most digital World Cup we've ever had. More people will be watching games on digital platforms, with the addition of streaming and social."
“The timing of the World Cup is in close proximity to the holiday season, which means media inventory is limited and expensive,” adds Paull. “Then there are limitations on what can be advertised because of location, which is a challenge for many long-term sponsors of the World Cup.”
Richard Oppy, VP of global brands at AB InBev – the company behind Budweiser, another one of the major sponsors of the tournament – says AB InBev planned well ahead in order to be able to “extract the best rates for those prime spots”, though he understands that inflation is a key issue for the ad industry.
“It’s a tough time for everyone and I think for big companies like us – we’re fortunate to have brands like Budweiser, Corona, Stella Artois and Michelob Ultra – we can use our scale to our advantage. Our major campaign for the World Cup was one production that is going across 76 markets.”
He describes having a winter World Cup as like a “second summer” for the brand.
He says: “Beer is a big part of bringing people together. It’s often the social lubricant during a football World Cup and Christmas is a time where friends and family come together.”
The theme for the Budweiser campaign, which launched last month, is “no matter your tunnel, the world is yours to take”, which he explains is about “looking forward and seizing opportunities” in a post-Covid world, despite the economic uncertainty.
“The beer industry is resilient,” adds Oppy, who has been in the industry for 20 years. “People often look at beer as an affordable luxury. So during difficult times, when people are holding back on their discretionary spend on big purchases, beer is very affordable and can be a treat to enjoy with friends and family.”
Jonathan Masterson, managing director of investment at Group M, UK, tells Campaign that for the first time TV scheduling in the run-up to Christmas will include both the football matches and big-hitting entertainment shows such as The Voice, I’m Celebrity… Get Me Out of Here, Great British Bake Off and House of Dragons.
The high viewing figures, Masterson explains, mean there will be a far wider reach for advertisers and “brands will be the clear winners”.
“We are working with many clients, not just those with historic Q4-heavy budgets, analysing how to best use AV at this time. While investment is forecast to grow YOY [year on year], the bigger audiences will drive real value for clients and the time of the games on ITV/ BBC will also mean other broadcasters will not be as impacted in key prime time as they usually are during an international football tournament.”
While brands such as Budweiser may be closely aligned to the tournament, focusing their messaging primarily on football in its campaigns, others may choose to also include Christmas as well.
Masterson adds: “This year, brands need to combine traditional Christmas messaging around a mass audience sporting event. Each brand I’d imagine will approach this differently, and I for one can’t wait to see the strong creative that Christmas brings alongside iconic advertising that we’ve seen in past World Cups from sporting brands.”
One of the controversies surrounding the World Cup in Qatar has been around the sale and promotion of alcohol brands.
Initially, because it was assumed alcohol brands would be banned from selling beer or placing brand logos inside the host stadiums, many have shifted their focus from sponsorship to marketing channels like TV, digital and out-of-home.
However, Oppy says Ab InBev has been “working closely with Fifa to manage the relationship with Qatar authorities to ensure beer is available to visiting fans in a manner that is respectable to local customs”. There will also be clear signage that states beer or other alcohol cannot be consumed outside the designated drinking areas.
So despite the controversies surrounding the event, with more than two million people expected to be coming through the stadiums in Qatar, Oppy sees this as an opportunity for brands to get their product and messages across.
Retailers look to World Cup to drive holiday spend
One sector that will likely benefit from the Christmas season timing of this year’s World Cup tournament is retail, which will be in the thick of the festive shopping frenzy as matches begin to air.
Martin Beverley, chief strategy officer at Adam & Eve/DDB – the creative agency behind the John Lewis ads – describes Christmas advertising in the UK as the “Super Bowl moment” for the country.
For many retailers, over the past decade “more and more brands see this time as an opportunity to create fame and be part of that cultural moment as well as reap the rewards”, he says. “And this year with the World Cup, we’re potentially going to see other brands outside of retail and FMCG interested in having a slice of that pie.”
Retail advertising has grown significantly in recent years, reaching $871m in 2021 – an increase of nearly $300m from 2019 (51%) – according to a report by Pathmatics, The State of Retail Advertising in the UK.
Beverley adds that while the UK is going to see a “huge extravaganza of ads” during this period, many brands may not be jumping on the football bandwagon in terms of the theme of their ads, but are very much aware of the impact of simply being present.
For this year’s John Lewis Christmas ad, the premier of which is an annual cultural high point, Beverley hints that they have tried to be “attuned to some of the other things going on at the moment such as the cost of living crisis”.
“What we always try to do with John Lewis Christmas ads is make sure we hit the right notes and make it emotional. For example, in ‘Man on the moon’ we picked up on loneliness at Christmas and helped Age UK,” he says.
While drinks and snack brands are typical categories that advertise during sporting events, UK and US viewers can expect to see more retailers including supermarkets push their Christmas shopping campaigns during this year’s tournament.
In the UK, brands face the challenges surrounding the food and drinks high in fat, salt or sugar (HFSS) legislation, which is initially due to come into force in England and Wales in October. The new regulations mean foods such as crisps and bagged snacks will have restrictions on daytime TV advertising and promotions in store.
While the ban on TV and online ads has now been delayed until January 2024 due to the cost of living crisis, the restrictions on unhealthy food being prominently displayed in stores – for example, at checkouts, entrances, aisle ends and “online equivalents” – will still go ahead. As a result, many brands still face the challenges of adapting their sales strategies in anticipation of regulations coming into force.
Speaking about the general difficulties facing agencies for this period, Martin Broad, executive director, head of AV, at MG OMD, says: “It’s more challenging but the audience is still out there. You just need to adapt accordingly.
“At MG OMD we’re constantly looking to create differences that matter for our clients. That means looking at, and diversifying, the blend of media channels for each brand and seeking innovation and partnerships whenever possible.”
For US marketers, however, “the timing is ideal”, Horizon’s Campanelli says, “particularly retailers”.
Due to high inflation and a rocky economic outlook in the US, and after two years of the ongoing pandemic, brands and retailers will likely use the World Cup, and its timing during the holiday season, to emphasise messages around getting together and spending time with family and friends – as opposed to spending on frivolous gifts.
“[Retailers are] talking about more consumer spending on essentials and food,” Group M’s Scott-Dawkins says. “I can imagine the creative messages will be like, ‘Get together to watch the event, and here are snacks that you may want to buy,’ as they foresee this shift into food and essentials.”
For many retailers, the World Cup presents an opportunity to reach a different audience than they typically can through domestic sporting events, such as the growing Hispanic market. Telemundo generated roughly $300m in advertising revenue from the 2018 World Cup games, and the network is on track to nearly double the number of deals with brands around this year’s games, according to NBCUniversal.
“It can bring in new customers and awareness,” Campanelli says. “That is a good thing.”
As for World Cup viewers, they can expect to see a lot more holiday messaging during this year’s games than they are used to during the typical summer event.
“This does open it up to the types of holiday-specific campaigns that would not have been attracted to the World Cup if it was in the summer,” Campanelli says.
Why retailers should avoid 'tokenistic' World Cup associations
November and December may be busy periods for marketers but given the fanaticism around football in Asia-Pacific, it can easily be separated from Christmas celebrations – particularly as it is not as big festival in many parts of this region.
Belinda Green, chief of creative strategy, Southeast Asia, at Publicis Groupe, says considerations also have to be made for Lunar New Year, which takes place just five weeks after the football finals, on 22 January 2023.
“If a brand is active in both the Christmas and Lunar New Year periods, it’s possible marketers may have found themselves planning these activities in a similar window [to the World Cup],” she explains.
Then again, the World Cup is an event that seems to transcend religious and cultural festivities; an important cultural facet in and of itself in Asia. This is why it draws audiences who wouldn’t normally watch football, in exactly the same way the Olympics draws audiences who don’t otherwise follow athletics or any other sports.
“I would encourage brands to remember that much of the appeal of the World Cup is not in how the ball is kicked around the pitch but in the stories,” says Green, adding that it is inevitable that many brands will present "tokenistic associations" to the World Cup, or slap football-inspired imagery on packaging.
“The way to avoid this is to go deeper into the opportunities presented by the World Cup as a cultural moment, to find the specific aspect that helps [consumers] build an authentic connection to a brand,” she says.
“For instance, Tiger Beer didn’t partner with Son Heung-min because he’s a recognisable Asian player. It partnered with him because his story was so closely aligned to its own.”
(This article first appeared on CampaignAsia.com)