Robert Sawatzky
Sep 25, 2017

Sports marketing in Asia: "It's not the future, it's now"

Social livestreaming, drones and eSports may be poised to take off, but with the next three Olympic games all set in this region, traditional sports sponsorships and local events still promise big growth potential for larger brands, says global agency CSM.

Sports marketing in Asia:

As we now know, to the relief of many, the Formula 1 Singapore Grand Prix will return next September and in the years following through to 2021. In that time, Korea will host the upcoming winter Olympics in 2018, while Japan plays host to the Rugby World Cup in 2019, followed by the summer Olympics in Tokyo in 2020. Two years later, it’s time for the winter Olympics again in Beijing. 

Little wonder that the NHL is staging two preseason games in Asia this week for the first time ever, the NBA set up its first basketball school in China last week and the NFL has made a deal with Tencent to stream its games to mainland fans. 

Without a doubt, there’s a lot for pro sports marketers to be excited about in Asia.  Alibaba has signed a major sponsorship deal with the IOC while Wanda has become China’s first top level FIFA sponsor.  Governments are investing money in local sports clubs and building fresh infrastructure.  This region is no longer just about growth potential.

“It’s not the future, it’s now,” said David Webb, CEO of the brands division of sports marketing heavyweight CSM.  

Speaking to Campaign from the company's Hong Kong office overlooking the Happy Valley racecourse, the managers at CSM Sports and Entertainment estimate the sports marketing industry to be worth about US$40 billion overall with about $15 billion of that coming from Asia.

Having combined their 13 agencies under the CSM banner earlier this year, the firm is hoping to use its global brand relationships and international footprint to grab a big slice of the Asian market, both for Western firms looking in, and for Asian brands looking out.

HSBC World Rugby Sevens Series

Key Asian sponsorship clients include large financial brands like HSBC (World Rugby 7’s) and AIA insurance (English Premier League).  But entering the portfolio are new Chinese brands going global, like television-maker Hisense. The electronics firm has hired CSM to help build brand awareness abroad through deals with F1, Nascar and now as an official 2018 FIFA World Cup sponsor.

The challenges: economic headwinds, higher demands

While there’s plenty of cause for optimism, it’s also tempered with caution, as many of the same marketing industry challenges facing the big holding companies also apply to sports marketers.

“The general economic tone at the moment is ‘let’s just wait and see what happens’,” said CSM Sport and Entertainment’s deputy chairman Jim Glover. “We’re not seeing spends from major corporations that we saw 10+ years ago,” admits Webb.

At the same time, client expectations around performance and ROI keep rising, as likely they should.  The olden days of a company sponsoring whichever team the CEO’s son might support were largely ineffective and less satisfying for many involved, but they’re long gone now.

“Brands that we work for in the past used to be happy buying a prescribed set of rights," says Glover. "Now each brand have a specific and bespoke reason for doing something that’s probably different from Brand B that sponsoring the same property." HSBC, for instance, “is meticulous about what they want out of a sponsorship".

Data and measurement, of course, are key. “Return on investment is a major conversation at every stage,” notes Simon Drake, CSM’s Asia head of account management, whose strategy and consulting team uses media tracking tools and third-party measurement data along with its own research.

Some recent research CSM did for Formula 1’s audience segmentation helped unearth a ‘new wave’ of potential F1 supporters looking for the right brand of excitement.

Singapore Grand Prix F1 night race

Fan fickleness and short attention spans may be a challenge for the pro sports industry, but they’re an opportunity for marketing agencies to jump on.

Big sports events are quickly overshadowing the actual sports involved. The recent F1 in Singapore is a case in point, with its multiple concerts and parties and networking gatherings that culminate in the race itself.

During Campaign’s interview, a brainstorming session was taking place in the CSM offices around the Hong Kong Rugby Sevens, which involves discussions about things like food and live sites in the Central district.

CSM teams work with global brands like Diageo, UPS, Bose, Mercedes, Qualcomm and Martini on their offsite activation. They also plan custom event experiences for corporate clients.

Martini racing event during Singapore Grand Prix

Changing sport tastes: entertainment experiences, virtual platforms and bite-sized matches

Not everyone, of course, has the time, energy or vacation leave to spend a week or weekend experiencing a sporting event. Sports federations are waking up to this, notes Drake, seeing the emergence of shorter format sports like 3-on-3 basketball, fast4 tennis, T20 cricket and Rugby Sevens. “Everyone’s trying to get into this format where it’s more bite-sized and easier to consume,” he says.

Similarly, not everyone has hours to invest sitting put in front of their living room TVs for sports event. For years, the massively lucrative TV rights deals have fuelled the industry, but are now being challenged by live streaming platforms like Facebook Live, Periscope or QQ Sports. 

In Asia-Pacific, Twitter has just announced eight new sports deals with groups like the Australian Open, Channel 7 Sports, Fox Sports Asia, Premier Futsal India and the International Cricket Council to broadcast everything from tennis to Asian football to motorsport to golf and cricket.

“No sports platform can hide away from what Twitter [and others] can bring to the party,” said Webb, who also noted that people are now digesting sport in clumps and don’t always have hours to invest in match.

“The big live events will start to stream it through Twitter and Facebook Live just to keep their audiences where they need to be.”

The rise of eSports: challenge or opportunity?

Holding the interest of a more mobile younger audience is a key concern for professional sport, which is also being challenged by the rising popularity of eSports, especially in Asia. eSports fans are not only as diehard and fanatical supporters, but have even lower barriers for participation and engagement through virtual forums.

Here too, there’s opportunity for pro sports to keep its youth audience by embracing it. This month, Formula 1 is launching its new game and eSports series platform with an annual competition to crown the world’s top virtual F1 driver.

“The FIFA game does the same for football. When you talk to a certain demographic that play FIFA, they don’t really know who FIFA are apart from the game they play, ” Glover added, which if nothing else does wonders for brand recognition.  

“[eSports] is a phenomena that no one can ignore, it’s not going away, it will coexist and will become a very big piece of inventory,” Glover said.

For an agency like CSM that matches brands with sports platforms, the most popular eSports arenas featuring first-person shooter or battle games are harder to get involved with. Makers of gaming equipment, headphones and computer chips might be a natural fit, says Drake, and a wider circle of energy bar and drinks-makers have also found a niche there.  “But what’s the relevance of a bank being involved in eSport?” he asks. “They have no legitimacy in this sport.”

Not only might big consumer brands find some eSports content objectionable, but they’re also wary about partnering with different eSports federations with varying degrees of professionalism. 

“At the moment it’s wild west in terms of being regulated so I think brands are a little bit skeptical about going in first,” said Glover.

For its part, CSM has had some success in matching brands with eSports hybrids like drone racing in the US. In February, it announced a multi-year global partnership between the Drone Racing League and insurer Allianz.

Sport branding with purpose

But for the most part, larger corporations are looking for more actual than virtual sports sponsorships, preferably with positive messaging. 

‘Brand purpose’ has become a marketing necessity, which is why a growing part of sports branding activity is centered around local sports and fitness initiatives like city runs which attract sponsors like insurance groups promoting better health and well being.

“We as an agency have had to develop quickly because of that as well,” said Webb, noting they’ve set up a health and wellness division to advise brands on how to get involved and activate.

“This is only going in one direction,” says Glover.

Local Hong Kong event around World Rugby Sevens

 

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