Deep Dive into the Sport Industry & Sport Marketing ⚽️🏎
Introduction
The global sports industry is worth up to $620 billion today. With growth that is faster than global GDP, its long-term prospects appear strong.
Today's global sports industry is worth between €350 billion and €450 billion ($480-$620 billion), according to a recent Kearney study of sports teams, leagues and federations. This includes infrastructure construction, sporting goods, licensed products and live sports events.
Live sports events in particular offer a compelling proposition to different industry participants—from free-to-air broadcasters seeking viewers and advertising revenues and pay-TV broadcasters looking for loyal subscribers, to sponsors moving away from traditional media, event organizers, athletes and spectators.
Our independent analysis, commissioned by Lagardère Unlimited, finds that the global sports industry is growing much faster than national gross domestic product (GDP) rates around the world.1 And the global sports value chain—its size, makeup and revenues—has significant growth prospects for the future.
https://www.kearney.com/communications-media-technology/article?/a/the-sports-market
Scope of this study
- How marketing plays an important role in different types of sports
- Marketing strategies used by them
- Barriers
- What Customers outlook on these sports
- Revenue Generation
- How other industries depend on Sports (overall)
Football is known in many regions of the globe as “the world’s game”. Buoyed by an increasingly diverse array of participation at the grassroots level, and spurred forward at its highest professional ranks
by bankrolling owners and lucrative media rights deals, this relatively simple, yet beautiful game has continued to excite and entherall billions of people around the globe. Its premier tournament, the FIFA World Cup, has grown into the largest, single-event sporting competition in the world, with an estimated 3.2 billion people tuning in to watch the 64 matches that were played in Brazil during the summer of 2014 (FIFA, 2014a). The English Premier League (EPL), considered by many to be the most popular professional sports league in the world, recently agreed on a television deal that will distribute over $7.3 billion in revenues to its member clubs over the
2016-2017 to 2018-2019 seasons (Premier League, 2015b). The grassroots level, too, is experiencing growth, with nations that have been reluctant to football’s influence in the past now boasting some of the sport’s highest participation numbers (Johnson, 2015; King, 2014).
Marketing Strategies
Here we’ll see how your local, national or university football club market like professional:
Online Presence
They make it easy for people to find your club online with a simple yet effective website and social media channels. Which include their social media channels which are dynamic, up-to-date and filled with engaging content to help attract fans.
For example, the Sydenhams Football League (Wessex) website features the latest in league and club news, upcoming matches, results and recent Tweets. Posting helpful information like this will engage and attract fans. You could also utilise your website to sell branded club merchandise for additional revenue.
Football Festivals
Another tip from your friendly Rocket Badge coach is to organise a football festival and bring your players, fans and the public together to celebrate your club. Combine entertainment, education and training to rally support and gain publicity for your team. For family fun, try hosting a youth game where pairs of young players can register, play and compete for prizes.
The Canton Rangers Football Club, for example, hosts a summer festival at a park, complete with youth teams from across the UK, face painting, activities and food and beverages. One marketing idea for your football festival is to create custom medals to award the winners or participants with a special prize.
Another idea for your event is to host a memorial football festival to honour members who have contributed to the club or perhaps who have passed away. To make the event most memorable, create a customised shirt or other items that features your club and the name and reason for the person being celebrated.
Free Trainings
Another winning move is to host a free training event. Offer a few free daily drills or training sessions over the course of a week and invite public youth to join. They’ll make new friends, train with your team and have fun. Who knows, you might find some superstar future club members this way! To help participants remember the event, include a customised button badge for a special take-home gift.
Fundraisers
Scratching your head on how to raise a little extra money for your club? A few ideas we’ve seen include weekly raffles, lottery-style giveaways and clever usage of customised sports pins and badges. (See this blog post for more on how trading pins can help your club bring in a little cash.) One of our favourite marketing strategies is an annual pin drive – get all your club members or parents together and create a custom design for a collectable team trading pin that you can sell on your club website or at games, football festivals and retail locations. Pick a new design every season so that your supporters can collect them over time for a long-term fundraising strategy.
Team Merchandise
Lastly, don’t underestimate the power of a tried-and-true marketing strategy: customised team merchandise. Create and sell creative products that feature your football club to build awareness, tap into fan loyalty and earn extra money for your club. Offer a range of items of different prices and purposes, like branded team shirts and training gear and smaller ticket items like keyrings and button badges. The Leicester City Football Club, for example, offers everything from club jigsaw puzzles to scarves to pet accessories. They even let people customise their own LCF gifts with their names.
This football season, don’t just bet on your winning bracket, bet on these winning football marketing strategies to help your football club score big. Take it from the expert coaches at Rocket Blog, we’ll help you find the perfect moves when it comes to merchandise and marketing you club.
https://www.rocketbadge.co.uk/blog/football-marketing-strategies/
Some Innovative Marketing Strategies & Campaigns undertaken:
Creating successful sports marketing campaigns is a lot of work. Much goes into promotion across many areas, media and more. Luckily, there is also already a lot of great stuff out there that we can draw on.
Creativity plays an important role in marketing and the most successful ones are the ones that stand out. But marketers should not go overboard, they should always keep an eye on the budget. Making the most of the tools, hashtags and platforms available will always help campaigns reach people on a wider perspective. Always make sure the audience gets to be a part and engage with the content you put out. It's important to make them feel like they are a part of the team.
Let's look at some examples:
1. Arsenal
To launch their new kit with Puma before the season started, launched it on River Thames with light projections, etc streaming the event live so fans all over the world could see it.
2. Google And the World Cup 2014
Not a sporting team, I included this to show how a company not directly connected with football- making the most of the worldwide event.
While not really marketing anything but themselves, Google did wonders during the 2014 football world cup. Not only did their homepage display daily doodles but fans could also find loads of relevant content.
Match results, lineups, live scores, tables and video highlights all showed up right in the search engine. You could even use StreetView to take a look inside the stadiums.
This made it so much easier for fans to browse through information.
3. Tottenham
Made a game called ‘Tottenham Turfies’ is an online game aimed at children that’s set in a world beneath the clubs home pitch at White Hart Lane.
There is also a newsfeed via the club’s main website, and the ability to win, print, and then trade player trading cards. Virtual trophies can be cashed in for things like places at fun days, soccer schools, tours of the stadium, and team merchandise.
And so many more...
So here are some ways you can increase fan engagement on your team social media page:
a. Conduct a Quiz
Eg. How much do you know about the World Cup?
b. Have Polls, Ranking & Predictions
Eg. Who’s the man of the match?
c. Survey
Who are you supporting in the FIFA World Cup?
d. Photo contest / Fan of the week
https://econsultancy.com/six-premier-league-football-clubs-with-innovative-digital-strategies/
https://www.themeboy.com/blog/sports-marketing-examples/
https://qualifio.com/blog/en/7-football-interactive-campaigns/
Competitive Landscape
The major players in the market, like Adidas and Nike, are innovating their footballs with abstract patterns and experimenting with the number of panels, to give better stability to the ball. The introduction of better products in the market will pave the way for more consumers to buy price-worthy products rather than choosing low-standard balls at a lesser price. Owing to the growing football craze, customization of balls, for individual leagues and games, is the newest way to attract football customers. The manufacturers are, thus, focusing on developing better and attractive balls to capture the market.
Customers Perspective
Revenue
Yes, there is a lot of money in football. But let's break it down further and understand the sources:
1. TV broadcasting contracts
Television rights are so hotly contested between the companies that can afford to bid for them. Of all of the leagues in the world, the English top-flight is the one most people want to watch and is therefore the one that brings in the most money. The worldwide sports media rights are estimated to be worth around $50 billion.
TV rights form a huge share of income for all of the world’s top leagues, in that the EPL approximates to $3.83 bn & La Liga to $2.27 bn.
2. Merchandising and licensing deals + Sponsorship deals
Like who wouldn't buy their favourite teams merch?! Official websites of sports leagues and clubs often have integrated e-commerce sections where fans can purchase all kinds of items branded with the appropriate logos and names.
According to Kenneth Research, worldwide licensed sports merchandise sales were worth $26.47 billion in 2018, and were predicted to reach almost $34 billion by 2023!
3. Player Transfers
This might be one of the overlooked point. But the sale of a player can earn a football club a decent amount of money. Often that money is re-invested in other players so clubs don’t necessarily consider it as part of their income, but the less wealthy clubs can often be kept afloat thanks to a large amount of money made on the sale of a player. One of the ways that smaller clubs can ensure a decent return on their investment is by adding a sell-on fee into the contract when the player moves to a bigger side.
The world’s most successful leagues and clubs are engaging in global commercial partnerships with various brands. Premier League, for example, has its official snack, soft drink, beer, and an official bank.
4. Match day Revenue
Before the Premier League reinvented football as a money spinning beast, the major revenue of football clubs came from a match day. This can be broken down into several different departments, with ticket sales being the most obvious one. Given that clubs are able to charge money to every single person that enters the stadium on the day of a game, it’s no surprise that those with bigger stadiums make the most money.
https://blog.statscore.com/what-are-the-sources-of-income-for-sports-leagues/
https://www.football-stadiums.co.uk/articles/how-do-football-clubs-make-money/
Future & Growth of Football
According to Nielsen's World Football Report, nearly half of the world's 7.7 billion people are interested in “the beautiful game,” and around a fifth play the sport in some form or another. Given its tremendous popularity, it makes sense there are many different businesses revolving around football.
The football market is expected to register a CAGR of 3.78%, during the forecast period (2020 - 2025).
- The increasing interest among people in the sport of football, fueled by the club-level and country-level leagues, is driving the growth of the football market worldwide.
- The sport requires significant physical effort in the form of running, thereby, enhancing the stamina levels of the players. It also keeps the body strong, flexible, and in shape. Therefore, being a complete workout package, the game is becoming popular among young athletes, cricketers, and runners, who play football as a part of their fitness routine or as an alternate sport.
- However, due to the popularization of video games, youngsters are indulging less in real games, which, in turn, is leading to reduced demand for football.
Business is booming
Bloomberg says, “The report shows soccer in an extraordinary position: It’s dominant in global sport and has room to grow in major markets. While 19 countries show a majority of the population expressing interest in soccer, the U.S. and China -- the world’s two largest economies -- are not among them.” In other words, these markets are both untapped and ripe for growth.
Another massive growth opportunity, according to insiders, is women’s football. In fact, with the social stigma attached to women playing football (thankfully) falling fast, there comes thrilling potential for the women’s game.
Growth areas
The Sports Daily explains, “In the past few years we have seen many high profile European football teams investing in, and setting up their own esports teams. Esports, or competitive gaming, has become hugely popular in the past decade with millions of gamers competing on first-person shooters like Counter Strike Global Offensive, battle arena titles like League of Legends, and football simulators such as EA Sports’ FIFA franchise.”
But football is about much more than technology and finance; it’s about heart and passion. Olivier Jarosz, Head of Club Affairs at the European Club Association (ECA), says, “Football is something more [than a business], especially in these times when things are evolving fast and it is fascinating to be part of that change. Where and how will football be in ten years’ time? Frankly speaking, nobody really knows, but we have the possibility to shape it.”
The politics of football
Sky News says, “This World Cup [2018] has proven that the current state of world politics is something that can't be escaped, or ignored.
And while the media tends to focus on the negatives, football plays a major part in a lot of good the world over. Former Pakistani football player and co-founder of Football for Peace and Champion for Peace, Kashif Siddiqi, says, “No other sport is quite like football. It undoubtedly has the capacity to break down barriers more than any other sporting discipline. Between peoples, between nations and between communities. I experienced this during my playing career, first in Britain -- my country of birth -- then in the United States where I continued my studies, and finally in Pakistan, the country where my family and my origins are.
Equality and inclusion organizations like Kick It Out and the Premier League’s Rainbow Laces campaign are looking to level the playing field for minority groups in football and beyond.
https://www.masterstudies.com/article/what-is-the-future-of-football/
Formula 1 is an industry as a whole is vey interesting. F1 is in fact one of the most watched annual sporting series in the world, with more than 525 million people watching over the course of the season. It has an estimate turnover of more than US$4 billion; employs around 50,000 people in more than 30 countries; and embodies the cutting edge of technology in the automotive industry. What is more, the technologies developed for F1 racing are relevant to many other industries far removed from the racetrack. Innovations by leading teams such as McLaren, Red Bull, Ferrari among others have made their way not only into the regular road car industry (e.g. ABS breaks, aerodynamics, finger-controlled gear shift systems, etc.), but also bicycling (e.g. Ultra-light carbon-fiber composites), the tracking of people in factory shop-floors, hospitals, or sports training for the Olympics (e.g., advanced telemetry systems), advanced engineering (e.g., virtual design and simulators), and even public transportation systems (e.g., flywheel energy storage mechanisms).
https://www.cass.city.ac.uk/faculties-and-research/centres/business-models-technology/research/formula-1
Marketing Strategies
As you can tell, F1 isn’t just the glamour of multi-millionaire race drivers drinking champagne; it’s an ultra-competitive sport consumed by data. A championship-winning F1 team is the sporting pinnacle of high-tech innovation and teamwork.
So, here are some marketing lessons you can use:
#1 Always Put Fans First
Something as simple as a meet and greet with fans, interviews can go a long way. Merch and team related products sell well as fans would do anything to collect them all.
Example: Aston Martin featured a montage of fans wishing good luck to Lance and Seb. They even held competition where fans could get signed merch.
When teams provide a personal experience it really shows that they care and make their fans a part of their legacy. It could be send them personal notes after they bought a merch and thanking them.
Other ways to personalize experiences include crowdsourcing and asking for opinions in online brand communities.
#2 Teamwork Makes The Dream Work
When you think of F1, we think its only the drivers and cars. But in reality there is so much more to it. Be it the trackside team, analysts, business partners, sponsors, mechanics, engineers and a whole a lot of flawless execution with precision, make a championship-winning team.
Watch this video - Red Bull broke the record for the fastest pit stop in Germany '18
https://medium.com/swlh/driving-growth-5-marketing-lessons-from-formula-1-racing-a33dbb545f0c
Mercedes estimated that they had carried out 400 pit stops in training before 2019 years’ season had even begun.
In every aspect of business, the diverse skills of teams are needed for success. From designing the car to picking the best driver. Putting this all together makes an F1 team stand out.
#3 Optimum Utilisation of Big Data & Analytics
Many F1 teams are turning to big data analytics to be more competitive. Datanami’s Alex Woodie spoke to Matt Harris, head of IT for Mercedes-AMG Petronas Motorsport, about his experiences using data visualization to analyze car data and identify any issues prior to race day. Harris says the technology helps “us to visualize our data so we can make more intelligent decisions quicker and faster, so that [we] don’t have to sift through data to work out what’s interesting.”
Analytics is not just about correctly interpreting analytical information but also about making the right strategic decisions in real-time race situations.
Its all about running, predicting, understanding, planning the different "what if" scenarios. Race simulation, cloud computing also play a fairly important role.
#4 Adapting to Change
Change is constant. To be on top of the game it is important to keep change in mind and working towards it. F1 is all about speed, adaptability, and rapid change.
https://medium.com/swlh/driving-growth-5-marketing-lessons-from-formula-1-racing-a33dbb545f0c
Some Innovative Marketing Strategies & Campaigns undertaken:
Let's take F1's Docu series - Drive to Survive as it has been spectacularly marketed.
Elements their marketing strategy consisted of:
Data first
Liberty Media relaunched the brand less than a full year after acquisition. But they didn’t cut corners. Remarkably, the first three months were spent exclusively on deep research into their fanbase. They came out of it with a thorough understanding of what the fans wanted: to get closer to the sport. F1 Marketing & Communications Director Ellie Norman describes this growth hacker mentality as, “Start from scratch. Bring in new fans. Do it quickly.”
Be human
F1 had the reputation for being an old boys club and very technical. Post-rebrand, F1 put the emphasis on human emotion. Building connections with the drivers became the new priority. We see this in a high volume of multi-platform content designed to build connections with drivers.
Find your right partner
F1 has experts in hosting events for 70k+ ticket-buyers and broadcasting races to viewers around the world. But what about storytelling? In 2018 they signed an unprecedented deal with Netflix to hand over complete editorial control to produce a 10-part docu-series. Netflix turned that exclusive fly-on-the-wall access into two seasons of fascinating content that, in turn, significantly boosted and diversified new audience acquisition and event ticket sales.
Get social
F1 knows that its fans are thirsty for stories and insider access. The volume of social content across all top platforms each day — including high quality videos, articles, podcasts, and graphics — is staggering. And it pays off. For the third year in a row F1 is the fastest growing major sport on social media.
https://www.linkedin.com/pulse/lessons-content-marketing-from-formula-1-michael-morreale/
Competitors
The variation here between NASCAR and Formula 1 is the difference between big business and prestige. Formula 1 certainly makes good money, earning $1.5 billion every year. But that’s only half of NASCAR’s yearly earnings, at $3 billion worldwide.
But where those earnings go is somewhat reversed. Lewis Hamilton, the highest earning driver in Formula 1 and current reigning champion, earns about $40 million per year, whereas the top NASCAR drivers receive less than $10 million in salary and bonuses.
Formula 1 had four million people attend races in person in the 2019 season, while NASCAR attracted 3.5 million people. Formula 1 may have slightly more viewers in person, but it’s a much more international sport. Races happen all over the world, including two in North America. NASCAR, however, takes place almost entirely in the United States. And even in the United States, it’s almost considered to be a “regional” sport, local to the South.
And finally, from a business perspective, NASCAR is a self-governing organization, and it’s devoted entirely to the sport. Formula 1, however, is only one part of the FIA, which also runs several other motorsports organizations.
Customers Perspective
Nielsen's report says all of that has worked, reaching younger fans for the series to see a six percent increase in the share of its fans aged 16-35 (up to 46 percent from 40 percent). In total, 77 percent of new fans tuning into F1 fell into that age bracket. F1 has previously revealed its viewership was just 14 percent under 25 in 2019 but that 80 percent of its esports viewers were under 25, showing the difference in platforms for its audience that, now, seems to be changing its overall demographic.
"F1 continues to benefit from its strategy of expanding its content offering—through additional peripheral and story-telling programming—which appeals to that 16–35-year-old market," McCormack explained. "The current grid of young, social media savvy drivers, like Lando Norris, is helping to reach new consumers through platforms such as Twitch and YouTube."
Nielsen says that F1 gained 73 million fans, a 20 percent increase, in ten of the territories it most wants to expand in last year—Brazil, China, France, Germany, Italy, Russia, South Korea, Spain, the U.K., and the U.S. Along with an overall 1.1 percent growth in audience per month, that puts the sport on track to hit 1 billion people taking an interest in it come 2022. Not bad for a series whose former owner still persists in predicting its death every few weeks.
https://www.thedrive.com/accelerator/39933/f1-finally-embraces-streaming-looks-at-1-billion-fans-in-2022-thanks-to-netflix-and-twitch
Revenue
F1's biggest revenue stream comes from the sale of television rights, unlike most sports or racing series, Formula 1 handles all TV logistics at all of the venues and provides what's called a "global feed" to hundreds of TV networks—each of whom pay a colossal price of admission.
F1's second-biggest revenue stream is made up of what is called "race-sanctioning fees." Every F1 venue in the world—from a classic like Monaco to a newbie like Baku—has to pay a massive fee to F1 to be added to the calendar. SEC filings show that F1 made $654 million in sanctioning fees for the 2016 season, which featured 21 races. This means that the average fee F1 charges are roughly $31 million.
F1's third-biggest revenue stream is a combination of ticket sales and other paid partnerships with companies or products. On top of the already hefty sanction fee, venues must pay a percentage of the ticket sales to the racing organization, although this is typically accounted for in the initial contract.
https://www.chaseyoursport.com/Business-of-Sports/How-Formula-one-Business-Works/2263
Growth & Future of F1
https://www.mercedesamgf1.com/en/news/2018/10/insight-five-examples-why-f1-is-accelerating-the-future/
The Business of Sports
The wave of new stadiums around the globe, the growing size of television contracts and the continued proliferation of sports advertising portends an industry that continues to soar, even as the global economy climbs out of recession.
Professional football is a specific type of commercial activity, where sports component is balanced with financial and economic; and we cannot state that one of the components is dominant. At the same time, professional football as a separate business industry is important for the world economic system, as it generates huge amounts of cash flow. The further football industry development, in particular, its return to the previous pre-crisis level, is directly connected with the period of the pandemic, the duration of which is not predictable.
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