Drinks producers are becoming increasingly sophisticated in their approach to the sponsorship of sports and entertainment events, taking ever more care to find the right vehicle to match their brand and its consumers. With several drinks companies recently moving into motor racing sponsorship for the first time, Deirdre Mason and Keith Nuttall look at what sponsorships have to offer and what the drinks companies are looking for.
The sports and entertainment industries thirst for sponsorship, and with the ever-growing boom in televising sporting events worldwide via satellite, the chance to expose a drinks company logo to world audiences in their billions should make sponsorship a sellers' market.
However, sponsors - among them the biggest names in the drinks industry - are increasingly looking to evaluate what sponsorship brings in. Now, there are marketing companies, such as the web-based Spotter, that offer to research which events receive the most coverage and the coverage most directed at the potential sponsor's target audience.
American lemonade brand, Country Time, used its sponsorship of NASCAR (National Association for Stock Car Auto Racing) events to carry out a promotional tie-in involving a simulated racing car. Everyone who presented a lemonade label could try out the simulated car. Country Time found that in areas where car racing was especially popular, sales rose by 66%.
On the 2005 agenda for the USA's Association of National Advertisers is a conference with papers specifically on events sponsorship. There are even packs on offer for businesses that are considering dipping a toe in the choppy waters of sponsorship.
Image is vital, for the sponsor but also for the event. Sport, in particular, wants to present a clean, cool and youthful image, and the trend is moving away from tobacco advertising plastered over every event. Hugo Boss, the male fashion brand, is now one of the key sponsors for the Formula 1 motor racing world championships, for example.
The drinks companies are also under pressure to present themselves as promoting responsible drinking and today, along with material drawing attention to their sponsorship of major sporting events, the big drinks companies such as Jim Beam and Diageo are stressing their own commitment to sensible drinking.
Diageo's Johnnie Walker brand, along with its annual sponsorship and marketing investment of £10m to £15m (US$18.8m-US$28.3m), will now be spending £2m (US$3.8m) every year directly on responsible drinking programmes in Grand Prix markets.
Johnnie Walker is now to sponsor formula 1 racing team, Team McLaren Mercedes. "We want to explore more opportunities to engage and motivate the 25-35-year-old consumers who are critical to both Johnnie Walker and Formula 1," says marketing director Charles Allen. Johnnie Walker is the first Scotch whisky brand to sponsor Formula 1.
Formula 1 has a global television audience of 2.9 billion, and there is a significant overlap with 25-35-year-old males who are Formula 1 fans but also at the core of Johnnie Walker's existing markets.
Recently, the US Jim Beam Brands Co. announced that it is going into partnership with the Indy Racing League and the Indianapolis Motor Speedway for an 89-day Road to Indy event. The event opened on March 6 and is taking the Jim Beam two-seater modified IndyCar to promote responsible drinking at car racing events in 13 cities.
"Responsibility is a top priority at Jim Beam," says the company's marketing director, Keith Neumann. "The Road to Indy tour communicates our drink smart platform in key markets and reinforces our position as the official spirit of racing." For the first time, the bourbon brand is backing a NASCAR team this year, but is not revealing details of the terms of the sponsorship.
Another drinks giant that is no stranger to sponsorship is Heineken, which for instance sponsors the Caribbean's largest annual sailing event, the Sint Maarten Heineken Regatta, operating from a dependent territory of its native Netherlands. Heineken spends roughly US$500,000 on the event, including the hosting of street parties and concerts.
Gabriel Morizet, Sint Maarten Heineken marketing manager, claimed this was money well spent, with television crews from the USA to South Africa and Europe attending this year, and coverage often featuring the company logo and mentioning its name. With print journalists also in attendance, Morizet claimed it was "a real success, giving Heineken a real market leader position", locally and internationally. The company was also able to ensure only Heineken was sold at regatta parties and concerts.
The British yachtsman, Peter Harrison, a participant in the 2005 regatta, told just-drinks.com that a commercial name emblazoned on the sail of a yacht in the Americas Cup was worth between £32m and £43m to the brand, depending on the boat's success. This was based on the potential television audience of 2.8 billion people in 63 countries logging 2,700 TV hours where watchers could focus on a sail logo. But even he admits that drinks and other companies need to play a smart game. "Sponsorship must be seen by companies as projecting their brand or promoting themselves to a group in the market that they want to project to", he said. Sailing, for instance, ran the risk of appearing too elitist for some brands, he admitted.
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