The Superbowl provides an interesting annual look into the best and worst of sports marketing. It is also interesting to compare the superbowl to our favourite fishbowl – the America’s Cup.
The Weekend papers in New Zealand and the UK both ran stories which give some insight into the apparent challenges of the new America’s Cup to tell a simple, believable story, thus making it difficult to convice marketing people who are willing to spend millions of dollars on a Superbowl ad that the America’s Cup might deliver comparable (or any) return.
While the AC45 and the America’s Cup World Series might have been necesary to help teams get to grips with a scaled down version of a wing-sailed catamaran and provide smaller teams with opportunities to woo partners with non-cgi video footage and stunning photos, as the build of the 72 foot version approaches, the confusion amongst the media and the public is starting to show.
An article in the main section of the UK’s Sunday Times by John Harlow highlights some of the issues – mixing up the AC45 with the AC72, suggesting that the Ultimate race for the cup will be sailed in One-design boats.
The curious case of Ben Ainslie Racing which sees the British Olympian competing in his own AC45 before sailing aboard the ‘real’ ORACLE Racing campaign has confused almost everyone from major media outlets to online forums.
But the topic of the week it seems is cost control – after the organisers of the America’s Cup admitted that only 4 teams would be likely to make it into the races that count.
In New Zealand papers, Emirates Team NZ boss Grant Dalton says that the reason that there are not more competitors is that the new deal America’s Cup is too expensive, but watching the Superbowl and looking at F1 budgets, the real problem doesn’t seem to be the amount of money, but the benefits of spending that money.
In other words, the objection from sponsors is less likely to be “we don’t have the money,” but rather “It’s not worth that amount of money.”
Unless you are Emirates Team NZ.
Because Dalton says that high-end sponsors, who used to have wide sponsorship portfolios, have rationalised them so that they are more targeted and more likely to deliver marketing return on investment. Despite the economic conditions around the world, Dalton claims:
New Zealand is cool in Europe and high-end sponsors and brands want to be associated with us. ETNZ is a strong brand in itself and is success driven, has all the right values and they like that.
But back to the Superbowl. Advertisers had to find $3.5 million for each 30 second ad-slot this year. That’s just shy of the amount Ben Ainslie needs to run his AC45 campaign.
But let’s put the big AC72 campaigns into perspective. Some estimates put the ORACLE Racing budget at around $200 million. For the same price, PepsiCo have advertised on average 7 times per Superbowl for 10 years!
A smaller, competitive AC72 campaign might be closer to $50 or 60 million – which is the same budget as Yum! Brands (owner of KFC, Taco Bell etc) have spent on 9 Superbowls with an average of 3 ads per game.
Of course it can be argued that the America’s Cup is about quality not quantity – that yacht racing attracts a better class of spectator at the same time trying to convince everyone that it is not elitist.
So while we are looking at some comparisons, let’s use F1 – because the America’s Cup loves to compare itself to Formula One.
For $50 or $60 million, a brand can get pretty close to being title sponsor of one of the top F1 teams, so as a marketing director I have to be pretty brave to suggest that the America’s CUp is the best place I can put my sponsorship dollars.
So is the America’s Cup too expensive?
Well that depends.
The Cup has never been about commercially viable sports franchises. The Cup has always been about the ego of rich blokes who want to win via any means possible, but this Cup was meant to be different.
This Cup was supposed to be simpler, more approachable, better entertainment, less costly and there was also a goal, perhaps utopian, that America’s Cup teams of the future could operate through sponsorship dollars alone, without having to be propped up by rich owners.
Judging by the lack of brands who have signed sponsorship cheques, then the Cup is too expensive to be a 100% commercially funded sports event – it’s either that or the pitch is not working.