The UAE sports marketing now stretches around the globe as local companies back leading international brands.
UAE sponsors are game
Etihad Airways's announcement two weeks ago that it will have its name attached to Melbourne's iconic Telstra Dome is a symbolic action, not just for the airline but for the Emirates. Now, together with Emirates Airline's two-year-old deal with the Arsenal football club for the naming rights to its London stadium, the sports marketing ambitions of the UAE wrap around the globe. The country has also recently been making news in the role as owners and hosts of high-profile sports brands, from Abu Dhabi United Group for Development and Investment's purchase of the English football club Manchester City to the lavish track design for next year's Formula One race on Abu Dhabi's Yas Island.
Taken together, the convergence of ambitious sports sponsorships and headline-grabbing sporting events makes the UAE an increasingly fertile environment for the people who make a living marrying brands and athletes. So it was little surprise when one of the most prominent international advertising agencies, Mediaedge:cia (MEC), announced plans last month to open an office in Dubai dedicated to sports, entertainment and charitable sponsorships.
"You can see the region is growing and you can see the number of events that are popping out," says Leena Kewlani, the planning and activation director for MEC Access. "There are four Fifa events, the golf cup that's happening. You have a lot of events that are happening, and we have clients who have been expressly saying, 'OK, you can do branding on the ground, but what else can you do for the consumer?'"
Among the office's first clients are Deyaar and Sony Electronics, the latter having hired the company to manage its football sponsorships in the region. She says the sports sponsorships are an attractive option to brands because sport "is a passion that is very close to the consumer's heart". That proximity to the consumer's heart comes at a high price. Sports marketing is a US$213 billion (Dh782.3bn) industry, according to the Sports Business Journal. It includes everything from advertising and venue signage, athlete endorsements, facility construction, sporting goods and licensed merchandise to event management and marketing services, sponsorship and ticket sales, media broadcast rights, and multimedia. It is also growing. Sports advertising spending rose 5 per cent last year to $13bn, and spending in 2006 was up nearly 11 per cent from 2005, the Sports Business Journal reported.
As advances in recording an replay systems such as TiVo make traditional television advertisements a riskier bet for brands,this growth has caught the attention of advertising agencies, both worldwide and in the Gulf. This weekend in Dubai, the Omnicom Media Group is sponsoring a conference on sports marketing titled "Beyond sports: scoring with innovations", with speakers from Unilever, Adidas and Sponsorship Science.
Although banks also play a prominent role, the pioneers of sports marketing in the UAE have been the airlines. Emirates began to build its sports marketing portfolio in 1987, only two years after its inception. Today, the airline's sports sponsorships span six continents. Two years ago, it signed the biggest sports sponsorship deal in English football history with Arsenal Football Club. In addition to the Fly Emirates logo on the players' shirts, the airline also has naming rights of Arsenal's home, the Emirates Stadium. Elsewhere, Emirates sponsors the Paris Saint-Germain, Hamburger SV, AC Milan and Olympiacos football clubs. It is also the official sponsor and airline of Thailand's BEC Tero Sasana club.
In 2006, the carrier became the first airline recognised as an official partner of the Fifa World Cup. Beyond football, the airline has sponsorships in rugby, golf, cricket, horse racing, Australian rules football, tennis, sailing and car racing. Close on the Dubai carrier's heels is Etihad, which has been increasing its sports sponsorships as it extends its network. Although the brand has been around for only five years, it has managed to link itself to the Ferrari racing team, the Chelsea football team and the Harlequins rugby union club, as well as the Abu Dhabi Golf Championship.
"Sponsorship is a substantial amount of Etihad's marketing budget, and that has a reason," says Peter Baumgartner, the executive vice president of marketing and product for Etihad. "Especially when you are a young brand, a sponsorship can help you to really accelerate your brand awareness." He points to the company's sponsorships with international brands such as Formula One, Ferrari and Chelsea football club as examples of opportunities for the growing airline to communicate to a global audience.
The airline also targets sports such as All-Ireland Hurling, that may not be well known abroad, but are intensely popular in a market where Etihad has an important connection. "It's something that is part of their culture, that's very close to their heart," he says. "We immediately built emotional loyalty that normally in the value chain comes at the very end... It gave us overnight fame in Ireland."
Buying the naming rights to Melbourne's Telstra Dome has had a similar impact in Australia, he says. "It was an opportunity to make a big noise overnight." The airline already flies to Sydney 11 times a week, along with three flights a week to Brisbane. It will begin direct flights to Melbourne to co-incide with the stadium's renaming. The economic climate has not put a damper on the airline's sports marketing ambitions. If anything, Mr Baumgartner says, it has opened doors to expand further.
"You could say that the current situation of economic downturn, credit crunch brings opportunities at a better value than maybe before," he said. "We are very fortunate that we can do that in the early stage of our life cycle." These opportunities are likely to increase in the near future, as many of sporting world's most generous sponsors have been some of the banks and insurance companies worst hit by the credit crunch. Formula One's list of sponsors, for example, reads like a who's who of the banking and insurance world. One sponsor, the Royal Bank of Scotland, was bailed out by the British government, while another, ING, received $10bn from the Dutch government, according to The New York Times.
In the golf world, the US PGA tour's sixth major, the Wachovia Championship, is in the awkward position of having its namesake having been bought by Wells Fargo last month. Earlier this year, Wachovia signed an extension to continue its sponsorship of the Charlotte-based tournament until 2014, and Wells Fargo is obliged to honour the contract, but Sports Illustrated reports that uncertainty about the details has compelled tournament officials to hold back on printing tickets and promotional materials.
Even the English Premier League is not immune. This season, shirt sponsorship revenue in the league fell for the first time in its 16-year history, from about $138.3 million last year to $123.6m, according to Reuters. Gary Leih, the chairman and chief executive of the advertising agency Ogilvy Group, told the news service: "I don't think Man United would have much trouble finding a new sponsor, likewise Chelsea, Arsenal and a handful of other top clubs, but if you're a team struggling in one of the lower leagues, sponsorship is going to be harder to come by."
But Abu Dhabi is bullish on the sponsorship prospects of at least one football team. Simon Pearce, the communications director for the Executive Affairs Authority, a policy arm of the Abu Dhabi Government, believes Manchester City's new ownership will make it more attractive to potential sponsors. "Manchester City as a proposition - with the new ownership, the underwriting it provides and its pragmatic, long-term ambition - gives a great new context for people to engage with in terms of what it offers," he says. "As a result, you therefore have a club that is on a journey to become one of the major clubs in Europe. For any company, but particularly for a UAE company with global ambition, it presents a great opportunity."
Such optimism pervades the broader sports sponsorship industry, despite the downturn. "Sponsorship is one of those things that in hard times, people tend to pursue," says Mark Warne, the strategy director at MEC Access. "It's things like the Olympics, Formula One and football tournaments that people will [follow] to lift their spirits." firstname.lastname@example.org