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Management Report

Management reports, briefs issued by Samsung Economic Research Institute

Sports Marketing

Sports Marketing

LEE Min-Hoon

May 22, 2006

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Global companies are eyeing mega athletic events to increase their own spotlight. Indeed, large-scale sporting events such as the World Cup and the Olympic Games give companies a chance to market their brands quickly to billions of television viewers worldwide. The number of spectators and TV viewers of the World Cup games has been on a steady rise since 1986. The cumulative audience over the 25 match days of the 2002 World Cup reached a total of 60 billion viewers across 213 countries.

Increasingly more global companies now understand the commercial value of sports. In the US, more than two-thirds of businesses are taking advantage of sporting events as a marketing tool. Rapid growth of sports marketing has even created as many as 160 new job categories. As stakes are being raised, companies are pumping more money into acquiring exclusive sponsorship rights for big sporting events.

An official sponsor of the 1998 World Cup had to pay on average US$40 million to associate itself with the event. The amount soared to US$60 million in 2002 and is estimated to further increase to US$70 million in 2006. Recently, Sony Corporation signed a US$305 million deal with the Federation Internationale de Football Association (FIFA). Under the agreement, Sony becomes an official sponsor of the world soccer's supreme governing body with exclusive rights to all FIFA competitions until 2014.

Global companies show great interest in sponsoring sports games as sports marketing seems to have greater influence on consumers than traditional commercials. Savvy consumers are no longer attracted to bland ad messages aired in the media. Furthermore, ads combined with sporting events touch consumers' senses more effectively, and help them familiarize with the brand. With more and more global companies aspiring to join the ranks of sporting event sponsors, the marketing competition will likely intensify.

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