Sports Marketing Article

The Age Business section, page 1

30/09/2006

There are more than just two teams involved in today's AFL showdown. Behind the
scenes, the sports marketers are the ones making the big plays, write Nabila Ahmed and
Kirsty Simpson.

Grand Financial

AS CLOSE to 100,000 fans stream into the MCG, and millions more watch on TV, one
team will already be celebrating - regardless of who wins the AFL premiership.

Team Toyota has sponsored the AFL for three years, after CUB vacated the field. The car
manufacturer decided to get involved in the biggest event in Australia's sporting calendar
for one reason - to take the lead in the Victorian market.

"We were the market leader in the eastern states and in the west, but in Victoria for some
reason we (were not)," says Toyota manager Peter Webster. "We were selling the same
cars and spending the same amount on advertising but there seemed to be a lower affinity
with our brand in Victoria compared to anywhere else."

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Toyota gave itself three years to achieve this goal. It made it in two. For $10 million a
year in direct sponsorship to the AFL, total car sales have risen from 43,700 in 2003 to
45,250 last year, for an estimated extra $46 million in sales. This year, Toyota has risen
to 19.5 per cent of the market, well ahead of rivals Holden, with 15.9 per cent, and Ford,
15.7 per cent.

Internal research shows that awareness of the Toyota brand has jumped from 68 per cent
to 82 per cent in Victoria. "The project has been a runaway success," says Webster. "We
believe that the AFL is without peer as a marketing and sponsorship opportunity in
Australia. We have sponsorship in other codes of football . . . but whether it was soccer,
rugby league, tennis, golf, motor sport, I don't think that there's an event or an activity in
Australia that is anything other than a distant second to the marketing power of AFL."

But this is marketing, so don't expect a hard-nosed economic analysis - for Toyota it's
about less easily calculable benefits. "This was really about changing attitudes of footy
fans towards Toyota."

Twenty years ago Australia had the bones of a huge sports industry: a sports-mad country
with a near religious interest in football, cricket, rugby league, tennis, the Melbourne
Cup. It had great stadiums, and the Sydney Olympics and Commonwealth Games
brought a rush of new venues.

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With it, sports marketing has become more professional, developing a critical mass of
specialist marketers. Along with their bosses, these are the men and women partly
responsible for the 50 per cent boost in visitors to the spring carnival, the spectacular rise
of Australian soccer, and this week's extended bout of AFL fever.

They have paid attention to fan development, where major sports get in at grassroots
level to capture followers at an impressionable age. The Australian Grand Prix has an
extensive schools program that allows free entry for registered school groups and delivers
curriculum support for teachers.

"We pick a couple of subjects per year level and produce activities," says grand prix
marketing manager Kate Heard. "So it means if you are in grade 4 and 5, you might look
at GP statistics and how that links to the curriculum. Or for older kids, you might look at
the mechanics of the cars. Teachers can download that from our website as a PDF . . . It's
not like AFL where you can play it at school, so we do a lot of grassroots promotions."

Dr Stephen Silk, former veterinarian and now manager of strategic marketing at the
Victoria Racing Club, puts these developments down to several factors. "Melbourne has
always led the way with sports marketing," Silk says. "However, in recent years sports
marketing has been spurred on by major events marketing. With (this) has come the
development of a can-do events culture in Melbourne which has had the support of the
Melbourne Major Events Committee."

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Set up by the Kirner government in 1990, it has been renamed the Victorian Major
Events Company and has been supported by both the Kennett and Bracks governments.
"Rather than just waiting for events to come around annually, it (the committee) set about
strategically to attract new major events to Melbourne. These were supported by the
existing infrastructure but also saw the development of world's best practice in
infrastructure in marquees and mobile kitchens, and the best in food and beverage,
security arrangements, event cleaning and turnaround times, event greening and mobile
toilets."

Sir Rod Eddington, VMEC chairman, credits its success with the strong backing of
successive governments and a willingness in Victoria for everyone to "set their shoulders
to the wheel". The future for the committee is not about cramming ever more one-off
events into an already extensive sporting calendar, it's about making sure the quality and
mix of products remain strong. We speak not just to the sports but to the sponsors, so we
know what they want. We seek to get not just one (international) rugby or soccer game,
but one every year for four years."
Sponsors have been prepared to pay for the privilege. Last year they invested about $1.6
billion, up 28 per cent in the five years after the Sydney Olympics. Globally, sponsors
forked out $34 billion, according to recent analysis by research group S-COMM
Australia.

The events - "properties" in marketing speak - that generate the greatest media exposure
for sponsors are the naming rights to the AFL Premiership, the NRL Premiership and
Australia's international cricket series. S-COMM calculates the total value of these
sponsorships at $15-$20 million a year.

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For individual AFL teams, the value to major sponsors is about $2.65 million a year.
Teams making it through to the grand final generate additional exposure for their
sponsors - an increase in annual value of up to 20 per cent from the week surrounding the
big match.

This money has funded the revolution in marketing. AFL general manager Gillon
McLachlan reflects a common view when he says that all such events now consider
themselves entertainment, as well as sport.

"We are competing against all forms of leisure time, so you can't afford to have poor
facilities, you can't afford for any aspect of your operations to not be the very best they
can be," McLachlan says.

Most marketers point to the AFL as an inspiration. Grand final week has taken off in size
and popularity and the code is continuing to develop it.

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The week includes the Brownlow Medal presentation on Monday night, the 200-game
club dinner the following night, a Channel Ten party, a golf day, the grand final parade,
grand final eve lunch and a week-long promotion at Federation Square. "The game will
always stand on its own," says McLachlan. "For those three hours, it stops the country. I
think we looked at the spring carnival as the template."

A good relationship with the media generates millions of dollars worth of advertising. For
the Melbourne Cup carnival, the value of free publicity in all media was worth the
equivalent of $95.6 million last year, according to the VRC. While last year's figures
were inflated by the heart-stopping performance of Makybe Diva, it is a still a dramatic
rise from $49.3 million in mentions in 2002.
Cricket Australia marketing services manager Mike McKenna is
spending less than his $6 million promotional budget for this year's
Ashes series because of overwhelming support from the sponsors.

Key to the campaign has been an internet ad featuring a group of

Australians presenting England with a huge statue of Shane Warne to
commemorate the Ashes, and the establishment of the Australian
Cricket Family. The campaign has been a success, with 750,000
downloads, but the direct marketing of tickets through the Australian
Cricket Family generated a lot of bad publicity when the system failed
to cope with demand, leaving thousands of cricket lovers without a
ticket.

"It was one of those things that exceeded our expectations," McKenna
concedes. "We'd never previously sold out a single day at the MCG, at
the Gabba or the WACA and all of a sudden we've sold virtually every
day of every Test match all up in about 48 hours."

McKenna says cricket has been able to market itself differently this
year because the Australian team's rare loss last year in England.
"Cricket over the last 10 years has been a little bit one-sided," he says.

Individual Tests are also being packaged as theme events, with ladies'
and children's days planned for the Boxing Day Test.

Without constant innovation, even the most popular event can slip.
Quality competition will always attract the crowds - today, the crowd is
turning up to see if the Swans star Leo Barry can repeat his magic
moment when he took a mark to defeat the Eagles last year, not to
check out Toyota's advertising hoardings. But now there are two
scores - one is for the fans, and the other for corporate Australia.

"Our biggest issue is to make sure that we don't overcommercialise

the game," says McLachlan. "If you are going to really deliver value,
you don't want the product too cluttered . . . all things come and go
but our biggest threat is ourselves and not becoming complacent."

The trick is keeping the balance.