Riding The Risk

As I type this bleary eyed, the tiredness of late nights watching the Tour de France kicking in, I’m forever amazed by the spectacle that is the Tour. No matter your interest in cycling, for 3 weeks each July, it captures the attention of the entirety of Europe and a good chunk of Australia as well. Whether you’re drawn to the sheer gut busting effort of cycling 3,500kms up some of the biggest mountains in Europe or just watching the amazing scenery go by, you are joining a global television audience of over 1 billion people tuning in each year. With that kind of exposure, is no wonder brands and sponsors are not far away.

Pro cycling teams are funded through sponsorship. While in Australia brands/teams like SunWeb, Francaise des Jeux or Lotto NL Jumbo mean very little, in Europe they do. Yet the exposure that businesses get from sponsoring a team comes at a risk. You don’t have to know your derailleurs from your drop bars to know the sport has been shrouded in controversy for years thanks to drugs scandal after drugs scandal. For teams and riders, these can be devastating but what about the sponsors?

There’s the old adage that all publicity is good publicity but it’s a fairly bold strategy when it comes to the kind of money that is poured into pro cycling. Figures are scarce but a name sponsor would spend around €6m to get onto a jersey for a year on the circuit. Why spend that kind of money in a sport that has been tarnished so badly, surely it’s a no-go zone when you are wanting to protect your brand image?

For a brand there are two things at play; brand recall and brand associations when it comes to sponsorship. Brand Recall is all about ensuring that at point of purchase or during the decision making process that your brand is top of mind. It’s hard to argue that given the numbers watching pro cycling races that the exposure provided via jersey sponsorship is enormous and the opportunity to embed your brand’s name in the mind of a consumer is huge. A quoted figure is that for every $1 spent on sponsorship, the return on investment is $5.401.

Add another layer to this, by considering the extra attention / publicity a brand gets in the midst of a scandal. So if you are looking to improve awareness and recall, maybe unwanted attention isn’t so bad after all.

Where things get a little more grey for marketing departments is what a sponsorship achieves for the values of a brand and the brand associations. While an ROI of $5.40 for every dollar is great, the damage to a brand’s associations could ruin any investment very quickly. All things going well, you’d want a brand that sponsors a Pro Cycling Team to absorb some of the associations of a professional cyclist (hard work, determination, focus, etc.) and to be a positive influencer on a social standing. For instance, TeamSky (arguably the most widely recognised team on the world tour) uses their connection with the team to further their agenda of ‘inspiring people of all ages and abilities to cycle, through the team’s positive profile, attitude and success.’2 When controversy hits though, brands would be very keen to distance themselves from the negatives of the sport (cheating, dishonesty, mistrust, etc.) especially with such lofty goals as what Sky has for their team.

You’ve got to wonder why anyone would take the risk in sponsoring a team in a sport with such a chequered history when a brand’s image is so critically important to protect and nurture. When it comes down to it, when weighing up between improving recall and awareness against any potential loss of equity, the likes of Sky, SunWeb and Francaise des Jeux have obviously sided with the $5.40 ROI and are happy to carry the risk of another not unto familiar scandal hitting the peloton no matter the potential carnage.

By Chris Binney


1Source: http://credibleresearchsources.com/study-hall/request/return-on-investment-of-sponsorships-in-cycling

2Source: Teamsky.com

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