9. cmo council report -- doing away with foul play in sports marketing (executive summary)

8/11/2019 9. CMO Council Report -- Doing Away With Foul Play in Sports Marketing (Executive Summary)

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SPORTS MARKETINGIN

WITH

DOING AWAY

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Doing Away With Foul PlayEXECUTIVE SUMMARY

2010. CMO Council. All Rights Reserved.


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Doing Away With Foul Play In Sports Market

vulnerable to brand infection and unable to reap the full benefits of their sports spend. With the amount

of money invested in sports marketing and the opportunity to tap into passionate sports audiences, this

neglect of brand protection is disconcerting.

After reorganizing brand protection programs to reflect the new landscape of property rights infringement,

companies must also better understand that a strong offense is the best defense against violators.

The research revealed how many marketers exhaust their budgets by becoming official partners and

cannot effectively utilize the sponsorship. However, with their access to exclusive event content and IP,

official sponsors have the potential to create a level of authenticity ambushers cannot replicate if they

strategically activate their investments. Therefore, instead of blaming sports event organizers, hosts or

franchises for not protecting their sponsors, brands must make sure to mount strong campaigns as the

first line of defense.

Increased attention to brand security should also include becoming more proactive in defense. Addressing

issues as they arise is no longer good enough. The most successful protection models aggressively work

to achieve more sustainable long-term brand security by weakening the motivation to violate property

rights at altogether.

Internally, or through third party collaboration, each of the properties regularly cited as the best protected

constantly monitor the market for infringement and are willing to pursue legal action when appropriate.

For example, in 1992, the NFL, NBA, NHL, Major League Baseball and Collegiate Licensing Association

formed the Coalition to Advance the Protection of Sports logos (CAPS) to deal with trademark defense

of its constituents. Since its inception, the organization has seized more than 9 million pieces of illegal

merchandise with logos from its members, valued at more than $334 million.

However, while threat of legal penalty preserves brand integrity in the short term, merely punishing

offenders is not a long-term solution. IP law cannot keep up with innovations in technology and digital

media. Furthermore, it is impossible for the biggest global brands to keep an eye on violators all over the

world. Sports properties that rely solely on defensive enforcement will always play catch up.

Rather, the most admired sports properties and brands have begun focusing on prevention andeducation. As leagues expand internationally and corporate sponsors launch global advertising

campaigns, they are entering markets where legal infrastructure does not exist at least at the same

maturity as Western countries. Consumers, lawmakers and businesses simply do not have a developed

understanding of rights protection. While this makes enforcement difficult, smart brands commit to IP

education and the development of better legal frameworks. These companies are rewarded with new fans

who can become loyal future customers.

Marketers have long understood the value of investing in sports. Now they must take brand infection

dangers equally as serious and learn how to better protect their assets. Brands should emulate the NFL,

NBA and other leading sports properties by investing in their futures and proactively attacking the source

of the problem. Educate potential violators on why IP laws are important. Engage them in the process and

preempt violations before they can occur. Only then will brands harness the full marketing potential of

sports properties and events.


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Summary of Key Findings

Doing Away With Foul Play continues the CMO Councils thought leadership on brand protection issuesin marketing. Following research in programs like Secure the Trust of Your Brand and, more recently,

Protection From Brand Infection, the Council identified brand security as a growing problem area for

marketers. This new study investigates how intellectual property (IP) infringement is impacting the global

sports market, how sports brands are safeguarding their investments, and what tactics are addressing

brand protection concerns effectively.

Sponsored by MarkMonitor, a leader in global enterprise brand protection, the global online audit tapped

into the insights of 228 marketers across 27 different industry sectors. In-depth qualitative interviews

were also conducted with more than 20 experts from various sports franchises, leagues and corporate

sponsors. The goal of Doing Away With Foul Play is to alert sports marketers to the evolving threats brands

face and help them better protect their investments, realize increased returns, satisfy fans and improve

the overall event experience.

According to the survey, brands believe in the value and potential of sports marketing, and many include

some form of sports sponsorship in their marketing mix. Yet even though respondents recognize that

trademark violations can damage brand value and undermine consumer trust, the research suggests

many marketers are not actively protecting their properties and sponsorship assets.

Many companies do not have brand protection programs, and many of those that do are not adjusting

to the new threats made possible by evolving technology. Without a more serious commitment to brand

security and a more informed stance against digital threats, marketers will not be able to maximize the

return on their sports marketing spend.

Key Findings From the Doing Away From Foul Play In Sports Marketing Audit:

Marketers continue to invest in sports properties to bolster their brand among the immense and

passionate fan bases sports attract. Some 72 percent of survey respondents believe sports sponsorshipsare a valuable and effective way to brand and engage customers. Another 15 percent say sports

sponsorships have always been part of their marketing mix.

According to Erica Kerner, Adidas global Olympic Games director and head of the companys London

2012 project, sponsoring major events opens doors to unique business prospects. Being an official

partner [at the Olympics] gives us the opportunity to work with consumers, other partners and to develop

business-to-business opportunities that we wouldnt have had otherwise, she says.

The specific makeup of the audience is as attractive to many marketers as its size. For 45 percent of

marketers, demographics and fan bases that match target consumer markets are the primary drivers

behind sports marketing decisions. TV branding and local community support both 15 percent are

also important considerations.

Sports sponsorships give us the ability to tangibly bring our brand to life in front of fans. VP Marketing, Global Financial Services and Credit Company

To best reach those target consumer markets, 41 percent of respondents plan to integrate their sports

sponsorships with other media buys, including interactive digital marketing channels. About a third

31 percent are increasing merchandising and promotions, and 30 percent are negotiating more

comprehensive sponsorship deals.

Despite the belief that sports sponsorships can boost brand equity and recognition, there is less

consensus on how to evaluate the actual impact. While 54 percent of marketers say sports marketing


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programs and endorsements are effective or somewhat successful, 27 percent have trouble determining

the value of and return on their spend.

According to Ryan Eckel, the head of marketing for Puma in Eastern Europe, Middle East, Africa andIndia, measuring sports marketing return is more of a qualitative than quantitative exercise at this point.

Were slowly developing a toolbox for quantitative stuff, he says. We do have metrics that we use, and

you can quantify a lot of viral stuff now, but were probably not as sophisticated as Procter & Gamble or

companies where [measuring return] dominates daily life.

However, when marketers measure the success of their investments, social networks and digital media

have had the most significant impact on helping brands connect and engage with fans, report 44 percent

of marketers. Online news and media channels are the next biggest contributor at 18 percent.

As social media changes the way brands interact with sports fans, companies can track the tonality and

sentiment of passionate, targeted consumer supporters. This in turn helps determine the true value of

sports sponsorships. Yet the uncensored nature of that conversation also provides a challenge, says

Stuart Cameron, MasterCards VP of regional sponsorships for Asia Pacific. You dont want to impede

upon IP rights you dont necessarily have, so what if a fan starts trashing a team you have a relationship

with? he says. You cant control that because the nature of social media is an open and honest forum

for dialogue, and once its out there, its out there.

To capitalize on these tools without succumbing to their pitfalls, 52 percent of marketers are monitoring

their brands in digital channels. Still, despite digitals growing relevance, one-fourth of marketers do not

track their brands on these platforms nor have plans to do so in the future.

Digital is a big worry because the rules cant catch up quickly enough to the technologies

and advertising ideas. Head of marketing, Global Athletic Apparel Company

In addition to new challenges from technology, the skyrocketing cost of sponsorships has prompted

ambush marketing from competitors seeking ways around the hefty price tags for official rights. Together,

these threats have joined counterfeiting among the major brand security issues.

The survey reflects these new conditions. Respondents listed ambush marketing by competing brands

and sponsors as the top concern in brand protection (41 percent), well ahead of counterfeit and knockoff

merchandise (29 percent) and improper behavior among top athletes (27 percent). Marketers showed

their increasing sensitivity towards digital media by ranking online brand hijacking fourth (26 percent).

Among the negative implications of these issues, marketers primarily believe they diminish brand value

and equity, undermine brand trust and integrity, and damage reputation. Nearly a third of marketers also

feel these challenges can discourage or lose future sponsorship.

The survey revealed less consensus on the factors encouraging the prevalence of these problems. At 42

percent, lack of enforcement or penalty for rights violations was the most popular explanation, followed by

more sophisticated fraudsters and difficulty in timely detection of threats (both 31 percent).

Jeff Bliss, president of the Javelin Group and former CMO of the 1994 World Cup, is one marketer who

credits the increasing innovation of the violators. Weve come a long way, but there are a lot of creative,

ingenious people out there who can get around the rules, he says.

To combat these trademark trespassers, many marketers are focusing on the quality of their own

campaigns. Some 34 percent of respondents run genuine and authentic marketing and merchandising

programs as part of their brand protection strategy, making this the most common brand protection tactic.


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Kim Skildum-Reid, a corporate sponsorship strategist, says companies who effectively activate their

sponsorships will be the best prepared for potential attacks and ambushes. If [sponsors] raised their

game, there wouldnt be any room for ambushes, she says. Instead of trying to clarify youre the real

sponsor, actually go in there and act like youre part of the event experience and leverage the opportunity.

Many other marketers, however, invest in less effective defensive practices, and too many ignore brand

protection entirely. An astounding 26 percent of marketers do not participate in any programs to protect

their brands virtually equivalent to the number of brands getting it right. Additionally, 24 percent are

trying to minimize the impact of issues and reduce potential negative exposure for their brands. Fewer

brands and properties are taking more active and preventative measures to stop future violations.

Were looking at public education and PR campaigns because relying on law enforcement

is not enough anymore. Its just not a police priority.

Lawyer, Major European Sports Franchise

Only 20 percent participate in programs to pursue and prosecute counterfeiters, and an equal percent

engage in public education campaigns on brand protection.

Conclusions

While marketers clearly understand and value the potential of sports marketing, the CMO Council

survey suggests too many companies neglect the necessary brand protection practices to properly take

advantage of their sports investments. To do so, they must make brand security more of an organizational

priority and tweak current rights protection programs to address the threats most likely to infect their

brands. Digital media is here to stay, and more than just a fourth of marketers should be concerned with

the many forms of online brand hijacking.

Additionally, companies who understand that brand protection is a preemptive, and not a reactive,

function will be better prepared. According to some of the experts interviewed, tactics focusing on

education and prevention will ultimately be most successful, especially as brands expand internationally

and face the less robust legal infrastructures of developing nations. The marketers looking ahead and

aggressively meeting potential risks before they ever develop are creating the long term, sustainable

model of successful brand protection.


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Demographics

Q1. What percentage of your expenditure is dedicated to online brand protection initiatives?

Q2. What is the size of your company (in revenue)?

Under $10 million

$10 million - $50 million




$500 million - $1 billion

Over $1 billion

42%

13%

8%

9%

3%

7%

17%

73%

19%

6%

1% 1%

Less than 5%

5% - 25%

25% - 50%

50% - 75%

More than 75%


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MIGUEL PORTELA

Legal Counsel Intellectual Property

FIFA

Overseeing FIFAs rights protection program, Miguel Portela is responsible for the protection of the

organizations sponsorship and marketing rights as well as its presence online. Before FIFA, Portela

served as legal counsel for Superleague Formula, a European auto racing competition; the Americas

Cup in Valencia; and the 2004 UEFA European Championships in Portugal.

In the world of sports brand security, there was no bigger lightning rod for criticism than the FIFA rights

protection team at this summers World Cup in South Africa. At various points in the preparation and

execution of the 31 day tournament, Miguel Portela and his staff were vilified in the media for their so-called heavy handed enforcement of FIFAs IP rights, especially after filing a criminal complaint against

two of the orange-dress-wearing girls from the Bavaria Beer ambush scandal.

According to Portela, that criticism comes with the territory of protecting the rights of the most popular sport

event in the world. The FIFA World Cup will always have its detractors, and these negative media stories

always come out before the event, he says. One of our tasks is trying to set the facts straight, but that does

not sell [newspapers]. The media is not as interested in our version of the facts or on the positive legacy our

program leaves in the host countries in terms of IP promotion and officials training.

Lost in the negative publicity were FIFAs thorough brand protection efforts to deal with its biggest

threats: ambush marketing, counterfeiting and digital infringement. With soccers global popularity, those

violations occur on nearly every continent, forcing FIFA to maintain constant relationships with legal

council all over the world.

For South Africa, Portelas team worked with local officials to prepare the host country and tighten its

legal system in the years leading up to the FIFA World Cup. In most cases, Portela says, a direct letter to

infringers explaining what they had done wrong was enough to prevent major issues. In addition, FIFA

organized on-site teams to monitor for ambushers targeting fans as they entered matches. These local

teams patrolled in and around stadiums, as well as throughout their surrounding cities.

Additionally, FIFA faced the additional challenge of South Africas relatively undeveloped business

community, especially its huge informal sector. Portela says his team put an extra emphasis on educating

the host communities where many citizens and consumers were missing a basic understanding of rights

protection. Those efforts included organizing seminars, workshops and meetings with local businesses,

arts and crafts people and nearby vendors to help South Africans learn about FIFAs rules. For the first

time, FIFA also compiled a public information document on IP regulations to help locals grasp the idea of

brand protection.

While some incidents still inevitably occurred, Portela says the extra attention to prevention made an

impact, as malls, shops and other small businesses were all getting involved with the soccer promotional

campaigns but in ways that complied with FIFA rules.

We took it upon ourselves to actually invest in that area and leave a legacy behind, Portela says. And

weve had less infringement in South Africa than we expected.

Nevertheless, despite FIFAs progress in brand protection, Portela would like to see more collaboration

among the major sports properties and corporate sponsors in the future. While you would think we all

have the same problems and face the same issues, were very isolated, he says. Having more synergy

and exchanging more ideas would be good.

Executive Insights


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Sponsors

About The CMO Council

The Chief Marketing Officer (CMO) Council is dedicated to high-level knowledge exchange, thought

leadership and personal relationship building among senior corporate marketing leaders and brand

decision-makers across a wide range of global industries. The CMO Councils 5,500 members control

more than $200 billion in aggregated annual marketing expenditures and run complex, distributed

marketing and sales operations worldwide. In total, the CMO Council and its strategic interest

communities include over 12,000 global executives across 100 countries in multiple industries,

segments and markets. Regional chapters and advisory boards are active in the Americas, Europe, Asia

Pacific, Middle East and Africa. The Councils strategic interest groups include the Coalition to Leverage

and Optimize Sales Effectiveness (CLOSE), Marketing Supply Chain Institute, Customer Experience

Board, LoyaltyLeaders.org, Online Marketing Performance Institute, and the Forum to Advance the Mobile

Experience (FAME). www.cmocouncil.org

About MarkMonitor

MarkMonitor, the global leader in enterprise brand protection, offers comprehensive solutions and

services that safeguard brands, reputation and revenue from online risks. With end-to-end solutions

that address the growing threats of online fraud, brand abuse and unauthorized channels, MarkMonitor

enables a secure Internet for businesses and their customers. The companys exclusive access to data

combined with its patented real-time prevention, detection and response capabilities provide wide-

ranging protection to the ever-changing online risks faced by brands today. For more information, visitwww.markmonitor.com.

9. cmo council report -- doing away with foul play in sports marketing (executive summary)

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