The battle of billions

C

No matter what industry, brand, sport, product or service you are marketing today, it has become fashionable to talk in billions. The 2019 Deloitte Football Money League reported the Top 20 football clubs in Europe generated €8.3 billion in the 2017/18 season. Tottenham Hotspur recently opened their new stadium with a micro-brewery, 1,600 Wi-Fi access points, retractable football pitch and heated seats for some of the 62,062 visitors for a cool £1 billion. Familiar territory.

What caught my attention was Santander’s new strategic plan unveiled last week to invest €20 billion in IT and digital technologies over the next four years. Yes, €20 billion. JP Morgan were investing €11.4 billion in technology in 2019 alone. US banks are leading the way with Bank of America, Citi, Wells Fargo and US Bancorp spending between $2.5 and $10 billion annually on tech. It made me curious, how many customers does Santander have? Answer: 125 million across 10 key markets. It also made me wonder what the Top 20 richest football clubs in Europe were investing in IT and digital technologies…..sadly that information is not available. What I can tell you (according to Deloitte) is Real Madrid, the number one club by revenue of €750.9 million has 109 million Facebook likes, 67 million Instagram followers and 31 million twitter followers. Perhaps not all of them are ‘customers’ of Real Madrid but like Santander their fan base is probably bigger outside Spain than inside. And technology is a central piece of their marketing strategy to attract and retain them.

We all know the biggest investment in professional sports like football are the ‘actors on the pitch’. Without the players we do not have a product to market at all. Whilst the banks will never compete for our leisure time, there are forms of entertainment who do. As one of the few people on the planet who has never watched an episode of Game of Thrones, I was rather surprised by the attention it was receiving. Apparently the ‘final’ season has arrived and the trailer has been viewed more than 55 million times on YouTube. Comparisons are being made to the climax of Harry Potter. Season one (of seven) in 2011 captured 2.2 million viewers in the US which has steadily grown to 12.2 million for the final episode last season. In a classic ‘good vs evil’ script, more than half of the 330 important characters in Game of Thrones have been killed-off! As a big fan of The Sopranos, murder was frequently part of the plot but Game of Thrones takes this to a new level.

For those fans who will not know what to watch when the final season has passed, don’t worry. In November 2017, Amazon announced it had bought the rights to adapt The Lord of the Rings into a TV series that will reportedly cost $1 billion, part of a broader strategy that involved a shift towards higher-budget productions with “global appeal”. “The mandate from Amazon chief Jeff Bezos is clear,” reported the industry publication Variety two months before the deal was announced. “Bring me Game of Thrones.” And, Netflix is reportedly spending $15 billion on programming in 2019 to maintain its growth and deliver content for 150 million fee-paying consumers.

So, when it comes to the world of sport, a give or take a few billion, the amounts being invested do not seem that outrageous. The real question is how the traditional sports are going to engage with the next generation of fans. This weekend in China, Formula 1 celebrates its 1,000 Grand Prix. How long before the young pretender of Formule E challenges the established F1? “I think Formula E will be for the next generation what F1 was to the last generation,” says Michael Perschke, Chief Executive of hypercar manufacturer Automobili Pininfarina. “Why? It’s an interactive series . . . It is not a format limited to the old Bernie Ecclestone system where if you paid hundreds of millions, you got in . . . It’s Racing 2.0.”

Whichever formula you choose to develop a sustainable relationship with fans, customers or prospects, investment in new concepts and technology is critical. As I settle down to watch the final round of the US Masters golf today, I don’t expect any murders but it would be a fairly-tale ending if Tiger Woods could win a fifth Green Jacket. And that is something billions simply cannot buy…..