Coke, content and consumers
A recent report from SensorTower grabbed my attention revealing Instagram is opened by more of its userbase every day (39%) than TikTok (29%) but TikTok keeps its users far longer. In total TikTok claims users spend an average of 95 minutes per day on the app compared to 51 minutes on Instagram. For the record, YouTube is second with 74 minutes per day. According to InsiderIntelligence TikTok has doubled its worldwide user base between 2019 and 2021 from 291 million to 655 million and will reach one billion by 2025. Impressive.
With the start of Women’s EURO 2022 tournament on 6th July, sport industry executives are also crunching the data. Sadly, the consumption of women’s sport is not moving at the same pace as TikTok. According to GWI research, the number of people watching three or more minutes of women’s sport coverage in Q1 2022 was almost three times that of Q1 2021. Hmm. So that means a shift from one minute to three minutes over a 12 month period….
Hopefully there is better news. TikTok is a Global Sponsor of UEFA and was active during the men’s EURO 2020 tournament. Out of curiosity I visited the official TikTok account for UEFA Women’s EURO to check the number of followers. The answer: 420,400 with 4.4 million likes. By comparison the men’s EURO 2024 already has 7.2 million followers. Conclusion, there is some way to go before the gap between men’s and women’s football can be reduced. OK, a little simple but sometimes you do not need a multi-market survey to see the bigger picture. There are other reasons such as 70% of football fans watched the Men’s World Cup whilst 22% watched the Women’s World Cup. Also, women are 27% less likely to watch games in a bar and 17% less likely to attend an event in-person every six months.
There is a danger that we measure everything with data when there are other learnings that can be applied from years of practice in the sports industry. First, a one-off tournament will not deliver long term growth unless the infrastructure for growth is in place. Referring to one of the oldest models in the marketing handbook, AIDA (Awareness, Interest, Desire, and Action), how will any new fans or followers of women’s football be accommodated after EURO 2022? Which teams, clubs or leagues will reach out and invite them to become regular consumers, followers or potentially players?
According to the global CMO of Coca Cola, Manuel Arroyo, a typical consumer has 50 ‘beverage occasions’ per week and anyone who repetitively drinks one of the company’s brands once every seven days is included in its consumer base. Basically, a hit-rate of one in seven. The sports world feels a bit like the number of ‘beverage occasions’ concept, except there are probably 100 or more occasions to consume sport on a weekly basis. If you doubt it, just keep a media diary of every time you open a social media app, website, podcast or watch a sports event on TV and the minutes you spend. You will be surprised. Just like all new brands competing with Coca Cola, women’s sport and football is competing with other established sports, associated sports events, and their content. Based on the Coca Cola methodology, the metric for the Coke consumer base is just below 500 million from a global population of almost 8 billion.
A second learning based on experience is marketing effectiveness. Traditional sports events such as the FIFA World Cup, Wimbledon or Tour de France have the benefit of building their business model and understanding their fan base over many decades. To adopt a ‘copy-paste’ approach for new sports or events in terms of marketing communication is no guarantee for success. Clearly covering the costs of staging a 31 match tournament such as the Women’s EURO 2022 is the main focus. Partnering with media networks and sponsors to raise awareness is important and there is never enough marketing budget to engage with all fans. But what are the metrics to measure success and identify which marketing activities are generating the highest levels of engagement or revenue per consumer?
Again, our friends at Coca Cola have been monitoring their marketing effectiveness as well with a ‘profit per invested dollar in marketing’. Over the last 12 months this metric improved 7% demonstrating tangible progress.
I have never been a big fan of trying to isolate every marketing or sponsorship dollar and the exact return on investment but to monitor the relative effects of different media, promotions, activations and specific assets or rights which can be activated around sports events. Having said that, it would not hurt to calculate the average revenue per user (ARPU) for a football club, league, or tournament instead of the latest multi-million dollar transfer fee that has no direct correlation to profitability or success off the pitch. If a club has 500 million fans and revenue of €500 million, the simple ARPU is €1 per fan. Why not?
Equity in sport today is often associated with an investment from CVC Capital Partners or Silver Lake private equity who offer commercialized sports an opportunity to leverage their assets in return for future profits. From Manchester City to F1, rugby and even the WTA are allegedly considering a $150 million investment for a 20% in a new commercial entity that would control the media, sponsorship, and data rights. This is one solution that more and more rights holders are exploring. It is a bit like mortgaging the crown jewels in the hope the value will appreciate in future years to cover the cost of the deal and generate a higher ROI. But you need to own the crown jewels to do this.
Another type of equity is brand equity, which often bamboozles the finance controller but is integral to the potential value of a brand. Unless of course you want to sell NFTs and think people will simply pay more due to scarcity. Brand equity as discussed by respected marketers is an asset which can justify an increase in price. Just ask Nike and Michael Jordan who created the Air Jordan brand worth more than $3 billion today. Yes, it took more than 30 years and will still retain its brand value in another 30 years’ time as well. Strong brands withstand the test of time.
A third learning is that you need to create value to build equity and justify the prices being charged, now and in the future. I am clearly not in any target group related to the Women’s EURO 2022 or women’s football in general as nothing has come across my path in recent weeks to encourage me to watch a live match. Of course, the competition is strong as Wimbledon tennis, Formula 1 and The Open golf are all taking place in the same period. The only email I received is one from The Football Association offering me ‘Official Lionesses Merchandise’ from the England Store. With all due respect I am way past those days of buying tournament merchandise to be considered part of the ‘in crowd’. I have enough sports merchandise to start my own shop…anyone interested?
Sometimes marketers get so close to the athlete, team, sports event or ‘next big thing’ they forget to take a step back and consider the basics. You may not find a comparison between a bottle of fizzy soda and a sports brand or event to be fair and equitable. Well, consumers are not always fair and equitable either. They vote with their hearts, minds, and feet in response to their own interests. The sports market is saturated by the major franchises, federations, media partners, sponsors, influencers, agencies, and investors willing to take your money. How many asked what you wanted and were willing to pay? The days of ‘build it and they will come’ have long gone. Technology has not only given fans control of what they consume, when and where but also what they want to block out or avoid.
All sport, including the Women’s EURO 2022, can benefit from TikTok, YouTube and Instagram but sustainable growth requires more than just content and consumption. Whatever your choice of sport this summer, make sure you enjoy it with a ‘Coke and a smile’!