Brand and trademark infringement in global sports draw red card from CMO council - developing leadership initiative to help brand sponsors and sports franchises secure the trust of their brands
Licensing violations, brand fraud and trademark infringement around mega-sports events will be a new area of study by the Chief Marketing Officer (CMO) Council as billions of TV viewers and football fans gear up for the month-long 2010 FIFA World Cup in South Africa, kicking off June 11. Sports sponsorship and event marketing is big business globally. And easy pickings for brand hijackers, ambush marketers, ticket scammers, online phishers, merchandise knock-off artists, as well as cable, satellite and IP-TV pirates.
According to Forbes magazine, the world's top 10 sporting event brands generate billions in revenue and have brand values ranging from $67 million to $420 million. The FIFA World Cup brand is estimated to be worth $120 million and FIFA, football's non-profit governing body, recently announced record revenue of $1.06 billion in 2009 and a profit of $196 million. FIFA also expects $3.4 billion in commercial revenues (sponsorships, merchandise, hospitality) and television rights for the 2010 World Cup, which is expected to attract more than 36 billion TV viewers during the month-long-tournament involving 32 national football teams.
Doing Away With Foul Play in Sports Marketing
The CMO Council's latest thought leadership initiative, "Doing Away With Foul Play in Sports Marketing," will take a hard look at brand protection challenges and brand degradation issues resulting from the growing incidence of online trademark trespassing, property rights pilferage, as well as ticket and merchandise scams in the global sports market. The market sector is expected to see global revenues of $141 billion by 2012, reports the consulting firm of PricewaterhouseCoopers. Sports merchandise, often the easiest to knock off, generates more than $4 billion in sales.
MarkMonitor, the campaign sponsor and a leader in online brand protection, believes global sporting events are a rich and fertile ground for fakes, fraud and brand abuse, particularly as more of the bigger events are being hosted in developing countries and regions where trademark and property rights controls are less stringent.
Leading up to the global spectacle of the 2010 FIFA World Cup in South Africa, the initiative will gather insights and brand protection perspectives from sports franchise owners, brand sponsors and event organizers looking to safeguard investments, realize better returns, gratify fans, and optimize the event experience. The program will build on the CMO Council's most recent Protection from Brand Infection study in which a majority of marketers (39 percent) polled estimated that the financial impact of brand hijacking, knock-offs and abuse was greater than 5 percent of sales. A surprising 8.2 percent of the 300 marketers surveyed said it exceeded 20 percent of sales.
According to Donovan Neale-May, executive director of the CMO Council.
The 2010 FIFA World Cup South Africa is set to feature sponsors such as Adidas, Coca-Cola, Emirates Airlines, Sony, Visa, MTN, McDonalds, Castrol, and Budweiser, all of whom could face serious brand repercussions should counterfeit tickets, merchandise or web portals prey on the excitement of fans looking to buy a piece of sports history ... Connecting with consumers through passion-brands like sports-franchises and events can have huge repercussions on brand image, value and promise should brand hijackers diminish or destroy customer trust. The goal of this program will be to sensitize marketers to these threats and challenges.
And, while the first team at the 2010 FIFA World Cup does not hit the pitch for many weeks, warnings have already been issued by organizing body, FIFA, alerting fans to fraudulent websites claiming to sell authentic 2010 FIFA World Cup tickets. Industry experts agree that this is just the opening salvo to what will likely be a global flood of shams, scams, and shenanigans around the high profile event. www.fifa.com
At the 2010 Winter Olympics in Vancouver earlier this year, some 12,000 tickets worth $3 million were lost in a rip-off of Olympian proportions. The Coalition to Advance the Protection of Sports logos (CAPS) has seized more than 9 million pieces of illegal merchandise featuring the logos of professional sports teams, colleges and universities since 1993, valued at more than $329 million. And since January, officials in South Africa have seized nearly $6 million of counterfeit FIFA World Cup and Premier League merchandise.
The CMO Council is inviting leading international sports bodies (FIFA, IRB, NFL, NBA, MLB, MLS, NHL, PGA, WTF, etc.), sports industry publications, retail trade groups, property rights holders, media network, and sports sponsorship firms to contribute content, analysis and experience as affiliate partners. There will be a special focus on sports sponsors in the apparel, footwear, auto, consumer electronics, CPG, financial services, food/beverage, travel and hospitality, high technology, sporting goods, media/entertainment, and communications sectors.
Nike, for example, is one of the most valuable and recognized brands and sponsors in the sports business with a valuation of $10.7 billion. On the media side, ESPN has a market value of $35 billion, while Manchester United in the English Premier League is the world's most valuable team brand with equity of around $270 million, reports Forbes. As indication of the business value of mega-sports events, MasterCard reported that the widely watched Six Nations Rugby Championship in Europe earlier this year generated an economic impact of $631 million for the participating countries (England, Ireland, Wales, Scotland, France and Italy).
Donovan Neale-May also noted:
With the massive amount of sports market spend and capital value created, there are many inherent risks and vulnerabilities that can impact revenue, relationships and reputations of sports organizers, teams, host countries/cities and sponsors ... The Internet now has an audience of 1.7 billion connected users and has become an essential channel for engaging fans, delivering information, driving merchandise sales, and selling seats at large sports venues. This virtual world is ripe for exploitation by savvy tricksters, fraudsters and brand hijackers.
The continuity campaign will continue to grow and multiply areas of discussion and knowledge transfer among global marketers. Top sporting events will be targeted for analytics, including the upcoming Commonwealth Games in Delhi later this year, as well as some of the world?s most widely watched and attended sports events:
- IOC Summer Olympics
- ICC Cricket World Cup
- European Championships (Football)
- UEFA Champions League
- IRB Rugby World Cup
- FIA Formula 1 World Championships
- Tour de France
- IOC Winter Olympics
- NFL Super Bowl
Forbes List of Most Valuable Sporting Event Brands in 2010:
$420 million = Super Bowl Brand
$230 million = Olympic Games (Summer) Brand
$120 million = FIFA World Cup Brand
$110 million = UEFA European Football Championship Brand
$106 million = Major League Baseball World Series Brand
$100 million = Daytona 500 Brand
$ 93 million = Olympic Games (Winter) Brand
$ 90 million = NCAA Men's Final Four Brand
$ 75 million = Major League Baseball All-Star Week Brand
$ 67 million = Kentucky Derby Brand
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 Council's 5,000 members control more than $150 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 Council's 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
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 company's 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, visit www.markmonitor.com.