CATEGORY ANALYSIS: AUTOMOTIVE BRANDS
tagged: branding category analysis golf marketing olympics soccer sponsorship strategy tennis
posted on April 5, 2018
Sponsorship, and particularly the sponsorship of sports entities, is a high priority for brands that operate within the automotive space. Rights holders prioritize automotive sponsorship as a marquee deal; and high profile events can typically attract a matching brand quite easily. The question at that point becomes: what automotive sponsorship is the right fit for my event or property's audience? What brand aligns with my audience values, as well as my own? As consumer perspective on individual car ownership shifts, automotive brands are increasingly using sponsorship as a tool to promote products and services in line with societal concerns.
CATEGORY LANDSCAPE
According to ESP, three automotive companies launched or bought shared mobility car services in 2016, including GM (Maven), BMW (ReachNow) and Ford (Chariot). Ford has expanded further into shared mobility outside of automotive options with the Ford Go Bikes found all over San Francisco. Ford’s involvement allowed the bike share company to expand from 700 bikes to over 7,000. Automotive brands are promoting their hybrid and electric options more frequently than ever before.
Within the top sports leagues, as well as additional sponsorship categories, automotive brands hold one of the top spots by money spent. Ford Motor Co. and Toyota Motor Sales U.S.A. both ranked in the top 10 of sponsors by money spent in 2016, with $175-180M and $165-170M respectively. Looking at individual sectors, automotive sponsors are one of the largest deals a rights holder can sign.
Sources: NBA, NHL, MLB, Soccer, Music and Fairs.
Taking a closer look at several important sponsorship segments for the automobile category, we will determine important assets, ideal partners and common methods of promotion. Properties include:
- Soccer (Domestic and International)
- Arts & Entertainment
- Olympics & Governing Bodies
- Big 4 American Leagues
- Tennis & Golf
SOCCER
There are a few major players in the soccer sponsorship realm, each brand with its own goals and tactics. Audi is a brand with a higher quantity of deals in multiple markets and leagues, while others, like Chevy or Nissan have specific focus within different aspects of the sport.
National Teams
Two big automotive spenders in soccer are Audi and Chevrolet. Audi, as evidenced by the chart above, is the main auto sponsor in North America. The brand began sponsoring U.S. Soccer in 2014 ahead of the FIFA World Cup in Brazil, following that deal up with one in professional soccer in America the following year.
Audi has been willing to include experiential components to its activations. For the 2014 FIFA World Cup, the brand used Audi A8’s to illuminate an LED screen displaying tournament results. As Audi has approached soccer in the US from the top down (at least as a corporate, non-local entity), it will be interesting to follow the continued fallout from the United States Men’s National Team’s (USMNT) failing to qualify for the 2018 tournament. The brand is currently not listed as a sponsor of U.S. Soccer. No word on if that status is due to the USMNT or the USOC deal with Toyota.
Making inroads to soccer on an international scale is Nissan, which signed a deal with the Mexican National Team in 2016. That multi-year sponsorship deal is in conjunction with El Tricolor’s US tour of matches and included in-stadium advertising as well as a media partnership with Univision. Nissan holds the designations of the Official Automotive Partner of Pancho Villa’s Army, the Mexican National Team supporter group in the US.
MLS
As a sponsor of Major League Soccer (MLS), Audi was the presenting sponsor of the 2017 MLS Playoffs. The brand had activation rights at both MLS Cup and MLS All-Star Game. Local Audi dealerships have also taken an interest, signing deals with MLS teams in Seattle, Portland and San Jose.
Source: Audi Player Index
Nissan has also made a very limited foray into the MLS with a team sponsorship of NYCFC as a founding partner.
INTERNATIONAL LEAGUES
Audi has not been as active in the international soccer spending arena, though the brand does have deals with perennial contenders in Bundesliga and La Liga: FC Bayern Munich and Real Madrid. However, one of the most discussed soccer sponsorships in the automotive industry does not belong to Audi; that dubious honor falls to Chevrolet’s kit deal with Manchester United in 2012. Chevy bet big on Manchester United, only to have circumstances surrounding the team change drastically soon after the ink dried.
Chevy and Manchester United signed a $559 million deal to place the Chevrolet logo on kits from 2014-2021. The automobile maker was paying for the high coverage Manchester United entails with English Premier League (EPL) and UEFA viewership. The EPL reaches 643 million weekly TV households globally. Champions League broadcasts add an additional 360 million TV households that tune in. Chevy wanted an in with the 659 million strong fan base with heavy population centers in Asia-Pacific. What Chevy received was a Man U that lost its manager and its place in the Champions League and associated exposure.
Source: Manchester United, December 13, 2017, Match Report
It’s been speculated that the Chevy-ManU deal isn’t as big of a bust as originally thought. Chevy itself states it’s happy - only 8 months, in fact, after the previously quoted article. Though GM stopped selling Chevys in the UK in 2016, the sponsorship is still meaningful. Exposure has met expectations, with fans in Russia, China, Brazil and the Middle East sporting Chevy-branded ManU jerseys. Since 64% of Chevy sales are made outside the US, numbers are matching up for the brand.
In European leagues, Nissan soccer sponsorship include deals with Manchester City of the EPL. The automaker also replaced Ford as the sponsor of the UEFA Champions League 2014.
ARTS & ENTERTAINMENT
This is a sector where sponsors have been able to test their creativity. Sponsorship within award shows, fashion, music and film is long-running, but much less explored than sponsorship within the sports sector.
GM dips a toe into arts and entertainment, but both its deals and its prominence lag behind the others. Currently, GM brand Chevrolet is the presenting sponsor of the Test Track at Epcot in Walt Disney World, where GM is also the official vehicle. Previously, Chevrolet also sponsored the Woodward Dream Cruise, a classic car cruise in Detroit. The brand dropped the sponsorship last year for unknown reasons.
FASHION
Major brands within the category include Audi and Mercedes-Benz, though Lexus and GM have found their niches as well. Lexus, in fact, entered its spot in the market (namely with New York Fashion Week) through Mercedes’ exit in 2015. Perhaps the event didn’t garner enough buzz, but Fashion Week was no longer a fit for Mercedes. It is likely that Fashion Week attendees already know about Mercedes - and if they want one, they own one. Lexus has flown much more under the radar and has much more room for growth within the luxury sector. Lexus has chosen to forgo title sponsorship, allowing New York Fashion Week to go forward unbranded. This gives the event and sponsorship a more authentic feel to the targeted audience.
FILM
Media exposure is one of the largest and most important components of deals within the arts and entertainment sector. Audi’s sponsorship of the Emmys and various film and television shows, Mercedes-Benz’ Justice League deal: all included prominent commercial and media activities. Mercedes was able to garner prominent placement in the film. It also received the ability to produce Instagram stories in conjunction with DC’s Custom Creative Studio. There was an additional marketing spend including a TV spot, print, online and OOH advertising.
In film, Audi partners with cutting edge platforms and up and comers like the Iron Man franchise, Showtime, Netflix and 50 Shades of Grey. Audi uses film and television partnerships to promote its vehicles and use them as an engagement tool. Hyundai, in particular, has noticed Audi’s success with Marvel, and signed a two-year deal with Marvel/Netflix in 2015 for placements in “Daredevil”, “Jessica Jones”, “Luke Cage” and “Iron Fist.”
AWARDS
Audi has been willing to co-brand with other entities and flex its creative muscles with its entertainment sponsorships. The campaigns and commercials done in conjunction with its Emmys sponsorship have been particularly memorable. In 2016, Audi partnered with Airbnb to run a promotion. It included a stay at an exclusive house with a complimentary Audi. Advertisements were aired during the promotional period and live broadcast. This campaign tied in neatly with Audi’s aim to provide its consumers with experiences, not only material goods. Last year, Audi took three memorable songs and turned their cars into an engine orchestra; this promotion featured three commercials during the live broadcast. Songs included were the themes from Cheers, Star Trek and The Mary Tyler Moore Show.
MUSIC
Mercedes has been willing - if not as successful - at trying new things with entertainment sponsorship. The brand signed on to sponsor the first US Rock in Rio festival in Las Vegas in 2015; unfortunately, that festival has not returned since. Mercedes sponsored a stage, marking the second time in festival history, and the brand did it well. Rock in Rio was theoretically a great fit for Mercedes. It is not a one-genre festival, it attracted attendees of all demographics and the brand was able to activate onsite. A festival price tag is pricey, and so are Mercedes. Those combined factors made it a desirable partnership. If the brand had known it would be a one-shot, would it have made the same investment? Probably not, but this partnership was likely worth it. For this event, Mercedes’ tagline, “Best or Nothing” was both prophetic and, unfortunately, applicable.
Mercedes has made life a little bit easier and a bit more fun for music-loving Canadians. In its 2017 sponsorship of Live Nation Canada, the brand created opportunities for itself and for its drivers. Mercedes received onsite exposure with a co-branded and applicable to both entities “Be Moved” tagline. Brand drivers were able to take part in Mercedes-Benz Star Access, which allowed local dealerships to create experiences.
OLYMPICS & GOVERNING BODIES
Toyota’s deal in 2015 with the International Olympic Committee (IOC) has almost completely taken over this particular segment for the automotive category. As a sponsor part of The Olympic Partner Program, Toyota (and other TOP sponsors in other categories) not only has rights with the IOC and Olympic Games, but with National Olympic Committees (NOCs) and National Governing Bodies (NGBs). In the announcement regarding Toyota’s deal with the IOC, that aspect was covered as follows:
Since Toyota’s TOP deal was signed, numerous NOCs have signed on with Toyota, listed below. Previous sponsors and circumstances are noted in parenthesis if known.
- USOC - United States (BMW, expired at end of 2016)
- BOA - Great Britain
- AOC - Australia
- CNOSF - France (BMW)
- DOSB - Germany
- NOC*NSF - Netherlands (Volkswagen, expired at end of 2016)
- CONI - Italy (Fiat)
- TTOC - Trinidad & Tobago
- JOC - Japan
NATIONAL GOVERNING BODIES
Deals with NGBs have been on the rise for Toyota, largely in conjunction with the Pyeongchang 2018 Winter Olympic Games. Notable NGBs signing with Toyota include U.S. Ski and Snowboard, U.S. Figure Skating and US Speedskating.
Toyota’s first post-IOC deal was with U.S. Ski and Snowboard, becoming the Official Automobile of the American snowboarding and freeskiing teams as well as title sponsor of the US Grand Prix event. Important to note: Toyota’s inroads with an NGB prior to the USOC’s deal with BMW expiring, and the notable exclusion of official automobile status for the alpine team. However, last year, Toyota became the Official Automobile for the NGB as a whole, claiming the entire U.S. Ski and Snowboard Team, following the expiration of Audi’s five year contract extension signed in 2012. The expanded Toyota partnership also includes brand presence at the U.S. Alpine Championships and domestic World Cups for all sports, as well as uniform logo exposure.
Post-BMW expiration, U.S. Figure Skating and US Speedskating signed deals with the new TOP sponsor, and renewed a pre-existing sponsorship with USA Hockey. New athlete deals were also on the table with freestyle skiers Gus Kenworthy and Torin Yater-Wallace. These deals were added to a previous endorsement with snowboarder Chloe Kim.
INTERNATIONAL GOVERNING BODIES
Though booted from U.S. Ski and Snowboard, Audi remains the title sponsor of the FIS Ski World Cup series until 2022. This deal, signed in 2012 and extended in 2017, added to Audi’s 15 year backing of the sport and competition. This deal is worth an estimated 5M Euro annually. While the benefits of TOP sponsor deals with the IOC may occasionally benefit smaller NOCs - like in the case of Trinidad & Tobago linked above - it is unfortunate the deals can supersede all previous relationships with brands that clearly care and promote individual sports as in the case of Audi and skiing.
BIG 4 AMERICAN LEAGUES
Each of the Big 4 (NFL, NBA, MLB and NHL) have chosen to work with different automobile brands. Most deals do not extend to each team within the league. Interestingly, official league sponsors are not always the most active at the team level.
NFL: HYUNDAI AND FORD (TRUCK)
National Football League sponsors have been in the spotlight during the past season. Brands were forced there by Papa John’s comments regarding the “Take A Knee” protests. The New York Times reached out to all NFL sponsors, and the two automotive brands had differing levels of support:
The NFL is also the only Big 4 league juggling two automotive sponsors, opting to sell Hyundai a non-exclusive deal, leaving the truck category open after GM failed to renew with the league in 2015. This non-exclusive deal is rumored to be valued around $50 million per year. During the following year, Ford capitalized on the open Truck category, adding the NFL league sponsorship to the 16 team sponsorships it already held. Ford had a social media activation ready to go, launching the “Ford Tough Offensive Line of the Week” recognition. This weekly designation ultimately leads to Offensive Line of the Year award at NFL Honors.
NFL Teams
Ford holds other sizable deals within the NFL. One of the longest running is with the Dallas Cowboys, with whom an extension was recently signed, resulting in the naming rights to the team’s new headquarters and indoor practice facility in Frisco, Texas.
Mercedes-Benz has made a splash in the world of NFL naming rights as well, with two stadium deals in the NFC South division: the Atlanta Falcons’ Mercedes-Benz Stadium and the New Orleans Saints’ Mercedes-Benz Superdome. First came the deal at the Superdome, signed on a 10-year deal in 2011, designed to make Mercedes part of the Gulf South’s rebuilding. Since the signing, the Superdome has played host to numerous prestigious events. Soon after, coinciding with the Mercedes headquarters move to Atlanta, the new Falcons stadium had an opening for a title sponsor. Mercedes jumped on the deal, signing on for 27 years and gaining rights to car displays, special activations, VIP treatment for Mercedes owners and other components to ensure that Mercedes can deliver an immersive experience while onsite at Falcons home games and the 2019 Super Bowl.
NBA: KIA MOTORS
Tied for second in the National Basketball Association’s most active sponsor classification, automotive sponsors are 3.8 times more likely to sponsor an NBA property than the average of all sponsors. Of that category, 45% of NBA properties report a Kia partnership. That number shows how outstanding Kia has done to be the automotive brand of the NBA since it signed on in 2008, with extensions in 2013 and 2017. The brand has associated itself with some of the NBA's most valuable assets, including:
- All-Star Game
- Tip-Off
- Performance Awards
- All-Star MVP Award
Kia’s 2014 extension added the luxury vehicle designation. The brand also became an official partner of the WNBA and the D-League (now G-League). Kia also has deals with 14 NBA teams and LeBron James. The brand has put its stamp on the NBA, even with participation at the team level from other automotive brands.
MLB: CHEVROLET
In a similar situation as automotive in the NBA, the industry is tied for second in Major League Baseball’s most active sponsors, also being 3.8 times more likely to sponsor than the average. Chevy is the top spender in that category. MLB’s partnership with Chevrolet dates back to 2005, with a multi-year renewal in 2016. Within this renewal, Chevy continued as the league’s official vehicle. The brand also became the official automotive sponsor of the MLB and USA Baseball’s collaborative Play Baseball initiative. Chevy also has exclusive category rights. It is the presenting sponsor of two major awards: the Ted Williams All Star Game MVP and the World Series MVP.
NHL: HONDA
The National Hockey League is the most interesting league to analyze regarding the automotive category. League sponsor Honda is not ranked in the top 10 spenders, but four other auto-related brands are in those rankings, including: Enterprise Rent-a-Car, Ford, Lexus and Toyota. The automotive category is the most active for the NHL (as of 2016). Automotive sponsors are 3.4 times more likely than the average to sponsor an NHL property, which ranks first among categories.
Honda celebrated nine years as the Official Vehicle of the NHL in 2016, and has tried a myriad of ways to become synonymous in the fashion of Kia/NBA. One attempt includes 3 years as the title sponsor of the NHL All-Star Weekend. This campaign included the title sponsorship to both the All-Star Game and Skills Competition.
But the competition is as fierce in the automotive category as it is on the ice. Not even including the top four automotive brands listed above, Motor City’s gone in another direction. The Detroit Red Wings signed a sponsorship deal with Chevy in 2015, and the new Little Caesar’s Arena has now signed as well, making the brand the official vehicle of three sports and entertainment properties: the venue, the NHL franchise and the MLB team (Detroit Tigers, who play at Comerica Park). Chevy also has deals in place with Fox Theater and Olympia Entertainment.
GOLF & TENNIS
The final sector we’ll explore within the automobile category is golf and tennis. These two sports often boast very similar audience demographics.
GOLF
Golf is an active category for automobile sponsors, with three tournaments titled with auto brands, including the Honda Classic, the BMW Championship, and the most recent addition, the Genesis Open. Hyundai jumped on the chance to replace Northern Trust at the Los Angeles PGA event. The Genesis was previously associated with the Tournament of Champions event in Hawaii.
Mercedes has a long relationship with golf sponsorship, but changed the brand’s approach around 2008. The brand decided association with golf and association with the pinnacle of golf were worth significantly different amounts. Mercedes had a similar approach with tennis, noted later. After nearly three decades involved with the sport, Mercedes signed on specifically as an International Partner at The Masters. The brand increased its sponsorship level in 2014, becoming one of only three Global Sponsors (the others being AT&T and IBM). Additionally, the PGA Championships was another opportunity where Mercedes has established itself as the Official Vehicle.
One of Mercedes newest sponsorships is as the Official Car of the WGC-HSBC Champions tournament, which is unofficially known as Asia’s major. While technically the only non-major golf sponsorship, WGC-HSBC is an exclusive event of high caliber. It represents the best way for Mercedes to break into the Asian market through sponsorship. Mercedes has also signed on as a sponsor to a third major tournament: The Open.
TENNIS
Mercedes followed a similar tactic with tennis. The brand had a 13-year sponsorship with the men’s ATP Tour it chose not to renew in 2008. The following year, Mercedes chose to sign a four year agreement with the US Open in a $35 million deal that replaced Lexus. When signing this agreement, Mercedes-Benz USA’s vice president of marketing, Stephen Cannon, said,
“This is one of those that is perfectly consistent with some of our other partnerships. Like with golf, we dropped our tour event in favor of the PGA Championship and the Masters, knowing that majors are a different animal than a tour stop. That analogy applies for me to the ATP. Tennis is a great sport, but you are guaranteed inside of a major to get the press coverage and the customer interest.”
This original agreement has been extended, as Mercedes is still a sponsor of the tournament today. Mercedes is probably one of the brands with better recall among both players and fans. The brand provides the tournament courtesy cars, has branding on the sides of the court, and in all men’s matches, has logo placement on the sides of the nets as official backer of the men’s tournament.
