Rugby World Cup brands O2, Marriott Hotels and Heineken have downplayed the expected commercial losses from England’s early exit from the tournament though sponsorship experts believe the humiliation of the defeat bears a damaging cost of association.
England’s championship hopes are over before they really begun and consequently so are the activation strategies for those brands that spent millions of pounds associating themselves to the team. And while personal emotions will fade, there is a hard cost to advertisers, sponsors and all associated businesses.
The World Cup will generate £1bn of direct economic impact, £2.5bn indirect, according to the Rugby World Cup’s rights owners World Rugby. Tickets for England vs Uruguay, along with England’s likely knockout games are flooding back onto the market at a fraction of their original cost, and the same loss in value will be felt across ad revenues. ITV is reportedly set to lose almost a million (£943,820) per game in advertising revenue now England are out.
The fact that brands choose to be tournament sponsors rather than team sponsors, insulates them against an immediate end to their marketing plans, “but the ‘value’ will always be diminished when England are out of the competition,” said Andy Clilverd, commercial director at sports media consultancy Stadia Solutions.
“They are the biggest draw in terms of TV audiences and therefore the sponsors will get less value from their TV facing advertising, perhaps by as much as 25 per cent. However, on the plus side, with the domestic UK TV audience being made up of England, Wales and Scotland – it could have been worse if all three were out.”
Rugby World Cup brands are defiant and have assured that they will continue to sponsor England. Those brands that were approached by The Drum for this article backed the World Cup buzz to carry on until the final at Twickenham, though advertising plans for some will likely need to be tweaked. For example, Beats had planned to ramp up activity around the national team as it progressed further into the tournament despite insulating the brand from an upset by backing England alongside other favourites France and New Zealand.
Brands like O2 activated heavily in the tournament build-up to maximise relevancy, although the circumstances of England’s failure will be of concern. The mobile network said it was here “here for the ups and the downs” and hailed the success of the Wear the Rose campaign, which has generated “5 million acts of support” since it launched in February 2015.
In a statement O2 said: “As proud sponsor of England Rugby for 21 years, we remain committed to our partnership with RFU and the sport of rugby. We'll stand beside the team with the same spirit that rugby is watched, played and enjoyed.
“We are supporters of the England Men's XV, Women's Team and Saxons, and with O2 Touch we have the largest grassroots rugby participation programme in the country.”
Heineken also tried to put a positive spin on the impact of an England-less World Cup despite neutral rugby fans being less inclined to watch games in pubs and clubs now. When England crashed of the football World Cup last year, beer sales rose by just £30,000 during the summer compared to the same period in 2013, according to IRI.
"Of course it’s really disappointing to see the host nation go out at this stage, but there’s still a huge amount more to come for rugby fans,” said David Lette, UK premium brands director at Heineken. “Over the last few weeks, we have witnessed incredible passion from supporters of all the participating nations; and we are sure that this will continue through the knockout stages, and on to a showcase final.
“From a business perspective, we evaluate the success of our sponsorship based on the global impact on the Heineken brand. To this extent, we are already delighted with quality of the tournament and the excitement it has created in all participating markets.”
The aim of the England rugby team sponsorship is not just about driving business for the group, it’s aim is to position Marriott as more than just a corporate hotel group, but a dynamic hospitality company that is relevant and exciting to both business and leisure travellers,” said Osama Hirzalla, vice president of brand marketing and ecommerce at Marriott International Europe.
“It is about driving brand awareness and going far beyond the activation rights by employing creative and engaging activations that really connect with rugby fans and Marriott’s target audience. We are really proud of our England rugby team sponsorship and all that has been achieved alongside the Rugby Football Union.
“Despite the disappointing outcome over the weekend, Marriott Hotels continues to be one of the England Rugby sponsors. We have a long and strong standing partnership with England Rugby and the RFU which covers multiple events inclusive of the Six nations, QBE Autumn Internationals and the Marriott London Sevens.”
The commercial prospects from the tournament are far brighter globally. The World Cup remains a global audience draw, according to Mark Huckerby, senior account director at sports marketing agency Fuse “and whilst UK pubs, bars & rugby clubs will feel the financial impact of England fans staying at home, the likes of Heineken & Coca-Cola will continue to benefit from their global deals through the duration of the tournament”.