WM advertisers are walking in a minefield

CNN business

Billions of people watch the FIFA World Cup every four years, an enticing opportunity for advertisers looking to capitalize on the feel-good fever of the world’s biggest sporting event. But this year it’s a reputation minefield for some of the world’s biggest brands.

Controversies over Qatar’s human rights record have dominated early coverage of the event, leading advertisers to tiptoe to criticism of the country’s treatment of migrant workers and its criminalization of homosexuality.

“There are real concerns about brand safety,” said Liz Duff, head of commercial and operations at Total Media, a London-based agency. “Therefore, the advertising supports the teams rather than the venue.”

But that shouldn’t be easy either. FIFA’s decision to punish players for wearing OneLove armbands to promote inclusion and counteract discrimination has sparked a backlash. On Tuesday, German supermarket chain Rewe ended its partnership with the German Football Association, calling the ban “scandalous” and “absolutely unacceptable”.

Fear of a global recession is also driving companies to cut advertising budgets. And because the tournament is taking place in the run-up to the winter break rather than the summer months, they wrestle with competing priorities.

No matter what, the month-long extravaganza will be huge for sports fans and brands. According to forecasts, companies like Ford (F), T-Mobile (TMUS), Coca-Cola (KO) and Samsung could spend $2 billion on promotions.

It’s easy to see why they’re interested. In 2018, the World Cup attracted a record 3.6 billion viewers. More than 1.1 billion people watched the final live.

With engagement so high, companies are keen to capitalize on the hype and spirit of camaraderie associated with the World Cup.

Coca-Cola’s campaign, titled “Faith is Magic,” features a woman drinking a Coke and suddenly being drawn into a huge street party. Nike (NKE) envisioned scientists coming together to create a multiverse in which the greatest soccer players of all time could compete. Lay’s owner Frito-Lay got David Beckham, Peyton Manning and Mia Hamm to comment on a classic debate: Is the sport called football or soccer?

But the start of the event was marred by reports of brutal working conditions for the migrant workers who built the tournament’s infrastructure and the announcement that the captains of several European teams would not be wearing “OneLove” armbands as doing so would risk penalties .

US Secretary of State Antony Blinken criticized FIFA’s stance on the armbands, stressing that any restrictions on freedom of expression were “worrying”.

FIFA President Gianni Infantino instead delivered a tirade in defense of Qatar over the weekend, which was supposed to be celebratory, stressing the “hypocrisy” of Western criticism.

“Advertisers know that TV audiences will still be there, but will be careful to focus on the teams, players and supporters at home rather than promoting the event itself,” said Mohammed Hamza, media analyst at S&P Global Market Intelligence.

The timing of the event is also a complicating factor for brands, as ads compete with promotions aimed at holiday shopping.

“A European Championship or a World Cup for four weeks in the middle of summer – it’s literally like an island in the middle of the ocean,” said ITV sales manager Mark Trindler on one Industry Podcast last spring. It’s different in the fall, he continued, as companies think differently about where and how they spend their money.

Early data shows advertisers are still ready to whip out their wallets. Telemundo, which owns the Spanish-language broadcast rights to the competition in the United States, said Monday it had just a few ad slots left. It had already broken revenue records for the tournament and managed to onboard more than 20 new advertisers.

French broadcaster TF1 said earlier this month it was making progress on ad orders, noting that “seasonality” could prove to be a boon.

“Demand is stronger in November and December than in July and June,” managing director Philippe Denery told investors.

But the bleak economic backdrop also raises questions about ad spending next month. British broadcaster ITV told investors that while the tournament is expected to boost ad revenue, “there is a high level of economic uncertainty”.

In the end, the total earnings of those broadcasting the World Cup could depend on which teams advance. When squads go further than expected in the top markets, brands will be more likely to want to share in the excitement.

“It will depend on the French football team and their ability to go in as far as possible and if possible [the] definitively,” Denery said. “A lot of people, including us, would really appreciate that.”


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