Tuesday, October 24, 2006

How Man United shirts suit AIG's China strategy

Why is AIG paying England's Manchester United football club 56.5 million pounds over four years to splash its logo across the chests of players such as Wayne Rooney and Cristiano Ronaldo? According to Patricia Cheng of Bloomberg, the tie up defies European advertising industry assumptions that insurance companies and football clubs make poor teammates. In Europe, football attracts a largely male, working-class audience, and brewers, betting companies and home electronics makers dominate shirt sponsorships.

AIG, however, is betting the sport's broad-based appeal in Asia will boost its profile and increase sales. The world's biggest insurer, founded in Shanghai in 1919, is using football to reach consumers in Asia and give it an edge over China Life Insurance Co and Prudential Plc. Man United delivers AIG a link with its more than 40 million Asia-based football fans, 20 million of whom are in China, according to UK market researcher Ipsos MORI.

"Football and insurance companies don't normally fit," said Stephan Schroeder, a management board member at Sport+Markt AG, a Cologne, Germany-based sports marketing consultant. Insurance sales depend more on needs than emotions, he added.

Seamus O'Brien, head of World Sport Group, a Singapore-based sports marketing company that holds sponsorship rights for Asian Football Confederation matches told Bloomberg that in Asia, football transcends the normal sports demographic. "Everyone from the taxi driver to the private banker will turn on Premier League on a Saturday night."

"The major purpose of the sponsorship is to drive revenue, as well as to further globalize AIG's brand recognition, particularly in Asia," responded Chris Winans, a New York-based spokesman for AIG. "We'd never done anything of this magnitude."

AIG's challenge is turning awareness of its brand into sales. However "there's no compelling evidence that suggests a direct link between shirt sponsorship and increased sales," said Simon Chadwick, director of the Birkbeck Sport Business Centre at the University of London. "It's one of those things that's very difficult to prove."

No comments: