The Use of Integrated Marketing Communications in the Volvo Ocean Race

Marketing Communications

Definition

Marketing communications: The communication of information which facilitates or expedites the exchange process.  The role of marketing communications is to inform, persuade, remind, reassure the customers and differentiate the organisation in the minds of the customers.

There are three requirements for successful marketing communications :

 RELEVANCE                   ORIGINALITY                       IMPACT

Communication is about engaging with your target market; 

Sender encoding     =>    Message (Medium) =>      Receiver encoding

There are several categories of marketing communications, such as Advertising, Personal selling, Public Relations, Sales promotion, Direct marketing, Internet/Interactive, Post-Modern.

 In a group, these are known as the “Communication Wheel”

 Increasing focus on communications

Traditionally, marketing communications were based on the premise that sale of a product must be immediate or direct for advertising to be considered effective.  For example, a good advertisement should:

·                     Attract attention (awareness)

·                     Stimulate interest

·                     Create a desire

·                     Bring about action

(AIDA model)

However those beliefs have now changed, sales no longer have to be immediate or direct, rather marketing communications should;

• ð     Prompts trial
  
• ð     Causes the brand to be added to the consumer repertoire
  
• ð     Works through peoples attitudes with a view to changing their behaviour
  
• ð     Establishing a relationship with the consumer e.g through a social media strategy  (a good example is Dove's Campaign for Real Beauty Campaign and Johnny Logan's McDonalds Eurosaver)
  

Now we have COMMUNICATION objectives as opposed to SALES objectives.

This shift from sales objectives to communication objectives is one of the factors which has given rise to the concept of Integrated Marketing Communications.

Integrated Marketing Communications           

Definition

It is defined as a concept of marketing communications planning that recognises the added value of a comprehensive plan that evaluates the strategic roles of a variety of communication disciplines – list al….and combines these disciplines to provide clarity, consistency and maximum communications impact. Synergistic approach to achieving the objectives of a marketing campaign,

 Why do companies take the IMC approach?

 1.                  Synergies (whole is greater than sum of the parts) / cost saving/ less duplication

2.                  Differentiates from competition

3.                  Brings greater accountability

4.                  Provides internal focus

5.                  Greater impact / cuts through clutter

6.                  Efficient and effective marketing communication programs

7.                  Globalisation

8.                  Move from transactional to relationship marketing

9.                  Fragmentation of traditional media

10.              Cynicism towards traditional communication techniques

A good example of a company applying integrated marketing communications would be “GUINNESS IT’S ALIVE INSIDE”.  Instead of different ads for different media, Guinness took one core idea and extended this across their communications mix; sponsorship, advertising, promotion – the fact that all the activities and channels communicated a consistent brand message meant that the campaign was integrated and effective.

The Role of Sponsorship           

Trends

Sponsorship as a form of marketing communications provides many opportunities to adopt an overall IMC approach. This is one of the reasons that sponsorship has the highest growth rate out of all the types of marketing communications. For example in Ireland, sponsorship spend as follows :

2002           €56 million

2007           €113 million     

2008            €135 million

Of this, sports sponsorship currently represents 60% of overall spend.

Another reason for the increases in sponsorship spend is the market reach for major sporting events: for example the Volvo Ocean Race has a combined audience of 1.5 billion

 people.

 Definition and elements

Sponsorship is defined as the financial or material support of an event, activity, person, organisation or product by an unrelated organisation or donor in return for the prominent exposure of the sponsors name and brands.

Sponsorship involves two main activities:

 (1) An exchange between a sponsor (such as a brand) and a sponsor (such as a sporting event) whereby the latter receives a fee, and the former obtains the right to associate itself with the activity sponsor.

(2) The marketing of the association by the sponsor. Both activities are necessary if the sponsorship fee is to be a meaningful investment.

Why Sponsorship?

1.      Access to specific audiences / Good “Fit”

2.      Increased corporate/brand awareness and identity

3.      Support new product launch

4.      Promote morale of workforce

5.      Improvements in brand reputation / brand equity

6.      Enhances community relations and goodwill

7.      Extends distribution

8.      Enhances media coverage/ PR activity/media leverage

9.      Forge links between a brand and a particular market segment

10.  To build relationships with key audiences/ change target audiences perceptions

11.  Good integration with other elements of marketing communications.

However, despite the many benefits, organisations need to be aware of several drawbacks with this type of marketing communication.

Potential problems with Sponsorship

·                     Unforeseen circumstances; weather / industrial disputes, terrorism, war, political uncertainty, scandals, disease epidemics.  E.g., 2001 outbreak in UK of foot and mouth disease. Many events cancelled such as St Patrick’s Day Parade, and remaining matches in Six Nations Rugby Championship.

·                     Adverse publicity with team, person or event 2002 World Cup, Roy Keane and Mick McCarthy.

·                     Alienation of opposition fans e.g. English premiership football league

·                     Distraction levels / by the event itself or ambush marketing

Factors to consider when selecting an event 

1.                  BRAND IMAGE: Is the event consistent with the brand image, and will it benefit the image?

This factor is crucial as the organisation needs to establish a genuine connection between the brand and the target audience. In the case of the Volvo Ocean Race, there are a number of links identified by Volvo management between the car manufacturer the event being sponsored;

·                     The race is about adventure, excitement and performance and Volvo want to associate these qualities with their products.

·                     Volvo want an emotional link with their brand; the Volvo Ocean Race is all about

human drama and emotions with the finest sailors battling it out with their peers as well as the elements

·                     Green credentials : natural association between the environmentally friendly nature of the sport (wind power only used, unless in case of emergency & in-port racing and Volvo cars designed with greater energy efficiency and less environmental impact.

Another example is PUMA who decided to sponsor the Volvo Ocean Race on the back of their success in motorsport: these type of sponsorships strengthens the brands position in the active lifestyle apparel arena. 

2.                  MARKET REACH : Does the event offer a strong likelihood of reaching the desired target audience? Is the event or product recognised by the sponsors target audience?

In the case of the Volvo Ocean Race, there is quite a broad demographic and geographic reach:

-         Appeals to men and women

-         Appeals to both serious sailors and armchair enthusiasts

-         8 month time span

-         Five continents (Global appeal)

-         Ten ports around the world (Local appeal)

This broad appeal means that there is a high likelihood that Volvo’s sponsorship of this race will reach the desired audience both for Volvo and the other race sponsors/partners/suppliers.

3.                  CONFUSION? Is this event one that the competition has previously sponsored, and is there a risk in confusing the target audience as the sponsor’s identity?

For example, Coca-Cola paid $250 million to be the official soft drink of the national Football league (NFL) for a five-year period. After sponsoring the NFL for several years, a general survey asked football fans to name brands that sponsor the NFL. 35% percent of the respondents named Coke, however 34% identified Pepsi-Cola as a sponsor.

 For the Volvo Ocean race, there was only one former commercial sponsor (Whitbread), also the Royal Navy Sailing Association. But Volvo have ensured that the link is with them, not Whitbread.

4.                  CLUTTER Is the event cluttered?

Like every “advertising” medium, an event sponsor typically competes for signage and attention form every other company that sponsors the event. The problem with sponsorship clutter is that a brand can get lost unless it is a prime sponsor.

In the case of VOR, while there are a number of sponsors, due to the limited number of teams in the race, the risk of clutter is reduced.  Also from the perspective of Volvo, their branding is on all the boats in the race, so their brand is quite prominent.

5.                  Does the event complement existing sponsorships and fit with other marketing communications programmes for the brand/product?

Many brands sponsor multiple events. In the sprit of integrated marketing communications, it is important that these events “speak with a single voice”.  An excellent example of this is Aviva, who have a distinctly sporting them to their sponsorship activities : 

·                                Australian Open Grand Slam tennis tournament.

·                                Aviva Southern Aurora solar car, an entrant in the 2007 Panasonic World Solar Challenge.

·                                Delta Lloyd team are taking part in the Volvo Ocean Race

·        Aviva Open Singapore (Badminton)2009

·                                Sponsoring Dee Caffari in the Vendee Globe : solo, non-stop, round the world sailing race 

6.                  Is the event economically viable 

In the case of Volvo Ocean Race : Cost of competitive campaign is estimated to be between €13 million and €17 million ; over 18 – 24 months this represents a cost effective investment.

Types of Sponsorship 

There are three types of sponsorship: 

1.                  Event : Sport is the main type of event sponsorship, the majority of spend inIreland goes to this category.  Puma actively engage in sports sponsorship ; for example, Sponsored 16 national teams at this years Olympic games, including Usain Bolt who won three gold medals. Puma were the first the first consumer brand to sponsor their own boat in the Volvo Ocean Race with an investment of €40 million. Puma also like to build brand ambassadors in order to ensure an emotional engagement with the brand.  Aviva are an example of a company who have also taken this approach, with their sponsorship of sailor Dee Caffari (the first woman to sail non-stop around the globe), currently competing in the Vendee Globe sailing race.

2.                  Broadcast Sponsorship : Recent research in the UK predicts that “within ten years, half of all television programmes will be sponsored”. E.g  Cadbury’s sponsorship of UK soap, Coronation Street. Miller beer and the Sopranos. 

3.                  Cause Related Marketing/ Sponsorship (CRM) Cause related marketing is a partnership between a for profit company and a non profit organisation, which increases a companies sales, has a positive impact on brand or corporate image, while raising money and visibility for the cause.  Example : Tesco “Free computers for schools” 

Approach to Sponsorship 

Sponsorship needs to be managed in a strategic fashion.  The best strategies are those that are based on identifying business objectives and brand and marketing objectives and, from that, identifying how sponsorship can deliver on those objectives.  The brands that are spending more on sponsorship have to approach it in a strategic way; but only the senior brands have taken the lead in terms of where sponsorship fits their business and how strategically it is used. 

Volvo look at sponsorship from a strategic point of view, evidenced by the fact that they have set up a dedicated company (Volvo Event Management, VEM).which is responsible for the planning and implementation of all Volvo’s sponsorship activity.  The purpose of VEM is to ensure

ð     optimum positioning of the Volvo brand

ð     Manage information

ð     Promote and protect strategic initiatives

How Sponsorship integrates with other methods of marketing communications

Companies that sponsor events must support the sponsorships with adequate advertising, point-of-purchase, and publicity. It’s not worth spending money for rights fees unless you are prepared to promote the endorsement to get the most from the relationship. Therefore sponsorship is not adequate as a stand-alone policy but must be incorporated into an integrated marketing communications (IMC) approach.

Organisations are recognising the potential for an integrated approach to sponsorship.  Puma hired a new PR firm Capitalize to leverage it’s sponsorship of the VOR 2008 – 2009.  The objective is to activate a comprehensive experiential PR, promotional, in-store and digital media campaign.  By way of example: they will display a replica of Puma’s raceboat “Il Mostro” in London and Galway which will become a focus for a number of other communications streams throughout the course of the Volvo Ocean Race.

Another example of combining marketing communications: During the Volvo Ocean Race, there are ten ports along the route.  Each port uses their stopover as an opportunity to promote tourism, inward investment and a general promotional platform.  Also, Volvo have introduced “in-port racing” which has given rise to further marketing opportunities; 

ð     Raises profile even further

ð     Gives sponsor representatives the chance to enjoy world-class yachting

ð     Provide a focus for shore side hospitality

ð     Product promotion

ð     Chance for fans to partake in the electric atmosphere of the worlds roughest, toughest race 

For the case of the Volvo Ocean Race, I will look at the different ways in which their sponsorship activity is properly supported and integrated into the other forms of marketing communication. 

For the Volvo Ocean Race, the most relevant communication methods are Advertising, Public Relations, Internet/Interactive, and Post-Modern Marketing.

Advertising

Advertising is defined as any paid form of non personal communication about an organization, product, service, or idea by an identified sponsor.  Examples are print / press, TV, radio, Internet, Cinema, Outdoor (billboards, ad shells, bus wraps)

 The Volvo Ocean Race is not heavily advertised in general press, but can be seen in magazines such as the National Geographic.  They could consider advertising in mass market  publications, much as Aviva have done by advertising their sponsorship of the Vendee Globe in Time magazine. 

Volvo have taken significant advantage of multi-media adversting ; This has been facilitated by the  advent of the Internet, broadband access, and developments in satellite technology. The Volvo Ocean Race is considered one of the most visible and media-friendly round-the-world race, with day to day coverage of the eight month long race by using state of the art satellite and digital technology.  The race can be followed on the Internet. Each team has its own website which can be accessed through the main www.volvooceanrace.org.  Each boat is equipped with high-tech media studio to provide data.  

Other means to keep up to date on the race include mobile, Google Earth, Audio and Podcasts. 

Volvo also advertise by providing wall papers, screensavers, image gallery, video downloads, virtual yacht tour of the Volvo Open 70

 Volvo have also taken the opportunity to release three special edition models, the V70, XC70 and the XC90 for the 2008/2009 Ocean Race. Once can also purchase a full range of clothing, footwear (men women & children), accessories, models, books and DVD’s, all emblazoned with Volvo Open Race and sometimes Puma.

Advertising is a key element to support any sponsorship activity. As stated earlier, an organization will not realize the full benefits of sponsorship if it does not effectively advertise their endorsement of the event.

Interactive / Internet Marketing

This is an interactive media which allows for a back-and-forth flow of information whereby users can participate in and modify the content of the information they receive in real time. The major interactive medium is the Internet. Mainly perceived as useful for advertising, it can actually be used to communicate other elements of the promotional mix including sales promotion, direct marketing, and public relations.

 Price Waterhouse Coopers values the online advertising sector in Ireland at between €50m and €60m>  it is the most measurable medium; can count how many times a person clicks on a website, how many times they click on an ad, what they do after clicking on the ad (eg. Buying the product or service advertised).

Advertising on mobiles : 

Ireland has almost 100% mobile penetration compared to 50% PC penetration.  Vast majority of people are walking around with advertising space in their pockets.

As an example of interactive marketing : BMW commissioned a series of short films designed to be viewed on the internet.  Short films had famous directors such as Guy Ritchie, were 5 – 7 mins long and only shown on the internet.  30 sec trailers were shown on TV.  100 million people viewed the films. Hit target market : half of visitors were male, with broadband access and excess of 75K in income.  This moved the genre into the new world of “Interactive Communication”

Volvo introduced another example of the interactive marketing to promote their sponsorship activity ; The Volvo Ocean Race Rush Game. The

 RUSH game is on the Internet and based around a rescue team that picks up a mayday message from one of the yachts with a sick crew member. They have four minutes to get from their homes to the rescue boat. In a four screen video interface you need to give the right directions to help out the four team members. Vehicles featured in the game are the Ocean Race versions of the Volvo V70 and XC70 and XC90.

Public Relations

Public Relations is defined as management function that evaluates public attitudes, identifies the public policies and procedures of an individual or organization with the public interest, and executes a program of action to earn public understanding and acceptance.

Publicity is defined as non-personal communications about an organization, product, service, or idea that is not directly paid for nor run under identified sponsorship.

 For Sponsorship events, media coverage is a critical factor and it is important to build good media relations.  This is achieved through press releases, ensuring that the media are present at the in-port events and keeping them informed of developments. For example the Aviva Ocean Racing website, which is tracking Dee Caffari’s progress in the Vendee Globe, has a dedicated section of the website for the media; press releases, background information and contact details for press enquiries.

Post Modern Marketing Communication

This category includes:

WOMM or Word of Mouth Marketing : Johnny Logan Eurosaver campaign:  McDonalds BEBO site received 5000 hits & 300 friends for Johnny. As it stands, it now has 25000 hits and 800 friends for Johnny.  Anecdotally, the ad became a major talking point among the teenage demographic.

Social Marketing

 : The process of co-opting users of social network sites into unwittingly becoming vectors for your product. For example Nike have a social networking site where members can post their times, form marathon teams and post new years resolutions.

Viral marketing :

 Creating entertaining or informative messages that are designed to be passed along in an exponential fashion, e.g.YouTube is a medium for viral marketing : the Volvo Ocean Race trailer for the RUSH video game is on YouTube, with in excess of 7,000 hits since it was posted.

Ambush marketing ;

 the literal definition is  ambushing consumers with marketing information e.g. CBS is advertising new shows on eggs using laser etching.  However, the most relevant definition of ambush marketing for sponsors is where companies that are not official sponsors of an event undertake marketing efforts to convey the impression that they are.  There are many examples of this such as : 

·                     1984: Kodak sponsors TV broadcasts, despite Fuji being Olympics' official sponsor. Fuji returns favour at Seoul 1988 Games

·                     1992: Nike sponsors news conferences with the US basketball team. Michael Jordan accepts the gold medal for basketball and covers up his Reebok logo

Ambient Advertising ; This is the process of surrounding the target market with advertising material e.g. advertisements on till receipts, street furniture, taxis, petrol nozzles. Need large gatherings of people; supermarkets, car parks, leisure arenas.  For Volvo, the in-port racing event represents a significant opportunity for ambient advertising as there will be large numbers of people gathering at the port to greet the teams and view the in-port racing activity.

The Future of Sponsorship 

Outdoor sponsorship

Sponsorship is increasingly becoming an outdoor event, due mainly to the rise in popularity in sporting events among the general public, as well as the increasing use of ambient advertising as a means of communicating with the consumer.

 As mentioned, sponsorship spend in Ireland is the largest category (60% of marketing communication spend is devoted to sponsorship).  The rising popularity of spectator sports is evidenced in the fact that 60% of the total sponsorship budget is spent on sporting events.

Outdoor sponsorship provides many opportunities for ambient advertising.  An example is the company 360 deg displays…..8 foot tall revolving displays, animated advertising from digital JPEG and MPEG files.  Can hold up to 7000 images and can be changed in minutes.  Displays are seen by 1.7 million every two weeks. These have been introduced at Blanchardstown,

Liffey Valley, Mahon point, and larger units are available for mall car parks and other commercial outlets. However, they were originally launched during the Irish hosting of the Ryder Cup.

Ambush Marketing

Ambush marketing continues to be the biggest threat for major sponsorship activities.  There are no legal provisions to combat ambush marketing, as the legal position is unclear.  In other words, while it might be unethical, it is certainly not illegal.

As the organiser of the major sport event in the world, the International Olympic Committee has been working to protect the position of the official sponsors by adopting specific measures to combat ambush marketing. The 1996 Atlanta Games introduced for the first time a “name and shame” campaign in an attempt to denounce ambush marketing practices. Subsequent Olympic events have seen the introduction of local legislative measures to try and combat ambush marketing.

 In the future, I expect to see further measures taken on an international level to try and prevent ambush marketing, as this poses a serious threat to the future of sponsorship.

Not-for-profit Sponsorship

The Green Dragon Racing Team is currently participating in the Volvo Ocean Race. This team is part of the Let’s Do It Global not for profit organization which was set up following Galway’s successful bid to host the Volvo Ocean Race this year. Let’s Do It Global has the following objectives :

1.  Set up a schools programme which will introduce young people to maritime activities, careers at sea, marine commerce and trade, the Naval Service, the Merchant Marine and the sport of sailing. Through a structured learning programme, they will experience the areas of learning associated with sailing.

2.  An outreach programme which will link the Irish diaspora in all stopover ports around the world and will deliver an Irish following for the Green Dragon entry. This outreach programme will also assist in promoting Ireland globally.

3. Promoting the sea, sailing, our maritime culture and it’s role in the future of Galway and Ireland in order to ensure that Galway and Ireland reap the long term sporting, tourism and social benefits from our participation in the Volvo Ocean Race 2008-09.

Conclusion

Sponsorship provides many opportunites to apply integrated marketing communcations. Increasing budgets are being allocated by companies to sponsorship as they are recognising the potential in this type of marketing communication. The major players approach sponsorship in a strategic fashion, engaging both internal staff and their customers in the process.

Post-modern communcation methods, traditional advertising, internet and public relations are key to successful sponsorship. 

Ambush marketing needs to be addressed as it is threatening the future of sponsorship.

The key point about sponsorship is that it needs to be part of a integrated marketing communcations campaign, and its popularity as a communcations method is growing year on year.  Event sponsorship, particularly sports sponsorship is the strongest area, however we are also seeing the growth of not-for-profit sponsorship as well as cause related sponsorship.