Yesterday, we looked at the growing U.S. TV audience for soccer and the opportunities this provides to sponsors and advertisers.
Today, let us look at the financial dimensions of sports sponsorships for the 2014 World Cup in Brazil. Although the investments are huge, it is not clear that they are always the best expenditures of marketing dollars.
According to McKinsey’s Jeff Jacobs, Pallav Jain, and Kushan Surana:
“The Fédération Internationale de Football Association (FIFA) stands to make $1.4 billion from sponsorship deals with 20 major companies during the World Cup in Brazil. That’s 10 percent more sponsorship revenue than from the last World Cup, in South Africa. Although significant, that’s still far below U.S. corporate spending on sports sponsorships, which grew to an estimated $20 billion in 2013 — equal to one-third of total U.S. television advertising and one-half of digital advertising.”
“Considering the huge amounts involved, you would imagine sponsors of athletes and events have clear answers when asked about their return on investment (ROI). You would be wrong. Industry research reveals that about one-third to one-half of U.S. companies don’t have a system in place to measure sponsorship ROI comprehensively. And that’s costly in another way: in our experience, executives who implement a comprehensive approach to gauge the impact of their sponsorships can increase returns by as much as 30 percent.”
Click the image to read more – including ways to assess the performance of sponsorship dollars.
After a few hiccups (such as the introduction of dual subscriptions), Netflix is certainly on a roll again. And a large part of Netflix’s recent success has been tied to its development of original programming, including Emmy-winning House of Cards. This move has changed the business for the industry and drawn emulators like Amazon.
Here is a good infographic that shows “The Economics of Netflix: How to Make a $100 Million Show.” Click on the image for a larger version, and then scroll down to learn many interesting facts about the economics of programming.
Over the last few years, the debate has been growing more fierce with regard to the way TV channel subscriptions are sold to consumers.
On one side of the debate are the service providers who aggressively bundle channels and charge a monthly fee for the bundle — whether the consumer wants all the channels in the bundle or not. On the side are consumer advocates and some government officials who say that people should only have to pay for the channels that they actually want to view.
Now, comes new research from Nielsen that seems to strongly indicate that unbundling channel fees would greatly benefit most viewers. According to Nielsen, the typical household now receives 189 TV channels through subscription bundles. Yet, the typical household regularly watches only 17-18 of those channels.
Click the image to read more from Nielsen.