Higher incomes and a shorter working week have given a huge boost to the popularity of spurting events in China, resulting in rapidly rising attendances and television audiences. The sponsorship and promotional opportunities that this presents are increasingly attracting Chinese and foreign companies which see it as an opportunity to build up brand equity and improve relationships with officials and consumers.
Tobacco companies are particularly keen as an advertising law, which came into effect in 1995, places severe restrictions on more traditional marketing strategies. The dissolution of the State Sports Commission, a body previously under the State Council, also means that the sporting federations are starting to become more proactive in seeking out sponsorship deals.
The benefits of sports sponsorship are most obvious when the sport concerned has a mass appeal, attracts large crowds and generates big television audiences. While most marketing executives believe that there is a subtle rub-off on brands which are associated with a popular sport, the appearance of brand names and logos on televised events lends event sponsorship a clear and easily quantifiable marketing benefit.
Football and basketball, the fastest-growing sports, also attract affluent, young and urban fans who offer a lucrative target market for a wide variety of consumer goods companies.
"These two sports, especially soccer, are incredibly popular. From the point of view of the sponsor, it is seen as beneficial to link their brand to a sport which is very popular," says Mr Richard Avory, senior international vice president of IMG Asia. MG, the firm behind China's football and basketball leagues, has been promoting sports events in China since the late 1970s.
The popularity of football in China can be gauged by total attendances at Marlboro League matches which exceeded 2.8m in the 1997 season. Average match attendance was more than 20,000 ?twice the level in recent years of Japan's ')-League' and even higher than in some European premier leagues (see map).
Perhaps the highest profile sports pro-motion has been Philip Morris' title sponsorship of the Marlboro League ?China's national football league. The sponsorship gives exposure to the Marlboro cigarette brand in a variety of merchandising materials including banners, leaflets, bunting, hats, photographers' jackets and some outdoor media such as billboards and light boxes.
South China Morning Post estimated that
Philip Morris's sponsorship cost the firm Yn15m (US$].8m) in the 1996-97 season alone, with each of the A-League clubs receiving Yn800,000 (US$96,000). But this is still a small proportion of the clubs' total sponsorship and advertising revenues which have been estimated to aver-age between Yn8m and Ynl4m each year.
Tobacco firms have been stepping up their sports sponsorship programmes in the wake of the 1995 advertising law which severely restricts tobacco advertising. The law prohibits tobacco advertising in newspapers and broadcast media as well as public places such as waiting rooms, cinemas and conference halls.
The substantial funding from the tobacco company appears to have some flexibility in the interpretation of China advertising law which also explicitly for-bids cigarette advertising in stadiums. Mr Goddard Kwong, Philip Morris Asia general manager, defends the US cigarette firm's position. "This is not tobacco advertising," he claims. "It is trademark advertising. The signboard does not say Marlboro cigarettes."
Even so, while initially the cigarette company was allowed eight six metre-long advertising boards at each match, this has subsequently been reduced to one. Official estimates say that foreign cigarettes account for four per cent of the 1,700bn units smoked each year in China. Mr Calvin Leung, account director at Grey China & Hong Kong, lends some credence to a rumour he has heard that there is now an internal guideline stating that tobacco companies should pay not less than US$l m for a national-level title sponsorship.
The decision to name this league after a leading cigarette brand has proved controversial, with many media outlets failing to use the word 'Marlboro' in their sports reports. Some 30 newspapers and magazines published in China are devoted exclusively to football. Soccer, the most widely-read of these, has a weekly circulation. of 2.5m, making it one of the 10 most popular newspapers in China.
The most important remaining expo-sure is through television coverage. At a national level, the league is covered by China Central Television (CCTV) Channels 2 and 5 with at least one live match broadcast each week during the season. Entire matches are also broadcast on Star TV across the region. In addition, there are repeats and highlights packages on other sports shows some of which are also broadcast across Asia. At a local level, provincial and city television channels and cable stations cover virtually all the league's matches.
IMG, the promoter behind the league, estimates that one advertising board generates an average of seven minutes of television exposure for a 90-minute live broadcast and between two and three minutes in a 30-minute highlights pro-gramme. The cost of one signboard in one stadium for a whole year ranges from US$100,000 to US$300,000. The average weekly television audience for premier division matches is 40m according to the Chinese Football Association.
Apart from the title sponsor, other official brand sponsors of the league include Castrol, Canon, WC, Fuji, Energizer, Puma, San Miguel and Ford. During the 1997 season, Ford exploited its sponsor-ship to put on a car exhibition at Beijing
Stadium, while Energizer (a leading battery brand) introduced public appearances by a costumed 'Energizer Man' at several of the matches.
Coca-Cola has also been active in sponsoring football in China but it has focused more on grass-roots coaching and youth competitions. The firm estimates that its 100 coaching clinics held over the years (many involving FIFA coach jack Gallagher) have benefited more than 1,500 Chinese coaches and one million Chinese youngsters.
The soft drinks manufacturer also sponsors the Coca-Cola Cup National Youth Football Tournament, in which 50 youth squads from across the country participated in the qualifying rounds. Coca-Cola has also sponsored a variety of other sports and games in China since 1979, including baseball, chess, gymnastics, swimming, table-tennis and track and field events.
Another IMG flagship sports competition, the Hilton Basketball League, is title-sponsored by the tobacco group BAT. The popularity of basketball in China has been growing in recent years and was boosted by Chinese men's basketball team finishing a creditable eighth at the1996 Atlanta Olympics. The league, set up by IMG, began in 1995 and league matches were watched by 600,000 spectators during the 1996-97 season. The three best supported clubs, based in Anshan, Baoding and Hangzhou, were watched by more than 190,000 spectators over the course of the season.
A total of 108 of the league's 132 matches were televised in one form or another. Two live matches (on CCTV2 and CCTV5 on Sundays and Wednesdays respectively) were broadcast during the 17-week season, with Star Sports also transmitting a weekly recorded match to h3 countries in Asia.
Promotional activities associated with the games included merchandise give-aways and competitions for prizes including Hilton bags, jackets and cigarettes, a Ford car, Spalding balls, Nike clothing and shoes, and Motorola pagers. By the end of the season, all 12 of the league's clubs had private sector owners or sponsors. Two of the clubs, Shenfei Bus Liaoning Hunters and Motorola Sichuan, formed joint ventures with IMG. The fresh money entering the sport enabled the introduction of 14 foreign players, mainly brought in from the US basketball game, as well as the introduction of half-time shows, cheerleaders and mascots.
Introducing the razzmatazz element to the Chinese basketball game was one of the selling points of a rival league which set up in the 1996-97 season. The China New Basketball Association promoted by Hong Kong company Spectrum involved sponsorship from United Airlines, Reebok, Adidas, Fila and Spalding, with Spectrum planning to inject more than US$lOm of its own money during the first year.
A senior IMG executive was scathing about the new league at the time of its launch, saying that "it's going to be exposed soon as a lot of has-been US players walking all over some lousy Chinese players". Sponsors report that this new league has folded after just one sea-son. "They weren't professional enough," comments one. "There were some difficulties with liaison when they couldn't confirm the venues and when the stars would come out." Spectrum executives were unavailable for comment.
Adventure in Xichang
Tobacco companies are also getting involved in less well-known sports. Last September, Japan Tobacco International backed a multi-sport event in Xichang city Sichuan province. The prize money of US$100,000 was the highest ever for a multi-sport event, the organisers claimed.
The four-day event involved 17 teams competing in canoeing, skating, mountain-hiking and mountaineering as wellas a biathlon covering a total distance of over 250km. The Mild Seven Outdoor Quest was the first 'adventure competition' to be staged in China involving the participation of several teams from the mainland, Hong Kong and overseas.
The event was promoted by media roadshows, educating people about the unfamiliar sports involved. A website was also set up. "The whole education process acted as an effective publicity platform," says Ms Irene Cheung, account director at API Prism, which handled media relations for the outdoor quest. The fact that the event took place in the pleasant surroundings of Xichang was also significant in introducing a thematic association with Mild Seven's "cool and natural'. brand image, she explains.
Hong Kong-based API Prism has also worked in promoting the Hong Kong-to-Beijing rally sponsored by BAT's 555 brand; a Reebok Tennis event involving Michael Chang; and a Hong Kong-to-Shenzhen marathon race sponsored by Standard Chartered.
But with the considerable sums going into sports sponsorship deals, does it rep-resent a cost-effective marketing tool? This is a difficult question to answer, believes Mr Ted Chan, director of the China unit of leading market research firm Research International.
The reason for this is the complexity of the motives that may be involved in engaging in sports sponsorship. As well as giving media exposure to a brand name and generating direct sales in the immediate vicinity of an event, there maybe less tangible but important benefits such as building relationships with consumers, officials and backers of the event.
While quantitative research techniques can reveal the amount of brand exposure and the degree to which the sponsor's name was noticed by target consumers, it is very difficult to quantify changes in consumer attitudes and purchase behaviour. "We seldom detect any attitude changes before and after the event, especially for one-off sponsor-ship," he says. "On the other hand, the question whether long-term sponsorship produces desirable imagery effects in the long-run is difficult to answer because over a longer period of time, say three years, there are usually a lot of communication activities other than the event.''
Reebok's Chan believes that, in practice, "the effectiveness is almost impossible to measure ?you have to rely on experience and gut marketing instinct". But API Prism's Cheung is more certain that event sponsorship can impact on consumer attitudes. "Event sponsorship has a very subtle and gradual effect on the fostering of community relations ?much more so than straightforward advertising, especially if the event has a charity angle," she says.
With new market entrants there can be a more rapid payback. "Many of our clients have found that sponsored events are one of the quickest and most effective ways to enter the China market. As a vehicle for generating publicity as well as making important government and business contacts, sponsoring an event can save a lot of time," says Cheung.
Coca-Cola prefers to view its television advertising and sports sponsorship as an integrated whole. "Although China is a developing country, there is a great proliferation of television sets, and that is where most advertising dollars are spent," comments Mr Parker Robinson, a Coca-Cola spokesman in Hong Kong. "At the moment, sports sponsorship does not have the reach of television in China, so we consider these two areas as an integrated package, as opposed to two separate entities."
Some of the largest sports sponsors are manufacturers of sporting apparel, such as Nike, Reebok and Adidas. According to one unofficial estimate, China's fast growing athletics goods market is already worth more than US$2.8bn annually. In this sector the benefits of sponsorship extend beyond brand building and public relations into expanding participation in sport and ultimately sales of sporting goods.
"We are working with athletes and teams in China not only with the objective of gaining exposure, but also to work with them to guide new products," says Ms Martha Benson, director of communications for Nike in Asia. 'We are not looking just to get a signboard. tVe would much rather support the athlete or team with products or cash and have them wearing our product when they cross the line or score the winning goal."
Nike views its sponsorship activities in China as a type of pyramid, ranging from supporting top sports stars at the apex to getting involved with local activities at the base of the pyramid.
Nike's 'Local Heroes' project involves building up home-grown Chinese sporting stars. The campaign was launched in 1997 television commercials involving the Chinese basketball stars. The award-winning campaign involves linking national basketball team members to three new product ranges matched to their different playing styles 'flight', 'force' and 'up-tempo'. .
Nike has been sponsoring China's national tennis team since 1991 and its basketball teams since 1994. In both cases the US-based footwear and apparel firm has organised several tours and exhibition matches as well as providing basic funding and equipment. The mid-range of Nike's sponsorships in China involves backing soccer and basketball league teams. Here, the firm sponsors four of the A-league soccer sides as well as all of the top-flight basketball teams. At the local level Nike sponsors an '1 dream' campaign which includes soccer, basket-ball and tennis competitions, training clinics and essay competitions and associated advertising. One Nike three-onthree basketball competition last summer attracted more than 1,000 teams from just one city.
Adidas backs national teams
Each year Adidas spends Yn20m-30m (US$2.4m-3.6m) on sports sponsorship in China. The focus is on football and basketball. The company has had a deal with the China Football Association since 1979 under which it provides soccer shirts and apparel, boots and balls to the Chinese national side as well as funding for overseas tours. Adidas also backs five other national sides including the women's team, the male and female Olympic sides and two national youth teams.
At the grass-roots level, Adidas has supported the Predator Cup, a four-aside football tournament for under 14s which involves 192 teams based in six cities. The champions of this competitionwill play in a global 'Football Park' tournament in Paris in June this year.
Reebok has sponsored the Chinese Athletic Association since 1995. Its biggest athletics celebrity at the moment is Wang Junxia who took the women's 5,000-metre gold and 10,000-metre silver at the 19% Atlanta Olympic Games. She attended a roadshow for Reebok last year to help launch Reebok's DMX air cushioning system.
Reebok currently spends more on sponsorship than on more traditional advertising forms. But it varies from year to year, says Mr Jeremy Chan, assistant advertising and promotions manager for Reebok in China. "Some years you might want to build up the brand image through television commercials. In other years you might want to convert that into sales which would tend to involve more below-the-line marketing," he adds.
Local sponsors emerge
While international firms have injected a new pace into Chinese sports sponsor-ship, local firms are increasingly taking an interest. One pioneer was the soft drink brand Jianlibao whose association with sport has enabled it to build up an image as a health drink. The brand was specifically developed in connection with China's participation in the 1984 Los Angeles Olympics.
Jianlibao then went on to offer a gold can with a cash prize to each Chinese medalist at the 1992 Olympics and has been lining up endorsement contracts with national athletes, including diving champion Fu Mingxia.
Says IMG's Avory: "Five years ago IMG was catering mainly to multinational companies that well understood the benefits of sports sponsorship, [but] there is definitely a growing trend towards involvement of local firms." He identifies as a watershed the widespread local sponsorships seen in the Eighth Chinese National Games which took place in Shanghai last autumn.
These games involved 74 Chinese businesses contributing more than US$2m in sponsorship money, compared with the US52.7 m spent by international firms. Leading international backers included Pepsi, which donated US$843,000 to become the official beverage of the games, and Fuji Film, with a contribution of US$602,000.
Recent changes in Chinese sport administration may enhance the, scope for sports sponsorship. Earlier this year the State Sports Commission, previously directly under the State Council, was replaced by the All-China Sports Federation ?a body which is likely to have amore arms-length relationship with the government.
Mr David Cantalupo, chief representative of Swiss-based global sports events and media marketing company ISL, believes that while the restructuring is a change in name only, "the associations for each sport have been told to rely more on the market place".
IMG's Avory agrees: "The trend and need is definitely for the national sports federations to become more financially independent." He believes that the federations have seen the positive benefits of bringing sponsorship money in, which enables them to popularise their sports and raise playing standards.
But Cantalupo says that the sport federations remain "woefully understaffed and lack experience in building equity in their products". With IMG's basketball and football contracts coming up for renewal, ISL has been in negotiation with the governing bodies for these sports but Cantalupo is not too optimistic about his company's prospects here. "Our philosophy is very different," he comments. "We seek to become a partner with the federations but they seem more interested in a buy-out. They want us to compete on a dollar-for-dollar basis but we are not pre-pared to do that."
Getting away with murder
Mr John Burgess, managing director of Singapore-based John Burgess Associates believes that sports federations are starting to understand the needs of foreign sponsors. "They are more serious about things than for a long time," he says. "In the past, the Chinese often sold sponsors short by placing signage from international sponsors next to poor quality locally-made signs. They were quite happy to take the dollars, but lagged behind in terms of providing benefit to the sponsors." Burgess has recently been discussing a potential deal for bringing the Chinese gymnastic team to Singapore with a couple of support sponsors already interested.
Television coverage may also be an area ripe for reform. "The rights are basically being given to television companies because there is no competition. This means that the federations need to get all their money from sponsors," says Cantalupo.
He adds that many television companies are bartering airtime for television rights and even demand payment to pro-duce a signal. With CCTV able to command rates of up to US$35,000 for some prime-time 30-second football advertising slots, "they are getting away with murder", he complains.