Manchester United’s decision to appoint Cheetham Bell as its first full-time advertising agency for a global brand-building campaign (MW last week) shows how serious football clubs are about transforming sporting glory into successful business off the pitch.
The club’s move is the latest plank in the long-term marketing strategy of chief executive Peter Kenyon and group marketing director Peter Draper. The Premiership’s other top outfits are all drawing up similar plans to stay in touch.
Man Utd is the world’s richest club, but last week announced a 25 per cent fall in full-year profits to £16.8m as a result of higher wage demands and its withdrawal from the FA Cup.
Cheetham Bell and Man Utd remain tight-lipped about the brand-building exercise. But it is believed the agency has a multi-million pound budget and TV work is likely to be involved. No one at either company was available for comment.
All football clubs advertise matches, but the next stage will be to market merchandise – such as Man Utd cola, wine, spirits and replica kits – through TV ads.
Matthew Patten, chief executive of M&C Saatchi Sponsorship, believes football clubs are developing business models similar to those of Formula One racing teams. He says Man Utd must export itself as a business, rather than a team, to parts of the world where its on-pitch exploits are not so famous.
“Football clubs and Formula One companies are becoming mini-corporations in their own right. Sport is their core business activity, but they are trying to develop new business through broadcast, licensing and merchandising,” he says.
“Man Utd is well aware of its international potential and this is the next stage. It is a plc and must achieve added value for shareholders.”
The club is reported to have signed a record £300m kit sponsorship deal with Nike over 15 years. Its deal with Umbro runs out in July 2002. It also signed a £30m, four-year deal earlier this year with Vodafone to offer WAP services to fans.
However, observers dismiss suggestions that the move to strengthen the Man Utd name globally is an attempt to prevent deals with other major brands that would overshadow the core brand. One says: “I don’t think Man Utd is being swamped. The brand stands out and it’s a situation where everyone wins – club and sponsors.”
Senior sports marketers say Premiership giants Leeds, Liverpool and Arsenal are best placed to follow Man Utd’s lead. But rival clubs are cautious. They trail the Premiership champions financially and are reluctant to invest relatively small profits in costly advertising campaigns.
Leeds has used local ad agencies for various projects in recent years, including poster and press work and limited radio and TV campaigns. It aims to develop its fan base and business opportunities in the Far East, but has no plans to hire a single agency for international strategy.
Commercial director Adam Pearson says: “We prefer to get our brand across through merchandising, wholesale licensing and Internet portals. We don’t see the need to advertise the brand in particular countries and I don’t see how one agency could help us to do that. We’re trying to build a brand, not advertise one.”
Sources believe Liverpool, which recently appointed Davide De Maestri from M&C Saatchi as its first brand director, will continue to focus marketing strategy on its core Merseyside-based support and develop media strategies with 9.9 per cent shareholder Granada Media Group. Arsenal is concentrating on building a team to catch up with Man Utd on the pitch.
One source is unimpressed. He claims the appointment of Cheetham Bell “won’t register a blip on the radar” of Man Utd’s fans.
But a prominent independent commentator on the club is concerned about the initiative. At a time when major signings may be shelved until profits climb again, fans may be disgruntled that millions of pounds are being poured into advertising to a worldwideaudience which may or may not take the bait.
The source says: “The club’s best form of advertising is its football. If it comes out with a cheesy television campaign, I can’t see it sitting too well with the supporters.”
Tim Crow, business development director of sponsorship agency Karen Earl, says Kenyon and Draper have already driven the Man Utd brand forward. Other Premiership clubs are playing catch-up, but the Ã©lite are starting to behave like brands and use ad agencies.
“Man Utd appointing an ad agency is all about brand guardianship. If the club was a normal brand without access to the market it has, it would have to spend billions of pounds a year supporting its current level of voice,” says Crow.
It may be a while before Cheetham Bell produces its global branding plan. Rivals will be keen to see whether Man Utd is frittering away money, or if the campaign builds long-term global support.