Every four years Latam thrives on football feast. For Latam, this event is far more important than the Olympics or any other worldwide sport event. This year, it is even more important, as the Football World Cup 2014 is being hosted in the Americas continent. That has certainly increased the excitement of the fans dreaming to be able to travel and watch their national team competing in such an important event.
Traditionally World cup has been the biggest opportunity for consumer electronics in general and TVs sales in particular. Latam fans tend to plan to purchase a new TV, with the biggest screen they can afford, to watch the games. Therefore, OEMs and retailers have been focusing, since the beginning of the year, to be able to grab the most share possible. Furthermore, winning the sponsorship or partnership for the FIFA World Cup, is always a major contest among major consumer electronic OEMs. This round, same as four years ago, Sony won the spot. It is believed that each partner has been paying each year, for the last four years, between U$S 25M to U$S 50M to have the right to sponsor this World Cup.
So far, there has been no proven correlation between sponsorship and immediate increase in sales. Instead, it is mainly used to build brand awareness. On the local side, each country usually has a carrier sponsoring the national team. The sponsor is usually the carrier with a lesser share in the market, and it uses this venue to strengthen its brand awareness; such as the case of Movistar (TEM) in Mexico or Colombia, or Oi in Brazil. The cost of being a sponsor of the national team varies widely among countries. In Argentina, Claro (AMX) paid around U$S1.5M for the privilege of being the sponsor of the national team. While in Brazil, Oi paid between U$S60M and U$S70M to be the only Brazilian telecom company to sponsor the Cup. In Mexico, Movistar(TEM) paid between U$S 20M and U$S 30M for this kind of sponsorship.
But the world cup is not only about paying mega figures to the FIFA, and expensive 30-seconds TV spots. Some brands have decided to pursue “The guerilla marketing” strategy. Such as the five-minute spot, the headphones brand, Beats by Dre, which is owned by Apple, released on YouTube. The spot is called The Game Before the Game, and it shows the rituals done before each game by the Brazilian player Neymar, Germany’s Bastian Schweinsteiger and Mario Gotze; Spain’s Cesc Fabregas; Mexico’s Javier Hernández Balcázar; England’s Daniel Sturridge; the Netherlands’ Robin van Persie and Uruguay’s Luis Suarez. It was released on June 10th, and in less than a month it already has more than 22M people who viewed it on Youtube. It made so much noise, that these headphones were banned, players are not allowed to use them in the stadium o media events, from the World Cup since Sony is the official sponsor and only Sony headphones are allowed to be used by the players during this event.
On the technology side, Brazil should have already reached about 30% of LTE coverage, following FIFA’s requirement. Although it is one of the best geographic coverage in any Latam country, except for Chile, users have reported that the quality of the connection has not been good. The problem might be so, because Brazil has not yet auctioned the 700MHz band. Nevertheless, 3G network has been reported to work very well, unlike some other Latam countries, such as Argentina, which 3G network is extremely saturated.
As smartphones penetration reaches around 30% in Latam. This World Cup is all about apps and digital content. Twitter, Facebook, Google, Android, iOS, etc, all have special dedicated team and content for the event. There are plenty of paid and free apps available for the fans. However, not only developers are taking advantage of this major event. Brands that have been running any type of promotion, almost all of them have supporting apps to push sales. Furthermore, almost every single promotion, since beginning of June, has been coupled to the World Cup, especially in those countries that the national team has qualified to go to Brazil. A friend of mine, who is a partner of a promo agency in Argentina, has confirmed that, since May, almost 80% of the promotions have been tied to the World Cup. Latam digital content space was perhaps the business that has increased the most for this round.
Ironically, in both Argentina and Brazil many locals are not so favorable about their national team winning the World Cup. They argue that this party-event is covering some major political corruption and mishandling. Brazil has spent U$S 13.6 billion building the stadiums for the event, and this investment doesn’t include infrastructure building costs. It is not yet clear on how much of this investment will the country recuperate. Furthermore, Brazil will have presidential elections, later this year. If Brazil would had won the cup, Dilma Rousseff (current Brazilian president) would most probably be reelected. Now, as Brazil has already lost the possibility of winning, many Brazilians are hopping, that the disappointment of spending so much money yet loosing the cup at home, will allow a change of the governing party thus its economic course. Argentina, on the other hand, as the country is in the verge of defaulting its debt, the government has spent more than U$S 18M to buy the broadcasting rights of the event. While it had also spent in 2013, another U$S 200M in football matches broadcasting rights.
As this very expensive party is coming to an end only four teams remain now; two Europeans and two Latin Americans, for three places in the winning podium. Let’s see if the Cup stays in the continent that hosts the party, or for the first time in the World Cup history a European country wins the Football World Cup in the American continent.