Sunday, November 2, 2008

Red Bull Air Race - The Marketing Value

The Red Bull Air Race is a minority sport which is hugely expensive, difficult to derive income from and falls under the banner of "corporate branding", but is it delivering any real value to the company? Purely taking a marketing strategy point of view their are two schools of thought, firstly that sports branding is nearly pointless and alternatively that you can 'associate' your brand with the sporting attributes (e.g David Jones & Melbourne Cup fashion). The Red Bull Air Race fits into neither of these directly, the strategy in relation to competitors is brilliant.


What would you say if I offered you, an event that people would not only associate your brand with, but your brand would actually transcend product boundaries and become part of the name? I also offer you unlimited branding, 100% creative rights and it represent your brand values of cool and premium? Would that be worth your advertising spend?

Contrast this to one of the sponsors of the Australian Open or America's Cup, many marketers I know claim this sort of spending buys nothing more than corporate entertainment. With this in mind, you can see why Red Bull sink so much folding stuff (money) into what is effectively a nothing sport.

Branding is Red Bull's point of differentiation. You will be hard pressed to find a more disciplined branding across any number of product categories, 'subtle premium' + 'young & cool'. They have worked very hard over the years to build their brand and now with competitors like Mother, Rockstar and enough pretenders to make the Foo fighters write a sequel song (follow the reference if you can) entering the market, this branding insulates the market leader from a price war and helps to maintain their market share without competition.

Josh Strawczynski's Opinion:
I love the air race, unlike Rockstar that has invested money in sponsoring some back water motor sport or any number of other energy drinks that max out their advertising spend in this way, Red Bull have a strategy keeping them miles in front.

Sam Berringer's Opinion:
There is room in the energy drink market for more players, but they need to find a point of differentiation. At the moment everyone is trying to create the same product. I asked a barmaid why she was drinking Mother and she said "because it tastes like Red Bull"...why? That is like selling an Ipod with the label scratched out and 'Sam's Music' stick slapped over the top...it's not fooling anyone!

Note: A new blogger 'The Oyster Project" wrote an interesting article about Red Bul branding at the Olympics, worth a read.

6 comments:

Daniel Oyston said...

Do we know if Red Bull sponsor the air race or created the air race?

There is a massive difference between creating an event (and being associated with it from the start) compared to “hoping on board” and event that already exists and getting you name associated with it.

The latter never quite works and is even worse when an event changes sponsors. Sponsoring an event and having your name synonymous with it takes a long time. That is unless your company’s name is on board from the start.

The thing that works in the name is that Air Race doesn’t work by itself.

They can call it the Toyota or Telstra premiership all they want but people still win “The” Premiership. They never win the “Toyota” Premiership. Supporters follow Hawthorn or the Hawks not the HSBC Hawks.

But in this case, it is very hard to reference the event name without the brand..

Josh Strawczynski said...

Another Valid point Daniel, I have always been savage on sponsors of major events because it is often the gorrilla marketers that get more value out of the Event e.g) Nike sponsoring the Soccer 'Beach' World Cup and placing their banner inside the Adidas Soccer World Cup.

I was also very happy with the hawthorn Reference, a great point & you made me think of Buddy Franklin snagging another goal!

Nicholas said...

Interesting Theorem.

Julian Cole said...

I think there is a real need for more Buddy in your posts!

Josh, you talk about them all trying to do the same thing but what would you suggest a energy drink competitor do, what better way to communicate energy than to align with a sport?

I am putting my thinking cap on as we speak!

Josh Strawczynski said...

You should only be sponsoring a sport if you are going to get a return out of it. Competitor or market leader you advertising spend should be strategic and yield a high return regardless of what that is (branding, sales etc.)

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