Sponsorship

[SloopJohnB 323]

From Daily Sail about Puma

 

Puma and sailing sponsorship

 

Chief Marketing Officer Antonio Bertone explains the big cat's return to the Volvo Ocean Race

 

Friday April 23rd 2010, Author: James Boyd, Location: United States

Following their second place behind Ericsson 4 in the 2008-9 Volvo Ocean Race, so Puma has recently announced its second participation in the fully crewed round the world race, once again supporting Ken Read’s US team. ‘Why have they returned?’ we wondered. Keen to find out this and why consumer brands like Puma have got into our sport, we had the opportunity to talk to the company's Chief Marketing Officer Antonio Bertone, who operates out of their US corporate headquarters in Boston.

 

Puma is what they call a ‘sportlifestyle’ company, a vision of corporate scarlet, well known for its range of sports footwear, clothes and accessories (footwear representing more than 50% of its business). Its 2009 financial report shows that the company turnover was a tidy 2.621 billion Euros, this having quadrupled over the previous decade. Perhaps most impressive though is its gross profit that for every year since 2004 has been just over 50% of turnover... According to official data, the company distributes its products in more than 120 countries, employs more than 9,000 people and has headquarters in Herzogenaurach, Germany, Boston, London and Hong Kong. One of the Puma's largest shareholders is PPR, which owns Gucci.

 

The history of the Puma is noteworthy - stemming back to the 1920s and the two Dassler brothers, Adolf and Rudolf. Their shoe company made one of their first sponsorships (and set them up) when they provided Jesse Owens with running spikes for the 1936 Olympic Games, where he won four gold medals.

 

Famously in 1948 the brothers split after a prolonged feud, with Adolf Dassler ('Adi') going off to form one company as his brother Rudolf set up another. And so, Adidas and Puma (respectively) were born.

 

Today Puma’s sports sponsorship includes a huge number of national football teams, including Italy, along with major clubs – in the UK they have recently joined forces with Burnley and Newcastle United and Tottenham Hotspur. They have individual sponsorships of vast swathes of footballers including, in the UK, Manchester City’s Wayne Bridge and Tottenham’s Peter Crouch and in the past have supplied the likes of Pele, Maradona, Paul Gascoigne and Kenny Dalglish. They also supply cricketers from Andrew Flintoff to Adam Gilchrist, rugby league and union teams, Australian football league teams, as well as track and field athletes such as sprinter Usain Bolt. In Formula 1 they supply Ferrari and Red Bull as well as Nascar teams in the US. They also back Scottish rock star Paolo Nutini. The list is seemingly endless.

 

 

 

 

 

Antonio Bertone confirms that football does account for the largest proportion of their sports sponsorship budget, but won’t divulge any more than this. “Football falls in line with the more traditional sports marketing portfolio, obviously it being one of the historical sports of the brand. There you have your team owner relationship, your shirt sponsor and your equipment deal - which is generally where we fit in - as well as individual player contracts. The sailing angle really allowed us to be creative and use the boat as a medium as well and really build the profile of the team to how we wanted to be perceived in the sport.”

 

Being involved in Formula 1 never comes cheap, but then neither is running a Volvo Ocean Race team with line honours pretentions. “In terms of our overall spend, the VOR is up there,” agrees Bertone. “Boats aren’t cheap. I guess when we decided to go into it, we wanted to do it correctly. It is a niche enough sport – it is not like there are a lot of TV hours on the thing – so if you are going to do it, you have to do it in a way that you will become visible and you will cut through, otherwise don’t do it.”

 

The significant difference in the case of their Volvo Ocean Race team, compared to all their other sponsorships, is that it is theirs and they are not merely a secondary sponsor or equipment supplier.

 

While many sponsors involved with sailing like that the fact that they or their clients can ‘get into the race car’, sailing on board, Bertone says they use benefit infrequently. “Personally it is quite nice when you get a chance to cruise around. Those opportunities don’t come around that often. We have used it for clients...to try and explain to them our entry into outerware...it always brings a smile to people’s faces. And then they get seasick! Hopefully they inform us before...”

 

Ultimately their sponsorship of a VOR team isn’t a corporate hospitality device. “We really only do it for the sales bit. For us, it is about consumers and selling outer wear and introducing foul weather clothing and more technical products into our collection. There is a global aspect to the Volvo Ocean Race which we liked and part of the reason we chose the Volvo was the stopovers and having these mini Olympic villages for a couple of weeks where it allows the brand to be really active, with swarms of people, to introduce a new side of the brand to. That’s why we felt this was the right type of venue for us to get involved in when we were looking at the sport."

 

Bertone continues: “We always look for unique angles. When we got into Formula 1 there was no one else in it from our standpoint and now all of our competitors have tried to follow us in one way or another. We generally try to go off piste, because from a turnover perspective we are smaller than our competitors, so you have to punch outside of your weight when it comes to marketing dollars.”

 

In addition to getting swarms of public around ‘Puma City’, the unique red container complex that went from port to port and included both a shop and a bar, as well as team offices, Bertone says that they were also impressed by the extensive media coverage provided by the VOR. “I definitely think we won the race from the media standpoint. It was a nice way to bring the brand into a more mainstream focus of media. For a long time Puma has been seen positively within specialist media categories. This was fairly broad and mainstream, so that was a benefit.”

 

However the Volvo Ocean Race also proved successful as an internal communication device within Puma and a motivator for its worldwide base of staff. “We have over 11,000 employees and the passion it generated as the 10 month long race went on... It is nice to get the company involved in these things. How many World Cups can we do? How many track and field events? This is fresh and I think the company appreciated that.

 

“I don’t think we would have done it again if we thought it had been a bad deal. We are quite a flexible organisation from that standpoint and it was quite easy to see there was something there and you can never get it right the first time or do it perfectly, even though we were really happy with what we yielded. Now you know how to do it – so what else can you do better? We are going to win it this time.”

 

Also, as a team sponsor within the Volvo Ocean Race, Puma also get a much bigger slice of the media pie than they would with an equivalent investment in other more mainstream sports. “In Formula 1 there are so many personalities trying to grab the spotlight or their point of view and I think we did a great job bringing Kenny Read to the world. With him as an internal motivator for the company as well as an external spokesman for the company, I don’t think we could have picked a better skipper. He quickly morphed from his traditional background as an athlete and made the transition fabulously. We couldn’t have asked for a better partner.”

 

 

 

This time to ease the financial pain they have a partner in their VO70 campaign in the form of Berg Propulsion. “Berg was involved in Green Dragon in a smaller capacity and if I may toot our horn I think they really liked our program and how we went about it and obviously they have needs that are different to ours, which are corporate hospitality and a lot of entertainment and stuff like that," says Bertone. "So we felt from a usage perspective we were a good fit. We wanted to bring in a partner to obviously increase the overall scale of the campaign. They are cool guys. They have got a great story and like us they are very low maintenance and they are incredibly competitive, so they want to win the race as well. We are bringing them on to help us win the race.”

 

Puma did take a creative approach to their sponsorship last time. In addition to their unique Puma City complex, prior to the last race they acquired ABN AMRO Two as a training boat and repainted it as a red shoe. Expect more of this behaviour for the next race. “Obviously we set the bar last time and we had a great reaction, so it would be a bad thing if we didn’t try to beat ourselves from that standpoint,” says Bertone. “I think people would be disappointed and that’s not what we are on this planet for. We want to make sure that we keep our customers engaged and excited and we keep the excitement behind our involvement in the sport. Ideally I don’t want to lose any of the energy that we brought at the stopovers. Obviously Puma City was a huge success and we want to figure out how to replicate that in more places, but to do that we have got to be smart.”

 

At present Puma has their Volvo Ocean Race campaign and also is involved in the Moth class (“we have a crush on the little buggers,” as Bertone puts it), sponsoring the incy foiler class' last two World Champinoships. So will we see them getting involved in any other aspects of sailing? “I really just want to get this done properly,” says Bertone of the VOR. “There is a lot of interest from club level and junior race leagues and what have you that are always asking us, but right now all our internal infrastructure for sailing is geared towards the Volvo Ocean Race and doing that properly and maximising that and then I think eventually the business will become manageable and we might be able to dip our toe into other areas. But right now it is all hands on deck for the Volvo.”

 

Also see our interview with Till Pohlmann, Bertone's equivalent at Hugo Boss here

[smithy09 50]

A very interesting snippet. Thanks SJB. I wouldn't think that they would get the returns such a significant investment requires, but what do I know. 50% Gross profit is not too shabby so they must be doing something right!