SPORTS MARKETING IN

WITH
DOING AWAY
TM
Doing Away With Foul Play
EXECUTI VE SUMMARY
2010. CMO Council. All Rights Reserved.
2010. CMO Council. All Rights Reserved.
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Doing Away With Foul Play In Sports Marketing
Introduction
With the 2010 FIFA World Cup in the books, the major questions leading into the tournament were
convincingly answered. Spain overcame tough competition for a dramatic victory. South Africa proved not
only capable of hosting the event but earned praise for new infrastructure and social progress. And the
drone of the vuvuzela was every bit as annoying to TV audiences as was suspected.
Yet over the 31-day tournament, brand protection issues stole some spotlight from action on the pitch.
Nikes Write the Future campaign outshone rival Adidas, FIFAs ofcial partner, with a record 7.8 million
viral views in its rst week online. Guerilla marketing ads from South African brands Kulula Airlines and
Nandos earned international headlines, as did the Dutch women arrested in the Bavaria Beer scandal. In
addition to ticket scams and other trademark breaches, these stories will make marketers remember this
FIFA World Cup for its implications on future sponsorships and intellectual property (IP) protection.
Brands have long invested in sports properties to boost awareness, loyalty and fan support for products
or services. Sports sponsorships and athlete endorsements give brands mass exposure and the ability to
interact with particularly passionate fan bases, creating strong brand attachment, afnity and emotional
connections with the consumer. The cross-cultural appeal of many professional sports has helped the
business explode into a giant global marketplace with projected revenues of $141 billion by 2012,
according to PricewaterhouseCoopers.
The negative consequence of this growth, however, is that trademark trespassers have intensied their
efforts to get a piece of the action. For years, counterfeit merchandise was the main violation confronting
sports marketers, and brand protection meant physically tracking down knock-off artists and advocating
the merits of ofcially licensed goods.
Today, Internet connectivity, mobile communication and the ability to deliver rich media experiences
over broadband pipelines are creating an even larger, more interactive audience for sports content. But
these innovations are also introducing new threats and trademark infringements at record rates. Online
ticketing scams, brand hijacking, illegal merchandise sales, pirated TV feeds and the unltered dialogue in
social media channels are undermining the interests of property rights holders, as well as the integrity of
sponsors and media partners.
Brand sponsors and sports associations also face more frequent and increasingly clever ambush
marketing campaigns by competitors. These marketers seek to capitalize on the media exposure and
popularity of major events without paying the expensive fee for ofcial rights. While growing numbers of
marketers are attaching their brands to leading sports properties and franchises, they dilute the value of
their investments by not implementing proper brand protection programs.
Doing Away With Foul Play in Sports Marketing is another global thought leadership initiative from
The Chief Marketing Ofcer (CMO) Council to help sports sponsors and franchises deal with trademark
trespassing, property rights violations and online fraud that compromises their brands and content assets.
With the sponsorship of MarkMonitor, the CMO Council surveyed more than 225 senior level sports
marketers across relevant industries for an assessment of how brands safeguard themselves and whether
those measures are effective. This study also interviewed more than 20 executives from top leagues and
corporate sponsors. The qualitative and quantitative research took place over six months in 2010 and
builds on the CMO Councils previously successful Protection From Brand Infection study.
While the research conrms that IP and trademark violations negatively impact brand value and consumer
trust, brands are not adjusting to the new violations made possible by evolving technology. A startling
number also neglect brand security entirely. Consequently, sports marketers are leaving themselves
2010. CMO Council. All Rights Reserved.
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Doing Away With Foul Play In Sports Marketing
vulnerable to brand infection and unable to reap the full benets of their sports spend. With the amount
of money invested in sports marketing and the opportunity to tap into passionate sports audiences, this
neglect of brand protection is disconcerting.
After reorganizing brand protection programs to reect the new landscape of property rights infringement,
companies must also better understand that a strong offense is the best defense against violators.
The research revealed how many marketers exhaust their budgets by becoming ofcial partners and
cannot effectively utilize the sponsorship. However, with their access to exclusive event content and IP,
ofcial sponsors have the potential to create a level of authenticity ambushers cannot replicate if they
strategically activate their investments. Therefore, instead of blaming sports event organizers, hosts or
franchises for not protecting their sponsors, brands must make sure to mount strong campaigns as the
rst line of defense.
Increased attention to brand security should also include becoming more proactive in defense. Addressing
issues as they arise is no longer good enough. The most successful protection models aggressively work
to achieve more sustainable long-term brand security by weakening the motivation to violate property
rights at altogether.
Internally, or through third party collaboration, each of the properties regularly cited as the best protected
constantly monitor the market for infringement and are willing to pursue legal action when appropriate.
For example, in 1992, the NFL, NBA, NHL, Major League Baseball and Collegiate Licensing Association
formed the Coalition to Advance the Protection of Sports logos (CAPS) to deal with trademark defense
of its constituents. Since its inception, the organization has seized more than 9 million pieces of illegal
merchandise with logos from its members, valued at more than $334 million.
However, while threat of legal penalty preserves brand integrity in the short term, merely punishing
offenders is not a long-term solution. IP law cannot keep up with innovations in technology and digital
media. Furthermore, it is impossible for the biggest global brands to keep an eye on violators all over the
world. Sports properties that rely solely on defensive enforcement will always play catch up.
Rather, the most admired sports properties and brands have begun focusing on prevention and
education. As leagues expand internationally and corporate sponsors launch global advertising
campaigns, they are entering markets where legal infrastructure does not exist at least at the same
maturity as Western countries. Consumers, lawmakers and businesses simply do not have a developed
understanding of rights protection. While this makes enforcement difcult, smart brands commit to IP
education and the development of better legal frameworks. These companies are rewarded with new fans
who can become loyal future customers.
Marketers have long understood the value of investing in sports. Now they must take brand infection
dangers equally as serious and learn how to better protect their assets. Brands should emulate the NFL,
NBA and other leading sports properties by investing in their futures and proactively attacking the source
of the problem. Educate potential violators on why IP laws are important. Engage them in the process and
preempt violations before they can occur. Only then will brands harness the full marketing potential of
sports properties and events.
2010. CMO Council. All Rights Reserved.
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Doing Away With Foul Play In Sports Marketing
Summary of Key Findings
Doing Away With Foul Play continues the CMO Councils thought leadership on brand protection issues
in marketing. Following research in programs like Secure the Trust of Your Brand and, more recently,
Protection From Brand Infection, the Council identied brand security as a growing problem area for
marketers. This new study investigates how intellectual property (IP) infringement is impacting the global
sports market, how sports brands are safeguarding their investments, and what tactics are addressing
brand protection concerns effectively.
Sponsored by MarkMonitor, a leader in global enterprise brand protection, the global online audit tapped
into the insights of 228 marketers across 27 different industry sectors. In-depth qualitative interviews
were also conducted with more than 20 experts from various sports franchises, leagues and corporate
sponsors. The goal of Doing Away With Foul Play is to alert sports marketers to the evolving threats brands
face and help them better protect their investments, realize increased returns, satisfy fans and improve
the overall event experience.
According to the survey, brands believe in the value and potential of sports marketing, and many include
some form of sports sponsorship in their marketing mix. Yet even though respondents recognize that
trademark violations can damage brand value and undermine consumer trust, the research suggests
many marketers are not actively protecting their properties and sponsorship assets.
Many companies do not have brand protection programs, and many of those that do are not adjusting
to the new threats made possible by evolving technology. Without a more serious commitment to brand
security and a more informed stance against digital threats, marketers will not be able to maximize the
return on their sports marketing spend.
Key Findings From the Doing Away From Foul Play In Sports Marketing Audit:
Marketers continue to invest in sports properties to bolster their brand among the immense and
passionate fan bases sports attract. Some 72 percent of survey respondents believe sports sponsorships
are a valuable and effective way to brand and engage customers. Another 15 percent say sports
sponsorships have always been part of their marketing mix.
According to Erica Kerner, Adidas global Olympic Games director and head of the companys London
2012 project, sponsoring major events opens doors to unique business prospects. Being an ofcial
partner [at the Olympics] gives us the opportunity to work with consumers, other partners and to develop
business-to-business opportunities that we wouldnt have had otherwise, she says.
The specic makeup of the audience is as attractive to many marketers as its size. For 45 percent of
marketers, demographics and fan bases that match target consumer markets are the primary drivers
behind sports marketing decisions. TV branding and local community support both 15 percent are
also important considerations.
Sports sponsorships give us the ability to tangibly bring our brand to life in front of fans.
VP Marketing, Global Financial Services and Credit Company
To best reach those target consumer markets, 41 percent of respondents plan to integrate their sports
sponsorships with other media buys, including interactive digital marketing channels. About a third
31 percent are increasing merchandising and promotions, and 30 percent are negotiating more
comprehensive sponsorship deals.
Despite the belief that sports sponsorships can boost brand equity and recognition, there is less
consensus on how to evaluate the actual impact. While 54 percent of marketers say sports marketing
2010. CMO Council. All Rights Reserved.
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Doing Away With Foul Play In Sports Marketing
programs and endorsements are effective or somewhat successful, 27 percent have trouble determining
the value of and return on their spend.
According to Ryan Eckel, the head of marketing for Puma in Eastern Europe, Middle East, Africa and
India, measuring sports marketing return is more of a qualitative than quantitative exercise at this point.
Were slowly developing a toolbox for quantitative stuff, he says. We do have metrics that we use, and
you can quantify a lot of viral stuff now, but were probably not as sophisticated as Procter & Gamble or
companies where [measuring return] dominates daily life.
However, when marketers measure the success of their investments, social networks and digital media
have had the most signicant impact on helping brands connect and engage with fans, report 44 percent
of marketers. Online news and media channels are the next biggest contributor at 18 percent.
As social media changes the way brands interact with sports fans, companies can track the tonality and
sentiment of passionate, targeted consumer supporters. This in turn helps determine the true value of
sports sponsorships. Yet the uncensored nature of that conversation also provides a challenge, says
Stuart Cameron, MasterCards VP of regional sponsorships for Asia Pacic. You dont want to impede
upon IP rights you dont necessarily have, so what if a fan starts trashing a team you have a relationship
with? he says. You cant control that because the nature of social media is an open and honest forum
for dialogue, and once its out there, its out there.
To capitalize on these tools without succumbing to their pitfalls, 52 percent of marketers are monitoring
their brands in digital channels. Still, despite digitals growing relevance, one-fourth of marketers do not
track their brands on these platforms nor have plans to do so in the future.
Digital is a big worry because the rules cant catch up quickly enough to the technologies
and advertising ideas.
Head of marketing, Global Athletic Apparel Company
In addition to new challenges from technology, the skyrocketing cost of sponsorships has prompted
ambush marketing from competitors seeking ways around the hefty price tags for ofcial rights. Together,
these threats have joined counterfeiting among the major brand security issues.
The survey reects these new conditions. Respondents listed ambush marketing by competing brands
and sponsors as the top concern in brand protection (41 percent), well ahead of counterfeit and knockoff
merchandise (29 percent) and improper behavior among top athletes (27 percent). Marketers showed
their increasing sensitivity towards digital media by ranking online brand hijacking fourth (26 percent).
Among the negative implications of these issues, marketers primarily believe they diminish brand value
and equity, undermine brand trust and integrity, and damage reputation. Nearly a third of marketers also
feel these challenges can discourage or lose future sponsorship.
The survey revealed less consensus on the factors encouraging the prevalence of these problems. At 42
percent, lack of enforcement or penalty for rights violations was the most popular explanation, followed by
more sophisticated fraudsters and difculty in timely detection of threats (both 31 percent).
Jeff Bliss, president of the Javelin Group and former CMO of the 1994 World Cup, is one marketer who
credits the increasing innovation of the violators. Weve come a long way, but there are a lot of creative,
ingenious people out there who can get around the rules, he says.
To combat these trademark trespassers, many marketers are focusing on the quality of their own
campaigns. Some 34 percent of respondents run genuine and authentic marketing and merchandising
programs as part of their brand protection strategy, making this the most common brand protection tactic.
2010. CMO Council. All Rights Reserved.
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Doing Away With Foul Play In Sports Marketing
Kim Skildum-Reid, a corporate sponsorship strategist, says companies who effectively activate their
sponsorships will be the best prepared for potential attacks and ambushes. If [sponsors] raised their
game, there wouldnt be any room for ambushes, she says. Instead of trying to clarify youre the real
sponsor, actually go in there and act like youre part of the event experience and leverage the opportunity.
Many other marketers, however, invest in less effective defensive practices, and too many ignore brand
protection entirely. An astounding 26 percent of marketers do not participate in any programs to protect
their brands virtually equivalent to the number of brands getting it right. Additionally, 24 percent are
trying to minimize the impact of issues and reduce potential negative exposure for their brands. Fewer
brands and properties are taking more active and preventative measures to stop future violations.
Were looking at public education and PR campaigns because relying on law enforcement
is not enough anymore. Its just not a police priority.
Lawyer, Major European Sports Franchise
Only 20 percent participate in programs to pursue and prosecute counterfeiters, and an equal percent
engage in public education campaigns on brand protection.
Conclusions
While marketers clearly understand and value the potential of sports marketing, the CMO Council
survey suggests too many companies neglect the necessary brand protection practices to properly take
advantage of their sports investments. To do so, they must make brand security more of an organizational
priority and tweak current rights protection programs to address the threats most likely to infect their
brands. Digital media is here to stay, and more than just a fourth of marketers should be concerned with
the many forms of online brand hijacking.
Additionally, companies who understand that brand protection is a preemptive, and not a reactive,
function will be better prepared. According to some of the experts interviewed, tactics focusing on
education and prevention will ultimately be most successful, especially as brands expand internationally
and face the less robust legal infrastructures of developing nations. The marketers looking ahead and
aggressively meeting potential risks before they ever develop are creating the long term, sustainable
model of successful brand protection.

2010. CMO Council. All Rights Reserved.
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Doing Away With Foul Play In Sports Marketing
Demographics
Q1. What percentage of your expenditure is dedicated to online brand protection initiatives?
Q2. What is the size of your company (in revenue)?
Under $10 million
$10 million - $50 million
$50 million - $100 million
$100 million - $250 million
$250 million - $500 million
$500 million - $1 billion
Over $1 billion
42%
13%
8%
9%
3%
7%
17%
73%
19%
6%
1%
1%
Less than 5%
5% - 25%
25% - 50%
50% - 75%
More than 75%
2010. CMO Council. All Rights Reserved.
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Doing Away With Foul Play In Sports Marketing
Professional Services
Sports League, Team or Franchise
Financial Services
Media & Publishing
Consumer Packaged Goods
Food & Beverage
Entertainment
Manufacturing
Online/Internet
Computer Software
Construction
Consumer Health, Beauty & Lifestyle
Education
Health & Life Sciences
Information Technology
Q3. Where is your company headquartered?
Q4. What best describes your industry sector?
North America
Europe
Asia Pacic
Middle East
Africa
Latin America
68%
16%
11%
2%
2%
1%
17%
17%
7%
6%
4%
4%
3%
3%
3%
2%
2%
2%
2%
2%
2%
Insurance
Retail
Travel & Hospitality
Wholesale/Distribution
Automotive
Chemicals
Computer Hardware
Consumer Electronics
Energy
Telecommunications
Transportation & Logistics
Government
Utilities
Other
2%
2%
2%
2%
1%
1%
1%
1%
1%
1%
1%
0%
0%
11%
2010. CMO Council. All Rights Reserved.
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Doing Away With Foul Play In Sports Marketing
MIGUEL PORTELA
Legal Counsel Intellectual Property
FIFA
Overseeing FIFAs rights protection program, Miguel Portela is responsible for the protection of the
organizations sponsorship and marketing rights as well as its presence online. Before FIFA, Portela
served as legal counsel for Superleague Formula, a European auto racing competition; the Americas
Cup in Valencia; and the 2004 UEFA European Championships in Portugal.
In the world of sports brand security, there was no bigger lightning rod for criticism than the FIFA rights
protection team at this summers World Cup in South Africa. At various points in the preparation and
execution of the 31 day tournament, Miguel Portela and his staff were vilied in the media for their so-
called heavy handed enforcement of FIFAs IP rights, especially after ling a criminal complaint against
two of the orange-dress-wearing girls from the Bavaria Beer ambush scandal.
According to Portela, that criticism comes with the territory of protecting the rights of the most popular sport
event in the world. The FIFA World Cup will always have its detractors, and these negative media stories
always come out before the event, he says. One of our tasks is trying to set the facts straight, but that does
not sell [newspapers]. The media is not as interested in our version of the facts or on the positive legacy our
program leaves in the host countries in terms of IP promotion and ofcials training.
Lost in the negative publicity were FIFAs thorough brand protection efforts to deal with its biggest
threats: ambush marketing, counterfeiting and digital infringement. With soccers global popularity, those
violations occur on nearly every continent, forcing FIFA to maintain constant relationships with legal
council all over the world.
For South Africa, Portelas team worked with local ofcials to prepare the host country and tighten its
legal system in the years leading up to the FIFA World Cup. In most cases, Portela says, a direct letter to
infringers explaining what they had done wrong was enough to prevent major issues. In addition, FIFA
organized on-site teams to monitor for ambushers targeting fans as they entered matches. These local
teams patrolled in and around stadiums, as well as throughout their surrounding cities.
Additionally, FIFA faced the additional challenge of South Africas relatively undeveloped business
community, especially its huge informal sector. Portela says his team put an extra emphasis on educating
the host communities where many citizens and consumers were missing a basic understanding of rights
protection. Those efforts included organizing seminars, workshops and meetings with local businesses,
arts and crafts people and nearby vendors to help South Africans learn about FIFAs rules. For the rst
time, FIFA also compiled a public information document on IP regulations to help locals grasp the idea of
brand protection.
While some incidents still inevitably occurred, Portela says the extra attention to prevention made an
impact, as malls, shops and other small businesses were all getting involved with the soccer promotional
campaigns but in ways that complied with FIFA rules.
We took it upon ourselves to actually invest in that area and leave a legacy behind, Portela says. And
weve had less infringement in South Africa than we expected.
Nevertheless, despite FIFAs progress in brand protection, Portela would like to see more collaboration
among the major sports properties and corporate sponsors in the future. While you would think we all
have the same problems and face the same issues, were very isolated, he says. Having more synergy
and exchanging more ideas would be good.
Executive Insights
2010. CMO Council. All Rights Reserved.
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Doing Away With Foul Play In Sports Marketing
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About The CMO Council
The Chief Marketing Ofcer (CMO) Council is dedicated to high-level knowledge exchange, thought
leadership and personal relationship building among senior corporate marketing leaders and brand
decision-makers across a wide range of global industries. The CMO Councils 5,500 members control
more than $200 billion in aggregated annual marketing expenditures and run complex, distributed
marketing and sales operations worldwide. In total, the CMO Council and its strategic interest
communities include over 12,000 global executives across 100 countries in multiple industries,
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Experience (FAME). www.cmocouncil.org
About MarkMonitor
MarkMonitor, the global leader in enterprise brand protection, offers comprehensive solutions and
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that address the growing threats of online fraud, brand abuse and unauthorized channels, MarkMonitor
enables a secure Internet for businesses and their customers. The companys exclusive access to data
combined with its patented real-time prevention, detection and response capabilities provide wide-
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