Just saw Spotify is going to pay 70 million dollars a year to have their name on the F.C. Barcelona t-shirt. How can this be profitable? Surely not that many people start using Spotify just because they saw it on their teams shirt right?
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More often than not it doesn’t bring any tangible sales. Marketing is a funny concept at times, but it’s mainly about establishing a brand in cases like this. So it’s more about “when people think streaming music they think Spotify” and less “this person with a logo on his shirt is making me give my money to the logo people at this very instant”.
You can’t really measure the impact.
Name recognition is a valuable advertsing strategy. If pricing was the same, would you buy Lay’s or Albert’s potato chips?
It’s the marketing paradox.
How much money do you spend on marketing? What kind of marketing? When are the returns not worth it? All these questions are hard questions to know the answer to, that often don’t have perfect answers, and you just gotta figure out with trial and error.
But the general trend is that for most companies, if they aren’t advertising, and their competitors are, then their competitors are gaining an advantage in brand recognition.
Hypothetically Coca Cola and Pepsi could both stop advertising right now and just keep selling products to the people that current know and buy their products. But if either company did that, they risk the other company swooping in and still advertising and starting to steal those new or on the fence customers. So neither company can let up.
Its just advertising. Nothing more.
Do not think of it anything more. This is ONLY a different way to buy ads.
You want your logo and name out there for ads. Every time someone sees you its an impression on them. You want to hit them from a lot of angles in ads. Being on a sports jersey is just another method. The jersey will be stores, on TV, in person, all sorts of stuff.
Ads, its only ads. Nothing more. Its not more complicated.
If you’re wondering, there are actually calculations that you can do for sponsoring and putting your name on various sports stuff (generally the biggest benefits is “free” showing your logo on TV, that is, for the same amount of money, its cheaper to sponsor a team than to buy traditional ads) and generally its a fairly inexpensive and effective way to advertise. NASCAR for a long time was a really cost-effective sponsorship, thats why so many logos were on these cars and people, however, the sports popularity has been having issues and its now less cost effective.
The first part of what is called the advertising funnel is Attention – people have to know that your product exists before anything else.
Spotify’s name on the FC Barcelona shirt isn’t about them supporting the club. It’s about them getting that word in front of the eyeballs of every person watching a match. For them, that’s apparently worth $70 million.
The simple answer is consumer awareness.
Especially when sponsoring elite teams / events.
What’s the difference between Spotify and Deezer for example? Not much from an offer perspective. So marketing makes one much more visible than the other.
One reason (as pointed out throughout this thread) is to raise awareness of your brand.
The other, more minor reason, is to try to get loyalty out of their fans. There are some Barcelona fans who will support Spotify as a way to support Barcelona.
Increased awareness and exposure. Really, they’re just trying to flood your senses with their product as much as you can. Do this enough, and a lot of people will eventually start thinking, “Dang, I really could go for some M&Ms right now!”
They’re trying to plant the seed, and they do that by just making you think about their product more, even if you think you’re not paying attention.
It also just keeps their product in a better position than competitors that might not have the money to throw around as much. You don’t want Canned Crispies, you want Pringles!
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