Question came from thinking of Emirates Airline who sponsor Arsenal, Real Madrid and Milan (and others). This costs them over £100m, surely they cannot be seeing a return on that investment?
In: Economics
My current company sponsors a golfer (logo on the hat) and we look at it for client retention. As part of the package, we get luxury box seats at a number of tournaments and he is committed to a couple of pro-ams (usually we get 9-holes and another sponsor gets the other 9), and a few private clinics that he puts on for ours (and other sponsor’s) clients. We send our best clients and then wine and dine them afterwards. They have a great time and ideally increase their spend. No one is buying our product because they saw a logo on the hat.
A big client for us spends about $5MM a year and the hat sponsorship isn’t even 10% of that.
Emirates does that on a way, way, way larger scale. There are only a few airlines that fly to the Middle East from London (and I assume other parts of Europe) – Emirates is the largest. There are a lot of people from the Middle East living in the UK (and around Europe). There are a lot of business people going back and forth too. They want those eyeballs and they want those people to think Emirates when they have to go to the region for work. So branding is probably 1/4 of that sponsorship spend.
Back to my tiny (in comparison) golf sponsorship, Emirates can lock in more corporate clients (big company that has an office in London and an office in Dubai and commits to 1,000 flights a year or something), and more profitably, corporate freight (Emirates Sky Cargo) with their biggest clients (think FedEx but for that region). They can wine and dine their clients like crazy. Don’t like soccer? That is okay because Emirates seems to sponsor anything that you’d like.
In 2020, Amazon spent $13B on shipping (that is a figure that blows my mind – just showing this to show what large clients spend on shipping). If I’m a large freight shipping client with Emirates (maybe spending $100MM+ per year), you know that they want to keep me around. There are other clients like me too. It is easy to keep me spending that money annually if you take me out to a few games, wine and dine me, let me get a photo with Saka, take me golfing in Dubai, etc. I’m going to stick around and keep giving Emirates SkyCargo my shipping spend.
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