Good Sports

China’s Olympics medallists are worth their weight in marketing gold

By MARK GODFREY

Liu Xiang, 110-metre hurdle Olympic gold winner, is advertisers' delight in China..

LIU Xiang, winner of the 110-meter hurdle at the Athens Olympics, has become China’s celebrity of the moment. The tall and dashing 23-year-old is also a marketing executive’s dream. For being the first Chinese athlete to win gold in a track and field Olympic final Liu was given 3.5 million yuan, but his commercial pay-off is likely to exceed that figure many times over. So far, however, Liu’s endorsement choices have hardly been exemplary. Along with a deal to promote local cigarette brand Baisha, Liu has signed an advertising deal with a clothing manufacturer in the eastern city of Ningbo. Figures for these deals have not been released by the hurdler’s camp. Liu’s fellow countryman Yao Ming has meanwhile become one of the highest paid sports stars in the world. Yao’s ability to attract endorsement deals is beginning to eclipse that of the marketing executive’s golden boy, David Beckham.

Athletes are quickly becoming the new pop stars of China, pulling down huge endorsement deals with local and international brands. Chinese athletes are becoming increasingly aware of their marketing power and are exploiting it, says Scott Kronick, managing director of Ogilvy Public Relations Worldwide in Beijing. “Before Yao Ming, the great gymnast Li Ning was…a hero not only for his Olympic accomplishments, but also from his story of going back to school and setting up a successful business… But today Liu Xiang has appeal, and he is so likeable that I am sure he will do extraordinarily well from marketing deals. Guo Jingjng, the diver who won gold in Athens is also very famous and should earn well.”

The drawing power of sports in China is undeniable. Television coverage of the 2004 Athens Olympic Games smashed previous records, with China registering the most significant increases in viewer hours. China pulled in an average audience of 85 million a day, according to figures from the international marketing group Sports Marketing Surveys, with each individual viewer watching, on average, eight hours of coverage. China brought home its largest ever haul of medals and athletes like Liu Xiang and women’s doubles tennis stars Li Ting and Sun Tiantian became household names overnight.

Soccer star David Beckham may have been more favored up to now but foreign companies, says Kronick, are beginning to rely on Chinese sports stars for their marketing campaigns in China - and globally. “You have already seen this taking root with Yao Ming globally, and for campaigns by multinational firms in China, I am sure you’ll see this happen. Multinational companies that are working towards becoming part of the fabric of Chinese society in their operations will find that one route to doing this is teaming up with a celebrity sports endorser that helps to build trust for that company far more quickly and effectively.”

China’s medal-winning athletes are given cars, houses and money by national and local governments proud of their efforts. Some gold medal stars make more than others however. Pay-backs for medallists in more obscure sports like shooting, fencing and table tennis are dwarfed by the marketing power of Liu Xiang and basketball star Yao Ming. “Companies want to see spread,” says Keith Bradbury, managing director of Club Football, a soccer skills and marketing company based in Beijing. “They look at the ability of a sport to generate viewing numbers before they commit. No one can supply those numbers like soccer and basketball.”

Yao Ming – one of the world’s highest paid sports stars.

Minority-interest sports stars have surprisingly good pulling power, says Scott Kronick, – though hardly the power of Yao Ming, whose familiarity ratings in China according to a survey of 1,000 Chinese in 2004 by German sports marketing group Sport+Markt AG hit 98 percent. “Many non-Chinese would be surprised at the popularity of athletes in China in the more obscure sports,” says Kronick. “These people are heroes in China, and all have their own marketability.” Disappointingly, however, China’s top beach volleyball stars like Tian Jia, Wang Fei and You Wenhui had difficultly attracting sponsors to the 2004 China National Beach Volleyball Tour in Shanghai. But new technologies like Internet TV flows will boost the marketing value of minority-interest sports, says Kronick. “I think the Internet will do for these sports what it does for all types of information and that is to make it more accessible to the masses. I don't think there is a direct correlation to ‘marketing value’ per se, rather that it will help build popularity that will in the end increase the value of endorsements.”

By contrast Yao Ming is cherry picking his endorsements, opting for a US $3 million, 3-year deal with Chinese mobile phone company Unicom, as well as endorsement packages with international brands like US brewer Anheuser-Busch, Pepsi Cola and fastfood franchiser McDonald’s. “We’ll certainly be using a lot more of Yao,” says McDonald’s chief marketing officer Larry Light. “Yao Ming personifies what the McDonald's brand is all about…[and] connects to today's customers and cultures.” McDonald's main rival in China, the Yum Brands-owned KFC, meanwhile, has hired newcomer tennis duo Li Ting and Sun Tiantian to sell chicken burgers in China.

Foreign sports stars like David Beckham rule in China because of their ability to put bums on seats. Beckham, however, has dropped endorsement deals with six Asian companies in favor of less endorsements but higher fees in other territories, said a spokesman. Beckham earns around US $15 million a year in endorsements and became the face of Pepsi in China, but has severed links to companies in China, Japan and Korea in favor of sports brand Adidas and shaving foam maker Gillette. Yao Ming is fast catching up with Beckham - industry estimates peg Yao’s 2003 endorsement earnings at US $10 million. Another NBA legend, Michael Jordan, earned US $40 million. But Yao may be just warming up. His familiarity in China makes him a reliable tool for western companies looking for market share in China. Yao was 25th on the 2004 Sporting News magazine’s annual list of the most powerful people in sports worldwide. That made him the highest ranked athlete on the list, one spot ahead of golfer Tiger Woods.

European soccer has proven the most consistent crowd puller in China says Bradbury, and the most capable of delivering marketing results. Research firm CSM says that popularity and television viewership of the English Premier League have reached an all-time high in China. About sixty in every 100 Chinese men – especially professionals between the ages of 25 and 44 - follow the competition. But the volatility of Chinese fanbases makes marketing executives’ jobs tougher. Chinese soccer fans shift loyalty according to which team is on top, says Keith Bradbury, making the value of sponsorship deals questionable.

The watchword for sponsors contemplating the Chinese sports marketing scene is therefore caution. Event management in China is in its very early stages and big names sometimes fail to draw the crowds promised. Several world-famous brands such as Mercedes and Lacoste signed up to sponsor the inaugural China Open tennis tournament in 2004 but turnout was disappointingly low, despite participation by the world’s top seeded players. The China Open attracted considerable marketing spends, mostly from companies searching out the cash-rich consumers normally attracted to the traditionally middle-class sport of tennis. “Sportswear and equipment manufacturers obviously see China as a huge market and have been making inroads in the past few years, but what they have actually been waiting for is China’s successful hosting of major sporting events,” said China Open tournament director Lincoln Venancio as the tournament opened. A half empty stadium hardly constitutes a marketing-effective sports event.

The China Open’s failure to draw a crowd was put down to poor marketing and bad timing. Local sports marketing skills, it seems, are still thin on the ground in China. International companies often “cannot justify the low returns on their investment,” says Scott Kronick. Other multinationals have also been stung by low returns: Motorola stopped sponsoring the Chinese Basketball Association, while Fuji and Virgin Atlantic Airways both dropped sponsorship deals with local soccer clubs. Others meanwhile point to more stable marketing possibilities in buying the naming rights to China’s new wave of high-tech sports arenas. “Stadium naming rights are undervalued as a marketing tool that lets brands cut through the clutter of traditional sports sponsorship and advertising,” says Andrew Walsh, an executive at German sports consultancy Sport + Markt.

With the Olympics Games only a few years away, China’s sports stars are set for bigger pay days, as the host nation bids to take first place in the medal tally at Beijing. But just in case anyone’s getting too jealous of Liu Xiang’s earnings, it’s worth noting that Chinese stars get to keep only 30 percent of the actual endorsement pay. The rest goes to tax collectors, sports administrators and local governments.

MARK GODFREY is an Irish journalist currently based in China.