You may have heard of the five-year marketing deal that GM recently signed with global soccer powerhouse Manchester United. The move raised several questions, which came two weeks after the automaker said that it will not advertise in the Super Bowl (or with Facebook). For those still wondering what the heck is the point, the following may be just what you need to appreciate the rationale behind the change-up.
To start, let’s realize that GM is not strong internationally. Heck, more than half of its sales in China are from non-GM brands; Cadillac is nearly non-existent outside the US of A while Chevrolet is not the powerhouse it is here. Internationally, the brand’s lineup used to consist of rebadged Daewoos, rightfully earning the Bow Tie and its vehicles a sub-par reputation. But now that GM is serious about its business, it has chosen to make Chevy a global marque with a range of common quality products in hopes of boosting its image — and more importantly, sales. To illustrate the gravity of needing to increase sales, consider this: Toyota sold more than twice what Chevy did in Europe in 2011. And for those wondering, Opel is not helping GM’s bottom line at the moment.
In effect, the goal is to sell cars and boost profits; specifically, GM needs to sell a lot more in markets outside the U.S. And one way to significantly increase profit margins is to significantly increase revenue. A way to do just that is to capitalize on opportunities. Hence, Europe. Hence, Manchester United.
“As we look around the world and … we found a really great partner in Manchester United,” said GM global marketing head Joel Ewanick. “Manchester United is one of the most popular sport franchisees in the world.”
See, with a few notable exceptions, American football is limited to the U.S. and Canada, while soccer has a much, much larger global fanbase — making it better for promoting a (car) brand. Dubious? Here are some figures.
The National Football League has about 400 million fans… compared with about 3.5 billion fans of soccer. And out of that huge global fanbase, about 659 million are faithful to Manchester United, which competes in England’s Premier League.
GM’s deal with Manchester consists of ads in the team’s stadium, specially-designed seats for the players on the sidelines (with the Chevy logo) and global marketing opportunities with the club’s players. And since China is, well, China, there is also an aspect of creating the Chevrolet China Cup as part of the Manchester United 2012 Tour. Scheduled for the 25th of July, Chevrolet China Cup will features games in Shanghai, among other cities.
Continuing with the NFL contest, GM’s decision to skip the Super Bowl is simple: the audience for the game isn’t growing, but the cost to run a commercial is increasing… sharply.
“We’re done. We really are reapplying those dollars and they know that,” Ewanick said, referring to CBS, which has the broadcast rights for the Super Bowl. “We could always change our mind. But right now, the door is shut.”
But sitting out the Super Bowl isn’t the equivalent of cutting advertising back during NFL games, or in the U.S. — as Ewanick said that this is not what’s happening. In fact, GM will increase its total advertising expenditure with the NFL.
For the sake of a grand perspective, GM spends about $4.5 billion a year in advertising, and about a third of that will be spent in the U.S. But it would seem that the Manchester deal is just one piece of a broader Chevrolet marketing strategy meant to build the brand (and sales) in Asia, South America, and Europe. And because at the end of the day, Chevy may outsell Toyota in the United States… but the Bow Tie sold 4.77 million vehicles worldwide in 2011. Toyota moved more than 7 million.