KEL195

MARK JEFFERY

Sony-FIFA Partnership Marketing Program:

The Value of Sponsorship

On April 6, 2005, Sony Corporation announced the signing of a global partnership program
contract with the Fédération Internationale de Football Association (FIFA), the leader in world-
class soccer and the organizer of the FIFA World Cup.1 The contract, which represented the first
global marketing and communications platform for the Sony Group, would run from 2007 to
2014 with a contract value (excluding services and product leases) of ¥33.0 billion
(approximately $305 million).

I am delighted and very proud that Sony has chosen FIFA and football for this
momentous deal, which creates a true partnership with many opportunities for taking the
relationship far beyond a classical sponsorship. Sony, like FIFA, enjoys tremendous
brand awareness and is therefore another perfect partner to support us in our mission to
develop and broaden the worldwide appeal of football even further.
—FIFA president Joseph S. Blatter, Tokyo, Japan, April 6, 2005

This partnership is an ideal one, as it benefits both sides from the point of view of
branding. FIFA has a spectacular reach around the world through the universal
language of football and it is this unique attribute that convinced us to commit to this
global sponsorship deal. This is an ideal opportunity for us to leverage the powerful
assets of the Sony Group in electronics, entertainment, and technology.
—Sony Group CEO Nobuyuki Idei, Tokyo, Japan, April 6, 2005

As a FIFA partner, Sony would be able to mobilize its personnel, material, and intellectual
property resources and develop new marketing methods to create new value for customers. Now
the questions were: how could Sony maximize the marketing potential of this partnership, and
what was the return on investment (ROI) of this FIFA sponsorship opportunity?

1
Press release, “Sony and FIFA Conclude Contract for Partnership Program—Sony to Develop Global Marketing Activities as
Official Partner of FIFA World Cup,” April 6, 2005, http://www.sony.net/SonyInfo/News/Press/200504/05-020E/index.html
(accessed June 29, 2006).

©2006 by the Kellogg School of Management, Northwestern University. This case was prepared by Professor Mark Jeffery and
Saurabh Mishra, Post-Doctoral Fellow in the Center for Research on Technology and Innovation. Cases are developed solely as the
basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or
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SONY-FIFA PARTNERSHIP PROGRAM KEL195

Sony Corporation
Founded in 1946 in Tokyo, Japan, Sony Corporation had become an $87 billion consumer
electronics and entertainment colossus by the start of the twenty-first century (see Exhibit 1 and
Exhibit 2 for summary financials). In line with the company’s growth during the past six
decades, Sony’s business portfolio had also grown. Originally focused primarily on electronics,
Sony now had a dominant presence in the gaming, music, movies, and financial services
industries (see Exhibit 3 for Sony’s 2004 organizational chart).

Although the company had expanded in multiple sectors, electronics still remained the
dominant part of the business, accounting for an almost 62 percent share of Sony’s sales and
operating revenue (see Exhibit 4). From its inception, electronics had been a vital engine of
growth for Sony’s expansion, and most consumers associated the Sony brand with electronics.

While Sony had benefited immensely from its electronics division in the past, recent trends
were a little disconcerting. In 2002 the electronics division at Sony reported a net loss of ¥1,158
million ($11.3 million). Although this trend reversed in 2003, with the division reporting a profit
of ¥41,380 million ($387 million), the 2004 fiscal year again witnessed a loss of ¥35,298 million
($339 million).

The losses in the electronics division eventually resulted in a decline in Sony’s overall
performance. In 2005 Sony posted a net loss of ¥7.3 billion ($65.2 million) in the three months
ended June 30, compared with a profit of ¥23.3 billion a year earlier. That red ink followed a loss
of ¥56.5 billion in the fourth quarter ended March.

A look at the breakdown of the different segments of Sony’s electronics business division
reveals that overall, the decline in the profitability was the result of loss in sales and operating
revenue in the audio and television businesses (see Exhibit 5). These two businesses were
traditionally the primary revenue generators for Sony, and losses for them translated to overall
losses for the company. In contrast to the decline in the profitability of the electronics business,
the other businesses had been growing well and were providing a sustainable flow of revenues for
Sony.

These trends in the performance of the portfolio triggered extensive reflection and discussion
among the top executives at Sony, and they began engaging in new organizational and marketing
initiatives to channel these trends in a positive direction. One such initiative taken up by the
company was to partner with the world’s premier football organization, FIFA, in an eight-year
(2007–2014), $305 million deal. With the partnership on the horizon, Sony was actively seeking
the most ROI from this deal.

FIFA
FIFA was founded in a back room of the headquarters of the Union Française de Sports
Athlétiques at the Rue Saint Honoré 229 in Paris on May 21, 1904. Since its inception, FIFA had
gained increasing prominence in the world of sports. By 2005 it represented 300,000 soccer clubs
worldwide comprised of 240 million players, 30 million of whom were women. FIFA organized
multiple soccer events every year in various parts of the world, along with the most popular
sporting event in the world, the trademarked FIFA World Cup, held every four years.

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No other sporting event captured the world’s imagination like the FIFA World Cup. Ever
since the first tentative competition in Uruguay in 1930, FIFA’s flagship tournament had
constantly grown in popularity and prestige.

By the beginning of the twenty-first century, the FIFA World Cup held the entire global
public under its spell. It attracted people from all walks of life—male and female, young and old,
white collar and blue collar—and from all parts of world (see Exhibit 6 for demographic
breakdown of key FIFA viewer segments).

Furthermore, according to 2002 estimates, accumulated audiences of more than 28.8 billion
people were watching the FIFA tournaments, with an average of 314 million people watching per
match. For the FIFA World Cup alone, an estimated 1.1 billion watched on TV in 2002. These
numbers were expected to grow to 1.6 billion TV viewers for FIFA World Cup 2006 and to an
estimated 1.9 billion viewers for the FIFA World Cup in 2010 (see Exhibit 7 for details).2

In addition to TV and stadium viewership, FIFA events also attracted large numbers of fans
to the Web sites. A recent study projected that by 2010 the FIFA World Cup would attract more
than 4 billion data page impressions, with these numbers expected to jump to more than 9 billion
data page impressions by the 2014 FIFA World Cup (see Exhibit 8 for details). In the past,
companies have successfully benefited from attracting and connecting to this Internet traffic. For
instance, Philips (Royal Philips Electronics) used its partnership with FIFA to have an official
MatchCast Web site for fans, which helped increase its awareness among the fans (see Exhibit
9).

For the fans, the FIFA World Cup combined different cultural elements and values. Fans
associated FIFA with esteem, trust, energy, reliable high quality, leadership, and dynamism.3
These elements made FIFA a unique opportunity for companies to gain from sponsorship and
partnering activities. Any company that could relate its brand image to any one or set of the
multitude of emotions held by the FIFA fans worldwide could benefit immensely from a
partnership with the organization.

The Sony-FIFA Partnership Program

The agreement signed with FIFA in April 2005 made Sony a “FIFA partner,” the highest
level of sponsorship status, which is accorded to only six companies. Only one FIFA partner is
chosen for a number of defined industries or business categories. Sony had been chosen for the
“Digital Life” category, which was to be established in 2007. Digital Life covered a wide variety
of business activities, ranging from entertainment to electronics.

As a FIFA partner in this category, Sony would be able to exercise certain exclusive rights as
an official sponsor of forty-eight FIFA events over eight years. These included the world’s largest
football event, the FIFA World Cup (due to be held in South Africa in 2010 and South America
in 2014), as well as the FIFA Women’s World Cup, the FIFA Confederations Cup, and the FIFA
Interactive World Cup. For a detailed list of scheduled FIFA events for 2007–2014, see Exhibit
10.

2
Sponsorship Intelligence.
3
WPP.

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As a FIFA partner, Sony would be able to energetically promote advertising and marketing
activities at these events, utilizing the global strength of its group companies in electronics,
entertainment, games, and more. Through this partnership contract, Sony was given a broad array
of rights at FIFA events. Sony would be able to use the partner logo at the FIFA World Cup and
other FIFA events, and it would have rights to the use of FIFA images and archive materials.
Other rights would include advertising boards in stadiums, TV sponsor credits, on-screen IDs,
and preferential negotiation rights for TV commercial spots.

In greater detail, the rights package with FIFA included:

• Use of marks/designations (e.g., FIFA official partner event name)

• Exposure on rotating boards at competitions
• Publications
• Exposure on the official FIFA Web site(s)
• Access to event tickets (complimentary and VIP tickets)
• Access to hospitality packages (VIP rooms)
• Display and sale of products at sites
• Use of historical FIFA competition film/video footage
• On-screen credit inserted into TV broadcasts
• Right of first negotiation with respect to TV commercial airtime/broadcast sponsorship

FIFA Marketing Case Examples

In the past, other companies had partnered successfully with FIFA to increase their brand
awareness, including MasterCard and Hyundai. In the case of MasterCard, the company had
extensively utilized its right to use a composite logo customized to sponsored FIFA events (see
Exhibit 11). Such composite logos provided important differentiation points between MasterCard
and other sponsors. In addition to the use of composite logos, MasterCard also used marks (see
Exhibit 12). These marks provided an important avenue for increasing awareness of
MasterCard’s sponsorship of FIFA events among the fans and MasterCard’s target market.

Like MasterCard, Hyundai also extensively exercised its right as an official FIFA partner.
However, in addition to using marks and logos (see Exhibit 13), Hyundai used creative
marketing campaigns such as “goodwill ball tours” (see Exhibit 14), in which large inflatable
balls, representing each of the thirty-two football finalists, were toured throughout the home
country through Hyundai dealerships, providing fans the opportunity to write messages on the
ball. These balls were then taken on to the respective team matches and displayed outside each
stadium. Through this marketing event, Hyundai was able to attract more than 200,000 visitors,
creating strong associations with Hyundai among FIFA fans.

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The Sony Challenge

Sony needed to come up with creative marketing campaigns similar to those of MasterCard
and Hyundai in order to help alleviate its current problems as well as build upon its existing brand
and customer equity. In addition, Sony hoped to make a real contribution to the great sport of
football around the world through this deep and long-lasting partnership with FIFA.

The key sectors of the Sony group (including electronics, movies, music, and games) would
be involved in the partnership with the world’s most popular sport: football. Their aim was to
heighten awareness and respect for the Sony brand, and to allow Sony to deliver new forms of
enjoyment to customers, thus enhancing its overall corporate value.

As Sony entered this new and exciting era of partnership with FIFA, the key question it faced
was how to effectively target and manage its marketing campaigns to maximize the ROI beyond
conventional sponsorship marketing. Sponsorship marketing campaigns often cost two or three
times the amount Sony was investing for the FIFA rights, so this new marketing strategy
represented a substantial investment for Sony over the next several years. The key to a profitable
relationship depended largely on Sony’s efforts to streamline its marketing campaigns around the
global FIFA events. Although the results of Sony’s efforts would be realized over time, Sony was
looking for creative marketing opportunities with a strong ROI.

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Case Questions
As senior executives at Sony, your task is to design a creative marketing campaign to be used
at future FIFA events. In choosing marketing campaigns, remember that your mission is to:

Activate the FIFA sponsorship opportunity and maximize ROI beyond conventional
sponsorship marketing.

Be creative in designing your marketing campaign. Your deliverable should at least include
the following:

1. The idea for your proposed campaign.

2. The target market segment.

3. The approximate execution strategy.

4. A scorecard of qualitative and quantitative metrics for determining the success (ROI) of the
marketing campaign.

5. A measurable way to define success.

6. The information you will require to more accurately assess the expected ROI from the
proposed campaign, and the methods you will use to obtain this information.

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Exhibit 1: Five-Year Summary Financial Data for Sony

Sony Corporation and Consolidated Subsidiaries

¥ in millions $ in millions
except per except per
share share
a
amounts amounts
Year ended March 31: 2000 2001 2002 2003 2004 2004

For the Year

Sales and operating revenue 6,686,661 7,314,824 7,578,258 7,473,633 7,496,391 72,081
Operating income 223,204 225,346 134,631 185,440 98,902 951
Income before income taxes 264,310 265,868 92,775 247,621 144,067 1,385
Income taxes 94,644 115,534 65,211 80,831 52,774 507
Income before cumulative effect of accounting changes 121,835 121,227 9,332 115,519 90,628 871
Net income 121,835 16,754 15,310 115,519 88,511 851

Per share data:

Common stock
Income before cumulative effect of accounting
changes
Basic 144.58 132.64 10.21 125.74 98.26 0.94
Diluted 131.70 124.36 10.18 118.21 93.00 0.89
Net income
Basic 144.58 18.33 16.72 125.74 95.97 0.92
Diluted 131.70 19.28 16.67 118.21 90.88 0.87
Cash dividends 25.00 25.00 25.00 25.00 25.00 0.24
Number of weighted-average shares for basic per
842,679 913,932 918,462 919,706 923,650
share data (thousands of shares)
. . . . . . . . . .

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Exhibit 1 (continued)
¥ in millions $ in millions
except per except per
share share
a
amounts amounts
Year ended March 31: 2000 2001 2002 2003 2004 2004

Subsidiary tracking stock

Net loss
Basic — — (15.87) (41.98) (41.80) (0.40)
Cash dividends — — — — — —
Number of weighted-average shares for basic per
— — 3,072 3,072 3,072
share data (thousands of shares)
b
Depreciation and amortization 306,505 348,268 354,135 351,925 366,269 3,522
Capital expenditures (additions to property, plant, and
435,887 465,209 326,734 261,241 378,264 3,637
equipment)
Research and development expenses 394,479 416,708 433,214 443,128 514,483 4,947

At Year End
Net working capital 861,674 830,734 778,716 719,166 381,140 3,665
Stockholders’ equity 2,182,906 2,315,453 2,370,410 2,280,895 2,378,002 22,865
Stockholders’ equity per share attributable to common stock 2,409.36 2,521.19 2,570.31 2,466.81 2,563.67 24.65
Total assets 6,807,197 7,827,966 8,185,795 8,370,545 9,090,662 87,410

Number of shares issued at year end (thousands of shares):

Common stock 453,639 919,617 919,744 922,385 926,418
Subsidiary tracking stock — — 3,072 3,072 3,072
a
U.S. dollar amounts have been translated from yen, for convenience only, at the rate of ¥104=US$1, the approximate Tokyo foreign exchange market rate as of March 31, 2004.
b
Including amortization expenses for intangible assets for deferred insurance acquisition costs.

Source: http://www.sony.net

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Exhibit 2: Sales and Operating Revenue by Geographic Area for Sony

a
¥ in millions $ in millions
Year ended
2002 2003 2004 2004
March 31:
Japan 2,248,115 2,093,880 2,220,747 21,353
29.70% 28.00% 29.60%
United States 2,461,523 2,403,946 2,121,110 20,395
32.5% 32.2% 28.3%
Europe 1,609,111 1,665,976 1,765,053 16,972
21.2% 22.3% 23.6%
Other 1,259,509 1,309,831 1,389,481 13,361
16.6% 17.5% 18.5%
Total 7,578,258 7,473,633 7,496,391 72,081
a
U.S. dollar amounts have been translated from yen, for convenience only, at the rate of ¥104=US$1, the approximate Tokyo foreign
exchange market rate as of March 31, 2004.

Note: Sales and operating revenue are attributed to countries based on location of customers.

Source: http://www.sony.net

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Exhibit 3: Organizational Chart for Sony

Headquarters

Sony R&D Entertainment Personal Solutions Sony Financial

Laboratories Business Group Business Group Holdings Group

Game Business Home Electronics

Group Network Company

Information
Technology & Microsystems
Communications Network Company
Network Company

Personal Professional
Audiovisual Solutions Network
Network Company Company

Semiconductor Sony Ericsson

Solutions Network Mobile
Company Communications

Source: http://www.sony.net

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Exhibit 4: Profit and Loss by Business Segment for Sony

a
¥ in millions $ in millions

Year ended March 31: 2002 2003 2004 2004

Operating income (loss):

Electronics (1,158) 41,380 (35,298) (339)
Games 82,915 112,653 67,578 650
Music 22,132 (7,867) 18,995 182
Movies 31,266 58,971 35,230 339
Financial services 21,822 22,758 55,161 530
Other (18,249) (24,983) (10,030) (96)

Total 138,728 202,912 131,636 1,266

Elimination 17,148 15,897 14,530 140
Unallocated amounts:
Corporate expenses (21,245) (33,369) (47,264) (455)
Consolidated operating income 134,631 185,440 98,902 951
Other income 96,328 157,528 122,290 1,176
Other expenses (138,184) (95,347) (77,125) (742)
Consolidated income before income taxes 92,775 247,621 144,067 1,385
a
U.S. dollar amounts have been translated from yen, for convenience only, at the rate of ¥104=US$1, the approximate Tokyo foreign
exchange market rate as of March 31, 2004.

Share of Sales and Operating Revenue by Business Segment

Other
Financial Services 4%
7%

Movies
10%

Music
7%

Electronics
62%
Games
10%

Note: Year ended March 31, 2004. Includes intersegment transactions.

Source: http://www.sony.net

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Exhibit 5: Electronic Sales and Operating Revenue to Customers by Product

Category for Sony
a
¥ in millions $ in millions

Year ended March 31: 2002 2003 2004 2004

Audio 747,469 682,517 623,582 5,996

15.70% 15.00% 13.10%
Video 847,311 851,064 948,111 9,116
17.8% 18.8% 19.9%
Televisions 984,290 950,166 917,207 8,819
20.6% 20.9% 19.3%
Information and communications 998,773 836,724 834,757 8,027
20.9% 18.4% 17.6%
Semiconductors 182,276 204,710 253,237 2,435
3.8% 4.5% 5.3%
Components 511,579 527,782 623,799 5,998
10.7% 11.6% 13.1%
Other 500,852 490,350 557,707 5,363
10.5% 10.8% 11.7%
Total 4,772,550 4,543,313 4,758,400 45,734
a
U.S. dollar amounts have been translated from yen, for convenience only, at the rate of ¥104=US$1, the approximate Tokyo foreign
exchange market rate as of March 31, 2004.
Note: The above table is a breakdown of electronic sales and operating revenue and operating income (loss) in Sony’s business segments.
The electronics segment is managed as a single operating segment by Sony’s management. However, Sony believes that the information
in this table is useful for investors in understanding the product categories in this business segment. In addition, commencing with the year
ended March 30, 2004, Sony has partly realigned its product category configuration in the electronics segment. The primary changes are
LCD televisions and computer displays (transferred from “Information and communications” to “Televisions”), and set-top boxes (transferred
from “Televisions” to “Video”). Accordingly, results of previous years have been reclassified.
Source: http://www.sony.net

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Exhibit 6: Key Demographics—Football Interest in All Age Segments 15–49

Breakdown by Age of Respondents “Quite Interested” or “Very Interested” in

Football

China 17 20 32 30

Japan 17 28 29 26

Korea 20 27 28 24

France 15 21 36 27

Germany 13 22 30 35

Italy 17 25 28 30

Spain 22 31 19 28

UK 14 28 28 29

Argentina 26 28 22 25

Brazil 26 25 24 26

Mexico 30 28 24 17

All Countries 29 29 25 18

15–21 22–29 30–39 40–49

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Exhibit 7: FIFA World Cup Final TV Audience (in billions)

FIFA W orld Cup 1998

FIFA W orld Cup 2002

FIFA W orld Cup 2006

FIFA World Cup 2010

0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8 2

Source: Sponsorship Intelligence

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Exhibit 8: FIFA World Cup 2006–2014 Expected Data Page Impressions (in
millions)
Euro 2000

Olympics 2000

Olympics 2002

FIFA World Cup 2002

Euro 2004

FIFA World Cup 2006

FIFA World Cup 2010

FIFA World Cup 2014

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000

Source: Sponsorship Intelligence

Exhibit 9: Philips MatchCast

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Exhibit 10: FIFA Events (2007–2014)

FIFA Women’s World Cup (China)
FIFA World Youth Championship (Canada)
FIFA U-17 World Championship
2007
FIFA Beach Soccer World Cup (Brazil)
FIFA Club World Championship
a
FIFA Interactive World Cup (IWC-Gaming)
FIFA U-19 Women’s World Championship
FIFA Beach Soccer World Cup
2008 Futsal World Championship
FIFA Club World Championship
FIFA Interactive World Cup (IWC-Gaming)
FIFA World Youth Championship
FIFA U-17 World Championship
FIFA Beach Soccer World Cup
2009
FIFA Confederations Cup (South Africa)
FIFA Club World Championship
FIFA Interactive World Cup (IWC-Gaming)
FIFA Beach Soccer World Cup
FIFA World Cup (South Africa)
2010 FIFA U-19 Women’s World Championship
FIFA Club World Championship
FIFA Interactive World Cup (IWC-Gaming)
FIFA World Youth Championship
FIFA U-17 World Championship
FIFA Women’s World Cup
2011
FIFA Beach Soccer World Cup
FIFA Club World Championship
FIFA Interactive World Cup (IWC-Gaming)
FIFA U-19 Women’s World Championship
FIFA Beach Soccer World Cup
2012 Futsal World Championship
FIFA Interactive World Cup (IWC-Gaming)
FIFA Club World Championship
FIFA Interactive World Cup (IWC-Gaming)
FIFA World Youth Championship
FIFA U-17 World Championship
2013
FIFA Beach Soccer World Cup
FIFA Confederations Cup (South America)
FIFA Club World Championship
FIFA Beach Soccer World Cup
FIFA World Cup
2014 FIFA U-19 Women’s World Championship
FIFA Club World Championship
FIFA Interactive World Cup (IWC-Gaming)
a
IWC (FIFA Interactive World Cup) is the global electronic football game competition, in which the world’s best players of the FIFA Official
Football software game will battle for the title to become the FIFA Interactive World player of the year.

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Exhibit 11: MasterCard’s Customized FIFA Logo

Exhibit 12: MasterCard’s Customized FIFA Marks

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Exhibit 13: Hyundai’s Customized FIFA Marks

Exhibit 14: Hyundai’s Customized FIFA Marketing Events

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