Austin Lally The Brands Lecture 2012 President, Braun and Appliances The Procter & Gamble Company

Sports marketing: unleashing the passion Austin Lally is President for Braun and Appliances, The Procter & Gamble Company and a member of the Company’s Global Leadership Council.

Austin is a 24-year veteran of P&G with significant international experience. He was the Global Vice President and Gillette Global Brand Franchise Leader (Chief Marketing Officer for Gillette). He served as Vice President of P&G’s Baby Care business in Western Europe and as Vice President and Marketing Leader for P&G in China, where he was named in Advertising Age’s Global Power 100. Austin also led the successful restructuring of P&G’s operations in Germany following leadership roles in France and the UK, where he started his P&G career. A native of Scotland, Austin is a graduate of the University of Glasgow. He served as the centenary President of the Students’ Representative Council and won the World Universities Debating Championship. Later, during his seven-year stint in China, he served as a Visiting Professor at the Peoples’ University Beijing, a Governor of the American International School of Guangzhou and was appointed a Senior Economic Advisor to the Peoples’ Government, Tongzhou District, Beijing. He is a member of the Scottish Enterprise GlobalScot Network. He is also a Trustee of The Friends Of Glasgow University Union. Sports marketing: unleashing the passion

The Brands Lecture 25th October 2012

Austin Lally President, Braun and Appliances 2

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t happened. A man boarded a capsule hanging underneath height of the SARS crisis. Airports across Asia were e k r

a a helium-filled balloon and flew up into the stratosphere, deserted. I walked through an empty Hong Kong airport m

s 24 miles high. He then stepped out, saluted, and jumped. on my way to Seville for the final of the UEFA Cup to t r o

p Free fall. Eight million people watched on YouTube. For a see Celtic play Porto when I heard singing in the S while, half of the world’s Twitter posts were about this distance. It was the Celtic song, but sung by Australian jump. The world’s media watched and reported. NASA Celtic fans, part of the great diaspora, all of whom were congratulated him. And through it all the logo of a heading the same way. One hundred thousand Celtic certain Austrian beverage company can be clearly seen. fans made that pilgrimage to Seville. Passion – the ability to mobilise people from all over the world behind We want to This is a remarkable example of how passion and a a common cause. touch and improve sports event can capture the imagination of the planet, with Red Bull delivering its fantastic message through We were passionate about Scotland too, through every people’s lives one landmark event. It is a brand for people with World Cup campaign. As a boy, I saw great teams fail to through our brands. courage, who dare to dream, who seek out and revel in fulfill their potential and later, hard-working teams try extreme situations. The old dream of flying, like Icarus, to punch above their weight. I recall the opening match brought to the world like never before. of the 1998 World Cup in the Stade de France against Brazil. I was stuck among a big group of Japanese Brazil This topic has always been important to me. It is about fans, one kilt in a sea of yellow and green, dreaming of passion and unleashing it through Passion Point Marketing. a tremendous victory. Then the ball ricocheted off the And that is what I would like to talk about tonight. knee of Tom Boyd, the Celtic captain and my classmate at high school, into the Scotland net and the dream was I was born in Glasgow and grew up in a Celtic- over. Fans remember the stories. supporting family. Our club bound our community together and we were proud and passionate about As P&G, we share with our Austrian friends at Red Bull football. The club itself was founded in 1888 to raise a desire for our brands to be noticed, to be distinctive in money to feed Irish families living in poverty in the east crowded and competitive product categories. We want end of the city. I was only two years old when it won to touch and improve people’s lives through our brands, the European Cup in Lisbon, the first non-Latin club to and reach them every day with what we do. And sport do so, a year before Manchester United’s win, and all can help us to deliver this. eleven members of that team were born within forty miles of the stadium, a stadium we call Paradise. Sports marketing is one the best examples of Passion Point Marketing. You have to meet consumers where The club celebrates its 125th anniversary this year. their passion points are because: If you saw us lose narrowly to Barcelona in the fourth minute of injury time in the Champions League back in • the consumer is leaning forward to listen; November 2012, you will have also seen the passion and • it gives marketing a tailwind to drive a brand forward; commitment of the travelling Celtic fans. I think back 3

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e h • tapping into passion makes your campaigns social on offer makes it almost unaffordable just for a T and engaging, rather than static and one-way. business-to-business plan or local initiative. It is only those with the intention to touch large numbers of That is the point about passion. It becomes an amplifier. consumers who can begin to make the economics work. Sports marketing targets the heart not just the eyeballs. If you get it right, it creates a connection with That is why in the sports market today the big global consumers that is lasting, deeper and eventually much franchises have a major advantage over the middle- more effective as a driver of sales. or lower-tier organisations, an advantage I believe is accelerating. If you look at the biggest three clubs Consumer focus globally – Manchester United, Barcelona and Real Madrid – their fans probably add up to over 600 million You cannot But you have to get it right! To do that you must ask globally. These are big numbers. This kind of reach is yourself some important questions. ‘kiss the badge’ why major properties like the English Premier League or and fake it. the National Football League in the US lend themselves The first is about scale. Is the group you seek to reach well to partnerships with big global brands and You need to act with your programme big enough to meet your business organisations. like you deserve to objectives? Or is it too narrow to drive your brand in a meaningful way? If you want to make a global impact, be in the sport. The next question to ask is about the authenticity of you have to work with the right organisations that the relationship. Are there shared values between your reach enough consumers – and the right consumers. brand and the organisation with which you want to work? People supporting a sport, a team or an athlete The next is about footprint. What’s your footprint and are going to defend their passions. I shared my Celtic where do you want to play? Sport used to be local. and Scotland examples and you will have your own When I was a child watching football on television, all teams and countries that make you passionate. If you the advertising around the pitch was for local are going to work in the world of sport, your credentials businesses: the local tyre repair shop, the local TV and authenticity will be subjected to real scrutiny. You dealer, the local restaurant or the local plumber. Most of cannot ‘kiss the badge’ and fake it. You need to act like the club sponsorship was local. you deserve to be in the sport.

In those days sports marketing was also essentially Return on investment business-to-business, offering hospitality to bring local clients to an event in order to build a relationship or Another tough question is how to turn sports marketing reward important customers. There is still plenty of that into higher sales and a real return on investment. Sports today with lots of people in the hospitality business, but marketing is one of the more controversial investments it is my contention that it is becoming a thing of the from that standpoint. There is a tendency for it to be a past. Today, the business is global, the biggest brands in ‘pet project’ chosen through emotion. Sometimes it is the world are global and they are looking to put together sold on the size of the viewing audience or the global programmes. The cost of the rights packages now theoretical fan-base, monetised as a set of eyeballs. I I i a 4 t n t

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This falls down in a very simple respect. If you have a brand that already has high awareness, you derive little benefit just from having your logo flash up on a pitch- side advertising hoarding. You need to go deeper, beyond awareness. It is about taking Performance attributes Gillette as a catalyst the attributes of the Beyond awareness-building is where it really gets P&G has been involved in sport over the years but it sports property you interesting. A more powerful dimension to sports was not front and centre for the entire company. want to work with marketing is about performance. It is about taking the With hindsight, our acquisition of Gillette in 2005 and bringing those attributes of the sports property you want to work with transformed how P&G thought about sports marketing and bringing those attributes to bear on your brand. and its potential as a business-building vehicle. attributes to bear Put simply, this is marketing that links the superiority on your brand. of the winning team or athlete to a superior product. Gillette was always a leader in this area and what you see today with the Olympic programme and other P&G For P&G this is a very important part of our Proven programmes has a direct link back to what we learned Business Model. For 175 years this has been to invest from the men and women of the Gillette Company. more in R&D than our competitors, develop superior We see Gillette as a catalyst for sports marketing inside products technically and then use effective advertising P&G because it was always such an innovator in the to bring that superiority to life. It lends itself very well industry. It started in 1910, nine years after the to this type of sports work. formation of the company by King Camp Gillette. They were innovators, not only inventing the world’s To explain this, I wanted to show you a non-P&G first safety razor, but also pioneering sports marketing example. This is a beautiful Nike print ad from about as we know it today. ten years ago – another Icarus commercial, men who fly. It is very clear from Nike’s work over time that it is Gillette created product endorsement through baseball a brand for winners. Michael Jordan is a winner. The stars and through exclusive sponsorship of the World juxtaposition of the two reinforces that. Nike is a brand Series. Here is a small piece of vintage Gillette history that is all about performance and all about winning. to show you there is little new under the sun. w S j ‘ b a w t 6 u g h w r p Sports marketing: unleashing the passion a i s i e a t v o t s h a y n e

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e h here in Europe is the Gillette Football Club. Since our Gillette and Head & Shoulders, but would it be good for T World Cup sponsorship ended after the 2006 World Cup a Beauty and Household care company with a very in Germany, we have continued to look for the best ways diverse portfolio of products? to participate in football. It is the number one passion point for men in Europe and globally. And we think our Thank you, Mum new Gillette Football Club is a very nice way to get men What unlocked it for us was a very simple truth: that involved in Gillette and to place Gillette in the middle of behind every amazing Olympic athlete is an even more the football world. Launched in September, it is a amazing mum. This was a new idea. After all, mums are dedicated YouTube channel with global application, with their children every step of the way, helping them formed from a partnership between Google and P&G. realise their dreams. And while we are not in the The Olympic business of making athletic equipment or sports apparel, Just as the Gillette Cavalcade of Sports curated the best we are in the business of helping mums, dads and movement has it all. sports content in the world and made it available for families, from changing nappies and brushing teeth to It builds awareness. people to experience in one place, the Gillette Football washing hair, taking a shower and doing the laundry – Club now brings the same to the digital era, curating for It creates emotion. in short, doing all the things that families do every day. free the best football content that will be available on It gets people to the net. Consumers who register then become people P&G has been there for families for nearly 175 years and talk and buy. with whom Gillette can build a direct ongoing as we talked to consumers around the world we realised relationship. that mums were the unsung heroes of the Olympics, of the athletes and of life itself. So we decided to recognise The Olympic Games the mum, celebrate her and simply say something that P&G has learned a lot from Gillette. And now, I wish not everybody says all the time, which was this: ‘Thank to talk about how those lessons are influencing not you, Mum,’ to every mum in the world. just individual P&G brands but the whole company. The flagship example today is our Olympics sponsorship. We learned a lot of things in Vancouver. We talked to The Olympic movement has it all. It builds awareness. the mums of Olympians and we were surprised to learn It creates emotion. It gets people to talk and buy. that, after all the sacrifices, many of them and their families are not able to make the trip to see their So, we have made a multi-Games commitment to the children compete. We wanted to help, so we created the Olympics. We believe it is the most extensive sports ‘Thank you, Mum’ Gift to help mums and families get to marketing alliance ever seen: one event, one platform, the Games. We also learned that, when at the Games, one message, one company and all of its brands. they are not allowed to enter the athletes’ village to see their children, making it difficult for them all to get The journey started in 2010 at the Vancouver Winter together. So we created the P&G Family Home as a Games. It was an experiment. At first, there was some gathering place with services to help mums. It was a internal scepticism. Some people in the company ‘home away from home’ and became the place to relax, thought P&G had little to gain from the Olympics. celebrate and create lasting memories beyond the It may be a good fit for male-oriented brands like Games. It was an incredible experience. W a h p w w 8 n e o Sports marketing: unleashing the passion i o h n d a o n e n d

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e h In the past, sports marketing campaigns sent out a T one-way message to consumers and groups of fans – to ‘modern tribes’. Today, sports marketing creates communities and movements that exist in their own right. It’s not just about performance, but also about so much more. It aims to establish long-term relationships between consumers and a brand, a relationship that benefits both sides, united by a shared passion.

That is what we sought to do with the ‘Thank you, Mum’ campaign in London. But we had to make it real Today, sports for P&G, to consider what role we could play and how marketing creates we could, and should, use our voice as an Olympic communities and partner while promoting our brands and growing our business. As I have said, you have to be authentic if movements that exist you are to announce yourself as the proud sponsor of in their own right. mums. You have to walk the talk and we tried to do this in London.

Again we created a home-away-from-home – the P&G Family Home, serving families 24/7 during the whole Games – as we did in Vancouver, but on a much, much bigger scale. We had over 3,000 people in the P&G home every day. We provided services: people could wash their sports clothes with Ariel; kids played in the Pampers playground; relatives went to the Crest and Oral B Smile Centre and were energised in the Duracell Massage Centre. They relaxed with a beauty treatment at the Wella Studio Beauty Spa. Men could shave with We were proud to support these élite athletes from Gillette and Braun in the Man Cave. around the world. In the UK we supported Sir Chris Hoy, Jessica Ennis, Paula Radcliffe and Mark Cavendish. They It was also a content-creation factory, with every became the faces of 2012 and we were delighted to athlete and every family member being available for have them associated with our brands and campaigns. interview. It was a chance for the media to meet them, We wanted to tell their stories through our brands and creating a huge amount of coverage and buzz that help our consumers follow their progress and feel part worked globally. of their success. 10

n o i s s a p

e h t

g n i h s a e l n u : g n i t e k r a m

s t r o p S

We think we made a mark in London with the Olympics but importantly this is a multi-Games commitment.

The key question you may ask is this: ‘OK, so nice On average, sales increased between +5% and +20% marketing, but what is in it for P&G and did it really in participating stores. Those products involved in the have a business impact?’ Obviously only a few months programme grew market share on average +2%. We have passed so we are still hard at work on the analysis. have also looked at the effectiveness of the advertising I mentioned earlier the importance of rigour. This was and found that this was +39% more effective than the a big investment for the company so we are subjecting norm. That is significant as it means every marketing it to extensive analysis. dollar is working almost 40% harder. It also reinforces the point that when you tap into a passion point and The big picture is that our Olympics programme was the you have the tailwind behind you, you have consumer world’s largest multi-brand campaign with 34 brands, engagement. The advertising just works better. 150 athletes and 4 million participating stores. It put P&G and its brands together on a world stage like never In terms of the marketing metrics, we had more than before. At the start, we committed to deliver $500 600 million views globally on social media – a record million in incremental sales in the year around the for us. We believe that our Olympic content made Olympics. We believe we are on track to deliver that, P&G and our brands part of the Olympic conversation, at double the average return on investment for all the content was only available through P&G and one in the marketing spend that we put in. That is twice as three people participating in that conversation shared efficient from a marketing spend standpoint. it with friends. These were the Digital Games and our 11

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L s

d s d n a n r a r B

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h s h i t t f i l r e B w T

e h strategy of shifting TV spend to digital and social media to grow further because of the large fan-bases in those T for the Olympics was one of the factors that amplified markets that are not yet being fully monetised. impact. There is a beautiful example of PepsiCo seeking to build We had a +30% increase in Facebook fans and a +48% a connection with football in India. Everyone knows that increase in people talking about P&G and its products India is cricket-mad but football is the fastest-growing on Facebook. It was also the Twitter Olympics, delivering sport among young Indians. PepsiCo got in at the 370 million Twitter interactions with P&G products. In beginning, with innovative training programmes, terms of the traditional measure of media impressions, introducing Indian children to football. And in China, the programme achieved an unprecedented 65 billion I witnessed the excitement build during the seven years impressions of which around a quarter had a rich I lived there, as Chinese athletes started to compete The next chapter message content that was more than equivalent to a successfully at a global level. I was in China when in sports marketing traditional advertisement. We believe this had a strong Beijing was chosen to host the 2008 Games, which put is probably not and positive impact on our business. China on the map in sports. Lin Dan, China’s badminton champion, was probably one of our most successful going to be written We think we made a mark in London with the Olympics Gillette ambassadors in the run up to London 2012. in London or but importantly this is a multi-Games commitment. New York. Everything we have learned in London will be taken to The next chapter in sports marketing is probably not Sochi in 2014, Rio in 2016 and beyond. going to be written in London or New York. This means we need to build superior understanding of the sports Sports marketing – the future properties and assets in the emerging markets. Today we are proud of our P&G relationships with Baseball and I want to close with a few thoughts about the future. the National Football League in the USA. But a big part of the future is to be found in the East and the South. Sports marketing started as local, rooted in local That is what we spend our time thinking about. communities and in countries where pride and patriotism were central. Now it is both global and local. Take Latin America as an example. It is already a rich As brand owners and leaders we need to consider how and important sports market. Think of Latin America this model continues to evolve. As the work becomes and you think of Brazil and Argentina, you think about more digital, more social, more one-on-one, it will also football. But we are heading into an unprecedented become more virtual than physical. Sports marketing period there, with the World Cup in Brazil in 2014 and will be more ‘everywhere’ rather than ‘somewhere’. This the Olympic Games in Rio in 2016. People must start move from traditional awareness-building through now to build a position in Brazil and Latin America performance into social and digital consumer because that is going to become an important geography participation will only continue to accelerate. for brands over the next few years. We are already building our position there as the sponsor of the Emerging markets will be key. I have mentioned already Brazilian national team, an important relationship for us. that this is a $100 billion industry with huge potential 12

n o i s s a p

e h t

g n i h s a e l n u

: The key themes therefore are the growth of digital, g n i

t the growth of relationships, less reliance on the US e k r

a and Europe, more focus on emerging markets and a m

s recognition that the sports space is just going to t r o

p become more and more competitive. The size of the S industry and the passion that sport arouses in ever- growing numbers of consumers means that more marketers are going to enter this space. That will put pressure on the leaders to stay ahead and keep innovating, something we are committed to doing. The sports space is just going to Thank you for your engagement. I hope you share my passion for sport and that you have a better become more and understanding of what we are trying to do as more competitive. sports marketers. This is the twelfth in the Brands Lecture series . Previous lectures include:

Are Brands Good for Britain? Tim Ambler, London Business School

Posh Spice and Persil Jeremy Bullmore, WPP Group

100% Marketing Rob Malcolm, Diageo

Hybrids, the Heavenly Bed and Purple Ketchup David Aaker, Prophet

Brands Beyond Business Simon Anholt, Earthspeak

The Lovemarks Effect Kevin Roberts, Saatchi & Saatchi

They think it’s all over… Martin Glenn, Birds Eye Iglo Group Limited

Can brands save the world? Let’s hope so Richard Reed, Innocent Drinks

In brands we trust Lord Bilimoria CBE DL, Cobra Beer

Brand new: Innovation in a challenging world Fiona Dawson, Mars Chocolate

Accountability is not enough… Rory Sutherland, Ogilvy Group UK

Copies of each Brands Lecture are available from the British Brands Group and are downloadable in electronic form from the website at www.britishbrandsgroup.org.uk . 100 Victoria Embankment, London EC 4Y 0DH Telephone 07020 934250 Facsimile 07020 934252 Email [email protected] www .britishbrandsgroup.org.uk