Soccer World Cup sponsors say it’s worth the huge price tag.

You’ve seen the Visa, Coca-Cola, Adidas and MTN (JSE:MTN) signs around the soccer pitches and you know these businesses paid $70m to $100m for global sponsorship rights.

How can it be justified?

Andrew Woodward, Australian head of sponsorships of Visa worldwide, is delighted that Visa “stole” the worldwide sponsorship from arch-rival MasterCard in 2005 at a price that only a card company that deals in trillions can understand. Visa enjoys perhaps the greatest visibility at all the soccer grounds.

Says Woodward: “We had three goals - to increase spend on our cards, to convert more people from cash and cheques to cards and finally client engagement.

“I can’t say that transactions have risen directly yet. In some markets, it might take a year for us to feel a difference. Inside SA card turnover by foreign visitors has risen 50% already.

“We are certainly happy with the visibility we have enjoyed.”

Visa has arranged big World Cup fanfests, parties and competitions in countries, such as Italy, Germany, France, Spain, Portugal, Latin America, Argentina, Mexico and Chile. Some 4 000 people who won tickets have been here on three and four-day packages. Visa has also wined and dined the major banking and merchant parties. Visa also sponsors the winter and summer Olympics, so it has a major promotion going on virtually all the time.

Anthony West of MasterCard laments the loss after 16 years of the Fifa sponsorship. He says MasterCard thought the matter was still under negotiation before Fifa suddenly switched to Visa. MasterCard has taken over sponsorship of the Rugby World Cup from Visa.

There was litigation and Fifa eventually settled with a $90m payment to MasterCard.

Adidas is one sponsor that can count on a direct return on investment in the cup. It says the 2010 FIFA World CupTM is already a success in terms of sales. Adidas is now expecting record sales of at least €1.5bn in the football category. This represents an increase of more than 15% compared to 2008. and an increase of 25% compared to the year of the last FIFA World CupTM in 2006 (€1.2bn).

In the first quarter of 2010, sales of football products were already up 26%. With more than 6.5m replica jerseys sold, the number of jerseys has more than doubled compared to 2006 (3m). This includes bestsellers, such as Germany, Mexico, South Africa and Argentina with sales of around 1m units or more each.

Nike has aggressively countered Adidas. Both companies claim the number one spot in soccer products.

Derek Carstens, head of marketing at FNB, is also delighted with the bank’s $30m purchase of SA rights.

“It is part of a long-term strategy that goes back to our investment in what was then the FNB stadium. It is part of a comprehensive legacy programme based on very clear business objectives. The idea was to increase our market share in a couple of key markets.”

For its investment FNB is entitled to minority visibility at the stadiums - two boards each side of the field. But Carstens says that is a small part of the value.

“It has been great for nation building. FNB launched the kuduzela, it had soccer ball and Makarape promotions. Then we gave away 15 000 tickets. We also used the cup to incentivise staff. Altogether, this sponsorship put us way ahead with our various goals.

Absa’s (JSE:ASA) advertising around the World Cup has been so prominent it might have smacked of ambush marketing. But this is because it is the sponsor of Bafana, which, Carstens says, was a lot more expensive than FNB’s local sponsorship of the cup itself.

This story first appeared on moneyweb.co.za, by David Carte.

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