New companies try to rev up sports marketing
As part of his job as business development manager for European emerging markets, Turner arranged Mobil's sponsorship of Polish rally car driver Krzysztof Holowczyc in conjunction with tire maker Stomil Olsztyn. Mobil's involvement increased significantly when Holowczyc's team won the European championship and went on to compete in the pinnacle event for rally racers, the World Championship.
The problem, however, was that Holowczyc's success meant that Turner was spending more and more of his time ironing out the details of Mobil's sponsorship, a job far harder than simply allocating money.
"I was looking for someone to organize that," Turner said, "and I realized that I wanted to do that."
Enthralled with the idea, the 36-year old Englishman quit his job in February and established his own sports marketing company, Turning Point. In doing so he joined a handful of larger firms active on the market and a host of small, independent players. Turner believes the time is ripe for such a venture in Poland as more multinational companies operating here look to build their brand awareness through sponsorships.
While the total market for sports marketing is relatively small - Turner estimates it to be about $15 million - one larger company, Go&Goal Advertising, has seen its revenue grow from $1 million in 1993 to $5 million last year.
But companies already active here say that while Turner is ready to push sports marketing, the market itself may not be ready.
"This market is sleeping. It hasn't woken up yet," said Robert Kaczynski, managing director of Go&Goal Advertising.
The sports marketing sector is so fragmented that participants said few agents handle more than one account. At the same time, however, some big companies have already come around to the idea of backing sports teams.
Automaker Daewoo-FSO owns a 30% stake in the Legia Warszawa soccer team, and the company shells out $5 million a year supporting the team. In terms of direct sponsorships, meat producer ZPM Mroz's spends more than zl. 1 million ($294,000) a year to sponsor cycling team Mroz. Lech brewery also gives money to get its name out at speedway events.
Turning Point's Paul Turner said that these partnerships are only the beginning, and that multinationals will devote a larger portion of their marketing budgets to sporting events as they dig deeper into Poland.
"I do believe that big companies are prepared to do sponsorships," he said. "Poland is recognized by all multinationals. Companies are going to come with reasonable (marketing) budgets."
Manfred Richly, sales and marketing director for General Motors Poland, thinks that Turner has a point. He said that his company regularly works with sports marketing agencies in Germany and would expect to do the same in Poland.
"It is quite a specialized business, you have to know the sports business, and we are not experts in this," he said.
The company so far does not have any major sponsorships here, except for a limited cooperation with former football player Wlodzimierz Lubanski. But Richly said the company may become more involved with sports in the future.
One man show
Turning Point's sole client at this point is rally star Holowczyc, whose team attracts $1 million-$5 million annually in corporate sponsorships, Turner said. He added that agencies typically charge 5% of a total sports marketing budget as commission.
But Turning Point is also talking to various international companies from the telecommunications, consumer goods and automobile sectors about sponsorships in football, tennis and other athletics, Turner said. He added that he hopes to clinch his first deals this year.
Nobody questions the desire of corporations to improve their image through sports sponsorships, but some marketing executives said that the companies can work directly with teams, cutting intermediaries like Turner out of the picture.
"There is no reason, at least in Poland, to go through a middleman that doesn't give anything besides higher costs," said Aleksander Ratz, marketing director with Volvo Truck Poland, which already sponsors equestrian and tennis events here.
It is a sentiment echoed by other multinationals known the world over for their big-money sponsorships.
"We have such a developed marketing department that we don't need these agencies," said Artur Czerwonogrodzki, marketing director for sports clothing and accessory maker Reebok Poland.
Czerwonogrodzki, however, admits that sports-equipment makers are veterans of the industry, while other companies may find agencies useful in helping them navigate uncharted territory.
It may not even be a question for the companies, though. Athletes here said that they need the agencies to sort out their financial backing.
"I think they (agents) are useful," said Zbigniew Tracz, a Polish wrestler who won three Olympic Medals including a bronze in Atlanta and a silver in Barcelona. "It's easier for them (than for sports stars) to negotiate with companies."
Tracz knows first hand how difficult it is for an athlete to arrange his own sponsorships; he said he has tried unsuccessfully to line up his own backers. "It's improper for a sportsman to go to a president of a company to offer an advertising deal," he said.
Turner is convinced that Turning Point can carve out a niche. "A sponsor wants to sponsor something, not to organize that," he said. "I've spent 15 years with a multinational doing sponsorship, buying sponsorship. I sort of know how to do that."
Sports sponsorships are big business in the international arena. Total sponsorship in the U.K., for example, is nearly $500 million a year, said Jonathan Coke, international vice-president with the London office of IMG, a U.S. sports marketing agency.
Poland so far has attracted two large agencies - Go&Goal, which negotiates sports broadcasting rights and brokers deals between sports people and companies, and JAG Sport Marketing, which is 80% owned by Germany's GVB.
Currently only 2-3% of GVB's total revenue comes from Poland, said Andrzej Grajewski, who owns a stake in GVB. "The power of sports advertising in Poland is not that big yet," he said.
Currently, companies' marketing efforts are managed by advertising agencies who tend to focus spending on TV spots. And those agencies see sports marketing agencies as their competitors, agents said. While in the West, companies see sports sponsorship as a key to sales.
Despite that hurdle, Go&Goal has seen its revenue grow steadily, approximately $1 million a year since 1993, Kaczynski said. The company pulled in revenue of zl. 18 million ($5 million) last year, he said. Go&Goal's commission ranges from 5-10% of a sponsorship budget.
Power of the brand
Turner is not alone in his interest in the Polish sports market.
"Poland, together with Russia and Czech Republic are interesting for us," said Coke of IMG, which has annual turnover of $1 billion and 100 offices around the globe.
IMG has already brokered two sponsorship deals in the region: U.S. tobacco maker Reynolds' and Japanese Fuji's sponsorship of the entire Russian soccer league as well as Mobil's sponsorship of Romania's national soccer team.
"Many international companies come to establish their brands there," Coke said. He added that IMG is considering opening an office in Warsaw in addition to existing locations in Prague, Budapest and Moscow.
Turner acknowledged that competitors will move in, but he said that they will only help to professionalize the industry. "Companies need more than advertising to create brand (awareness)," he said. "I am a marketing person and I believe in the power of the brand."
He said that Mobil's decision to sponsor driver Holowczyc was a major factor in helping the company gain a dominant position - 25% - in the lubricants market here.
To create the brand awareness, Turner said companies should spend 20% of their marketing budget on sponsorships. He is not alone in thinking that multinationals here need to realize advertising in the media is only the beginning.
"The market has to wake up, there is no other solution," said Go&Goal's Kaczynski.
Sports marketing gurus might also gain the attention of smaller firms, who realize that putting their money behind one sports team may be more effective than trying to roll out an expensive, nationwide advertising campaign, Reebok's Czerwonogrodzki said.
Sports marketing works particularly well for advertisers targeting a male audience, such as makers of beer, male cosmetics and cars, Kaczynski said.
All of that may be nice, but the real treat are the free tickets, said Volvo's Ratz. "Companies sponsor sports events because clients could be interested in them,' he said. "Golf is a typical discipline where companies take their clients to watch it."
Take all that into account, Turner said, and sponsorship simply gives companies a level of prestige that they cannot gain through simple advertising.
"A company wants to be seen as not only making profits but giving something back," he said. "They want to have an image as a decent company so that people will buy their products, sign contracts with them."
The problem, however, was that Holowczyc's success meant that Turner was spending more and more of his time ironing out the details of Mobil's sponsorship, a job far harder than simply allocating money.
"I was looking for someone to organize that," Turner said, "and I realized that I wanted to do that."
Enthralled with the idea, the 36-year old Englishman quit his job in February and established his own sports marketing company, Turning Point. In doing so he joined a handful of larger firms active on the market and a host of small, independent players. Turner believes the time is ripe for such a venture in Poland as more multinational companies operating here look to build their brand awareness through sponsorships.
While the total market for sports marketing is relatively small - Turner estimates it to be about $15 million - one larger company, Go&Goal Advertising, has seen its revenue grow from $1 million in 1993 to $5 million last year.
But companies already active here say that while Turner is ready to push sports marketing, the market itself may not be ready.
"This market is sleeping. It hasn't woken up yet," said Robert Kaczynski, managing director of Go&Goal Advertising.
The sports marketing sector is so fragmented that participants said few agents handle more than one account. At the same time, however, some big companies have already come around to the idea of backing sports teams.
Automaker Daewoo-FSO owns a 30% stake in the Legia Warszawa soccer team, and the company shells out $5 million a year supporting the team. In terms of direct sponsorships, meat producer ZPM Mroz's spends more than zl. 1 million ($294,000) a year to sponsor cycling team Mroz. Lech brewery also gives money to get its name out at speedway events.
Turning Point's Paul Turner said that these partnerships are only the beginning, and that multinationals will devote a larger portion of their marketing budgets to sporting events as they dig deeper into Poland.
"I do believe that big companies are prepared to do sponsorships," he said. "Poland is recognized by all multinationals. Companies are going to come with reasonable (marketing) budgets."
Manfred Richly, sales and marketing director for General Motors Poland, thinks that Turner has a point. He said that his company regularly works with sports marketing agencies in Germany and would expect to do the same in Poland.
"It is quite a specialized business, you have to know the sports business, and we are not experts in this," he said.
The company so far does not have any major sponsorships here, except for a limited cooperation with former football player Wlodzimierz Lubanski. But Richly said the company may become more involved with sports in the future.
One man show
Turning Point's sole client at this point is rally star Holowczyc, whose team attracts $1 million-$5 million annually in corporate sponsorships, Turner said. He added that agencies typically charge 5% of a total sports marketing budget as commission.
But Turning Point is also talking to various international companies from the telecommunications, consumer goods and automobile sectors about sponsorships in football, tennis and other athletics, Turner said. He added that he hopes to clinch his first deals this year.
Nobody questions the desire of corporations to improve their image through sports sponsorships, but some marketing executives said that the companies can work directly with teams, cutting intermediaries like Turner out of the picture.
"There is no reason, at least in Poland, to go through a middleman that doesn't give anything besides higher costs," said Aleksander Ratz, marketing director with Volvo Truck Poland, which already sponsors equestrian and tennis events here.
It is a sentiment echoed by other multinationals known the world over for their big-money sponsorships.
"We have such a developed marketing department that we don't need these agencies," said Artur Czerwonogrodzki, marketing director for sports clothing and accessory maker Reebok Poland.
Czerwonogrodzki, however, admits that sports-equipment makers are veterans of the industry, while other companies may find agencies useful in helping them navigate uncharted territory.
It may not even be a question for the companies, though. Athletes here said that they need the agencies to sort out their financial backing.
"I think they (agents) are useful," said Zbigniew Tracz, a Polish wrestler who won three Olympic Medals including a bronze in Atlanta and a silver in Barcelona. "It's easier for them (than for sports stars) to negotiate with companies."
Tracz knows first hand how difficult it is for an athlete to arrange his own sponsorships; he said he has tried unsuccessfully to line up his own backers. "It's improper for a sportsman to go to a president of a company to offer an advertising deal," he said.
Turner is convinced that Turning Point can carve out a niche. "A sponsor wants to sponsor something, not to organize that," he said. "I've spent 15 years with a multinational doing sponsorship, buying sponsorship. I sort of know how to do that."
Sports sponsorships are big business in the international arena. Total sponsorship in the U.K., for example, is nearly $500 million a year, said Jonathan Coke, international vice-president with the London office of IMG, a U.S. sports marketing agency.
Poland so far has attracted two large agencies - Go&Goal, which negotiates sports broadcasting rights and brokers deals between sports people and companies, and JAG Sport Marketing, which is 80% owned by Germany's GVB.
Currently only 2-3% of GVB's total revenue comes from Poland, said Andrzej Grajewski, who owns a stake in GVB. "The power of sports advertising in Poland is not that big yet," he said.
Currently, companies' marketing efforts are managed by advertising agencies who tend to focus spending on TV spots. And those agencies see sports marketing agencies as their competitors, agents said. While in the West, companies see sports sponsorship as a key to sales.
Despite that hurdle, Go&Goal has seen its revenue grow steadily, approximately $1 million a year since 1993, Kaczynski said. The company pulled in revenue of zl. 18 million ($5 million) last year, he said. Go&Goal's commission ranges from 5-10% of a sponsorship budget.
Power of the brand
Turner is not alone in his interest in the Polish sports market.
"Poland, together with Russia and Czech Republic are interesting for us," said Coke of IMG, which has annual turnover of $1 billion and 100 offices around the globe.
IMG has already brokered two sponsorship deals in the region: U.S. tobacco maker Reynolds' and Japanese Fuji's sponsorship of the entire Russian soccer league as well as Mobil's sponsorship of Romania's national soccer team.
"Many international companies come to establish their brands there," Coke said. He added that IMG is considering opening an office in Warsaw in addition to existing locations in Prague, Budapest and Moscow.
Turner acknowledged that competitors will move in, but he said that they will only help to professionalize the industry. "Companies need more than advertising to create brand (awareness)," he said. "I am a marketing person and I believe in the power of the brand."
He said that Mobil's decision to sponsor driver Holowczyc was a major factor in helping the company gain a dominant position - 25% - in the lubricants market here.
To create the brand awareness, Turner said companies should spend 20% of their marketing budget on sponsorships. He is not alone in thinking that multinationals here need to realize advertising in the media is only the beginning.
"The market has to wake up, there is no other solution," said Go&Goal's Kaczynski.
Sports marketing gurus might also gain the attention of smaller firms, who realize that putting their money behind one sports team may be more effective than trying to roll out an expensive, nationwide advertising campaign, Reebok's Czerwonogrodzki said.
Sports marketing works particularly well for advertisers targeting a male audience, such as makers of beer, male cosmetics and cars, Kaczynski said.
All of that may be nice, but the real treat are the free tickets, said Volvo's Ratz. "Companies sponsor sports events because clients could be interested in them,' he said. "Golf is a typical discipline where companies take their clients to watch it."
Take all that into account, Turner said, and sponsorship simply gives companies a level of prestige that they cannot gain through simple advertising.
"A company wants to be seen as not only making profits but giving something back," he said. "They want to have an image as a decent company so that people will buy their products, sign contracts with them."
