With major domestic and international sporting events in recent years and rising popularity of the internet, more and more sporting goods enterprises are starting to consider online marketing as an important means for corporate marketing optimization, market expansion and brand building.
High profile co-operations
The competition for online sports channels began on 4th Apr 2007, when China’s well-known sports brand, Lining, named the sports section of Netease, one of China’s largest internet protal. Not only Lining’s logos and product promotions dominate the web pages, the web page design colours also conform to Lining’s red-based branding. This is a 3-year strategic cooperative agreement between Lining and Netease. Elsewhere, the sports sections of other major national internet portals are also powered by sports brands: Adidas Sohu, Nike Sina and 361° Tencent Sports, etc.
In fact, sports brands’ online marketing wave has begun long before 2007. Observers commented that the rise of internet marketing in China has huge implications for the two sunrise industries, namely sports goods and internet commerce. It not only reflects the strategic marketing transitions of leading sports brands, but also brings a marketing breakthrough in China’s sports goods industry amid the emerging internet marketing trend. By partnering with internet portals in areas such as advertising, editorial columns, contents and featured products, sports brands can build a comprehensive online brand display platform, which in turn enables websites to expand their sports contents, hence a win-win situation.
Take the example of Lining and Netease cooperation. According to Netease, the co-branding pages are expected to provide several hundred million times of brand exposures each year, enhancing the brand penetration in targeted audience. In terms of contents, NBA columns and various Lining branded events columns have been launched, and other Netease online products will also become channels for promoting Lining brand. There are also Lining associated sections such as online communities, sports star profiles, new product exhibitions and sports fans interactive forums.
From Netease’s perspective, such all-round cooperation will not only enrich their sports section contents, but also create a more humanized and interactive online atmosphere, attracting more audience and enhancing sports brand recognition.
Recent research reports have demonstrated the reason why sports companies are willing to invest large sums to online marketing: the dramatic rise of internet users in China has given them sufficient confidence in the internet channel.
According to China Internet Network Information Center (CNNIC), as at June 2007, the total number of Internet users in China reached 162 million, second only to the United States 211 million. Compared to end of 2006, new internet population has reached 25 million. Demographic mix of Chinese internet population is current skewed towards young people, with 51.2% under 25 years old and 70.6% under 30 years old. Such a young, adventurous and large group of internet users is a natural target for sports goods, no wonder sports sections on internet portal sites are the hotly contested spots for sports brands companies.
IT&T industry consulting firm iResearch also published China‘s Sports Goods Online Advertising Report, 1st Quarter 2007. The reports showed that online sports goods marketing experienced strong growth between 2006 and 2007, with significant increases in online advertising placement income, frequency, volume and media channels. Online advertising has become a focus for consolidating marketing resources among sports companies, and it is expected online market investments will further rise in 2007. Growth in online sports goods advertising fees has maintained a high speed since 2002, with an annual growth rate of 101%, and the advertising fees in 2006 had reached almost US $10 million, 14 times the amount in 2002.
iResearch suggested that the rapid rising of sports goods online advertising fees indicated more and more sports goods companies are paying attention to this new and alternative channel. As for Beijing Olympic Games in 2008, online advertising investments from sports companies is expected to further increase, with a focus on corporate image promotion. Online advertising fees in corporate images, sports footwear and sports clothing kept rising in 2006, especially led by corporate image promotions. While spending on sports footwear and sports clothing experienced a decline in first quarter of 2007, spending on corporate image promotion continues to rise rapidly.