Russia 2018 Part Two – Are brands turning their backs on FIFA?

Welcome back to our three-part series on the 2018 FIFA World Cup in Russia – our complete sponsorship breakdown for this year’s most anticipated sporting event.

In this article, we’ll be analysing all the reasons why brands might be a little sheepish in their sponsorship strategies and investments in the 2018 Russia World Cup.

In summary of last month’s article – Castrol, Continental Tyres, Johnson & Johnson, Sony, and Emirates have all declined to renew for the 2018 World Cup.

The only regional sponsors are four Russian owned companies – Alpha Bank, Rostelecom, Russian Railways, and Alrosa – along-side one Chinese company, Yadea.

A few sponsors have held on at top tier level, such as Coca-Cola, Visa, and Adidas. But why are brands hesitant to involve themselves in the 2018 Russia World Cup?

 

Ex FIFA President Sepp Blatter showered with fake money by a protester (© Getty Images Photo by Fabrice Coffrini/Getty Images)

 

Historic FIFA Corruption

The year 2015 rocked FIFA. After 17 years, the world’s most powerful man in football was banned for eight years – reduced to six years on appeal. This was due to alleged criminal financial misconduct, which later put Blatter under an international investigation.

On top of Blatter’s departure, 2015 saw 14 individuals under investigation worldwide for allegedly accepting bribes estimated at more than $150 million.

Seven arrests were made at a Zurich hotel that year. Infighting and tension left the FIFA name under a cloud. Further allegations of corruption even questioned the legitimacy of Russia and Qatar’s World Cup bids.

What did this mean for brands? Well, the top tier sponsors moved quickly to distance themselves from the 2015 scandal.

Coca-Cola, McDonald’s, Visa, and Budweiser all called for Blatter to step down as FIFA president immediately, citing the need to continue the development of football without corruption.

However, during crises such as this, social engagement can sometimes overshadow brand responses.

Adidas suffered 44% negative sentiment, Coca-Cola around 50%, and Nike (not even a sponsor at the time but a sponsor of the Brazilian national football team) received 96% negative sentiment.

It is no surprise that after the 2015-16 scandal, critics referred to FIFA as a toxic brand, and suggested they consider a re-brand.

The backlash from football fans on social media may have led brands to be more cautious about associating themselves with the FIFA name.

 

(© Getty Images)

 

Civil Rights Issues

Russia has long been a hotbed for civil rights issues. Let’s talk about sex. Russia is famous for its anti-gay propaganda laws, and discriminatory attitude towards the LGBTQ+ communities.

However, this is not just a governmental decision, there is an enormous cultural difference between Russia and Western countries.

In a 2013 survey conducted by the Pew Research Center, 73% of Russians said homosexuality should not be accepted in society.

In a country where religion is a driving force in people’s lives, the Putin administration only benefits from introducing anti-gay laws.

Why is this important? Western Millennials and Generation Z are incredibly progressive:

Our own JWT Intelligence reports that in 2016 65% of Millennials (21-34) identify as completely heterosexual, and less than half (48%) of Gen Zers (13-20) identify as completely heterosexual.

While 56% of Gen Zers know someone who uses non-gender binary pronouns like ‘they’, ‘them’, and ‘ze’.

When much of your audience either identify as or are friends with someone in the LGBTQ+ community, supporting an anti-LGBTQ+ government that’s hosting the World Cup could lead to backlash.

We can look just four years back at the 2014 Sochi Winter Olympics to see how vocal audiences got.

McDonalds launched a #CheersToSochi campaign website, where users could ‘Cheers’ athletes. It received 3,000 ‘cheers’.

A pro LGBTQ+ parody website was launched in protest to McDonalds which received over 30,000 ‘Cheers’ and hosted a collection of pro-LGBTQ+ UGC memes.

Coca-Cola were forced to shut down an interactive feature on their website after LGBTQ+ groups rallied people to use the tool to highlight messages about Russian anti-gay brutality.

Queer Nation NY also created a protest video mocking Coca-Cola’s ‘To Buy The World a Coke’ ad. It went viral.

Next, The Courage Group organised more than 3,500 Visa customers to boycott their credit cards for the day of the ceremony.

After seeing how easily Sochi 2014 was hijacked for social causes, there just may be too much risk involved in associating your brand with a country so culturally out of step with the west.

 

Russian President Vladimir Putin speaks at a FIFA World Cup event. (© Getty Images Photo by Dennis Grombkowski/Getty Images)

 

Political Uncertainty

For the past nearly 70 years, Russia and the West have not seen eye to eye. The level of tension has peaked and troughed. Currently we are at a peak, with the devastating conflict in Ukraine and Syria.

This year saw the domestic poisoning of Sergei and Yulia Skripal in Salisbury, UK. This resulted in 342 diplomats from various countries being expelled.

In a direct response to the nerve-agent attack, United Kingdom Prime Minister Theresa May, announced that neither state officials nor members of the Royal Family would attend the World Cup.

Speculation is growing that Poland, Iceland, Denmark, Sweden, Australia and Japan will also follow suit with similar responses.

This sentiment seems to be echoed by many fan groups. Recent research has shown that surprisingly 76% of football fans said that attending a FIFA World Cup in Russia did not appeal to them.

The perception of Russia in Western media has been constant. Politically it has been frightening. Comically it has been full of cultural stereotypes.

With all this in mind, whether brands can be sure of a positive return on investment for sponsorship of Russia World Cup 2018 remains a muddied issue.

 

Anything Else?

Another point worth mentioning is the cost to sponsor. As we discussed last month, FIFA are asking for $10 million for the bottom tier sponsorship program.

With the risk involved, and the current cost-cutting trend of the industry, it is no surprise sponsorship marketers have opted to stay clear.

It is very unlikely we will see any more regional sponsors come on board with just weeks to go before kick-off.

There is of course another side to this coin. Russia’s middle class are growing rapidly, and expected to form 86% of the county’s population by 2020. With an estimated spending power of $1.3 trillion.

If a brand can find the sweet spot of messaging to both Russian and Western audiences, it could achieve a big win.

So, what has been the best activations so far from brands ahead the World Cup? And what should we expect to see in the coming weeks?

Keep an eye out for our final part in this series where we answer these questions and offer our insights.

June 13, 2018