Red Bull: The Sponsorship Genius

There isn’t a brand out there that knows sponsorship much better than Red Bull.  Their activations are jaw-dropping; they will pay tens of millions of dollars to drop someone from the brink of outer space.  They own all kinds of sports teams, endorse all kinds of athletes, and sponsor all kinds of events.  Please fact check me on this, but I read that Red Bull’s revenue in 2012 was $5.75 billion (Wilson, 2013).  The general consensus on various forum posts that I found was that its marketing budget was roughly 25% of revenue.  Their marketing/sponsorship team is blessed with an enormous budget, but kudos to them for consistently creating content with the “wow” factor that often goes viral.

Fan of the Content, not the Brand

I have to admit though, I’m not a fan of the brand.  I’m not a fan of energy drinks in general.  Although companies like Red Bull and Monster will deny it, they have positioned themselves as a substitute for what athletes should really be drinking: water.  Studies show that athletes are far more productive when hydrated than caffeinated, not to mention the risk of elevating your heart rate well beyond the norm for a given physical activity.  So before I talk about how great Red Bull is, check out this not-for-profit that is against energy drinks in action sports called DrinkWater.  DrinkWater donates a percentage of their merchandise profits to water.org as they believe we are taking safe, drinkable water for granted.

Back to Sponsorship

So, to Red Bull. Similar to any business that sells some sort of product, entities that are sponsored (i.e. organizations, events, teams, individuals, etc.) often have sponsorship inventory.  Furthermore, there are often multiple variants of sponsorship with different price points within this inventory; an example could be official partner, proud partner, and supporter.  In addition to activation, these sponsors will all be featured on some sort of wall, either on or offline.  Sometimes being featured on this wall is the only benefit of the sponsorship.

Where am I going with this?  Red Bull is almost never on these walls, yet they spend hundreds of millions of dollars every year on sponsorship marketing.

How is this possible?  Red Bull takes sponsorship to another level.

Why Red Bull is a Sponsorship Genius

When the opportunity presents itself, Red Bull will own something rather than simply sponsoring it.  Think about it: Red Bull Signature Series, Red Bull Stratos, The New York Red Bulls, Red Bull F1… The list goes on and on.  Essentially, when Red Bull associates itself with an event, athlete, or a team, it leaves nothing on the table.  Although I don’t like to copy and paste, Danny O’Leary—a writer on Sponsorship.com—could not have said it any better:

[Red Bull] is a sports or property innovator, creator, organizer and producer. It leads with this philosophy and reaps the marketing benefits because of the ownership position it has created for itself. Look at it this way, Red Bull is sports’ philanthropist. It has an almost altruistic concern for athletes and the advancement of sport. Few sponsors these days are vehicles. They are only interested in what a sport or sports property will deliver and less concerned with what they could do to enhance it. Red Bull invests to earn attention, not to buy it. (O’Leary, 2013)

This is where brands that may not be able to afford this “ownership” position can take a page out of Red Bull’s book.

What Other Brands can Learn

Both sides of a sponsorship can learn from Red Bull.  On one side, the sponsorship seeker should not necessarily accept a sponsorship from just about anyone who is willing to pay for it.  Both sides should be in it for the long haul and share a unified vision that extends beyond financial success.  In the long run, this philosophy will likely extend ROI for both sides beyond what would be expected from a “low involvement” sponsorship.

On the other side, Red Bull does so many things that sponsors can pick up on.  If you’re forking out big money to sponsor something, milk it. Milk it. Milk it.  I didn’t really notice it until I read Lesa Ukman’s (2013) write up on Sponsorship.com, but Red Bull creates social media accounts and a website for all of the events it sponsors.  This allows Red Bull to create hype leading up to an event and to maintain a conversation for months afterwards.  Look at the Stratos drop; there was a Twitter profile, newsroom, Instagram account, Facebook page, Google+ and a super interactive website (this could have been a blog post in its own) specifically for this event alone.  The remarkable thing is, the brand remains active on many of these platforms 18 months later.  If digital media has revolutionized event sponsorship activation in any way, the ability to prolong the return well after the event is it.

So what do you think?  Can (and should) Red Bull’s best practices be translated to smaller brands?

 

References

O’Leary, D. (2013, September 3). Red Bull: Not A Sponsor, A Vehicle For Sport. Retrieved from Sponsorship.com: http://www.sponsorship.com/About-IEG/Sponsorship-Blogs/Danny-O-Leary/September-2013/Red-Bull–Not-A-Sponsor;-A-Vehicle-For-Sport.aspx

Ukman, L. (2013, January 11). Five Relevant Lessons from Red Bull on Using Digital to Activate Sponsorships. Retrieved from Sponsorship.com: http://www.sponsorship.com/About-IEG/Sponsorship-Blogs/Lesa-Ukman/January-2013/Five-Relevant-Lessons-from-Red-Bull-on-Using-Digit.aspx

Wilson, D. (2013, December 9). Red Bull – Revenue: $5.75 Billion (2012). Retrieved from TheRichest: http://www.therichest.com/business/the-most-successful-action-sports-companies-2/4/

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3 thoughts on “Red Bull: The Sponsorship Genius

  1. trevorburns says:

    Loved reading your posts bro

    A couple really good friends of mine at ‘High On Life’ were recently sponsored by Redbull and its true, they really do go ALL out for everything they sponsor. One of the events that they are a part of is called the ‘Redbull Flugtag’ (http://redbullflugtagusa.com/). Redbull paid for their travel and accommodations just so they would be a part of them and expose the Redbull brand on YouTube.

    Another good friend of mine was recently part of ‘Redbull Crashed Ice’ and they really put production into a event that really hasn’t taken off how they hope but is slowly gaining traction(it’s crazy and I recommend you watch it if you haven’t).

    I think that RedBulls strategies can’t be translated to smaller brands because they just don’t have the capital. BUT – that’s not to say smaller companies can’t own sports teams. I have about 25 friends in different sports leagues and they are always complaining about sponsorship and how much everything costs. A smaller company can make a investment into team jerseys (for a standard hockey team its roughly $40 a jersey so about $600) and get the team to use their companies name. The reach goes to not only those participating in the league but the family and friends who watch. Instead of just donating money that can do what Redbull did with The NewYork RedBulls.

    I would have to say that Playboy energy is coming up on Redbull for sponsorship they are accepting ANY and EVERY sponsorship thrown their way(I know this from personal experience)

    Cheers

  2. Great post,

    I believe that many smaller companies cannot fully adopt a marketing plan like Red Bull’s they can take some effective pointers to help out with their own marketing. Sponsorship’s can become expensive and costly but if done selectively with a similar strategy to Red Bulls it can be very effective. The main goal when having all these sponsors is to create a buzz about the brand, that is why the brand is so commonly associated with extreme sports and a wide variety of athletes. It is important that any sponsorship’s your business does is in conjunction with your brands image.

    For a business with a low cost budget hiring famous athletes and creating elaborate videos will be much too expensive. I believe that a good tactic would be to use ‘ internet personalities’, these are essentially people who are well known or famous on the internet. The more common personalities are on YouTube and post videos usually on a weekly basis. With many of these people getting millions of views within days, it would be a inexpensive way to reach your target audience.

  3. jchen0921 says:

    HI, Great Post. I’m also not a big fan of Red Bull the energy drink but I am a fan of what they do. Especially, how much commitment they give in backing up their athletes. I’ve watched the Red Bull Signature Serious by Travis Rice and thinking to myself the amount of work and dedication put into the project is just insane. They had to carve out and build all the jumps during the summer so that when the snow fall everything is in place for the event. With that being said, I don’t believe smaller sized company are capable of pulling off what Red Bull has done simply because they do not have the budget for it. But, there are good practices that could be employed. One of the most important aspect is to find someone that share the same vision and culture so that the partnership may last for a long period of time.

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