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SBD Global/October 10, 2012/Marketing and Sponsorship

A Look At Red Bull's Legendary Sports Marketing Success

Pilot Felix Baumgartner, of Austria, steps into his capsule before his mission was aborted due to high winds during the final manned flight of Red Bull Stratos Tuesday.
Austrian energy drink producer Red Bull has "managed to establish its brand as an integral part of extreme sports and competitive sports marketing," according to WIRTSCHAFTSBLATT.at. Austrian extreme athlete Felix Baumgartner's "daredevil" jump from out of space "could turn this status into a mythos." Just recently, Red Bull generated headlines with its "Flugtag" (Flight Day), which attracted 100,000 people in Vienna. A total of 38 "brave teams" with their self-made aircrafts plunged down into the Danube river. Red Bull also sponsors the Dolomitenmann (Dolomites Man) race, which is billed "the world's toughest team relay race." More than 100 teams compete over 60km in the events of mountain run, paragliding, whitewater kayaking and mountain biking. The "crazy idea" celebrated its 25th anniversary in '12. Red Bull's marketing budget "seems endless." About "one-third of its revenue flows into its marketing department," which is used to finance, amongst others, big air shows such as the Red Bull Air Race Series and the Red Bull X-Fighters. Red Bull's F1 involvement dates back to '94, first as a sponsor of the Sauber team and by now with its own racing team -- Red Bull Racing. In addition, the company took over the Minardi F1 team in '05 and renamed it Scuderia Toro Rosso. Red Bull also wants to "give football wings." In '05, Red Bull co-Founder Dietrich Mateschitz took over the struggling football club Austria Salzburg. In '06, he took over the MLS New York/New Jersey MetroStars, and rebranded them as New York Red Bulls. The company "spends millions to produce its own stars." Red Bull "runs football academies" in Salzburg (Austria), Leipzig (Germany), Brazil and Ghana. The academies' output is so far "rather modest." The "once notorious prison of Alcatraz," located in the San Francisco Bay, hosts only one sporting event: the Red Bull King of the Rock. Only a few selected street ball players will get the chance to compete in the "most-spectacular one-on-one basketball tournament." According to a brand value study by market research institute Millward Brown "ranked Red Bull as the 80th most-valuable brand." In '11, its brand value was around $10B, which is an 8% increase in comparison to '10. One thing is for certain, "the energy drink giant does not want to hold back from any sport," regardless if it is skateboarding, base jumping, kite surfing, surfing, snowboarding, whitewater kayaking or mountain biking. Mateschitz "has a finger in the pie" in all sports. Red Bull has sponsorship contracts with more than 600 athletes worldwide" (WIRTSCHAFTSBLATT.at, 10/7).

POSITIVE NUMBERS: ORF.at reported that Red Bull "increased its profit by 40% to €311M ($386.5M)" in '11. The company "sold about 4.5 million cans worldwide." Red Bull, which employs more than 8,000 people in 164 countries, "spends a third of its revenue of more than €4B ($5.1B) on marketing." For Mateschitz, who holds a 49% stake in the company, those numbers translate "into a received profit distribution of €75M ($96.6M)" (ORF.at, 10/9).
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