Sponsors with a taste for Mickey Mouse marketing
By Matthew Garrahan
Published: March 5 2008 02:00 | Last updated: March 5 2008 02:00
At first glance, Walt Disneywould appear to have little in common with Siemens, the German industrial conglomerate that makes everything from light bulbs to hearing aids.
Yet a Siemens logo proudly adorns the newly relaunched Spaceship Earth attraction at Disney's Epcot theme park in Florida. It can also be seen on the Disney website, where visitors to the Spaceship Earth section can take part in the "Siemens Science Minute" or "Be a Siemens Superhero".
Siemens is one of Disney's "corporate alliance" partners alongside companies that include Coca-Cola, Hewlett-Packard, General Motors and Kodak. The partners pay fees to Disney running into hundreds of millions of dollars in return for promotion, sponsorship and access to its millions of customers.
The Siemens deal represents a change from the German company's former focus on sports sponsorship and offered it a way to benefit from a mix of traditionally distinct marketing opportunities. The relaunch at Epcot is the latest development in a 12-year deal that, unlike a more typical sports sponsorship, works on several fronts and across different media.
Siemens medical products have appeared in Grey's Anatomy , the Disney-ABC medical drama, while Disney characters have been used to sell hearing aids made by Siemens.
The deal has developed to included the Spaceship Earth website and other businesses that operate under the Disney banner. "We have really expanded this relationship far beyond the theme park," says George Nulton, chief executive of Siemens's US division.
Although it operates a vast array of businesses in the US, Siemens is not well known by American consumers. As a former shirt sponsor of Real Madrid in Spain, it initially considered sponsoring a US sports event to raise brand awareness.
"There were many opportunities to get involved with sport, whether in motor racing or by sponsoring a stadium," says Mr Nulton. However, the group eventually chose Disney because it gave Siemens the ability to showcase its technological expertise and reach a broader, more diverse audience.
Sport is beloved by advertisers and this year will be responsible for 70 per cent of all spending on sponsorship, equivalent to $11.6bn (£5.8bn), according to consultancy IEG. But Disney hopes to win business from companies that would normally sponsor a sports event or attach their names to a stadium.
"A lot of people are going to be missing [if you sponsor a sports event] whereas the Disney brand appeals to families," says Laurence Aldridge, Disney's senior vice-president of corporate alliances. "And with ESPN [Disney's cable sports network] you have a sports brand that has access to men."
Sport appeals to sponsors because it attracts passionate people and Mr Aldridge says the same is true of Disney. "The consumer [at a Disney park] is in a magical environment . . . you can connect with them in a state of heightened emotion and that's going to be much more effective than eyeballs on a screen."
The range of businesses owned by Disney gives the group an advantage over a sports event in the competition for sponsors. It can showcase brands in its theme parks or in the TV programmes and films it makes via product placements. Crucially, the Disney brand also has broad appeal.
Disney has a long history of corporate partners. Walt Disney enlisted ABC and Coca-Cola to help finance his first theme park in the 1950s after promising promotional opportunities using the Disney brand. An innovative marketing deal was struck: Coca-Cola was given rights to be the sole supplier of soft drinks within the park in return for its backing while ABC agreed to invest after Disney promised to make a weekly TV show for the network.
Fifty years on, Disney and Coca-Cola continue as partners, while ABC is now part of the media group. Disney is keen to add more corporate partners to the existing alliances, particularly in Europe and Asia.
The relationship with General Motors dates back to 1982, when the company sponsored the Test Track ride at Epcot in Florida. Since then, the agreement has expanded considerably: Disney's fleet of company cars is supplied by GM, which also provides environmentally friendly fuel-cell cars to be used at Disney's parks.
GM cars also feature in some of Disney's studio movies - the stars of the new Martin Lawrence film, College Road Trip , drive a Chevrolet Tahoe - and at promotional events. The Jonas Brothers, a teenage pop act contracted to Disney, recently played a concert for GM staff and its clients at the Disney studio buildings in Burbank.
Much as the International Olympic Committee does sponsorship deals for particular categories, Disney's corporate partners get exclusivity. So Disney has a deal with HP but will not do a similar deal with an HP rival.
Contracts with corporate alliance partners that last for years can be worth hundreds of millions of dollars and often include purchasing agreements. Disney spends $12bn a year on goods and services and the company's alliance partners are often at the front of the queue when the group comes to place orders.
This increases its appeal to sponsors, the group says. Tom Staggs, Disney's chief operating officer, declines to comment on the value of the group's corporate partnerships. But he acknowledges the business is a growing and important revenue stream. "It can be a real growth area for us and is consistent with what sets Disney apart from other media companies."
Copyright The Financial Times Limited 2008
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