Inside a media company’s strategy to monetize the FIFA World Cup
Football media company Footballco has spent most of 2022 trying to make hay while the sun is shining.
The occasion in question is the FIFA World Cup. It’s like catnip for advertisers – even in a downturn when advertising dollars are scarce. Better to try to ride in the wake of an event like this while it lasts. As always for media owners. Even more so for a sports media company like Footballco which derives over 90% of its revenue from advertisements sold on football news site Goal and a number of local market publications including Voetbalzone in the Netherlands and Calciomercato. in Italy.
“The World Cup gave us aerial coverage in a difficult time for the media,” Footballco said. CEO Juan Delgado. “We’re trying to fill our boots as much as we can this year to then deploy some of the capital we already have next year to continue to grow the affiliate side of the business as well as subscriptions and some of the others we’re going through so to emerge from this period with a set of additional sources of income.
That is to say, advertising is a means to an end. The objective being to obtain sufficient funds to erect a more complete business model in whose non-advertising revenue ultimately accounts for more than a third (35%) of its revenue, Delgado said. Right now it’s more like 8%, and that covers advertising and affiliate subscriptions.
“When the next World Cup comes around, I want to be sitting in a company that has 100 million unique monthly web and app users, and a set of ancillary revenue streams and a set of communities. built on this platform,” Delgado said.
The call for diversification
To be clear, Footballco are not in trouble. In fact, he’s probably in poor health all things considered. It’s profitable, to begin with. Of the $100,000,000 — or thereabouts — in revenue it’s expected to raise this year, about 8% will be spent on content, Delgado said. He’s even been on the acquisition trail lately. It has acquired three other football publications in the years since it was sold by Dazn to US-backed private equity firm TPG Capital in 2020.
It’s great, of course, especially in the current climate. Nevertheless, the best way to make money in media is – and always will be – in many ways. Or at least as long as it’s not about media rights. Besides being an expensive race, it would also put Footballco in competition with Dazn, who still retain a minority stake in the business.
“We need to diversify the business,” Delgado said. “Otherwise, if there is another downturn, we will be very exposed financially.”
Subscriptions are a good example. And it starts with Mundial, the print magazine which had around 25,000 subscribers and customers when Footballco acquired it earlier this year. Since then, the company has sold magazines or merchandise to nearly 10,000 of those people. Unsurprisingly, it’s going to do more of the same, developing a multi-layered subscription service that spans magazine, merchandise, experiential events, and even access to online communities.
Get that mix of features right and chances are people will consider shelling out more for a subscription, Delgado said.
“The idea is to see if we can extend the RPU around the subscription business from £32 a year (the cost of four quarterly Mundial magazines at £7) to £60 a year by adding more stuff to that subscription package that the public believes they’re getting more value from,” he continued.
If it works, then Footballco has a model to apply to other titles. First with its women’s football brand Indivisa, then potentially in grassroots football through its youth culture brand NXGN. This last area is one that could be very lucrative if properly unraveled, Delgado said.
“Our content is always presented from the perspective of the elite professional, but the real big opportunity is to reach everyone who kicks a ball on a Sunday afternoon,” he continued. “That’s potentially millions of people buying boots, wanting to train or learn about nutrition.”
Subscriptions are not cheap. There are many upfront (and hidden) costs to consider when creating a revenue model for readers, from ad technology to analytics. That said, growth is the lifeblood of business and there’s plenty to be had in recurring revenue in smaller communities on specialist topics like the football nostalgia of Mundial’s raison d’être.
“The expectation here is not to try to reach millions of subscribers, but rather to focus on hundreds of thousands,” said Delgado, who declined to say how many subscribers he has, pointing the figure of 25,000 cents that Mundial had. when purchased in February.
Banking on World Cup publicity
It comes down to the underlying logic: advertising is not bad for Footballco. However, this can be fickle, with these dollars often at the mercy of an algorithm adjustment or economic swing. So it makes sense to create more ancillary trade flows around it.
That’s why the upcoming World Cup has come at an important time for a media company that has yet to find its feet.
“The amount of advertising dollars spent outside the Middle East is disproportionately higher than it was in 2018, when a large portion of advertising came from advertisers in Europe,” Delgado said. “It’s both the change of venue for this year’s tournament and the change of where the advertisers are coming from has allowed us to decouple ourselves (to some degree) from the impact of advertising about a World Cup at the middle of the holiday season.”
Expect video to be key as Delgado and his team try to continue some of that momentum next year. This is particularly true when it comes to player-supported content, such as the original Box to Box series he made with England internationals like John Stones and Declan Rice, as well as campaigns featuring Karim Benzema for the Dubai Department of Economy and Tourism.
Much of these moves are aimed at driving organic growth. But it’s hard for a business to survive on that alone, let alone a publisher. That’s why Footballco plans to get back on the acquisition track. Ultimately, Delgado wants to consolidate the business in Europe and expand in Latin America through acquisitions.
“Sports businesses that recognize that young audiences are more than just sports fans and develop the infrastructure to create brand experiences with their audience will have a much better chance of generating revenue compared to businesses that are strictly dollar dependent. traditional advertising,” Sports Marketing said. expert Mat Bilodeau, marketing manager at Stadium Live Studios. “Younger audiences want authentic interactions with brands in the media they know (social media, games, etc.). Brand experiences enable a two-way dialogue between a brand and a sports fan. »