The current status of digital transformation within football at IFA Berlin

November 7, 2014

Guest Post: Benjamin Stoll founded Digithalamus, a consultancy for digital strategies and solutions, in October 2014 in Berlin. He has worked with a focus on digital and sports for about ten years, helping brands, clubs and organizations with digital solutions, e.g. with Ledavi, GMR Marketing, Serviceplan and sport1. In 2011 he founded the missing piece as a digital engagement marketing agency.

 

What’s the secret of Ronaldo’s social media domination? How to make profits from social media as a football club? What should sports journalism in the age of digital media should look like? Those and other issues driven by digitalisation were tackled by an international football audience at IFA Conference Berlin on 30th of October.

The International Football Arena (IFA) is dedicated to foster an inspiring exchange between decision makers in the business of football and has been hosting this annual conference in Zurich since 1999 (as well as selected global events). So I was honored to be invited to the IFA Conference in Berlin. I hope you’ll enjoy my following subjective summary.

 

CR7: Dominating social media on a global scale

First one to give a speech at Deutsche Telekom in Berlin was Luis Correira, Director with Gestifute. He lectured on the secret of Cristiando Ronaldo’s domination in social media.

Cristiano Ronaldo now has 155 million followers on his presences on the social web and recently celebrated the milestone of 100 million fans on Facebook making him the person with the second most fans in the world (only topped by Shakira). Correira told the audience that five years ago there was a huge reticence in Ronaldo using social media due to controlling issues. When they first met with Facebook they said Ronaldo has the potential to gather 10 million fans. Now he has more than 100 million.

This means he has more fans on Facebook than Manchester United and Chelsea FC combined. With a single posting, e.g. him and his girlfriend going to dinner, he often reaches over 50 million fans. On Twitter @cristiano has with 31 million followers a bigger followership than The New York Times and CNN combined, also topping the reach of Coca-Cola or Nike and McDonalds. These comparisons show what a massive brand CR7 has become on a global scale and the massive reach and social influence he brings to the club he plays for as well as to the commercial partners he is working with. In China there is still big growth potential for him as he has an exclusive period agreement with Tencent (“only“ 8 million fans there) that is about to expire. According to Correira they don’t have a strategy to reach certain demographics. Currently the interest in Ronaldo comes from 78% men and 22% women.

Furthermore Correira stated that David Beckham opened the way for footballer players to become a global brand. He feels that there is still great potential for Ronaldo even after his retirement from professional sports to become an even bigger global brand. His current brand value is already much higher than direct monetization and there are many respective projects in the pipeline within the next years.

 

Twitter, Facebook and YouTube as an accelerator and interaction ground of sports moments and emotions

This panel was dedicated to the future goals of the three social network giants Facebook, Twitter and YouTube and consisted of Paul Keuter (Head of Sports Germany at Twitter), Glenn Miller (Head of Media Strategic Partnerships EMEA at Facebook) and Christoph Heimes (Manager Content Partner Switzerland at Google).

According to Paul Keuter from Twitter 41% of tweets are about sports, even tough live sports only accounts for about 1% of TV programming. He suggested to clubs to „innovate through experimentation“. The German national team for instance used a Twitter wall embedded in their training camp in Brazil showing tweets with the hashtag #aneuererseite (translated: “by your side“) from fans. Schalke 04 uses live tweets of fans displayed on a wall next to their dressing room to motivate players before matches. Their big rival Borussia Dortmund serves as a great example for using the right tonality and finding its own voice on Twitter. Great examples for players on Twitter are Mesut Özil and Lukas Podolski, who not only interact with fans but with other celebrtities. Michael Preet from Hertha BSC Berlin was the first manager of a Bundesliga club on Twitter. The club advertised his handle on perimeter advertising within the stadium. Referring to the monetization of Twitter activities Keuter advises clubs and players to collaborate closely as the money will be all around experiences and events.

Glenn Miller implied that 500 million users engage with football on Facebook each month. Football as a sport is five times bigger than the next sport (basketball) on Facebook. According to Miller fans don’t want updates from games on Facebook, but interaction opportunities with like-minded. He suggests that clubs must start with the relationship to the fans first and not only focus on commercial opportunities. As emerged during the discussions Facebook with all their user data knows more about the club’s fans and respective sponsorship correlations than the clubs knows about them. Nevertheless being a real fan of a club and liking it on Facebook are often different relationship states.

Miller introduced Arsenal as a club playing it specially well on Facebook. Arsenal is leading the way with its content strategy, for example by owning the post match time with exclusive content and an own Facebook video post match show. This is particularly clever as 65% of videos on Facebook are now watched on mobile devices. On average football clubs from the Premier League geo-target seven territories with each individual posts. Being asked for possible acquisitions of live broadcasting rights in the future, Miller stated that they are not in this business: „Once you start paying for content, it changes dynamics and relationships with fans“.

Christoph Heimes from YouTube said that YouTube sees itself as a platform and a complimentary service for rights holders. Therefore they don’t think about buying content as there’s enough content uploaded by users everyday. 300 hours of content are uploaded every minute. All YouTube content is now checked via a proprietary solution for copy right infringements. Nobody would have considered this control automatism to be possible several years ago. In the direction of the club representatives Heimes implied that if they want to reach bigger and new audiences, club TV might not be enough. YouTube provides a perfect platform to reach a wider audience which is not ready to pay for premium club TV content yet.

In Germany FC Bayern Munich just started to live stream training sessions to YouTube. The international Bundesliga channel may serve as a good example for content packaging as they mix their video archive with current match highlights (e.g. top 5 goals by Brazilian players after a splendid goal of a Brazilian player). Referring to monetization clubs can choose between the implementation of ads and a subscription model.

Another great tool to engage with fans are Google Hangouts. With Front Row Manchester United used a Hangout to broadcast about 150 fans live to perimeter advertising during a Premier League match.

Giving an outlook to the future Heimes doesn’t think that linear distribution channels will die, but have to adjust. Better curation, better discovery and better personalization will be key to new experiences and will also happen within the sports industry.

 

Professionalizing player scouting with the help of technology and network effects

Next on stage was Wyscout’s founder Matteo Campodonico. Wyscout is now the leading video analysis platform for football players in the world analysing more than 1,000 games per week across 450 professional clubs and 30 leagues including 85% of UEFA Champions League participants. He told Wyscout’s impressive story of „constant innovating“ starting from a student’s room in a little fishing village in Italy. Their starting point for player scouting was the sending out of DVDs produced by agents. Now everything is digitalized within a database with intelligent filters.

Campodonico predicts Google glass as the next natural evolution of player scouting. Currently on average there are four agents involved within an international transfer, Wyscout wants to further professionalize their services in order to diminish this number. When Borussia Dortmund purchased Ciro Immobile as a surrogate for Robert Lewandowski they matched the player’s heat maps and discovered that they are quite similar.

 

Claiming back and monetizing the relationship with the fan

The next panel moderated by Simon Kuper from Financial Times was labeled by the question “Will the football industry ever make a profit from the social media hype“. Participants in this controversial but fruitful discussion on stage were Prof Simon Chadwick (Sport Business Strategy and Marketing at Coventry University Business School), Oliver Kaiser (Ledavi), Carlos Moreira (WISeKey) and Thomas Röttgermann (VfL Wolfsburg). Especially Kaiser and Moreira took up position that clubs have to claim back the „ownership“ of the relationship with the fans and respective data and monetize them.

„Once you build your ecosystem you are in business, clubs have no ecosystems yet“ stated Moreira. The holy grail will be the last meter towards the fan and being able to service the fan on respective data and insights according to Kaiser. In a recent acquisition SAP paid 344 € per person in the companies database (referring to the purchasing price). When implying to transform this logics to clubs and football communities, as Kaiser did, this would create incredibly high valuation figures. SAP recently defined sports and entertainment as their 25th global industry. Chadwick dropped that Arsenal has more people working at social media than CNN employs at their sports department in London. According to him this is still an exception as clubs are still highly suspicious of the internet after the break down of the dotcom bubble. Currently most clubs don’t even know their audience within their stadium. Predictability in terms of what a club’s fans will buy next will be a huge market, even bigger than social media according to Moreira. According to Chadwick football needs cultural and structural change to succeed digitally.

 

Leveraging technology and digital transition to foster fan relations

Next David Dellea from PWC and Frank Zahn from Exozet gave an interesting overview about the current situation of the digital transformation within the sports industry. According to Zahn there will be 28 billion connected devices by 2020 in the world with wearables generating not only much more but also better fan and consumer data.

 

Embracing change to better service sports fans via digital

After a break Dr Andreas Wiele, member of the board at Axel Springer SE, lectured about sports and journalism. Axel Springer has realized that digital will kill their traditional model of print and that their only option will be to embrace digital in order to survive. The German publishing house takes digitalization pretty seriously and sees pretty good traction recently. “Journalism can only survive if there’s a price on some areas of digital content“ said Wiele. Germany’s biggest newspaper BILD sold 2.6 million copies one day after Germany wining the World Cup in 2014 (after the World Cup 1990 victory BILD still sold 6.2 million copies). The day after the World Cup victory 2014 Bild.de attracted 16 million unique users. Furthermore BILD+ now counts 240.000 paid subscriptions. Besides Axel Springer has acquired transfermarkt.de, a community where users contribute content for free that generates an authentic valuation of football players. In his final words Wiele advised the audience 1. to stay paranoid and 2. to actively embrace change.

 

Winning, engaging and monetizing fans with new digital services

Next Simon Kuper moderated a panel including Christoph Biermann (11Freunde), Walter de Gregorio (FIFA), Ben Lyttleton (author & broadcaster) and Jonathan Lavigne (OneFootball) upon “sports journalism in the age of digital media“ or as Simon Kuper put it “how can we try not to die?“. Up front Jonathan Lavigne offered great insights into Berlin based OneFootball which aims to deliver the best mobile platform for fans around the world by connecting them socially and emotionally like no other. Currently OneFootball is looking into more promising monetization opportunities via user engagement instead of leveraging mobile ads like they did in the past.

Biermann discussed how critical digital is in order to spread content for 11Freunde. The monthly magazine for football culture sells 85,000 copies and talks to 350,000 Facebook fans. For instance the format of a humoristic and completely biased online live ticker adds a special flavor to games. The live ticker has won online prizes and is often received by fans even days after the matches. He also argues in favor of a market for long-form writing also knowing that the circumstances in terms of research time and financing are getting worse. Ben Lyttleton advises journalists to build their personal brands and become an experts in a niche as he became the one for penalties. He even wrote a book about this favourite World Cup topic with Englishmen. Referring to the current challenge to finance quality online journalism he told that he recently was offered as much as 8 pounds for writing a 500 word article for a big British publishing house which name he doesn’t want to reveal. Walter de Gregorio also argued for the critical importance of costly, investigative journalism bringing the example of revelations of FIFA corruptions by the Sunday Times onto the table. Besides he praised Twitter as a fantastic communication tool especially for the correction of false rumors with the account @SeppBlatter during the World Cup. The well-selected panel discussed interesting cases but played pretty much on journalisms’ generic funding problems. Especially OneFootball will be an interesting case to follow in terms of further growth and monetization of fan relationships and engagement on mobile devices with new approaches.

 

FC Bayern Munich & Deutsche Telekom: Connecting all the dots with the fans

Next on stage was Stefan Mennerich. The Director New Media, Media Rights and IT at FC Bayern Munich talked about the German record champions’ transformation to a media house.

He highlighted that business is important, but that they are still a football club dealing with emotions and have to respect fans and their love. Therefore the supporters are an important part to shape the club’s policies. The social web which Mennerich labeled as “the pedestrian zone of the internet“ serves the club as a fantastic platform to distribute emotional content but also to get valuable unfiltered feedback from fans. In order to create this kind of emotional content the club’s own media team tries to be as close to the team as possible. Via its digital platforms the Germans serve up to 1 billion contact points each month. With the help of their new partner SAP the club started to rearrange its backend and CRM infrastructure in order reach the next level in the further professionalization of fan engagement and services.

In addition Dr Henning Stiegenroth, Vice President Sports Marketing at Deutsche Telekom, the main sponsor of FC Bayern, introduced their plans for a connected stadium and gave insights into current digital activations with the club. A video showcased their „stadium vision“ including respective services and commercial opportunities within the Allianz Arena. Among those will be the opportunity to access a selection of camera angles, watch replays and highlights, order merchandise and many more services that will be accessible via smartphones. Referring to engaging fans via digital channels they developed joint formats with the club. Here, they invite fans to ask questions to their favourite FC Bayern stars within a regular video show called “Mia san dran“ and to be part of the club’s anthem “Stern des Südens“ (translated: star of the south) with “Fan Voices“. Within the latter fans can record their performances of parts of the anthem within a karaoke application. For each home match a new episode mixing performances of fans from all around the world and players is broadcasted on the videowall in the stadium and released via social media (e.g. Oktoberfest version).

[Disclaimer: As Director Digital & Social I have worked on several digital projects for Deutsche Telekom including the initiation and set up of “Fan Voices“. With my agency the missing piece I have also consulted FC Bayern Munich on digital issues in the past. So I have to apologize for a potential positive bias.]

 

An appeal to slow down and reflect in the high-speed information age

Walter de Gregorio from FIFA, who admits to having a complicated relationship with social media, gave a speech on his thoughts about the current state of digitalisation and its implications. He contests that as a society we are better informed today than ever before. Nevertheless the FIFA often serves as a synonym for everything that is wrong with football – largely ignoring their positive developments. In his opinion not only digitalisation but also society has changed journalism. He asked people to switch on their brains in order to avoid the banalities of the internet, go offline and take time to reflect. He delivered quite a likeable speech, but also an interesting counterpart for an event focussing on digital opportunities.

Marcel Schmid and his IFA team have organized and staged a great event with an inspiring selection of speakers and panel participants. In my opinion the event tackled the right questions and offered new perspective and a vibrant dialogue. However we are still just at the start of the digital transformation of many areas of businesses. Sports may here serve as a fantastic playground and showroom as it hosts and serves extreme emotions, powerful relationships and unique fandoms. New digital technologies and social networks will keep on bringing new challenges and opportunities to all stakeholders.

Here, sports businesses have also a great chance to learn from other industries like the entertainment and music industry and adapt successful strategies and solutions. Football as the biggest emotional connector in the world will continue to bring new experiences and perspectives to people with the help of new technologies. This implies huge opportunities to ignite and maintain new and deeper relationships for all involved parties, also leading to completely new business approaches.

 

 

About author

Daniel McLaren
Daniel McLaren 820 posts

Dan is the Founder & CEO of Digital Sport. Can be found at sports industry events and heard every week on the Digital Sport Insider podcast. @DanielMcLaren

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