Ecommerce giant Rakuten is making waves in the world of sport having recently signed off on sponsorship deals with the NBA, Barcelona FC and the Golden State Warriors. Ben Cronin spoke to the company’s global marketing director, Rahul Kadavakolu, at the recent Leaders business conference.
- Brand wants to use sponsorship to bring its 70 businesses together
- Rakuten will offer NBA League Pass exclusively to Rakuten members in Japan
- Brand has also become a global marketing partner for the NBA
What is included in the deal with the NBA?
Rahul Kadavakolu (pictured): The partnership sees Rakuten become the NBA’s exclusive distribution partner in Japan for all live NBA games. From October 18, approximately 250 games per year will be available through a subscription service on Rakuten TV, Rakuten’s video-on-demand service.
Rakuten will also offer NBA League Pass exclusively to Rakuten members in Japan. There are also plans to sublicense the broadcast rights to broadcasters in Japan.
Rakuten has also become a global marketing partner of the NBA, which allows Rakuten to create NBA and team zones, and sell select NBA and team merchandise on its e-commerce channels globally, including Rakuten Ichiba in Japan and Ebates, a leading membership-based online cash-back site in the US.
Rakuten Viber, Rakuten’s instant messaging platform, will also become an official platform for the NBA and its teams, providing Viber’s more than 900 million users with access to league content.
So the media deal is local while the marketing partnership is global?
RK: The marketing partnership is a global partnership. The exclusive distribution partnership is for Japan only.
Are the objectives behind this deal any different from the ones behind the Barcelona and Golden State Warriors deals?
RK: Rakuten has long had a special affinity with professional sports. We believe that sport has the ability to transcend language and cultural barriers and truly inspire us.
We are very excited to be partnering with the NBA to promote the growth and development of basketball in Japan and to engage with NBA fans around the world through our e-commerce platforms (Rakuten Ichiba and Ebates) and social media platform (Rakuten Viber).
After the establishment of the Tohoku Rakuten Golden Eagles and our entry into professional baseball, awareness of the Rakuten brand increased dramatically.
Through our partnerships with FC Barcelona, the Golden State Warriors and now the NBA, we are aiming to raise global awareness of our brand and increase engagement in Japan.
The NBA deal has been reported as being worth $225m (€190m). How many years is the deal for and what’s the split in value between media and sponsorship rights?
RK: The partnership is a multi-year global partnership. We are not disclosing the figures for the contract.
What was the context for the sponsorship of FC Barcelona and the Golden State Warriors?
RK: Rakuten is a global brand. We’re a fairly large brand in Japan, a household name.
Our international expansion over the last five years has largely been acquisition driven. There have been a few businesses which were also organic, but largely [we have expanded] through acquisitions.
So really by design and by strategy we let these brands run independently with their own brand name and we were in no hurry to integrate them.
Starting this year, as part of our business strategy for global markets, we decided to bring all the brands under the Rakuten portfolio so [we adopted] an approach where all our businesses will carry the Rakuten name in front of them. So, Viber becomes Rakuten Viber. Ebates will become Rakuten Ebates, and so on and so forth.
What role will your sports sponsorship deals play in this strategy?
RK: In order to support this whole brand transformation journey, we needed a very strong partnership that supports us right through the journey.
Because it’s bringing 70 brands together, so we’re talking about consumers of all these 70 brands, merchants and partners we work with around these 70 brands and internally all of the employees coming together, the CEOs coming together.
So, it truly is to bring the Rakuten brand to life, it is to connect the dots between these 70 businesses.
We have a very successful ecosystem model in Japan where all businesses are connected, which is when a consumer gets the benefit of all brands and all services, so we’re trying to replicate the same success in international markets.
What other aspects were important in choosing two global teams like the Golden State Warriors and Barcelona?
RK: It’s a tripod strategy. Brand awareness is a no-brainer, but the second part of the strategy is to convert some of the traffic that we get from the partnerships into members who use our services.
The third piece is looking at new business models, new revenue streams, new markets that we can go to jointly with some of these partnerships.
How important is the staff engagement aspect in your sponsorship strategy?
RK: We made a conscious call and we thought sports and entertainment is definitely an area we would want to invest in and create partnerships around to support this journey.
It clearly involves consumers, merchants and the community, and internally the employees, and also, not just existing employees, it’s also new talent we want to bring into the company. I think a credible authentic brand is extremely important for getting the right type of talent into your company.
How important was the social media following of Barcelona and the Golden State Warriors in your decision to partner with them?
RK: We could use the fanbase to communicate the portfolio, but the most important thing is that we need to seamlessly integrate our services – I think that’s the important, operative word.
We wanted to partner with brands which had a similar philosophy, a community-driven approach to running the team or the club, and innovation and entertainment are core to our brand. Our vision is to be a global innovation company.
The way we deliver our services has an entertainment angle to it – it’s a sense of discovery that we want to deliver to consumers and I think both the Warriors and FC Barcelona perfectly align to all of these core words. We have probably the two best brands in the world of sport.
Is it true that Barcelona player Gerard Piqué was instrumental in the Barcelona sponsorship deal?
RK: I think the connect came through Piqué at an introductory level. Since then it’s been a very formal process in terms of connecting with the teams, ensuring we align on objectives first, align on the philosophy, align on the goals that we set for each other – and it works both ways.
That’s why I’m calling it a partnership over and over again and not a sponsorship. It’s not just slapping a logo on a jersey.
Can you give a sense of how the Barcelona partnership will encourage fans to use your services?
RK: Rakuten Viber is a good example. Rakuten Viber has become the official communications channel of the club.
The question is how do we create unique features that create excitement in terms of how fans engage with the club? We’ve launched the Barca bot on our public account which gives the consumer, or the fan rather, an opportunity to participate a whole lot more than they have been in tracking the club in the past. It could be quizzes and contests in real time.
We’ve launched ‘most-valuable player’ which is a user-driven choice of who they think the most valuable player should be per game. 70 brands are included in this [sponsorship deal] and it covers four categories: e-commerce, digital contents, media & communications and Fintech. It’s a fairly broad set of categories and brands.
An increasing number of B2B activations seem to be about ‘story-doing’ rather than story-telling, the Alibaba and IOC partnership being a case in point. Would you say your partnerships with the Warriors and Barcelona fall into this category?
RK: I think every brand wants that. I think telling a story without doing anything doesn’t give you the maximum value.
It’s about how you seamlessly embed services into the fan engagement journey. That’s the beauty of sport and entertainment: it gives you the opportunity to express yourself at an emotional level as a brand and it also has the interactivity angle to it.
You can actually let fans interact with some of your services. Traditional platforms will not give you that advantage.
Fan forums and social media platforms already control a large proportion of the fan engagement space. How confident are you that you can encourage fans to use your platforms and services?
RK: Messaging is just one aspect of a messaging and calling app. Through bots there could be a payment integration to it, depending on our roadmap, and actually the option to make transactions through the app.
We have sticker packs [a type of team-branded emoji] which is something new to the western world but huge in the APAC region. You send them to people, so you make it a part of your conversation. The beauty of the stickers is that it’s a way of expressing yourself. The sticker by itself will not make too much value, it’s about what message goes with that sticker.
Being the official communications channel of the club is much larger than stickers and bots. It’s to build functionality, which gives users such a unique experience that eventually will make Viber the single interface point for the club
Exactly what are you looking for when you sponsor a sports team or property?
RK: I think the most important thing when we evaluate and when we look for partnerships is to see how close and how connected the philosophies are.
This community-driven approach is critical. How different are they from other teams? Are they united when they play? You may have great players in a team but getting them to play together is an art. How does management run the team? How are the coaches involved with the team?
They should stand for some of the core values of the brand, so those are things we would definitely look for. And it doesn’t have to be a huge jersey deal every time.
If it doesn’t have to be a huge jersey deal, what other types of deal are you looking for?
RK: It could be anything that supports our business goals. It could be something we could do where we partner for specific goals, it could be just in the e-commerce area, it could be just in the content area, it could be how we can help the club or the team to go to global markets.
A lot of the American sports are wanting to go global. Viber is huge in Russia. In fact, I think they have bigger equity or as much equity as Nike has in Russia, so Viber is a super-hot property. And partnerships like this, what they do is, they give your brand so much recognition.
These companies who would put you as one of the partners to talk to, now put you right on top and say we want to look at partnerships with you.
- Sister title Sports Sponsorship Insider has produced a Brand Report investigating Rakuten’s sponsorship strategy. To read the report, click here