Finally, the World Cup is here! I am a huge soccer fan, so nothing makes me happier than watching this tournament, which is being held in South Africa this year. Well, I suppose it'd make me happier to watch without the annoying buzz of the vuvuzela horns. The problem has gotten so out of hand that Masincedane Sport, the South African company that makes these annoying sound machines, has said it plans to introduce a new, quieter product in an attempt to keep FIFA at bay. Let's all hope that happens soon. I'd imagine I'm not the only soccer fan who's tired of the vuvuzela orchestra, and TV advertisers certainly wouldn't be very happy if viewership took a dive as a result.
But if early data is any indication, the vuvuzela annoyance hasn't had an impact. For example, the viewership for the U.S. team's opening game against Britain was the highest for a match involving the national team in 16 years. Around 17 million viewers on both ABC and Univision combined tuned in to watch the game, according to Sports Media Watch. That's quite a feat considering not one of the first four games of the NBA Finals surpassed that many viewers.
Through the first week's matches, ESPN and ABC are averaging 4.9 million viewers, which is a 108 per cent increase from the first five games of the 2006 World Cup. Through the first eight games, the networks are averaging 4.2 million viewers, vs. 2.3 million for the first eight games of the 2006 games. According to ESPN, an additional 1.3 million people have watched a game on ESPN3.com.
Here's a look at some of the top World Cup stock picks that could benefit off the growing popularity in soccer.
Soccer has clearly arrived in the U.S., and many companies are poised to benefit and profit off the ad dollars they're spending to increase brand awareness. There are a number of publically traded companies that are either official partners or big sponsors of this year's event, including McDonald's , Coca-Cola and Sony . Sony is pushing its new series of 3D-enabled high definition TVs just in time for viewers to watch live footage of the World Cup like never before. Coca-Cola is splashing ads for its sports drink Powerade all over the electronic screens that circle the pitch. These companies could see a big jump in sales in the coming quarters if their investments into the World Cup pay off.
One company that could be a big winner off of the 2010 World Cup is Anheuser-Busch , the Belgium-based brewer that controls over 200 leading beer brands, such as Stella Artois, Michelob, St. Pauli Girl and Becks.
The company is going to be a major player off the pitch in South Africa since its flagship brand Budweiser is the official beer sponsor of this year's tournament. Anheuser-Busch is launching a blitz of TV ads and posters for Budweiser that will far exceed any other brand as part of a marketing campaign that is designed specifically around the World Cup.
If the company can be successful in raising brand awareness at the World Cup, it could see sales bump up across many of its popular brands as people pack local bars to watch the games and knock back beers.
Another World Cup winner could be U.S.-based search giant Google . The company might not be the first stock people think of as a World Cup play, but take a few minutes to think about all the online advertising dollars that will be flowing their way as customers ramp up sales programs during the month long games. Whether you're selling video games, such as Electronic Arts' FIFA World Cup 2010 game, or you're just selling team merchandise, you can bet that companies are buying up sponsored search results to move products.
Online and mobile searches are going to go through the roof as fans across the globe constantly search for breaking news on their favorite teams. If you think that Google isn't serious about the World Cup, then just take a look at how it's tweaked search results for "world cup" to show recent game scores and upcoming matches at the top of the page.
Also, let's not forget that soccer is the most widely followed sport in the world, with more than 3.3 billion fans. To put that into perspective, consider that American football is the ninth-most-popular sport, with around 400 million fans. A company doesn't just have to be a sponsor or partner to win when you take into account that gigantic consumer audience.
An increase in ad spending isn't the only way that Google could win off the World Cup. The company's foray into the smartphone market, with its Nexus One device and the Android operating system, could provide for all kinds of new revenue streams. Recently, Sprint Nextel began selling the EVO phone, which operates on 4G technology that allows for 10 times faster downloads than 3G phones. This phone will be capable of streaming live World Cup matches, and it runs on Google's Android operating system. The search king should also benefit from increased spending on mobile ads through its recent purchase of mobile ad firm AdMob.
Similar tech companies, such as gadget maker Apple and Web service company Akamai Technologies , should benefit from live Internet streaming broadcast of World Cup games. Apple offers applications through its iPhone and iPad that will stream the matches right to a user's fingertips. The company has said that since the iPad hit the market less than two months ago, it's sold 2 million units, which equates to about one every three seconds.
According to Akamai, the first day of the World Cup registered as the company's highest bandwidth demand at over 12 million visitors per minute for news sites. The previous record for bandwidth demand for news sites was the inauguration of President Barack Obama.
Another big winner could be worldwide entertainment company Walt Disney . Disney controls both ESPN and ABC, which have paid $100-million to televise both this year's World Cup and the next one in 2014. ESPN's World Cup marketing bonanza is the largest it has ever undertaken for a single event. The company is looking to expand its global footprint with the World Cup in just about every form of media that you can imagine -- TV, Internet, mobile devices and traditional radio. If the early viewership ratings continue to trend in the right direction, Disney's big soccer investment could pay dividends.
ESPN plans to stream around 25 games in 3-D at ESPN3.com, as well as 54 matches in HD, and the company is marketing two iPhone apps. Overall, ESPN will provide more than 230 hours of live original World Cup content. For its online and ESPN Radio, the company will broadcast in a number of different languages, including Chinese, German, Greek, Italian, Japanese, Korean and Portuguese.
Germany-based producer of sportswear and sports equipment Adidas has a strong presence at this year's World Cup and is the official apparel sponsor. The company is sponsoring such soccer powerhouses as Argentina, France, Germany, Spain and the host nation, South Africa, whose teams are all wearing jerseys with the famous three-stripe logo on them. If any of these teams were to win the entire Cup, it would be a big win for Adidas. It's also worth noting that many of the players are sporting high priced Adidas soccer cleats that often have price tags well over $200.
The company is also the official sponsor of the World Cup soccer ball, which will be used in every game. The ball, which costs $100, is a technological breakthrough. It is constructed out of eight 3-D thermally bonded panels that are molded together, creating a high-energy product with perfect roundness. Many players have voiced their dislike for the ball, but that happens almost every time a new game ball is introduced.
One company that is advertising at the World Cup that might have been better off not is UK-based oil giant BP . We all know about the problems that BP is facing due to the oil spill crisis in the Gulf of Mexico. Yet the company is running ads at the World Cup for its motor oil brand Castrol, and as a first-tier sponsor, this could have cost BP $100-million. The public opinion of BP could really take another hit here if people across the globe wonder why the company isn't cutting spending to make sure it has enough cash for the coming litigation and cleanup costs it's sure to incur from the oil spill.
- McDonald's Corp$128.52+0.32(+0.25%)
- Coca-Cola Co$44.74-0.24(-0.53%)
- Sony Corp$24.08-0.64(-2.59%)
- Anheuser Busch Inbev SA$124.80-1.04(-0.83%)
- Alphabet Inc$695.37-2.84(-0.41%)
- Sennen Potash Corp$0.18+0.03(+16.67%)
- Apple Inc$95.54+1.90(+2.03%)
- Akamai Technologies Inc$50.04-0.90(-1.77%)
- Walt Disney Co$103.69-0.67(-0.64%)
- BP PLC$32.55-1.07(-3.18%)
- Updated May 3 12:13 PM EDT. Delayed by at least 15 minutes.