independent

Saturday 25 May 2013

Marketing magician propels the Man U brand into top division

Fans around the world dig deep for their team as Draper's winning strategy transforms value of Old Trafford logo to €332m

Manchester United's Wayne Rooney celebrates scoring against Everton earlier this year

When Peter Draper took the marketing reigns at Manchester United back in 1999, he was given a decidedly imprecise goal. "I was told to increase revenue by 'a lot'," he recalls. "Just 'a lot'. We just knew that given the potential customer base - our fan base - we could be doing much more."

And so began a journey that saw Manchester United become one of the most powerful sports brands in the world, with Malcom Glazer's 2005 takeover of the club putting a stg£225m (€332m) value on the club's brand alone.

Not that the explosion of the Man U brand sprang miraculously from nowhere. By the time Draper found his way to the hallowed ground of Old Trafford, Manchester United was already one of the most brand active clubs in the English Premiership. The infamous MUTV was already in full swing, the website had begun to generate decent ad revenue, lucrative sponsorship deals were in place, pencil cases were flying off the shelves and Manchester United fans could support their team with a range of branded financial products that spanned saving accounts to credit cards.

For Draper's new employers it was a case of those six words that so unforgettably immortalised the 2002 Fianna Fail campaign: 'A lot done, more to do'.

And so the new marketing man set about doing.

Evolution, not revolution was the name of the game, and one of Draper's early plays was to revamp the financial services being offered by Manchester United.

"What we had was a savings and credit card product but not very well done," said Draper, who was in Naas, Co Kildare last week addressing Chamber Ireland's Extreme Business Makeover Seminar. "So we said 'let's just leave it, let's start again'."

The revamp of the financial products puzzled some - the offerings that were in place were already making money - but the decision went to the heart of Draper's new branding strategy for his club.

"In the end, they're our customers. It's not MBNA they blame if anything goes wrong, it's us. They know where we live - Manchester United, Old Trafford, Manchester, England.

"If there's a promotion and it all goes skiwiff guess who gets the letters?"

And so 'quality' became the buzz word, paving the way for what Draper believes was his best decision at the club - a stg£300m (€443m) deal to give Nike full rights for all Manchester United's merchandising, from 2002.

"It hadn't been done before, a total licensing deal," he says. "Nike made shirts, they don't know anything about pencils, mugs, jigsaw puzzles, woolly hats.

"That‘s what they bought and they have to do everything now."

Pre-season tours to exploit the lucrative markets of America and the Far East are something else Draper credits himself with bringing to Man United.

"Man Utd doesn't just stop in Manchester," he says. "When I was there we did two tours to Asia and two to America.

"You do it to bring the brand to life in the places you go to. You have got fans there - more than 20m fans in China alone - but most of the time they can only see you on TV."

Leaving aside the noble goal of "bringing the team closer to the fans", the finances of the tours make for compelling logic.

Nurturing a fan base further afield makes the team far more attractive to global sponsors, Draper says.

"The AIG sponsorship we have now is worth £14.5m (€21.4m) a year - that's an American and Asian company really."

Then there's spikes in local merchandise sales in America and Asia to consider, as well as tickets sales from sell-out matches in super sized stadiums.

Or as Draper sums it up: "There's a reason to be there and you get paid to go."

Yet despite the unequivocal financial pros of the tours, Draper says one of his worst decisions was going on tour in America in 2003 and 2004.

"It was too close to go two years on the bounce," he says. "The first year was fantastic, absolutely fantastic, the second year was good but it just wasn't fantastic."

One of Draper's more controversial decisions came in 2005, when he decided that Manchester United's 12 key sponsors should be cut down to 8.

"For sponsors, you can‘t actually cut through the message if there are too many of you," he explains.

"And for us, going from 12 to eight was plus on the revenue side. You have to believe that eight sponsors will say 'If I am one of a few I will get more from my relationship so I will pay more'."

That decision was one of the first Draper made under the shadow of incoming owner Glazer, and one of the last he made at the club. By May 2006, the marketing man was heading for the door, prompting rumours that the brand-focused Glazers were impatient about Man Utd's global brand roll out and had their own plans to up the ante.

Those are rumours that Draper denies - he says he left on very good terms with all Glazers - but still they persist.

How aggressively the Glazers plan to pursue their global branding strategy remains to be seen, but there is one thing Draper thinks they will never do.

"I don't think they will ever sell the naming rights to Old Trafford," he says.

"You don‘t sell your soul. I don't think it's that beneficial for an organisation with revenue streams like Man United's to say we want to be called the XYZ Stadium Old Trafford.

"It wouldn't happen anyway because the ability to give value to people who name it would be limited - people wouldn't call it XYZ Old Trafford, they'd call it Old Trafford."

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