On July 16th, 2020, when Real Madrid won the 34th league title, they had 248m social media followers. On winning the league, the club generated more than 16 million interactions on Twitter, Instagram and Facebook and an average of 74,192 per publication, according to their website.
The following day, the club exceeded this milestone, publishing 180 pieces of content that generated over 16.6 million interactions, increasing the average to over 92,000 interactions per publication, according to industry analysts.
As we fast approach the culmination of the 2021 UEFA Champions League against a backdrop of Covid-19, the finalists are yet unknown but Real Madrid’s total social media following stands at 259m and has grown by more than 15 million only over the last year. Similar levels of social media growth have also been observed across professional football as clubs intensify interaction with their fans in all corners of the world, and effectively 24/7. Fans increasingly demand an engaging, authentic and consistent digital experience from their clubs, therefore social media has become an essential element of a club's integrated brand strategy and a source of incremental commercial income if implemented effectively.
In this article, KPMG’s Football Benchmark team analyses the relationship between clubs’ social media followers1 and their commercial revenues and how this has evolved over the past five years.
Large corporates have demonstrated how social media can be exploited to enhance brand presence through engaged online communities, and football clubs are fast seeing the commercial potential in growing and engaging their fan base. Up until very recently, there has been a degree of uncertainty across many football clubs on how to best and to what extent utilize social media with concerns for losing control of their brand communication on public platforms. Clubs are now fully embracing social media, using it to promote consumer-to-consumer discussion and build engagement and positive brand association as part of a wider media strategy, and football achieves this to a level matched by very few other industries.
KPMG Football Benchmark analysis has revealed a strong relationship between clubs’ commercial revenues and social media following, based on available commercial revenue data for the financial year 2019/20. The below analysis demonstrates the significant role a strong and engaged following has in the commercial aspects of a club. This has become particularly important during Covid-19 where clubs, lacking in activity and communication with their loyal fans, are innovating to engage and monetise their fans.
It must be noted that the extensive growth and ubiquitous nature of fans' engagement and the exact impact this is having on a club’s commercial strategy is relatively hard to observe, yet it is difficult to ignore how social media is playing an increasing role in a club's ability to maximise commercial opportunities, starting with the ever-growing trail of fan data for clubs to utilise in various aspects of an integrated media, marketing and commercial strategy.
In an age where clubs are brands and fans are increasingly seen as customers, many clubs are beginning to demonstrate the importance of understanding and utilising fan data to improve the fan experience and to maximise commercial partnership arrangements.
Clubs that are meeting the specific needs of their fans with relevant, authentic and timely-communicated content succeed in deepening brand loyalty whilst also being able to develop targeted commercial opportunities, either directly by the club or through sponsor activations.
Juventus FC, for example, have seen their followers on social media grow by 320% to 110m followers over the past five years, largely facilitated by the clubs’ brand repositioning in 2017. The club’s successful extension into aligned categories globally such as entertainment, sport and fashion generated exposure amongst a new pool of global fans across existing and new touchpoints including social media.
The arrival of Cristiano Ronaldo and his legion of almost half a billion social media followers has also contributed to Juventus’ online popularity. In addition to his on-field value, his marketability has certainly amplified the club's commercial value and performance on social media channels. In fact, player marketability and commercial power, including social media exposure and influence is increasingly becoming an important factor in the player transfer market and reflected in the transfer fee.
Another factor is the exploration of new social media channels such as Weibo and TikTok, which helped to further adapt communication measures to the respective target audience.
Over the same period, Juventus FC grew commercial revenues by 145% demonstrating that the club have been able to capitalise on the vast development of its brand appeal, diverse global fanbase, impressive on-field performances and the Cristiano Ronaldo effect over this period.
Fan intelligence is also affording clubs with considerable insight and leverage with sponsors. Sponsors are increasingly interested in the locations, profile, demographic and value of a clubs’ fans, in addition to the size of the fan base, in order to ensure the sponsorship is a good strategic opportunity for their brand and to maximise ROI.
Developments in social media technology are now also allowing more communication and better-targeted engagement between football fans and clubs than ever before. Enhanced user algorithms are ensuring that fans are fed with the most relevant, authentic and interesting content to keep them engaged more frequently and for longer, along with automated targeted marketing capabilities, allowing clubs and sponsors alike to effectively capitalise on the extensive and fast-growing global football club following.
Likewise, the development of new social media platforms themselves is providing opportunities for clubs to target different audiences in innovative ways. TikTok, launched in 2016 and primarily driven by short-form video content appears to be a good way for clubs to engage with fans and potential fans under the age of 25 (known as Gen Z) in a very competitive ‘consumer attention’ market.
Another innovation that demonstrates many clubs’ priority for deepening authentic fan engagement and loyalty whilst directly monetising their large global fan base is the recent launch of Fan Tokens, a digital currency providing access to specific club goods or services. In 2019, for example, Paris Saint-Germain released 20m traded tokens giving fans a tokenised share of the club, and therefore influence in club decisions. Other examples where fan tokens are available include, AS Roma, Juventus and FC Barcelona amongst others.
Corporates are also targeting social media in a bid to gain a more directed audience with their precious consumers and football has long been seen as an attractive opportunity to broaden brand exposure and equity amongst a large group of highly engaged fans. But unprecedented levels of club following, targeted fan engagement and conversation make the club a much more meaningful value proposition for sponsors and commercial partners.
Interestingly, however, the relationship between social media following and commercial revenues seems to weaken amongst the top 10 clubs by commercial revenue 2019/20. Commercial revenue generation for many high-profile clubs, is greatly impacted by other factors such as; brand, duration of commercial agreements, the capability to negotiate advantageous sponsorship deals, the location of the club, and the demographics of their followers.
Moreover, many top 10 clubs have a superior proportion of international fans, who are inherently harder to monetise commercially per fan than localised fanbases. FC Barcelona and Real Madrid for instance have both amassed 262m and 259m total social media followers, respectively, the highest followings of any football club globally. Whilst commercial income for both clubs 2019/20 are second and third highest only to Bayern München, the average commercial revenue per social media follower stands at only EUR 1.30 for both clubs.
Contrastingly, there are clubs within the top 10 by social media followers that are generating comparatively strong commercial revenues annually whilst not yet fully developing a global fanbase and social media following to match their peers.
Tottenham Hotspur FC has recently become an established top six Premier League club, a regular amongst European club competition with a brand-new state-of-the-art stadium and the right to argue they sit amongst Europe’s elite. Certainly, in terms of operating revenues, they are now a top 10 revenue-generating football club, with revenues of EUR 523m in 2018/19, falling to EUR 446m (-14.6%) in the Covid-19 affected 2019/20 season. However, despite recording the second-highest growth in social media across the Big 5 leagues of Europe since 2019 (91%), beaten only by FC Internazionale Milano (95%), Tottenham Hotspur are ranked 12th in terms of social media following with 44m followers globally. Most significantly, however, Spurs would need to almost double their social media following to enter the top 10. As a consequence, Tottenham Hotspurs' commercial revenue per social media follower stands at EUR 4.30, supporting the notion that other factors are driving the club’s strong commercial revenues.
Therefore, whilst major clubs undoubtedly profit from gaining global followers by generating higher commercial revenues than domestic rivals with more of a local fan base, the income differences between the most followed teams require further investigation. Rather than stressing differences between the business operations of these clubs, the contrast between commercial revenue per social media follower performance seems to highlight that the monetization of social media followers by many top football clubs still has a long way to develop yet.
1All figures referring to Social Media followers in this report are valid as of March 2021 and include the following channels: Facebook, Instagram, Twitter, YouTube, TikTok and Weibo.