Tecate Beat Corona for Mayweather-Pacquiao, but Now What?

Brew Launches Social Media Campaign After Paying Record Sum for Sponsorship

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Tecate landed a punch on Corona when it recently secured sponsorship rights to the blockbuster fight between Floyd Mayweather and Manny Pacquiao on May 2. But now the pressure is on to make the expensive deal pay off.

The Heineken-owned brand paid $5.6 million for the rights, outbidding Corona's $5.2 million, according to a recent report by ESPN.com. The report characterized it as a "fierce bidding battle" between the two Mexican imports in which Tecate emerged only by committing a record amount for such an event.

There is plenty of potential upside: Tecate believes the fight could draw upwards of 4 million homes on pay-per-view and at least 33 million total viewers. That would surpass other recent marquee sporting events such as game seven of the 2014 World Series (23.5 million), game five of the 2014 NBA Finals (18 million) and the 2014 FIFA World Cup final (17.3 million).

Tecate has been hoping to get in on such a major fight since it began sponsoring boxing in 2007, said Gustavo Guerra, co-brand director for the brew. "There is no doubt this is going to be the fight of the century," he said.

But is the sponsorship worth the cost?

Consider that the reported $5.6 million price tag is roughly enough to pay for the title sponsorship of an NBA arena for a year, or to sponsor a big concert tour, according to Jim Andrews, senior VP-content strategy at sponsorship consultancy IEG. Still, he said that "it's not an outrageous number for what they are going to be able to do surrounding it, because there is going to be a lot of attention on this fight."

Tecate will have its name featured in the center ring and splashed throughout the arena at the MGM Grand in Las Vegas. But the key to getting the most bang for the sponsorship buck rests in the marketer's ability to gain attention in the weeks leading up to the fight. On that front, Tecate is seeking to amplify its exposure with a social media campaign, retail executions and by sponsoring viewing parties at 200 or more bars in restaurants.

From April 6 to May 3, Tecate will solicit opinions on the fight on social media via the hashtag "MyBoldOpinions." Select fan posts will be used in digital videos starring Sylvester Stallone and renowned boxing commentator Larry Merchant. The campaign is by Saatchi & Saatchi.

Most of the on-the-ground marketing -- including outdoor advertising and retail programs -- will run in five states where Tecate gets a large percentage of sales and where the brand is targeting so-called bicultural Hispanic-Americans: California, Nevada, New Mexico, Arizona and Texas. Programs include mail-in-rebates with each Tecate purchase that will give consumers discounts on the pay-per-view price of the fight, ranging from $15 to $50 depending on the amount purchased. Seperately, Tecate will run a sweepstakes with prizes including tickets to the fight or getting the pay-per-view for free.

Tecate will cover its sponsored viewing parties in branding. In some cases, the brand will subsidize cover charges so that some bars can show the fight to consumers for free. The match is expected to cost $99 on pay-per-view at home, according to a report by The Wall Street Journal.

While the fight seems evenly matched, Tecate is an underdog to Corona in the U.S.

Corona Extra is the top-selling imported beer, with $1.4 billion in sales in the 52 weeks ending March 22, up 6.5% from the period a year prior, according to IRI, which does not include bar sales. Regular Tecate ranks seventh, at about $155 million, after sales fell by 3.4% in the period. The company is increasingly shifting marketing resources to Tecate Light, which grew by 55.6% in the period reaching $46 million in sales, according to IRI.

So how did Tecate outbid its larger rival? Mr. Guerra declined to discuss financials or confirm the price tag. But he said the brand took advantage of its relationship with Top Rank, which is promoting the fight along with Mayweather Promotions. Tecate has previously sponsored Top Rank fights, Mr. Guerra said. Corona, meanwhile, has historically been aligned with Golden Boy Promotions, which is not involved in the fight.

A spokesman for Constellation Brands, which markets Corona in the states, confirmed that the brand bid on the sponsorship. "We wanted to make sure we were aggressive but also fiscally responsible," he said. "We were very comfortable with our decision to remove ourselves from the bidding process."

For Tecate, the sponsorship comes on the heels of a new campaign for Tecate Light called "Born Bold" by Saatchi. That effort targets what Tecate describes as 21 million bicultural consumers, people who are "confident and fluid in their Mexican and American duality," according to the brand's description of the campaign. "They share Mexican values and American values," said Belen Pamukoff, Tecate's co-brand director.

The effort, which includes a TV ad, emphasizes the brand's black eagle icon.

Neither boxer in the May 2 fight is Mexican. Mr. Pacquiao is from the Philippines and Mr. Mayweather is from Grand Rapids, Mich. But Mr. Guerra suggested that Mr. Pacquiao "is the fighter that Mexicans and biculturals are cheering for," noting his strong following among those demographics. "He is a very charismatic fighter."

That won't mean that Tecate will favor Mr. Pacquiao in its marketing. "We need to be neutral because we are sponsors of the fight, not of Manny Pacquiao," he said.