The Hitch said:Since this thread is largely about whether sponsors make money in cycling, I would like to ask how a company like liquigas and even more so, the companies behind astana make money.
With liquigas it is my understanding that they are a gas company. Now when specialised have a cycling team I can see where they would make money, because more fans will buy specialised bikes. But a gas company. Are people going to invest their shares in liquigas because of the cycling team??? How on earth is a bike team worth anything to them.
Even more so with astana because astana isn’t an actual company but a coalition of Kazakh companies united under the name of the Kazakh capital. What are they going to get out of this when their names aren’t even on the shirts?
Thanks
It's just advertising Hitch. Every company that "invests" in a cycling team is essentially just buying a billboard to plaster their brand name on. As such, all expenditures for any company on a cycling team simply get booked as "marketing expense." It is a cash outlay that takes away from revenues every year it is spent. As such, pretty much every company making this choice is expecting to see an increase in sales due to increased product visibility from spending this money on advertising. If they don't see an increase in sales during the period of time when money is being spent on the marketing then they are going to eventually stop doing it in order to avoid "throwing good money after bad."
See a one Michael Ball and Rock Racing for exhibit A on doing just that. And please reference eToys and their ridiculous sockpuppet Super Bowl ad for exhibit B on that, LOL.