World Cup Football: 770 Billion Minutes of Attention (Economics)

Thales Teixeria of Harvard has some interesting facts/trivia on the football world cup and how it is all about attention economics.

He says FIFA world cup is the 7th largest business in the world on annual basis:

The 2014 FIFA World Cup in Brazil is expected to attract the attention of 3.2 billion people worldwide. During one month, 32 teams will vie for the trophy of best football (a.k.a. soccer) team in the world. With 64 matches and assuming that 3.2 billion people watch one entire game, the whole tournament will garner 770 billion minutes of attention.

The fact that most will view the matches as they are played makes the tournament even more valuable to advertisers—a key principle of “Attention Economics,” which focuses on what has become a scarce commodity in an age of information overload. Using a standard cost of $25 per thousand viewers, which is generally charged by broadcast companies for a 30 second ad on primetime television in the United States (a value cheaper than Japan and more expensive than Brazil) FIFA has the potential to generate $23 billion in revenues from TV ads, billboards, and sponsorships in a month.

In other words, this would make FIFA the seventh largest business in the world, after Britain’s BP and before Japan’s Toyota, when compared on an annual basis.

The business of football has a well-established global audience. In this playing field, aggregating the attention of fans and selling a portion to advertisers and sponsors is where the real riches lie. The ticket sales are a mere fraction of the total profits. For instance, the 1.6 million tickets sold at the World Cup will likely generate only around $160 million dollars, at the average price of $100 per ticket.

If one were to compare potential profits, FIFA would likely come out even better than BP or Toyota. Some of its costs and capital expenditures, such as the $4 billion invested in stadiums, are borne by national and local governments. In terms of human capital costs, FIFA itself employs only 400 people, according to the organization’s website. Even if each of its 209 country members employs another 50, that adds up to a total of 10,850 employees worldwide, a mere 3 percent of Toyota’s 333,000 global workforce.

What are the principles of attention economics? Not different from economics:

The fact that most will view the matches as they are played makes the tournament even more valuable to advertisers—a key principle of “Attention Economics,” which focuses on what has become a scarce commodity in an age of information overload.

….Another key principle of the Economics of Attention is that attention is valued in a “superlinear” manner, which means that advertisers place twice as much value on the attention of 100 million viewers as they do on 50 million viewers. So FIFA drives up the value of those eyeballs by selling exclusive broadcasting rights to only one broadcaster per country rather than splintering attention among multiple outlets. In Brazil for example, the broadcaster has always been TV Globo, which captures more than a 50 percent share of the television sets turned on at any given night in that country.

….A third principle of Attention Economics is that attention associated with emotion has more value due to its “sticking power” in people’s minds. In other words, the passion of football fans further increases the value of their attention for advertisers.

Nice bit..

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