Group 13 Simon Stout & David Erjavec

The AFL push to become the dominant national Football code has been the primary focus for the league since the expansion into Sydney in the mid 1980’s, when the besieged South Melbourne Swans were relocated to the Harbour City as a means of reinvigorating the then Victorian Football League. Further expansion included logical moves into Aussie Rules dominated Eastern states complimented with the initially foray into Queensland with the Brisbane Bears, which occurred in 1987.

 

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The Bears struggled, to put it mildly, (being located in a Rugby League dominated market) and when the weakest of the remaining Victorian clubs the Fitzroy Lions was on the edge of extinction, the now AFL grabbed the opportunity to reinvigorate their Brisbane identity with the remnants of the team from Fitzroy, and in 1996 the Brisbane Lions were born.

In the 2000’s the two primary AFL northern clubs witnessed the ultimate success.The Brisbane Lions took an amazing three in a row (2001 to 2003) Premierships and Sydney Swans in 2005 taking one also. This solidified the AFL brand in the sporting landscape of the Northern capital cities.

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After over 15 years of consolidation, the AFL’s desire for a greater presence in the high population growth areas of northern Australia’s continued to be an identified target market and with negotiations forthcoming for the Broadcast rights the AFL was keen to act. In 2009 an offer for relocation to the Gold Coast was made to another struggling Victorian based Club in North Melbourne, given the success of the Brisbane Lions, this was seen as the best opportunity to take a recognised brand into the new territory.

When North Melbourne rejected the reported $100m offer, the AFL was not going to let their push into the new territory wane, particularly with another burgeoning market in Western Sydney in mind.

The birth of two new expansion teams was brought to fruition, the Gold Coast Suns (2011) and Greater Western Sydney Giants(2012) were include as part of the now 18 club national competition, timely with the inking of a $1.2 billion broadcast deal that began in 2012.

To assist the clubs in building brand awareness and connection amongst their target markets, the AFL facilitated 2 major recruiting coups from their most obvious competitors within these particular markets. They built rapport with potential supporters through the addition of Rugby League icons to the new AFL clubs. The news that Karmichael Hunt to the Gold Coast Suns and Israel Folau to Greater Western Sydney Giants resonated throughout all sporting news outlets as the new recruits cut their teeth in their new codes.

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With multimillion dollar contracts in place the Clubs built their newly formed brands around their prized additions.

Fast forward to 2015 and both Folau and Hunt have seen out their contracts and exited the game, both signing high priced Rugby Union contracts. Additionally, Hunt has left a trail of destruction with criminal proceedings related to illicit drug use and tarnished the Club and its young list with an alleged endemic drug culture.

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The young talent that has been stacked at the two expansion clubs have both shown signs of great brilliance, but as is the case with young players, their physical and mental capacity to maintain this level over the course of a season is not quite there. Combine this with the ongoing issues surrounding the AFL’s equalisation model which is built around ensuring that weaker clubs are subsidised to remain competitive with the stronger ones and the question remains….Can the AFL sustain four teams in NRL dominated markets with the current 18 team structure?

http://www.couriermail.com.au/sport/afl/time-the-afl-stopped-treating-northern-clubs-like-outposts-writes-andrew-hamilton/story-fn842gep-1227199983756 http://www.theroar.com.au/2015/05/08/an-unwanted-storm-looms-for-the-afl-as-the-reality-of-expansion-bites/

Target North – The AFL Agenda

19 thoughts on “Target North – The AFL Agenda

  1. Considering the limited population within the regions that AFL is played and that this is also competing against other sporting codes such as soccer, tennis, rugby league, cricket and rugby union.

    The AFL is not only competing within the sports arena, they are also competing within the entertainment industry. This restricts the actual market available even further when considering concerts, museums etc.

    Considering the limited market available to AFL within the entertainment sector, I believe the AFL is pursuing a loss making strategy, and is only limiting the market share of its competitors. Overall no benefit to AFL brand or market share is expected.

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  2. A very interesting post. The NRL dominated markets are crucial segments for the AFL to penetrate in order to bridge the gap between Northern and Southern states. But what are these northern segments made up of? Are there die hard AFL fans amongst these northern parts? How do we improve the northern segments? Consider some of the following statistics from 2014 which may be able to assist in this analysis:

    Average Weekly Attendance: AFL(32163), NRL(15940), A-League(12347) & Supr Rugby (19629).
    Grand Final Attendance: AFL(100007), NRL(81491), A-League(42102) & Supr Rugby (25800).
    Average Weekly Viewership AFL(519975), NRL(590145), A-League(84072) & Supr Rugby (82246).

    Order of Popularity by State (1 most popular and 4 least popular):
    R= Rugby
    L= League
    AR = Aussie Rules
    F= Football

    ACT NSW NT QLD SA TAS VIC WA
    1 R L AR L AR AR AR AR
    2 L R L AR F F F R
    3 AR F R R R R R F
    4 F AR F F L L L L

    Some initial points:

    In NSW, Aussie Rules is lowest in terms of popularity, but League/Rugby being highest.
    In terms of viewership, NRL has approximately 70000 more viewers per week than AFL.
    In terms of weekly attendance, AFL has approximately twice that of NRL.

    How can these figures assist in the analysis?

    http://www.theguardian.com/news/datablog/interactive/2014/apr/15/australia-football-interactive-statistics

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  3. This is a very interesting topic, the question of whether the AFL can sustain four teams in NRL dominated markets is one which I’m sure will spark differing opinions. I believe that the AFL will not be able to continue to sustain these four teams without angering the other 14 clubs (particularly Collignwood). This in conjunction with the rise of soccer in Australia and the overwhelming dominance of NRL in NSW & QLD it places the AFL in a difficult position where they must decide whether to continue to significantly invest in these areas or cut their losses.

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  4. Hi Simon and David, this blog really interested me because I have witnessed this NRL vs AFL battle first hand in Canberra. I am a Victorian girl by birth but moved to Canberra (place where everyone loves rugby of both codes) have finally landed back in Melbourne (land of the AFL). Where am I going with this? When I left VIC I had no idea about Rugby and was pro AFL, however this quickly had to shift when ‘footy’ meant NRL not AFL in Canberra and AFL was hardly ever seen there and no one really got behind it. North Melbourne tried to break into the ACT market in the early 00’s and the Melbourne Dees tried in the late 00’s both with poor traction. Along came GWS in 2012, signing a 10 year 4 games per year deal with ACT Govt, making Manuka Oval one of their home grounds. GWS has gained many an ACT member and game attendance is still going strong with their 2015 match against the Cats a near sell out for Canberra stadium. I have been to these games and there are plenty of orange GWS beanies – and apparently they have more supporters at Manuka Oval than Skoda stadium – one of the links questions whether they have poorly targeted Sydney siders.

    I think one of their smartest moves was the acquisition of Israel Folau from the NRL, to be honest at first most people I know became interested in GWS just to see how the great Isael Folau played when he switched codes. Whilst he was not AFLs next shining star he was there purely to make the NRL fans take a look at AFL, and I think it worked – he was a marketing gimic if ever I have seen one.

    Rather than continue to talk about the marketing strategy these sources are really interesting:
    http://www.canberratimes.com.au/sport/act-sport/gws-giants-boss-urges-canberra-teams-to-avoid-cannibalising-in-funding-battle-20150415-1mlg9w.html
    http://www.abc.net.au/news/2010-11-10/gws-commits-to-canberra-matches/2331440
    http://www.theroar.com.au/2014/03/24/confessions-of-a-gws-supporter/

    With all this in mind, I wonder why the shift, is it that GWS have managed to bring the Canberrans around to AFL or is that the ACT is growing in size with many people moving there who may already be AFL fans?

    Prior to your blog I had never thought of this situation through the marketing lense, seeing Canberra as a market to target and that NRL was key competition to AFL breaking through. Thanks for putting this into a new perspective.

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  5. There could be potential for further analysis as to why the struggling teams competing in NRL dominated markets are not doing so well. What I mean by that is looking further into fan segments and gathering intel in regards to demographic, geographic, behavioural and attitudes towards the sport. It would be ideal to obtain this information from several segments ranging from highly supported to areas where support is severely lacking, this would provide good insight into the differing segments further fleshing out the motivations of true supporters.

    There is also the consideration on a much deeper human level that the team, or game for that matter selected to support and follow is based on who your family supported growing up and what games you went to with Dad as a kid. This could potentially be the case for the struggling segments and if so, the chances of trying to persuade an avid NRL fan since nappies to become interested in AFL could be highly unlikely.

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  6. Regarding demographic, I found some statistics (a little old however – 2009 release date, see bottom of comment). I did a quick extraction and a summary.

    Participation: A person aged 15 years and over who participated in sports and physical recreation activities as a player or competitor at least once during the 12 month period.

    Participants by age
    • AFL 18-24 year olds are the highest participants with 100,000
    • Rugby League 15-17 year olds are the highest participants with 33,000
    • Rugby Union 18-24 year olds are the highest participants with 28,000

    Participant popularity order by state
    NSW
    1. Outdoor soccer
    2. Rugby League
    3. Rugby Union
    4. AFL
    VIC
    1. AFL,
    2. Outdoor Soccer
    3. Rugby Union (very small)
    4. Rugby League (Zero)

    Participates by country of origin
    Participation Rate for AFL, 2.2% Australia, 0.6% other MESC and 0.1% Others
    Participation Rate for Rugby League, 0.8% Australia, 0.4% other MESC and 0.2% Others
    Participation Rate for Rugby Union, 0.4% Australia, 1.0% other MESC and 0.3% Others
    (MESC – Main English Speaking Countries)

    Participate versus attendance
    AFL 2% participants, 16% Attendance
    Rugby league 0.8% participants, 9.7% attendance
    Rugby Union 0.7% participants, 4.6% attendance

    Male to Female Attendance Ratio
    AFL attendance 1.5 males to 1 female
    Rugby League 1.7 males to 1 female
    Rugby Union 1.9 males to 1 female

    Summary
    • 18-24 year olds are the highest participants for AFL (most likely Vic biased)
    • Outdoor soccer has the most participant in NSW, followed by Rugby League
    • People from an Australian origin base support AFL more than other English speaking countries and non English speaking countries
    • AFL, Rugby league and Rugby Union has a much higher attendance rate in comparison to participation
    • More males attend than females

    Further work
    • Any one care to comment on geography, psychological, behaviour and socio economic?

    http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/4156.0.55.001Feature+Article1May%202009
    Release date 2009

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    • A further insight into my previous comment above, in NSW, outdoor soccer has a 4 time higher participation rate than Rugby. The question is: is the AFL targeting conversion of Rugby fans to AFL? Which segment are they targeting? Who should they target and why?

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  7. Reading this blog brought to light that when segmenting a market, softer elements play an important role too. E.g. the culture in which the product is placed. Given specific sports are related to specific countries, target audiences and broken down even further into human elements.
    When creating or promoting a product for a specific segment, one thing that might come to mind is, what is the most popular ‘need of that segment’ is it the experience, knowledge, safety etc. Could it maybe be as simple as bringing out a personal element, a softer element for great success?

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  8. This is an interesting segmentation question… and I wonder if we are to revisit this in a few years – will GWS still be struggling? I suspect not.

    If you look at the demographics of GWS – over 40% of the population is born overseas. AFL is very much positioned as the Australian game – the national game – and what better way to grow a market than to target a segment of customers who are new to Australian sports.

    GWS is also a very young area – with over 20% of the population being aged between 0 – 14 years. The AFL has an aggressive strategy to grow grass roots football – because it develops their potential talent pool, but it also builds loyal customers in later life. Essentially developing the next generation of consumer.

    With segmentation data like this – I think the AFL have made a considered choice in developing a team in GWS. It takes time to grow a new market segment – moving the Lions to Brisbane was evidence of this, with their popularity expanding significantly beyond the loyal customer base when they started to experience some success (three premierships in a row).

    Whilst the strategy for GWS is different in that there isn’t an existing fan base to support and champion follower growth – the population segmentation data plays to their favour.

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  9. Great topic. The AFL communicated a clear strategy with the 2 newest expansion clubs: target the fastest growing areas of the country and maximise the TV audience.
    The key will be what they define as success. Are sustainable , break even middle of the table clubs that have a solid membership base win lose or draw enough or does the AFL want to dominate the northern markets. If you look at the state of the Brisbane Lions after winning 3 premierships from 2001-2003, it is clear that winning a premiership, whilst a great way to build a supporter base, is not the key to long term success.
    The Northern clubs may have to adopt the model that North Melbourne has embraced in the saturated Melbourne market – keep costs low, strong administration and keeping at least a mid table level of success to keep membership and attendance from dropping away. Sydney, whilst highly successful, has stated that they can’t afford to be irrelevent in the Sydney market and has shied away from bottoming out, relentlessly chasing success through smart trades and recycling players.
    Ultimately, there is likely to be a different position for each of the clubs due to the different nature of the markets that they compete in. It is not all about success on the field and the way to win over the customer in Sydney differs greatly from the fan in Western Sydney

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  10. A great post which clearly demonstrates how Marketing pervades so many aspects of our day to day life. In my opinion the AFL has a huge battle on its hands in terms of winning the hearts and minds of the future generations whilst appeasing those followers whose loyalty may be waivering ever so slightly. As was pointed out the AFL aren’t just competing against other sporting codes but against all elements of the entertainment industry and as such need to ensure that consumers continue to feel like the product on offer provides value for their hard earned money.

    At present much discussion is going on regarding the ‘state of the game’ in regards to the visual aesthetics of the spectacle. Different tactics which coaches are using to ensure that their team wins are causing congestion and as a result some matches don’t have the same characteristics which have been the hallmark of our indigenous sport for the last 150 years.

    This has coincided with a shallowing of the talent pool due to the introduction of the expansion teams and the ever burgeoning popularity of the world game. The A-League is getting stronger each year and easy access to live coverage of all the European leagues mean that many of those kids who used to wear their favourite afl jersey to their casual dress days are now turning up with the name Ronaldo on their back.

    By striving to steal market share from their rivals in the rugby heartlands of NSW and Queensland and increasing the dollars it could earn from the broadcasters I believe the former AFL administration took their eye of their traditional and die hard supporters, and no one likes to feel like they are taken for granted.

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  11. rustyd43, some great points raised in particular the fact that despite Brisbane Lions triple premiership, the fact that have been non competitive and embroiled in off field issues has negated the strong base they had built a decade ago.
    Your point around North Melbourne is also particularly relevant as another key to their off field sustainability has been the targeting of a ready made AFL market outside of their traditional Melbourne base, namely Hobart in Tasmania.
    Certainly the AFL influence is going to be strong in protecting the new franchises, but ultimately true success both on and off the field, is in the hands of the club.

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  12. With regard to this topic, I was thinking of another dimension to add here, and that is footy ball culture and NRL culture. There is a culture in the clubs between the two sports, but there is also a culture amoungst the fans. Culture is established over time and it’s corner stone is based on beliefs and assumptions, then shared values amoungst the fans. Once these aspects are solidified, as they are in NSW, they can be very entrenched to the point where some very clear strategies may be required to change the culture.

    I believe NSW is at the point of NRL pride. In other words, they are so proud of the game they support that they are unwilling to consider this ‘Victorian game’ (now Aussie wide) attempting to regionalising into the NSW, which is NRL territory.

    So how do we change the beliefs and assumptions of such a large body of people? One things for sure, it will take some time, even under a successful strategy.

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  13. actually had never considered the marketing techniques behind the AFL’s move into other states, so thank you for a thought provoking blog!

    Firstly, I don’t entirely agree with MPK732 Group 6 spjones’s comment that the AFL is pursuing a loss making strategy, because as amywile mentioned, GWS actually is gaining significant support in other areas (ACT). Furthermore, as derjblog123 points out, there is lots of ground to be made, as in NSW, AFL is less popular than Rugby Union, Reugby League and Soccer/A-League.

    In fact, if we look at these codes with reference to Porter’s Five Forces model, the rise of Soccer/A-League in Australia should be of serious concern to Rugby (currently the dominant market share holder) as it is currently a rival threat. In this model, AFL poses the threat of a new entrant. I think this brings up an interesting conversation about STP: what is the AFL’s target market is? Is it the NRL fans as this blog suggests? Or is it sporting fans in general, or all fans of entertainment?

    I think for the AFL to be successful in the long term, its marketing managers will need to focus on targeting more specific segments than just NSW growth areas: think specific socio economic groups, or cultural demographics. Culture is definitely a segment that requires individual, tailored targeting, as sporting codes are traditionally very closely linked with culture, background and family.

    Another segment that the marketing managers may wish to target more specifically could be women. The figures that derjblog123 provided on attendance ratio were also interesting – male:female attendance at AFL games is 1.5:1. To me this indicates that females are a segment that is currently being ‘under’ targeted, as most advertising for AFL I see usually seems to be very masculine and features only male supporters.

    On another note, I definitely agree that GWS’s employment of Israel Folau was a good marking move, however to me this is more a consumer decision making process tactic than STP. It reminds me of a blog from Topic 3 Consumer Behaviour about using a celebrity to influence consumer decision making processes (Power of Persuasion).

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  14. I used to live in Brisbane for 7 years. From my experience, people in QLD area seems to prefer rugby more than aussie rule. When I come to MEL, i found that in here AFL is more famous than rugby. I am an international students, i did not grow up in a environment with people like rugby, cricket or AFL. I only notices this kind of sport when I came to Australia. Even though I can not claim I know Australian culture well, but regarding to promoting a sport or culture into a areas which is not familiar with it, it can be difficult and time consuming. Also, a good strategy is also important to help people to accept with “new” culture.

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  15. Great topic! I agree with a lot of the comments here, the markets that were chosen were done so because they are the fastest growing in Australia. ‘

    There was a lot of fury early on in the decision to expand to Gold Coast and Greater Western Sydney, because people though that Tasmania deserved their own team instead of having Hawthorn (and now North Melbourne) come and play games there. But now, I can see why they picked these two expansion sides over going into other states (such as ACT, NT or Tasmania). As Gillon Mclachlan put it, Tasmania can’t afford to have their own team in the foreseeable future (http://www.heraldsun.com.au/sport/afl/tasmania-deserves-its-own-afl-team-but-its-not-getting-one-says-gillon-mclachlan/story-fni5f22o-1227489935985).

    I have been up to the Gold Coast for the games that have been played against Geelong. Now the crowd figures may be skewed as Geelong fans will go to these games to watch the beloved Gary Ablett do his thing, but crowd numbers are great at all games. amywile raised a good point and it is true, the games at Manuka Oval in Canberra certainly attract a far greater audience than Skoda stadium, but it is likely to only be a matter of time before they get into this further.

    I think these two clubs are in it for the long haul. You only have to look at Fremantle over in Western Australia to see that success doesn’t have to be the only thing that keeps a team in the competition. They haven’t won a flag in the years they have been in the competition (they came close in 2013 and quite possibly could this year). I’m aware that WA has a far higher AFL fan base, but does winning a flag really equal success? The GWS and Gold Coast teams are both still young and once they experience more wins and start playing finals (which to me is in the very near future) the crowds will come.

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  16. As an American I have enjoyed learning about Australia’s major sports. The competition between AFL, NRL and Rugby Union is unique to Australia not only for the brand of sport but the competition they create against each other. I don’t understand why the AFL or one of the other sports does not stagger its season away from the competition in order to take advantage of the dead air time. In the USA our major sports have a staggered season which allows local fan bases to get behind the different brands from a city or region throughout the year rather than pitting them against each other in the same town. The general calendar is:
    Aug-Jan Football
    Oct-Jun Basketball/Hockey
    Apr-Oct Baseball
    Even with these staggered seasons we run into sports doldrums in Jul and Mar.
    It doesn’t seem that the viewership of your off cycle leagues like Cricket, Soccer, or Basketball could out compete AFL or one of the Rugby codes if they had to go head to head. Wouldn’t an expansion into these vulnerable windows make sense?

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  17. It is my first time to understand the australian local sports indeed,i also google the difference between the AFL and NRL, seeing the match highlight in Youtube. Two leagues has their unique style and way to attract audiences, AFL seemingly operate more successful in some states, NRL will be dominated in others.
    competition will never wrong in sport industry, but cooperation always make a larger profit.I agree with the point of view from Gregoryharkins. The clash of season time between AFL and NRL will be divided into several part of group, including the common people. maybe the league will consider about the weather, holiday and etc. which decrease the number of total potential participators. two similar leagues are certainly cutting a big cake to smaller, how to maximize the profit and minimize the conflict is the key currently.

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