ShcShc11 0 #1 January 7, 2012 I don't know if anybody has a definitive answer, but it always piqued my curiosity as to how Red Bull manages to spend so much on advertising/sponsoring. They are omnipresent in skydiving/basejumps/wingsuit athletes & events, Red Bull Air Race, etc... They almost went along with the Red Bull Stato event not too long ago. I can't think of any other non-skydiving related company sponsoring so much in our sport. What impresses me the most is Red Bull's presence in F1. They have not one, but TWO Formula 1 race teams in a very very expensive sport. Not only do they have two race teams, but they are very successful (winning the championship in 2010). We all know it takes much $$$ just to have an OK team. Please dont tell me that they make all the money by selling their slim and shiny 250ml cans! Any thoughts? Cheers. Quote Share this post Link to post Share on other sites
BobbyR1990 0 #2 January 7, 2012 they sell sugar water for $4 a can Quote Share this post Link to post Share on other sites
quade 3 #3 January 7, 2012 Take 1 can. Add 99.9% water plus traces of inexpensive chemicals, total cost about $0.25. Sell it for $2.50. Profit.quade - The World's Most Boring Skydiver Quote Share this post Link to post Share on other sites
Andy9o8 0 #4 January 7, 2012 QuotePlease dont tell me that they make all the money by selling their slim and shiny 250ml cans! Pretty much. They have aggressive product placement advertising, an investment which has paid off in sales greater than the investment in advertising. I imagine they also invest some of their revenues in other revenue-growth opportunities. It's pretty basic advertising principle. Quote Share this post Link to post Share on other sites
ShcShc11 0 #5 January 7, 2012 Quote Quote Please dont tell me that they make all the money by selling their slim and shiny 250ml cans! Pretty much. They have aggressive product placement advertising, an investment which has paid off in sales greater than the investment in advertising. I imagine they also invest some of their revenues in other revenue-growth opportunities. It's pretty basic advertising principle. Well I guess that's the answer Still baffles me how they can do this with 1 sugar drink. Guru, Monsters energy drinks doesn't seem to nowhere near scratch the surface... Shc Quote Share this post Link to post Share on other sites
JerseyShawn 0 #6 January 7, 2012 4.8 billion dollars in revenue (2010). Quote Share this post Link to post Share on other sites
AggieDave 6 #7 January 7, 2012 Well, they sell a shit-ton of little silver cans for near 90% profit. Not just in your country, but globally as well. It must be so hard for those executives to sleep at night, with their homes warmed by the burning embers of 100-dollar-bills in their fireplace.--"When I die, may I be surrounded by scattered chrome and burning gasoline." Quote Share this post Link to post Share on other sites
jdfreefly 1 #8 January 8, 2012 Your comment implies that CEOs should feel guilty for their success, or that their success is somehow morally wrong. Methane Freefly - got stink? Quote Share this post Link to post Share on other sites
ShcShc11 0 #9 January 8, 2012 Quote Your comment implies that CEOs should feel guilty for their success, or that their success is somehow morally wrong. Not at all. I'm actually quite happy about this. But two questions does come in mind: -If something happens to Red Bull, is there another company that can sponsor our sport as much as they do? -I'm still confused how a company with only 4 billion $ of revenue (keyword: revenue) can do so much. 1 F1 team should cost approximately 100-300 million $ per year. 2 teams make it 200-600 million $. The owner has about 49% of Red Bull Company thus have access to 2 billion $ in revenue. Minus cost of production, transportation, TV ads, other (non-sponsor) ads, facilities, etc... And well, its very impressive! But seriously, the math doesn't add up (then again, we are missing a bunch of information). Cheers. Quote Share this post Link to post Share on other sites
dqpacker 7 #10 January 8, 2012 a better question is, are you retarded? i bet that shit out sells coke-a-cola. Quote Share this post Link to post Share on other sites
ShcShc11 0 #11 January 8, 2012 Quote a better question is, are you retarded? i bet that shit out sells coke-a-cola. LOL. I definitely accept your wager. If Coca-cola outsells Red Bull, then you owe me your rig (and vice-versa). Hugs & Cheers! Shc Quote Share this post Link to post Share on other sites
quade 3 #12 January 8, 2012 Quote-If something happens to Red Bull, is there another company that can sponsor our sport as much as they do? The first thing you need to do is forget the idea that Red Bull sponsors skydiving. They don't. They sponsor an extremely small team of people who do stunts for them in order to get attention for their product. That's all. Skydiving as a sport doesn't enter into the equation. If Red Bull went belly up tomorrow it wouldn't affect the sport in any way.quade - The World's Most Boring Skydiver Quote Share this post Link to post Share on other sites
catfishhunter 1 #13 January 8, 2012 QuoteQuote-If something happens to Red Bull, is there another company that can sponsor our sport as much as they do? The first thing you need to do is forget the idea that Red Bull sponsors skydiving. They don't. They sponsor an extremely small team of people who do stunts for them in order to get attention for their product. That's all. Skydiving as a sport doesn't enter into the equation. . I would bet your wrong. It is just my opinion but the powers that be over at red bull spend money and tons of it on sports/sport stars they enjoy watching/participating in. The return on investment for sponsoring the base jumpers/skydivers and their trips wouldn't ever pass the bean counters at any other company which is why you don't see anyone other then go fast active in our corner of the "extreme" world. Why i believe they do it because they love it. MAKE EVERY DAY COUNT Life is Short and we never know how long we are going to have. We must live life to the fullest EVERY DAY. Everything we do should have a greater purpose. Quote Share this post Link to post Share on other sites
DSE 3 #14 January 8, 2012 Quote I would bet your wrong. It is just my opinion but the powers that be over at red bull spend money and tons of it on sports/sport stars they enjoy watching/participating in. The return on investment for sponsoring the base jumpers/skydivers and their trips wouldn't ever pass the bean counters at any other company which is why you don't see anyone other then go fast active in our corner of the "extreme" world. Why i believe they do it because they love it. you'd lose that bet. GoPro is becoming another Red Bull. The Go Pro athletes not only give GoPro a large platoform to show their name, logo, product, but also allows them to have access to super exciting footage of activities they'd not be able to fund and source on their own, for purposes of marketing/advertising. Red Bull is the same. It's intangible marketing/branding. Indirectly selling a product by showing a "cool team" doing "cool and intense things" associated with their product may not scream "buy Red Bull" but it does suggest that if you drink Red Bull, you'll be cool like "those guys." In the end, it's entirely about marketing. They do it very well. Quote Share this post Link to post Share on other sites
ufk22 32 #15 January 8, 2012 Quote Quote Your comment implies that CEOs should feel guilty for their success, or that their success is somehow morally wrong. Not at all. I'm actually quite happy about this. But two questions does come in mind: -If something happens to Red Bull, is there another company that can sponsor our sport as much as they do? -I'm still confused how a company with only 4 billion $ of revenue (keyword: revenue) can do so much. 1 F1 team should cost approximately 100-300 million $ per year. 2 teams make it 200-600 million $. The owner has about 49% of Red Bull Company thus have access to 2 billion $ in revenue. Minus cost of production, transportation, TV ads, other (non-sponsor) ads, facilities, etc... And well, its very impressive! But seriously, the math doesn't add up (then again, we are missing a bunch of information). Cheers. It totally adds up.... First, the fact that the owner doesn't own 100% of the company doesn't mean he only has control over a certain percentage of total revenue. Second, look at the math. $4 billion-cost of production=$3.6 Billion profit. Spend $1 billion on advertising=profit of $2.6 billion The alternative, quit advertising, cut sales in half, profit of $1.8 billion (assuming only a 50% loss of sales). People buy and drink Red Bull because it gives them a mental association with all those guys doing cool stuff even though most will never do any of that stuff. It has almost nothing to do with the product.This is the paradox of skydiving. We do something very dangerous, expose ourselves to a totally unnecesary risk, and then spend our time trying to make it safer. Quote Share this post Link to post Share on other sites
AggieDave 6 #16 January 8, 2012 QuoteYour comment implies that CEOs should feel guilty for their success, or that their success is somehow morally wrong. Nope, quite the opposite actually. If I get mad I guess I'll occupy the packing mat or something like that...--"When I die, may I be surrounded by scattered chrome and burning gasoline." Quote Share this post Link to post Share on other sites
Joellercoaster 6 #17 January 8, 2012 Quote1 F1 team should cost approximately 100-300 million $ per year. 2 teams make it 200-600 million $. The owner has about 49% of Red Bull Company thus have access to 2 billion $ in revenue. Red Bull (the drinks company) own the naming rights to those two F1 teams. They don't provide all the money. Those hundreds of millions of dollars (like for other F1 teams) come from more than one place!-- "I'll tell you how all skydivers are judged, . They are judged by the laws of physics." - kkeenan "You jump out, pull the string and either live or die. What's there to be good at? Quote Share this post Link to post Share on other sites
deltron80 0 #18 January 8, 2012 Red Bull is the most successful energy drink...they do very well...and I'm pretty sure beverage companies are known for spending a LOT of money on advertising. Thank goodness this is how they're spending it.... Quote Share this post Link to post Share on other sites
obelixtim 100 #19 January 8, 2012 Red Bull tastes like crap. It beats m how easily people are sucked in by a bit of flash marketing. But hey, good luck to them...My computer beat me at chess, It was no match for me at kickboxing.... Quote Share this post Link to post Share on other sites
jakee 1,254 #20 January 8, 2012 QuotePlease dont tell me that they make all the money by selling their slim and shiny 250ml cans! Ok. Magic pixies come in the middle of the night and leave piles of gold coins under Dietrich Mateschitz's pillow. That's where they get the money from. Quote-If something happens to Red Bull, is there another company that can sponsor our sport as much as they do? Can? Yep, loads. Our sport doesn't cost much in the scheme of things. Wants to, is a better question. Quote1 F1 team should cost approximately 100-300 million $ per year. 2 teams make it 200-600 million $. The owner has about 49% of Red Bull Company thus have access to 2 billion $ in revenue. Minus cost of production, transportation, TV ads, other (non-sponsor) ads, facilities, etc... Red Bull doesn't pay the entire budget of either team, they have a lot of other sponsors, including Renault who now supply the engine to RBR for free (engine costs can amount to 50% of a team's budget). Also, as a second tier team, Torro Rosso operate on a much, much lower budget than RBR - and while RBR have a very high budget they are also immensely successful. By winning the constructor's championship for the last 2 seasons they have earned approx $200M in prize money alone, without even considering increased sponsor revenue.Do you want to have an ideagasm? Quote Share this post Link to post Share on other sites
BlindBrick 0 #21 January 8, 2012 Quote Guru, Monsters energy drinks doesn't seem to nowhere near scratch the surface... Many of the other brands are either entirely or majority-owned by major soft drink companies and thus don't need to spend as much on advertising because they already own so much cooler space to begin with which is it's own form of marketing. -blind"If you end up in an alligator's jaws, naked, you probably did something to deserve it." Quote Share this post Link to post Share on other sites
catfishhunter 1 #22 January 8, 2012 When did GoPro start making energy drinks? MAKE EVERY DAY COUNT Life is Short and we never know how long we are going to have. We must live life to the fullest EVERY DAY. Everything we do should have a greater purpose. Quote Share this post Link to post Share on other sites
DSE 3 #23 January 9, 2012 Quote When did GoPro start making energy drinks? Apologies, I didn't think the comparison would be lost on you. See the remainder of the post and maybe it will make sense. Nixon, Sony, Monster all sponsor skydiving teams/people/gear too. They also all sponsor planes, race cars, professional hunters, tennis players, mountain bikers, skiers, kayakers, and maybe even chess players. They really truly don't give a shit about the sport they're sponsoring any more than RedBull does. They get access to eyeballs and association. It's called "branding." It has nothing to do with whether they like skydiving or not. RedBull got sold on skydiving by a skydiving professional, just as skydivers are sold on RedBull by professional marketing. Same thing, different floor. Quote Share this post Link to post Share on other sites
Arvoitus 1 #24 January 9, 2012 QuoteTake 1 can. Add 99.9% water plus traces of inexpensive chemicals, total cost about $0.25. Sell it for $2.50. Profit. I doubt it costs that much to produce. Last time I was in UAE one can cost something like 0.20 $ to buy. I'd guess the liquid costs something like 5 cents per can to produce.Your rights end where my feelings begin. Quote Share this post Link to post Share on other sites
Remster 24 #25 January 9, 2012 QuoteQuoteTake 1 can. Add 99.9% water plus traces of inexpensive chemicals, total cost about $0.25. Sell it for $2.50. Profit. I doubt it costs that much to produce. Last time I was in UAE one can cost something like 0.20 $ to buy. I'd guess the liquid costs something like 5 cents per can to produce. I'm not saying RB is barely scraping a slim profit, but at the same time, it's not that straight forward. Even IF the cost of the liquid in a can is 5 cents (I just I have no idea if it is, but, lets say it is), packaging is a fairly big part of the cost of a consumable product: the cans, the boxes, etc. Then, well, you kinda need a factory to produce this stuff. It wont be a 10 billion dollar investment, but it's still there. Then there's transport costs. Liquid is heavy, and expensive to move around. You could build more factory to have less transport cost, but, well, then you need more capital, and that's an expense too. Then there's profit from distributors, agents, and retailers. Again, I'm not saying Red Bull is losing money on every can, but to say that their profit is $4 - 5 cents liquid cost is a tad bit simplistic. (PS: Estimates of how much Red Bull has spend on F1 is in the range of 450 million Pounds since 2004 total)Remster Quote Share this post Link to post Share on other sites
