COPY Red Bull's Marketing Strategy (WITHOUT the Budget)

whatever you think of the red bull drink you've got to admit the business is pretty interesting because have you ever wondered why a drinks brand would own two formula one teams four professional football teams nascar ice hockey teams two esports teams a clothing company a record label a media company a travel agency and then do things like spend 50 million dollars helping someone jump from space that's not a business model that you read about in textbooks in 2021 rebels sold 9. 4 billion cans of their drink which is more than one for every person in the world and possibly the craziest part of all of this is red bull doesn't even make their drink they outsource manufacture of their product red bull is a pure marketing firm so from the outside it can really appear like red bull is throwing its marketing budget around carelessly after all they reportedly spend between 25 and 30 of their total revenue on marketing now that's definitely not typical for the beverage industry pepsi by comparison spends 2. 5 percent of its revenue on marketing rebel 25 to 30 this is insane but obviously it's working on already surface level red bull's marketing strategy can kind of look like a typical influencer campaign right they pay athletes to run around wearing red bull clothing and driving red bull cars people then watch their heroes doing these things and go out and buy red bull so that they can emulate their success but whilst there is an element of influencer marketing in red bull actually they go much deeper the first thing that they do to go deeper is that they build really long-term brand partnerships with their ambassadors and how many times have we seen this whether it's gym shark or lounge underwear the brands that tend to get the most traction with influencer have long-term relationships with their ambassadors red bull finds its ambassadors by having teams really ingrained in the sports and music scenes that it works in this means that they're really well placed to spot up-and-coming talent this is quite a long-term strategy and can take sometimes years to pay off but red bull can afford to do it because of the finance stuff that we'll see later on then once they found someone that they want to bring into their ambassador program rather than having a traditional sponsorship relationship with them which can feel really transactional like we pay you this much and you wear these clothes every year interviews with ex-robot employees show that red bull actually wants to give its ambassadors wings now this can be providing them training in their sport or discipline it might be hosting athlete summits where they can come and get tips and training on things like social media and interview technique and of course get nutrition and product information about red bull in the case of music it might be giving them access to the red bull music studio that they've got in london or access to their record label or it might be funding crazy stunts that these athletes would never usually be able to do themselves they also have some pretty hardcore programs like their student marketeers program where red bull essentially embeds red bull marketers inside university so they can spread the word about red bull and promote it as part of student lifestyle but really what red bull is known for these days is the next level stuff the owning of the sports teams and this is where they've taken things to a whole new place if we think about how a traditional beverage brand like pepsi would work with sports teams they might sponsor a team or they might sponsor an athlete or they might run a super bowl ad and in these cases they are paying their marketing budget to the team the nfl the player or the tv network they are basically giving their marketing budget to the owner of the distribution the owner of the eyeballs but red bull goes a level beyond this they don't just pay for the super bowl ad they film and broadcast the entire event through their own media company if we look at their purchase of the formula one team as an example now they bought the formula one team from jaguar for one dollar they had to spend 400 million dollars over the next three years so they basically bought this team for 400 million and one dollars but not only does that give them the advertising space by calling this the red bull team they can then monetize that team like all of the other formula one teams do they can sell advertising space to other brands on their car they can win races and collect prize money they recently announced just two sponsorship deals which have a total combined value of 150 million dollars a year this formula one team is profitable for red bull and has been for years so rather than just paying for advertising space they bought the team made the team profitable they get much more advertising space than they'd be able to buy anyway and they're making money from it or take the new york soccer team which they purchased back in 2006 for 25 million dollars well forbes estimates its value today at 290 million dollars so even if they sold the team having not had any uplift from the brand awareness by calling this the red bull team they would still be making money on it or think about how they run their own events whether it's the red bull cliff diving world series red bull crushed ice the red bull air race they've run over 30 different events which they own they film and broadcast these events using their own media company so they earn the rights they have their record label which they can use as a platform for the artist that they're working with this is such big thinking whereas most companies would buy an ad on a billboard red bull is buying the billboard company and then running red bull ads on it but also selling advertising to other advertisers okay tim but this is an expensive model this isn't the sort of thing that you can jump into as a startup or a medium-sized company so how did red bull get to the position where they're able to be this aggressive well to understand that we need to go back to the start when the founder of red bull brought the drink over to austria the energy drink category didn't exist people didn't know what this was in europe and maybe it's me but i don't think people buy red bull just because of the taste right but that's not what people are buying when they buy red bull because red bull is sold as an energy drink it has more value to it than a regular canned drink this not only differentiates it from competitors but allows them to charge a much higher price and this is key to red bull's growth it's reported that a can of red bull costs nine cents to make and with average wholesale price in the west being around 1.

87 that gives red bull a 95 gross margin obviously this then generates massive profit and red bull takes a decision to reinvest this in marketing which establishes the brand which in turn allows them to sustain that premium price and becomes a virtuous cycle but being able to sustain a higher price also means that the bars and clubs selling red bull can make more profit this means that they're more incentivized to promote it at the point of sale and of course let's not forget the red bull does use chemically addictive ingredients which is a surefire way to increase repeat purchase rate so as you can see red bull's numbers and their profit margin facilitate all of this growth but the thing that facilitates that profit margin is this differentiated position from being just a canned drink to being an energy drink which brings you the benefits of whatever you're gonna do with that energy whether it's party all night study more not crash when you're driving home from a late gig whatever it might be okay so what are the lessons that we can learn from red bull's marketing that we can apply in our own business the first lesson is that nothing opens up marketing opportunities like high margins but of course there's more to getting high margins than just charging more for your thing if you're going to sustain high margins you usually need one of two things the first is a hugely recognizable brand with some sort of emotional attachment this is exactly what red bull has because of their investment in brand marketing over years and years the second thing that you need is a product with added value that you can somehow differentiate from your competitors red bull has this because in the early days the energy drink market was completely new and it owned the space the next lesson that we can take from rebel is the power of owned media owned media being the media channels that you own that you control now paid media for example google ads or facebook ads is great and there is a time and a place where every single business needs to do this and it makes sense to use it as part of your marketing mix red bull itself invests as much as 300 000 per month in google ads but really red bull's long-term success has come through its own platforms is owned media and online there are some very simple ways that every business can be a little bit more readable by making the most of their owned media channels the first is with your company's social media to be a bit more red bull with your social media channels think about how you can make them more interesting and entertaining to your audience now if you have a look at red bull's instagram for example what you don't get is loads of heavily self-promotional boring posts now of course i get it your business isn't related to extreme sports you don't have loads of amazing crazy content that you can post on your channels that doesn't matter the way to think about this is to imagine what sort of magazine you would have to run for your target audience that they will be willing to pay for because they find it either interesting or entertaining for example if you're selling beds the knowledge that you have is about how to help people get better sleep if you sell accounting the knowledge that you have might be about how to save people tax or help them make more profit through their business if you sell marketing the knowledge that you have might be to help them do better marketing or help them figure out how to grow their business and by the way if you want some help growing your business then check out the free website and marketing review at exposureninger. com we'll take a look at your digital marketing figure out plan for you over the next six to 12 months to help you generate more leads and sales through your website completely free of charge go to exposureninja.