Dietrich Mateschitz is masterminding a sports marketing revolution at Red Bull

The revolution begins here

Dietrich Mateschitz, the Austrian billionaire owner of the Red Bull beverage company, is in the middle of a process to launch a whole new type of marketing, tentatively named media activated marketing. Using the vast reach Red Bull has in sport and entertainment, it could change the media landscape, spark a whole raft of imitators and revolutionise the way sponsorship is viewed by global companies.

When Dietrich Mateschitz turned 40 years old, the Procter & Gamble toothpaste salesman was called to a meeting with his chief executive at P&G’s global headquarters in New York. It should have been the best day of his life as when he arrived the then chief executive, John Smale, offered him the job of president of global marketing. It was a real honour and recognition of his achievements at the company. If he had accepted it would have been the first time the job had gone to a non-American.

Smale apparently expected him to say ‘yes’ there and then. But Mateschitz asked for time to consider. As an excuse he said he needed to think about relocating from Vienna to New York. As he left the P&G building, Mateschitz remembers he looked up to the sky… but couldn’t find it: “I walked out and looked up and could not see the sky for all the skyscrapers and there were cars and people everywhere and I said to myself, ‘I come from a country where it is green, there are cows, there are mountains, there is skiing and there is a beautiful environment’.”

At that moment Mateschitz claims he had what he calls his “epiphany”. Apparently he decided there and then, in that flash of inspiration, to turn the job down and leave the company altogether and make selling the nascent Red Bull energy drink he had been developing his full-time occupation.

At P&G as global marketing supremo he would have likely earned US$2m a year with bonuses and gained share options worth at least another US$1m each year. By way of contrast, starting Red Bull would cost him all his savings and expose him to terrible risk. If he had made the sensible decision to take the job then Red Bull would never have happened. It marked him out as a man who was not naturally inclined to take the ‘sensible’ decision.

Since then Dietrich Mateschitz has never been afraid of taking big risky decisions. He has always run a blue-sky kind of company where the positives are accentuated over the negatives. The Red Bull glass is always half full, never half empty.

Three years ago Mateschitz had another blinding idea. An idea that has so far cost him at least US$100m and has barely got started.

It is a brand new marketing strategy, tentatively called media activated marketing (MAM). The Red Bulletin magazine, so familiar to Formula One, was the first manifestation of MAM when it debuted three years ago. Now it appears that Red Bulletin, far from being one man’s flight of fancy, was the start of a big experiment to see if the MAM strategy would work.

When he started Red Bulletin, Mateschitz could have taken his idea in two separate directions. He could have become a traditional publisher and broadcaster or become a content supplier to traditional publishers and broadcasters. Mateschitz appears to have made a decision that Red Bull will not become a traditional media owner. It will rather become a supplier of media. As Norman Howell, publisher of the English-language edition of Red Bulletin says: “What we are trying to do is go to these big media groups and say, we want to be your content partner. We do have some good content, you may be interested in it – we do not want advertorial – we do not want to pay – if you want us that’s fine.” At heart it is a simple strategy, which has been tried before by agencies, notably IMG in the 1990s, but never by a brand owner and never on such a potentially large scale. And never in such an obvious way.

In line with Mateschitz’s desire for Red Bull to have totally positive attributes, the MAM strategy has been created to reinforce the notion that it is user friendly, outward facing and available, a company that interacts with people. In short, that Red Bull is a proactive not a passive company.

Howell, who as the first top executive to work on MAM has been involved with the strategy from the beginning, says: “People from outside struggle with the concept – a lot of people do.”

But it is actually remarkably simple. It involves taking the activities from all the sports, entertainment and events that Red Bull is involved with and creating high quality media content, be it print or broadcast, and then delivering it to media outlets for usage.

And Red Bull, as an organisation, is starting to create huge amounts of content through all its various sponsorship activities. The Red Bulletin material was just the forerunner. Events like the Red Bull air race are also producing quality shows. And that is just the well-known events. There are dozens of less well-known events that are starting to produce material, often of interest only locally or through specialised media.

A little known, but perfect example of the way MAM can work comes through Red Bull’s support for stuntmen and women in Hollywood. The risk of stunt people being injured in their profession is very high, so Mateschitz created what he has called the Taurus Foundation, which is helping the community in many tangible ways. Now if a stuntman or woman is injured then the Foundation instantly is there to help.

The Foundation has paid the medical expenses and literally arranged to have the bodies of injured stuntmen rebuilt so they can work again. The goodwill that has engendered in Hollywood for the brand cannot be measured. And Mateschitz is not unaware that the Hollywood community is a very influential group of people. When actors such as Tom Hanks and Brad Pitt and their like see what Red Bull is doing to help and change the lives of their less well-paid, but equally vital, colleagues, then they cannot help but become ambassadors for Red Bull.

To exploit the association, Mateschitz organises something called the Taurus World Stunting Expo, as Howell explains: “Mr Mateschitz has set up a considerable foundation to support the stuntmen and women community. Not only do they give out these Taurus statuettes like Oscars, so it is the best fight scene, the best fire, the best car chase, but it is also there to support stuntmen and women who have been injured.”

At the glittering event to present the awards, Mateschitz arranged for the Red Bulletin to be published as a programme for the awards. So Howell and the Red Bulletin English-language executive editor, Anthony Rowlinson, travelled to Los Angeles to advise on producing a version for the event. Howell confirms: “We produced a Red Bulletin for these awards and commissioned some American writers from Rolling Stone magazine and all kinds.” Afterwards, that content was made available to the general media and eagerly taken up, as well as the TV programme made of the awards. It was win-win all the way for Red Bull and was the best example of MAM and the Red Bulletin in action to date, as Howell says: “At Red Bulletin we are the production backbone. So anybody around the world who wants to do a Red Bulletin, we either do it for them or they can do part of it and we retain the control of it because we retain the standards which Mr Mateschitz wants.”

No one knows exactly how many sponsorships or events Red Bull supports and funds, but it is in the thousands and is going on in more than 80 countries, which all have programmes running. The scope is truly remarkable in marketing terms, as Howell reveals: “We have a presence in just over 80 countries. All of the 80 countries have communications and marketing managers.” All of these 80 people have sponsorship programmes going on and some in quite a substantial way. The amount of media material being generated is huge. Howell says: “What they are producing is very localised content and valid content. It is high level content, because Red Bull works at a very high level.”

Currently the media content, be it print or broadcast, is being distributed at local levels by existing Red Bull executives.

But Mateschitz’s plan is to set up a media structure within Red Bull where the content gets channelled through a media house and put back out in the media partnerships with some of the big content houses. He eventually wants this organised formally in a separate structure within the Red Bull organisation. It is tentatively called the Red Bull Media House.

Howell says it all makes perfect sense: “Red Bull sits on a huge amount of content. We have the rights, we have made it, we have paid for it, we are legally on top of it. A lot of it can be digitised and re-mastered and fiddled around with. So why not use it or re-use it? The Red Bulletin, the pioneer, is meant to be the premium expression of this.”

Mateschitz has laid down the rules under which Media House, or whatever it is eventually called, will work. Red Bull will create the content and cover all the costs that involves. But the media owners provide the newsprint space and broadcast time free. Mateschitz sees it as a genuine partnership and so far media owners are lapping it up. Including mainstream media owners, who see no problem with showing the Red Bull air races under this arrangement, or indeed big Italian and British newspaper groups, which are printing and distributing Red Bulletins. The material provided is not biased towards Red Bull and sometimes doesn’t even feature Red Bull, but it undeniably has the Red Bull stamp all over it.

The basic tactics are simple, according to an insider: “To put the name Red Bull or the philosophy in front of lots of people.” For Mateschitz, it is the perfect way to connect to consumers, especially Red Bull’s consumers who Mateschitz considers very different. They are mostly young and aspirational. Apparently Red Bull outsells Coca-Cola in some university towns in America by quite a significant margin. As Mateschitz typically says: “Coke is Dad’s drink. If I am younger I drink Red Bull.” The MAM programming philosophy is to be irreverent, to be anti-authoritarian, to be fun, to be young, even if some of the Red Bull drinkers are now aged 40 plus. Mateschitz says: “The idea still is that these are the people that enliven society, are the ones that are irreverent – a bit different.”

The launch of the MAM concept is very exciting. Mateschitz realises he is at the start of a new curve in marketing history. He also sees Red Bull as a company at the beginning of a huge expansion phase, a company that has in no way reached its maturity. He appears to believe that Red Bull can carry on growing and possibly be selling six billion cans a year by 2013.

Norman Howell was a sceptic, like everyone, when the Red Bulletin was first announced. Now he is a true believer, and somewhat in awe of Mateschitz’s skills – something he doesn’t mind admitting: “His world is a big one in the sense he does a lot of stuff that is not immediately apparent.” At least not until now.