Mercedes-Benz, one of the world’s leading auto companies, announced a 10-year agreement worth close to $100 million to put its name on a new 18,000-seat arena in Shanghai. This is the first time that an indoor sporting site will take on a cooperate name in China.

Embedding a brand name in a piece of architecture, especially a massive and famous stadium or arena, is an innovative and effective way to increase brand awareness. Along with the deal, Mercedes will be granted a 3,000-square-foot showroom in the arena and the right to transport artists and athletes in and out of the facility in its limousines. This brand naming and strategic communication effort by Mercedes should help them capitalize on the growing automobile market in China. Mercedes has obviously recognized the strategic importance of building their brand in Shanghai and in China and are willing to make the investment.
There are many other examples of corporations taking advantage of naming rights in other parts of the world. For one, Citigroup spent almost two or three times the money Mercedes-Benz is investing to attach its name to Citi Field, the home of the New York Mets. However, the recession has caused a slow-down in the naming rights market in North America. It seems China is now opening up to the idea, with Coca Cola having already putting its name on an outdoor soccer stadium in Shaanxi province.
As advertising becomes a rather ordinary and at times obsolete promotional tactic, naming rights emerges as a novel and powerful method in the Chinese market to reach thousands of potential consumers and strategically build a brand. Mercedez Benz may be the first to take advantage of this unique option, but it is unlikely they will be the last.