Sponsor Logos on NBA Jerseys: What Do We Think?

The NBA recently approved a three-year pilot program that will allow for a 2.5-inch by 2.5-inch advertising space on team jerseys to be sold to sponsors who can then put their logo. The NBA have already experimented with this in the 2016 All-Star game which featured team jerseys with the Kia logo on a the front left opposite the jersey manufacturer’s logo.

Teams will have to sell this space on their own and will have to put half of the revenue generated in the league’s revenue sharing pool. According to industry estimates, this initiative will generate $150 million in additional annual revenue. Obviously, teams with a more global presence and probable playoff appearances will end up selling the space for higher rates, but that being said, this will help do wonders for some smaller, less successful teams.

Financially speaking, this is a welcome addition to the league; however, one also has to analyze what fans are thinking and social media sentiment around this issue is rather divisive. We gather that the the outrage is gathered around two main issues, namely – 

Sponsor logos will be intrusive and will make affect the aesthetics of the jerseys, making them look more like motorsport overalls.
While soccer teams have had sponsor branding on their jerseys for a long time, it makes sense for them considering they have only commercial break during half time. On the other hand, NBA games have more breaks, including timeouts.

While these concerns are legitimate, here are our thoughts on the matter – 

When speaking about aesthetics, one thing that fans have to remember is that this will be a rather small patch and will not be intrusive. Soccer jerseys naturally allowed for significant sponsor branding simply because club logos have traditionally been in the form of small crests placed on the top left of the jersey. Because NBA jerseys have never accounted for significant branding before, it would mean that the team’s branding would have to be reduced. And that is not something that any team is going to stand for, simply because teams have been present for a long time during which, they have built up a significant amount of brand value. Any major change to jersey designs would result in a drop in that value and that’s not what any team wants. So fans can rest easy that the addition of a small patch will be done tastefully and will definitely not result in the jersey looking like motorsport overalls. 

Secondly, ask any person who is a fan of both soccer and basketball (and we have a few within BWA), basketball is definitely a much easier sport to watch either live, or on the television, simply because the commercial breaks allow for more opportunities to get up from one’s seat and not miss out on the in-game action. The risk of leaving one’s couch to fetch a cold one from the fridge is definitely a lot higher in soccer.

Lastly, if fans are still worried about having their team jerseys with logos stitched on, they have to remember that the NBA’s merchandise division will still be selling the jerseys without the patches. The jerseys with the sponsor branding will only be available through the teams’ official store.

The final word: Change such as this has always been inevitable and in time, the fans will get used to it and will grow to accept it. And to this, we’d like to give the example of FC Barcelona. The Catalan soccer team has some of the most loyal and devoted fans amongst all sports teams in the world and had always snubbed jersey sponsorship till 2006 when they signed a deal with UNICEF. As part of the deal, the club also donated €1.5 million to fund, which seemed to appease the purists who were extremely opposed to the deal. After this deal expired, the club signed a deal with Qatar Sports Investment worth €150 million. This decision was met with surprisingly little opposition from the club’s fans. Thus, in time, this phenomenon will also gain acceptance from the league’s fans.

The Meteoric Rise of eSports

Why would anyone want to watch someone else play a computer game? That’s the questions that a lot of sport marketers may have asked themselves when first witnessing the advent of professional gaming tournaments, or as the industry calls it, eSports. The answer may lie in the ‘professional’ part. 

For example, if you are a lover of soccer and play it in your spare time. Would you still follow the games of your favorite professional team on the TV? Would you try to watch them if they were playing in your town? If your answer is yes, then you understand the sentiment behind why so many millennials flock to arenas or tune in to watch their favorite professional gamers practice their craft. Gaming at the highest levels requires an average of 200-300 mechanical actions per minute coupled with critical thinking, quick decision-making and seamless team communication and strategizing. 

Now that we’ve gone behind some of the psychology behind this, let’s look at how popular eSports actually are.  In October 2013, Over 32 million unique viewers tuned into the finals of League of Legends World Championships. This figure also includes a sold out crowd at the Staples Center. To put this into perspective, this total viewership figure is more than the combined viewership of the 2014 World Series and NBA Finals. With figures like this, it is safe to say that gaming tournaments are no longer confined to a group of friends having a Counter-Strike LAN party hunching into their monitors whilst consuming unhealthy amounts of Cheetos and Mountain Dew.

A testament to this is the rise in the number of universities in the USA that offer gaming based scholarships. Furthermore, the number of students participating in inter-university gaming events dwarf the number of participants in men’s division 1 basketball, soccer and hockey.

With such impressive stats and major sports networks starting to broadcast professional gaming tournaments, it was only about time that sponsors would start getting in on the action. Brands such as Red Bull, Monster, Coke Zero, Intel, Nissan, and American Express have been sponsoring major eSports events. In fact, even the Obama administration utilized the help of professional gamers to promote the launch of healthcare.gov. 

That being said, there is still a lot of space in the market for other brands to come in. of course, they have to be mindful of the fact that there is still some stigma attached to playing games. Pre-conceived notions about gamer's still exist amongst a large amount people, including parents and peers. But to that we counter and say that we’re in 2016, and nerdy is the new sexy.

Using Data To Create Effective Sponsorship Activation

Data from Superbowl 50 indicates that fans used over 9.5 TB of data during the game, which is a 63% increase over last year’s usage. During this time, the most popular uses were video and web browsing (each garnering a share of 20% each) followed by social media sharing which garnered an 18% share.

The above statistic is a testament to the fact that modern day sports fans aren’t always concentrating on the action that’s taking place on the field and appealing to these fans requires marketers to include digital initiatives taking place within the stadium a lot more seriously. As a naming rights holder, this becomes even more important so as to increase the effectiveness of one’s sponsorship activation.

This in itself presents a range of complications. First of all, there are more than enough brands that are vying for a sports fan’s attention within the environment of the property. Add to this services provided by the venue such as seat upgrades and in-seat meal ordering. And then of course there is the time spent by the fan on his/her social media pages. To capture the attention of the consumer, a brand needs to send the right message to the right consumer at the right time. And in today’s world, it can be made a lot easier by gathering the right data.

How would data gathering help sport marketers and naming rights holders? Firstly, it would help in seamlessly matching the audience to the right consumer segments. For example, if a basketball arena attracts both first time and luxury car buyers, the right data can help in determining who’s who and help the brand create targeted initiatives for each segment.

Secondly, it would help in pinpointing potential customers. For example, if a fan orders a drink on his/her seat through the online ordering portal, one could determine if the fan is a beer or a wine drinker and then create targeted promotions for each one.

Lastly, it would help brands create precise, in the moment promotions. Many sports bars have promotions wherein if a goal is scored; special offers on the menu are unlocked. Imagine doing that, but at a stadium-wide level. It could be a way to increase volumes at concession stands.

In order to help sponsors and rights holders gather this data, properties have to make sure that their technology foundation is up to date. One way of doing that is to partner with the right infrastructure providers. An example of this is Captivate by Horizon Communications, a platform that can help brands aggregate over 2500 data points on fans and then help create and deploy customized, localized real time campaigns across the mobile platform. Captivate’s Engage is a tool that utilizes the network, location, event timeline and fan data to trigger automated real time promotions.

The NFL has already created and deployed a set of Wi-Fi standards that need to be deployed across all participating properties and other leagues are following suit and sport marketers need to utilize this to maximize the ROI on their sponsorships.

Disclaimer: Horizon Communications is a technology partner of Bonham/Wills and Associates. For more information on the captivate platform please visit: http://www.horizon-com.com/fan-engagement

The Case for Emotional Sports Marketing

Last week, we talked about how sponsors can successfully appeal to the modern sports fan. This week, we’ll look at creative approach that has become popular amongst advertisers across the globe and how adopting it has created real results for sport marketers.

The World Advertising Research Center (WARC) recently released its warc100 list of the world’s best marketing campaigns for 2015 and within this list, they reported that close to 30% of the campaigns utilized emotion.  In fact, there has been a steady increase in the number of brands employing this approach.

A deeper investigation into the research surrounding this phenomenon gives insight into this trend. By exposing the fickle nature of world occurrences, the post-financial crisis world has fundamentally redefined what human beings want. Yes we still want to move up in life, get a bigger car and a bigger house, but we do not want it by working in a job that makes us unhappy. As human beings, we are no longer willing to sacrifice our sense of self and our values and we have become more comfortable with ourselves and are proud of our passions, which is why statements such as “geeky is the new sexy” are increasingly resonating with consumers. Thus, at the end of the day, consumers will choose brands that appeal to their value and belief systems.

This paradigm shift requires sponsors and sport marketers to rethink their approach to consumer engagement. Gone are the days that just slapping a logo onto a jersey or on the sidewalls, brands now need to go beyond to appeal to a consumer’s deeper need states. Passion for a sport or a team may not translate into passion for a brand unless there is an overlap between the consumer’s values and the brand’s values.

Some marketers have understood this better than others and have made a connection that has translated into real results and given that 2016 is an Olympic year, we’ll have a look at two campaigns that were the stars of the 2012 Olympics. A noteworthy fact is that none of these brands were directly related to the Olympics, yet the connection the reason why they were so successful was because they aligned themselves to consumer values and need states

The first is from P&G. Consumers may have known some of its brands, but they might not have known about P&G as a corporate brand. How did they do it? By connecting their brand to mothers. The campaign celebrated the fact that a mother empowering her child to participate in the Olympics is a feat that is almost as impressive as being an Olympic athlete. It did so by thanking mom.

According to Unruly Media, this particular commercial was the 7th most shared ad of all time (2013 figures). More than engagement, it also translated into $200 million in increased sales.

The second one is for a brand that was getting a fairly bad reputation amongst consumers. In fact, before the Olympics, only 1 in 5 people thought that this brand’s sponsorship of the Olympics was appropriate and the twitter brand sentiment for this brand was the lowest among all 25 sponsors of the Olympic games. Because of their sponsorship, The Children’s Food Bank nicknamed the 2012 Olympics as ‘The Obesity Games’. That brand is McDonald’s.

But that was before the games, after the debut of the ‘We All Make The Games’ campaign, showed consumers that the Olympics were an inclusive event and the extension of the campaign into the Paralympics went a long way to reduce the negative conversation about the brand. Furthermore this campaign increased brand affinity, trust and relatability. All in all this campaign went on to deliver a Return on Marketing Investment of £5.60. By utilizing emotion as a creative approach, McDonald’s was able to move from the negative to the positive.

This year will see big ticket events such as the European Football Championships and the Olympics and consumers can expect big ticket campaigns that will utilize emotion as a creative approach.

Appealing to the Modern Sports Fan

Today’s consumers present sponsors with a dichotomy, in a recent study conducted by Momentum Worldwide, 86% of respondents said that they wouldn’t mind more sponsors in the sports that they follow and 88% accept that sponsors can create new opportunities for their teams. That being said, an 83% of the respondents also feel like sponsors “do not consider the fans”, thus leaving them feeling marginalized and felling like an afterthought. Fans also expressed their disdain at heavy-handed branding present in arenas and broadcasts.

Navigating this dichotomy requires an insight into the consumption habits of modern day sport consumers. Arguably the biggest trend is the rise of the second screen. Data from the Mobile World Congress last year indicated that 83% of all sports fans use a second screen whilst following a game. And according to Nielsen data, American fans consumed 7.1 billion minutes of sports in the month of October 2015. 

Furthermore, when the above data is looked at in tandem with consumer needs, a clearer picture begins to emerge. Over half of all sports fans indicated that up to date statistics and information is the greatest demonstrator of their passion and that they always want to get closer to the on-field action.

So how can sponsors leverage this and generate more effective results from their properties? The answer lies in demonstrating that they always have the consumers’ best interests at heart and in enhancing their experience both inside and outside the arena. Creating content and assets that fans willfully want to interact with can help in achieving this goal. Such content should be-

•    Relevant to the fans and should be real-time – Modern fans want everything ‘in the now’ and the content should reflect that. That being said, it should be relevant to what they desire to know. The content should help them be a more complete fan and should help them show their friends and family that.

•    Should not contain heavy handed branding – Modern consumers find that overt brand promotion takes away from their experience, hence the brand should be seamlessly weaved into content that they would want to interact with.

•    Lastly, it should be global, but locally pertinent – If this isn’t done effectively, then there is a risk of alienating consumers.

When trying to appeal to sports fans, brands should go more towards the way of Heineken’s #sharethesofa

or IBM’s slamtracker
 

and less like Facebook’s sports stadium (http://uk.businessinsider.com/facebook-sports-stadium-had-a-bad-super-bowl-2016-2)    

Telecommunication Industry Finds High Rewards through Sponsorship

Sports Marketing through the medium of large-level Sponsorship and Naming Rights, has proven to be a successful endeavor for many brands around the globe.  Focusing further, successful Sponsorship trends within select industry categories has been something BWA has kept our eye on, to help understand the future of this industry and to provide our clients with the most up-to-date consultation.

Over the last 5 years, due to technology advancements and the growing marketing/advertisement trend utilizing devices such as smart phones, tablets and various other, through fans in their seats, there has been an opportunity for marketers to really speak on a more personal level to its audience. Having a unique/targeted brand play right on someone’s device, provides undeniable engagement for any company. Therefore, as part of Naming Rights/large-level sponsorship plans, we see that Telecommunications companies are finding ways to include this aspect of sponsorship into their packages. With more than 6.1 billion smart phone projected to be in people’s hands by 2020, marketing managers are taking notice, especially with North American and European Football(soccer).  By the time the 2015/16 season kicked off, naming right deals with telecommunication companies as a whole, has more than tripled since 5 seasons previous.

This trend has trickled into many different key markets. Where today as it stands, investment from these telecommunications companies into stadium Naming Rights has overshadowed all other industry investments within stadium sponsorships. Good examples are AT&T Stadium & Park in Dallas and San Francisco, T-Mobile recently in Las Vegas and the Verizon Center in Washington.

BWA has monitored the demand for heightened mobile connectivity in stadia, arenas and the event space for quite some time. With the recent announcement that the trendsetting NFL wants all of its stadiums to have Wi-Fi in place by 2016, it has seen many minor league facilities as well trying to keep pace. This has created a boom in the creation of innovative systems and in-seat engagement which will only grow more comprehensive with time. What better than to have a telecommunications company monitoring and controlling all of these messages/data to fans.

Repucom recently reported:

“Since the 2012/2013 season, the amount of money invested by telecommunication companies in the US into stadium naming rights deals has grown by over 68% ($20m). The growth rate is even greater in Europe, where football stadiums have seen a 266% ($16.2m) increase in the same period. Combined, this represents an increase of 103% ($36.2) on revenues generated.”

Industry leaders such as AT&T have developed a strategic partnership with a mobile app, and are featuring event/venue information, enhancing engagement and experience at their two major Naming Rights stadiums.

Soon are the days when we will be able to remote-control the players from our Wi-Fi networks, provided by our telecommunications companies, while ordering a hotdog to our seat, while reading about last year’s stats.

Super Bowl, the Sport of Marketing

Super Bowl is not just the avid sports fans favorite day of the year.  For marketers around the globe, especially the elite, this is the most exciting annual event in the entertainment industry.  During a Super Bowl campaign, marketers are given the chance to reach millions at once.  It is a stage to make history in advertising,  and it has been the platform for some of the most memorable and effective commercials in history, for example, when Steve Jobs and Apple computers introduced the first Mac in 1984.( https://www.youtube.com/watch?v=axSnW-ygU5g)

Here is a quick look at BWA’s Super bowl Advertising Pics of 2016

AXE - Find Your Magic
https://www.youtube.com/watch?v=WzTSE6kcLwY

Audi R8 Big Game Commercial – Commander
https://www.youtube.com/watch?v=yB8tgVqmKzw

First Date – Hyundai Super Bowl Commercial
https://www.youtube.com/watch?time_continue=5&v=-R_483zeVF8

Xifaxan Super Bowl 50 Commercial
https://www.youtube.com/watch?time_continue=4&v=3Hnldf3z4bY

Let us know what your favorite campaigns of Super Bowl 50 below....

Millenials On Site, In Demand and On Line

Imagine you’re en route to the big game, your team is in the Stanley Cup playoffs.  You can feel the excitement and smell the popcorn in the air.  Your shoes are already sticking to the floor as thousands of rambunctious fans push through the crowd, spilling their overpriced beer as they make their way to their seats.   Now imagine, all your favorite players taking to the ice, but wait… there is something off.  These guys are all wearing flimsy knee pads, clunky dysfunctional gloves, and where are their helmets?  You would never expect to see something as ridiculous as this!  It throws you right off.  This may very well be the same sort of dismay felt by fans trying to engage in the full experience at a venue with an outdated, under-performing WiFi/Wireless system.

At most major events that occur in our lives, we the millenials are constantly posting pictures, sharing, tagging, tweeting and sending status updates throughout the experience.  If this is not you, we find this endearing - Hold Strong!  But it’s safe to say that this is most of us.  Now why would some of the largest events, drawing some of the biggest crowds; to stadiums that may have the capacity of a small suburb, not be providing its attendees with anything less than the proper equipment to fulfill this constant need for connectivity?

Not only does having a proper WiFi system in your facility help enhance the customer experience and fan engagement; it increases revenues for organizers, helps with team management, training ,analysis, ticketing, merchandising, promotion for the provider and a whole lot more.  The investment in these systems will pay for themselves. Owners and organizers who are not serving this IT savvy audience, will just simply not be seeing the benefit from any new sources of information and increased revenue that is has proven to provide.

Revelations within this digital generation,  have forced our WiFi/IT providers to create systems specific to large capacity venues.  Whether it be customising Distributed Antenna Systems for specific clients to ensure a uniform signal throughout every corner of the property, or creating innovative “low profile” Omnidirectional Antennas to preserve aesthetics on site; they are working hard to ensure their industry benefits by customising its services for this growing demand.

Although the majority of major players in the sports and entertainment realm have been surfing this technological wave for quite some time, it is no question that organizations big and small will be catching that swell right alongside them.  We are excited to see how these new technologies will help build bridges between attendees,  events, brand awareness, sponsorship value and create invaluable data bases for many organizations moving forward.

Activation + Engagement = EXPOSURE =

In the last few years, we have seen a substantial increase creatively with onsite sponsorship activation, both with our clients and entertainment properties globally.  The amount of effort and financials put into these creative marketing platforms, have really been a game changer, enhancing attendees and consumer experiences, while creating a significant brand recognition. Due to this, these branding plays will remain relevant and in peoples’ minds for years.  I can still recall being amazed at the Coachella music festival a few years back where Sephora (a major player in the beauty Industry), had a tent where they provided a unique experience targeting the young female demographic of the festival, steering attendees through different makeup stations.  Each station had its own “Sephora” branded product and application tools as well as a trained professionals on hand for assisting the process and providing product knowledge.  Finally, once you have seen/used all the products offered, you end up in line at a photo booth that takes your picture, airbrushes it and emails you a copy so you can post it on your social media on the spot.  Each photo has the Sephora watermark in the corner to be sure to maximise exposure.

Now out of the 180,000 thousand people that attend Coachella music festival that year, 51% were female.  That makes about 91,000 females in attendance annually.  Now if even 30% of females in attendance stopped by that Sephora tent during both of the 3 day events.  And only half of them posted these photos on Instagram and facebook, generating 13,770 social media imprints in less than 10 days.  Without calculating shares/reposts and multiple social media outlets, and in terms of branding and exposure, I would say that Sephora has more than hit the mark with their efforts at this event.

Here is another example of just a few of the most creative and costly activations we have seen in recent years:

A futuristic approach made by American Express at the U.S. Open.  Utilizing spokesperson Maria Sharapova, fans were given the opportunity to return a serve from the tennis star.  The computer generated image of the athlete took 9 hours in a virtual reality studio to generate the right content needed to enhance the fan interaction. 

One of the many activations Visa launched during the FIFA world Cup was an initiative called “Visa Teletransporter” it was a creative program that gave World Cup fans virtually transport themselves into multiple scenarios during the event.  Whether it was sitting down to dinner with Fabio Cannavaro or playing pass with Zinedine Zidane.  Fans could actually place themselves (personal images) into these desired situations and were able to share them on top social networks.

These types of activations are becoming increasingly popular at all events around the globe.  Whether it be local food/wine festivals, county fairs, concerts or global sporting events, attendees and fans alike act as the primary resource when it comes to capitalisation on the business of entertainment, recreation and sport.  We are keeping a keen eye on next level activations' that will be driving revenue and increasing imprints within our industry for the exciting years to come.

Fantasy Sports Entertainment.

The bold reconstruction of 21st century sports and its shot gun marriage to “Fantasy” gambling… 
 

New Realities for sponsors, teams, equity holders and sports fans due to fantasy league “entertainment” websites are in the pipeline.  In 2006, the USA, passed a federal law exempting fantasy sports from a long standing law, built to prevent online financial wagering.  Now like most industries ($$$) the world of fantasy sports has been rapidly evolving.  

Instead of a group of high school kids, sitting around in their parents’ garages’ with a chalk board and some potato chips, picking their favorite players, creating a secret society of healthy competition.  We’ve now seen this, formally known as a “non-aggressive” form of fan interaction, be strategically manipulated into a multi-million dollar WWW.BOOMTOWN.COM.

As we have all seen in the past, there are many ways to limbo under the loopholes of strictly intended laws and regulations.  I mean, if money makes world go round, than surely we will find a way to squeeze a dollar through a small crack in the system.

This is what has been done by popular gaming websites like FanDuel and Draftkings who have dominated the fantasy online movement.  These companies have rapidly gained backing from major entertainment corporations such as Google Capital, 21st Century Fox and Time Warner Investments.  Now with these Industry leaders backing the websites, the opportunity for a maximum return on advertisement/sponsorship ($$$) has grown at a beastly rate.  

Although controversy over the “entertainment” websites have been buzzing.  It has not stopped almost all of our favorite professional sports teams and properties from joining this sponsorship platform.  All parties are using this interactive traffic to enhance brand awareness and engage their fan base.  It has been documented that in the NFL alone, 28 out of the 32 teams are on the list of official sponsors, claiming one site or the other as official sponsors.
 
 Commonly asked questions by critics:

“Is this going to change the future of American Sports?”
“What will become of the classic relationship between fans, their chosen Team and preferred leagues.
 

While it may be too soon to truly answer these questions, especially from a non-biased point of view, here is what we do know.

The partnerships do not come without strict rules: for example when the NBA became an equity investor in FanDuel, they simultaneously developed a policy declaring that all NBA personnel (employees and players) are strictly prohibited from taking part in any NBA fantasy leagues.   Now this raises the point that there is definitely a brazen conflict of interest when it comes to the union.  All other professional and collegiate leagues have followed suit, on both a partnership platform as well as developing strategic policies for staff/players in regards to interaction with the sites.

All controversy aside, statistics show that once a fan is engaged and starts playing FanDuel/Draft Kings, they consume an average of 40% more sports content overall, through multiple outlets.   This significantly increases value for the sponsorship dollars and advertising reach.  Many industries/preferred partners are soaking up this exposure with open arms and no SPF.  

For the Industry at large, Integrity will take a back seat for the time being, allowing the continued growth and reward for the cash cow.  Although this continued success will not come without controversy, with the support of all heavy hitting industry players, sports leagues and entertainment enterprises.  We can expect to see this trend only become a bigger topic at the forefront of our industry in the years to come.

Playoffs & Exposure

What happens with our favorite teams and their sponsorship contracts when they hit play offs???

As the world of sponsorship in sports has evolved, so have the terms of negotiation when signing deals involving teams, properties and corporations. Traditional formulas once used have now been broken down and personalized creating an exciting window of creativity when drawing up contracts.  This gives the freedom to develop standards for negotiation on a case by case basis when getting down to Playoffs.

Methods of Negotiating Playoff Deals with Sponsors vary.  It is up to the negotiation team to use their own hypothesis to determine the extended value regarding the property/team when/if playoff games are held on the property or involved teams are headed for an extended season (playoff run). 

Drilling for Oil….

Rolling the Dice in 2006, Lucas Oil purchased the naming rights to Colts Stadium in Indianapolis, Illinois.  The Naming rights cost Lucas $122 million over a 20 year span.  Six years into this contract Lucas Oil “struck oil” as the Colts had made it to Super Bowl, to top it off Illinois won the bid the same year to host the event that then in turn catapulted Lucas Oil onto an invaluable yet unexpected Global Marketing platform.  Lucas estimates this single event alone has increased revenue by $10 million and Lucas Oil hasn’t looked back since.

Bonus Structures….

Considering there are no guarantees a team’s annual performance. Putting a monetary value on extended seasons have known to be structured in different ways.  In some cases an “exceptional performance revenue” will be included in the contract.  Stating a specific royalty to be exchanged from the corporation to the team/property, usually multi-level bonus structure.  Value based upon number of playoff games, final fours, championships and wins.  Due to extensive exposure during these time periods teams/properties can negotiate based on enhanced marketing exposure frequencies. 

Playoff Packages….

In some cases, additional packages are set to sell if playoffs become a reality.  This is a high risk and high reward method that is used to maximize sponsorship revenue.   This method consists of a fast paced negotiation process, utilizing sales teams attempting to maximize complicated short term contracts.  Evaluation on the team/property/event and exposure, may prove the dependant variables included in this process are well worth the fuss!

Long Term Commitment….

In this case most commonly linked to Naming Rights or Exclusivity Deals the commitment of a sponsor will remain through playoffs with a pre negotiated plan of action.  A per-game calculation is determined due to the undetermined amount of games.  In these relationships it is most common for benefits of regular season contracting stay static, additional promotions may be optional.

Tactics and Strategies….

We all know the amount of impressions significantly increases if a team makes it to playoffs.  For a hosting property and all brands involved during this time, promotional communication has potential increase revenue far above the original projection value.

The characteristics of negotiation allow both Team/Property and Corporation to determine the most symbiotic and profitable approach for their specific contract when approaching the topic of Playoffs. 

The Benefits of Naming Rights Sponsorship

Why Naming Rights? 

This is a question we often get from prospective corporate sponsors who are curious about this growing trend in the sponsorship world.  This week's post highlights what many corporate sponsors and sports and entertainment properties find attractive about naming rights by covering some of the benefits that both sides gain when entering into a naming rights agreement. 

 The tremendous growth in sponsorship in recent years is due, in large part, to the actions of corporate decision-makers who view sponsorships as a cost-effective method of achieving specific marketing objectives. Sponsorship marketing, and naming rights in particular,  is particularly valuable for businesses due to its effectiveness in introducing new products, helping new or established products contend with competitive brands, and increasing corporate brand awareness.

 A recent study by sponsorship evaluation firm Performance Research found that nearly 90% of sports fans in Chicago, Boston, Indianapolis, and Minneapolis were able to correctly name stadium or arena sponsors without prompting.  Having corporate branding on a sports and entertainment complex offers the naming rights partner coveted ‘top of mind’ brand awareness for regional consumers and affiliated sports fans.

Findings from the same study revealed that 20% of the U.S. sports fans questioned reported that they personally benefit from corporate-named stadiums and arenas, a positive association that can only serve to improve consumer’s relationships with sponsors’ brands. Naming rights offers a larger opportunity for the sponsor to get consumers to engage with their product by enhancing fan experience through mediums such as freebies, smart phone apps, or providing added entertainment value.  It is well known that the most effective marketing campaigns are those that enhance consumer experience, facilitating an emotional connection with the brand, which often translates into increased consumer loyalty.

On the property side, the benefits of securing a Naming Rights partner are many. From gaining extra annual revenue to the ability to eliminate or minimize various expenses from in-kind agreements, forging a partnership with a high level sponsor can offer a serious boost to a property’s bottom line.

Here are some other ways that sponsor corporations and recipients benefit from naming rights:

 Staying Relevant

In the competitive marketplace, maintaining relevance and visibility is a brand’s #1 priority. Often, naming rights is not necessarily about increasing ROI, but reminding consumers that a brand exists, which can translate into brand preference when considering what product to purchase. 

Free advertising and Brand Exposure

A naming rights partnership offers a huge return on advertising dollars that is far above what can be achieved through traditional marketing channels. Much of which comes in the form of offsite promotion through media mentions. The stadium, and thus the name of the corporate partner, gets innumerable free mentions on websites, newspapers, magazines, TV, and radio when media sources cover sporting and entertainment events. Seasonal games in all four major sport categories garner valuable unpaid ad time with championship games offering huge impression values that reach numerous demographics. The average cost per 30-second national television commercial during Super Bowl XLIX in 2015 was an incredible $4.5 million, but there was no charge for media mention of the stadium where it took place. When all opportunities for passive advertising are taken into account, naming rights is a level of sponsorship that pays huge dividends

Financial boost to the team

It goes without saying that teams who occupy a stadium with a Naming Rights sponsor benefit considerably from the partnership. A naming rights partnership offers a great opportunity for corporations to bask their brand in the ‘halo effect’ of a successful team and its famous players. In exchange, teams receive a large boost to their bottom line which contributes to player incomes, new equipment, upgrades to facilities, and increases team negotiating power with corporate sponsors in smaller level sponsorship contracts such as shirt deals.

Naming rights sponsorship occupies the highest point on the sponsorship pyramid, and for good reason given the many benefits that it offers. The competition to gain consumer attention is intense as ever, and increasingly, corporate sponsors are choosing to use naming rights to rise above the advertising clutter normally associated with sports and entertainment properties to gain direct access to consumers.

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-Erin Beaudoin

Category Exclusivity: what it means & the industry categories that are more likely to pay for it

When entering into a sponsorship partnership, category exclusivity is often an essential consideration for sponsors. Category exclusivity dictates that the sponsor is the only company within its product or service category that has a relationship with the property or event. A guarantee of exclusivity is very appealing for potential sponsors because it serves to limit their competitors’ access to the consumer group affiliated with a certain property or event.

Sponsorship typically exists on a continuum however, from high level Naming Rights partnerships where the sponsor gains exclusivity that runs throughout a property or an event, to small scale sponsorship where the sponsor competes for consumer impressions alongside other sponsors that are from the same industry category such as is often the case with sporting events featuring multiple beverage and performance products. In practice, categorical exclusivity often exists on a middle plane that might include categorical exclusivity to a certain area, but not the entirety, of a property, for example the “Lexus Lounge” in Amalie Arena in Tampa, FL.

The ultimate value that a property or event can garner from a sponsorship partnership is often directly related to the level of categorical exclusivity offered. In most cases, a lack of categorical exclusivity can significantly lower the value of a sponsorship deal. An exception to this general rule is in the case of sponsorship deals for charities or non-profit organizations where a company may relinquish its requirements for exclusivity in the interest of boosting their Corporate Social Responsibility portfolio.

So the question is, when seeking high level sponsorship such as a Naming Rights partner, what industry category is more likely to pay for the privilege of being the exclusive category partner? While a company’s willingness to pay for category exclusivity is influenced by a number of market variables, there are two primary characteristics that are thematic of industry categories that most often purchase category exclusivity: 1) The product experiences high competition in the marketplace, meaning that there is high cross elasticity of demand between their product and a competitors’ as consumers are more prone to substitution, and 2) They exhibit a strong command of their product supply chain that allows the company in the industry category to keep production costs low and profits high.

According to the 2015 IEG Property Sponsorship Category Survey, these two characteristics are present in the top three Industry categories most likely to purchase exclusivity, starting with non-alcoholic beverages in first at 55%, the automotive industry coming second at 54%, and alcoholic beverages third at 53%.  Rounding out the lower end of the scale is retail with 14% and restaurants at a low 13%, which both exhibit a lower elasticity of demand due to consumer’s diminished proclivity towards substitution, longer supply chains and, generally, lowered profit margins.

While these numbers are indicative of sponsorship trends overall, the tried and true method when searching for a sponsorship partnership that exhibits high categorical exclusivity such as naming rights is to look at the community where the property or event is based. Most often, high level sponsorship is derived from companies that have their headquarters or a large consumer base in the area and are interested in securing and growing that consumer base through an integrated community presence.  

See the full table of industry categories that are most likely to purchase exclusivity here.

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-Erin Beaudoin

Pan Am 2015: ticket sales are up, sponsors' impression values are through the roof, but what about the athletes?

As the 2015 Pan Am games draws to a close, the tide of excitement is at an all-time high. Things started out slow however, with only 850,000 of the available 1.4 million tickets accounted for just days before the grand opening on July 10th at Toronto’s Roger’s center, or the “Pan Am Ceremonies Venue” as it will be known for the span of the Games in compliance with various sponsor exclusivity agreements. Premier sponsor CIBC even facilitated the sale of tickets at a 25% discount days before the event, with dual motives of increasing attendance and consequently upping exposure for their brand.

“Pan-Ampathy” didn’t last long however, as the hype surrounding Canada’s outstanding medal performance intensified, causing ticket sales to jump more than 300,000 since the opening ceremonies. With tickets sales passing 1 million last week, sponsors and Pan Am organizers alike are happy with the rising turnout. Ticket purchases took another jump when it leaked that international superstars Kanye West and Pitbull would be performing at the closing ceremonies, the product of a value in-kind donation by Pan Am partner Live Nation who is footing a portion of the booking fees.

All in, Pan Am organizers expect revenue from ticket sales to reach $40 million, with sponsorship and government subsidies meant to help cover the remaining $2.5 billion price tag of the Games.

Pan Am fever has been a boon for social media and television networks as well, with roughly 16 million Canadians, or 46 percent of the population, tuning in to watch the multi-sport event according to a release by the CBC and its partners. The success has caused CBC up its TV coverage and online livestreaming of the Games, adding 12 more hours of coverage to its original broadcast schedule.

According to organizers, Pan Am 2015 has been a trending topic globally with over 534,000 social media mentions and 1.82 international impressions. Pan Am staff claim that the website has received 7.2 million hits and counting and the Games official app has been downloaded more than 135,000 times in the past two weeks.

With the breadth of local and international exposure, one would expect some of the benefits to trickle down to the hardworking athletes around which the event is built. However, according to Team Canada javelin competitor Liz Gleadle from Vancouver BC, this is not the case.  Gleadle threw an impressive 62.83 meters to win Pan Am Gold this past Tuesday. When asked about any financial kickback resultant from her win, the answer was a little sobering

“None.” She replied.

Unlike the Olympics, there aren’t any financial rewards for placing in the top three at the Pan Am or Commonwealth games. Any money that goes to the athletes does so through sponsors, and according to Gleadle, meaningful sponsorship is not always easy to come by at this level.

“I don’t have any [sponsors] yet. No one has approached me. It’s been a tough road but I am hoping that the Pan Ams might generate some interest”.

To those familiar with athletic partnerships, Gleadle’s difficulty in securing post medal sponsorship isn’t surprising. “The Pan Am games simply doesn’t provide the type of exposure and worldwide appeal the sponsors with the big bucks are willing to throw cash at”, explains Brian Cooper president of S&E Sponsorship in Toronto.

Gleadle said she didn’t know about the post competition experiences of fellow medal winners,  “I’m in the U.K right now and [I] don’t know what is going on with the other athletes post comp. Hopefully they get something. Some athletes easily catch sponsor’s interests, others don’t.”

Overall, Gleadle is positive and hopeful, still riding out the high from her Gold victory and is not letting the lack of funding affect her outlook, “I’ve received a lot of great press though! And a lot of people are recognizing me and giving me their congratulations. That means so much to me”

If only a pat on the back paid for a new pair of training shoes.

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-Erin Beaudoin

Stadium Names: the hilarious, the weird, and the downright awful

As Naming Rights deals increase in breadth and frequency, inevitably so does the probability of strange, ill-fitted, or downright hilarious stadium and arena names.

Here are eight of the wackiest past and present sports facility names we liked best:

#1-Dick's Sporting Goods Park - Colorado Rapids, USA

Originally slated to be called ‘Dick Park’, representatives of the soccer-specific stadium that is home to the Colorado Rapids decided in the end to go with the more demure title of Dick’s Sporting Goods Park - a good example of how a little extra context can make a big difference!

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#2-HUNKY DORYS PARK -DROGHEDA, IRELAND

Drogheda F.C, known as the Boynesiders by fans, was once a strong contender at the premier level in the League of Ireland, defeating Cork F.C to win the FAI cup as recently as 2005. Unfortunately things took a turn for the worse, with the club falling into financial troubles, experiencing a steady losing streak, and barely escaping extinction in 2009, only to have their home stadium named after a chip in 2010. Needless to say, things aren’t going quite as ‘hunky dory’ as the club would like. 

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#3-Bumthang Stadium -Jakar, Bhutan

While soccer is growing all the time, archery remains as Bhutan’s national, and consequently most popular, sport. It appears as though despite the introduction of this state of the art soccer specific stadium the Bhutanese people still wouldn’t exactly consider soccer to be their number one ‘thang’.

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#4-Arnold Schwarzenegger Stadium -Graz, Austria

Originally named after the famous bodybuilder, actor, and governor of California who was born near Graz, Austria, the stadium name came under harsh criticism when Schwarzenegger failed to halt the execution of Stanley Tookie Williams during his term as Governor of California. After a number of days of intense discussion over whether to change the stadium name, Schwarzenegger ‘terminated’ the debate by revoking the city of Graz’s rights to the use of his name. The facility is now known as UPC-Arena. 

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#5-Wankdorf Stadion (Demolished) -Bern, Switzerland 

The Swiss Berner Sports Club’s ‘Young Boys’’ move from the old Wankdorfstadion to the new ‘Stade de Suisse’ in 2005, sparked what is potentially the greatest football headline of all time. The Stade de Suisse is the second largest football stadium in Switzerland and cost more than any other building in Switzerland at the time, effectively ‘dorfing’  the Wankdorfstadion that it replaced.

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#6-Whataburger Field -Corpus Christi, Texas 

In 2005, the Texas-based fast food chain Wataburger paid an undisclosed amount for the naming rights to a minor league baseball stadium in Corpus Christi, Texas where it was headquartered at the time. Home to the Corpus Christi Hooks, the field will carry the title ‘Whataburger’ until at least 2020 when the contact expires. Whataname! 

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#7-Middelfart Stadion -Middelfart, Denmark 

The stadium is named after the small Danish town within which it resides. To date no unpleasant odors have been reported by the home team, Middelfart G&Bk.

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#8-Bargain Booze Stadium -Northwich, England

Perhaps the most overtly hilarious stadium name was Bargain Booze Stadium in Northwich, England. Home ground of Witton Albion FC, the stadium’s partnership with the discount alcohol brand sadly (but perhaps not surprisingly) didn’t last for more than a couple seasons. The naming rights were bought for an undisclosed amount, but with a name like that we can only hope that the city got a good ‘bargain’,  perhaps paired with a couple of cheap glasses of strong liquor to wash down their potentially contentious decision. 

Naming Rights are essential in today’s market. Sports Franchises around the globe depend on the income from multi-million dollar naming rights deals, public sector groups are increasingly turning to naming rights to supplement government funding (or lack thereof). College sports arenas are even joining in on the trend, opening up the naming rights to their sports facilities to the multiple corporations looking to get in front of student demographics.  Naming rights are here to stay, and with them perhaps so are some hilarious and wacky stadium names. 

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-Erin Beaudoin

Sponsorship for Upcoming Mayweather vs. Pacquiao Fight Breaks Records at $13.2 million

The countdown is on for Saturday’s fight between undefeated, five-division world champion Floyd Mayweather and eight-division world champion Manny Pacquiao.

Deemed as ‘The Fight of the Century’ by insiders and fans alike, the faceoff is wrought with the hype of a long and dramatic oppositional build up. Three previous attempts to negotiate a fight between the two heavy hitters were terminated due to the failure of both parties and their representatives to come to an agreement over the terms relating to drug testing, location, and compensation. However on February 20th of this year, Mayweather and Pacquiao finally came to an agreement to fight on May 2, 2015 at the MGM Grand in Las Vegas.

The fight is expected to be the most lucrative in history, with boxing experts predicting the match to generate around $400 Million. Much of the $400 Million will be derived from PPV sales that are expected to shatter previous records, and at a cost of US$89.95 for SD and US$99.95 for HD it is easy to see why.

Ticket prices to see the match in-person at the MGM Grand range from $3,500 to $250,000 and are going fast. Yesterday, a floor-side single ticket reportedly sold for $41k on StubHub proving that the upcoming Mayweather vs Pacquiao showdown easily represents the hottest, and most expensive, ticket around.

As one can imagine, the match is a financial boon for the fighters, promoters and Las Vegas in general. According to ESPN  reports sponsorship alone is expected to top a record $13.2 million, nearly $10 million more than previous sponsorship records.

The largest of the sponsorship commitments is that of $5.6 million from Tecate, Pacquiano’s traditional sponsor, who bid to beat the $5.2 million offering by Corona, Mayweather’s previous sponsor, to be the official beer of the fight. Considering that in the past, total sponsorship for boxing events capped at around a previously record-setting $4 million, the Teacate deal is a reflection of just how seriously sponsors are valuing the hype surrounding the event.  

Tecate is expecting to gain massive exposure and brand awareness by having their logo featured front and center in the middle of the ring mat and adorning all fight signage, posters, and other collaterals such as T-shirts. Tecate beer will also be sold at the arena on the night of the fight.

Other sponsors include the Mexican Tourism Board who are looking to attract travelers and Smart Communications, A Filipino telecom company and long standing sponsor of Pacquiano’s fights.  Also involved are Paramount Pictures/Skydance Productions who is promoting two movies, “Terminator Genisys” and “Mission Impossible: Rogue Nation”, and The Weinstein Company who is promoting their movie “Southpaw”. Trailers for the new films we been seen between fights on the pay per view telecast.

Mayweather Promotions and Top Rank set the minimum sponsorship bid at $1 million.

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-Erin Beaudoin

Trend Watch: Credit Unions Partner with Collegiate Arenas to Target Gen Z and Y

The heavy competition between financial institutions to capture new prospective clients has many credit unions looking for new ways to influence the market.

The most sought-after demographic is the 94 million Americans in Generations Y and Z, many of whom have yet to cement their fiscal loyalty and who face a dizzying number of options as to where to get their next loan. However, as most marketing professionals know, reaching Gen Y and Z is not an easy task. The demographic is highly segmented as an audience due to their divided and selective engagement in various forms of media and a general immunity to traditional forms of marketing resultant from a lifetime of exposure to advertising via multiple mediums.

The problem that credit unions face is gaining access to consistent and meaning exposure towards this fickle generation, and many are turning towards Naming Rights partnerships with collegiate sports centers as a solution. What better way to get in front of young prospective members than to create an encompassing presence at the arenas where they go for fun and excitement?

A Partnership between CFE Federal Credit Union and the arena at University of Central Florida has linked CFEFCU to 60,000 UCF students. CFEFCU credits its Naming Rights partnership with University of Central Florida for the acquisition of 629 new households registered through its on campus and arena branches. With an annual retention rate of over 87% at campus locations, the young members are well on their way to forming lifelong relationships with CFEFCU.

Other credit unions such as State Employees Federal Credit Union have found that becoming a Naming Rights partner to a collegiate arena has allowed them to become and influential figure in the greater community.

Through its partnership with the University of Albany arena in Albany N.Y, SEFCU donates $1, 000 every home game to a non-profit organization in the greater community and publicizes the donation at the arena during half time. SCFCU’s partnership with University of Albany has created the perfect platform for the credit union to not only access  prospective young members, but to also increase their brand's integrity by demonstrating a commitment to the community.

Some other drivers behind the trend of Credit Union/Collegiate Naming Rights Partnerships include but are not limited to:

1.      Becoming a Naming Rights partner to a collegiate arena creates consistent access to students, faculty, and the community at large on a daily basis in a way that is generally too expensive to achieve via traditional marketing channels.

2.       Gaining brand association with exciting sporting and entertainment events.

3.      Increase brand recognition, loyalty, and perception among target demographics.

4.      Multiple opportunities to leverage different assets of the partnership such as digital, kiosks, print, media, broadcasting, and the installation of campus branches and ATMs.

5.      Opportunity to offer hospitality and ticket discount benefits to current clients of credit union.

With credit unions expected to expand in number and size in the coming years, post-secondary institutions and sponsorship firms alike would be wise to consider the many positives of the growing mutually beneficial relationship between credit unions and collegiate sports and entertainment arenas. 

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-Erin Beaudoin

March Madness

March Madness 2015 came to a close last night with Duke Blue Devils overcoming a 9 point deficit in the second half to beat the Wisconsin Badgers 68-63 in the final minutes of the game.

Notable performances were that of Duke’s freshman players Grayson Allen who scored 8 straight points and Tyus Jones who led with a game changing 23 points.

While Wisconsin’s Frank Kaminsky held his own on the court with 21 points and 12 rebounds, it wasn’t enough to make up for a lackluster offensive performance by Wisconsin’s other star players such as Josh Gasser who failed to score a single point the entire game.

 The athletes weren’t the only players giving it their all on the courts over the course of the challenging tournament however. March Madness hosts some equally well-known corporate players, all vying for their moment in the spotlight in hopes to transfer fan avidity into brand loyalty.  

Every aspect of the March Madness tournament is saturated with branding: major sponsors include ‘MVP’s’ of the corporate world such as AT&T, CapitalOne, and Coca-cola, the NCAA bracket is presented by Buick, the ‘drive of the night’ presented by Enterprise Rent-a-Car. March Madness even has an official ladder, Werner, used to reach the nets to cut them down after the championship game.

 It’s no surprise then that sponsorship of March Madness has generated a purported $7.5 billion in TV advertising alone since 2005.

Last year alone, TV sponsorship topped $1.13 billion, representing a 1.5% increase from the prior year that is second only to NFL playoffs in total national TV ad revenue for post-season sports programming. According to price, this trend will only gain in momentum, with the increase in advertising progressing at an average rate of 8.21% every year for the past 10 years.

Due to the increasing popularity of the Tournament, networks have also been able to increase the price for their advertising inventory.  Kantar Media says that in 2014 the average 30 second advertising spot was just short of $1.5 million, which was a 5% increase from 2013.

 March Madness has become big business for the NCAA, its corporate partners and the networks that air the content that captures the attention of sports fans around the world.

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-Erin Beaudoin

Sponsorship Goes Digital, Cellphone Provider Samsung Canada Partners with the NHL

The realm of Naming Rights and Corporate Sponsorship has recently seen a rise in the union of sports and smartphone providers. Increasingly, smartphone providers have joined in corporate sponsorship of sports franchises in an attempt to try and capture part of the fan base through content-driven marketing agendas.

In the case of this week’s announcement of the sponsorship deal between Samsung Canada and the NHL, the marketing angle comes in the form of exclusive access for Samsung users to videos and footage from discussions held in NHL’s “Situation Room” that is not available to iPhone and BlackBerry users.

Samsung hopes that NHL fan avidity will translate into mobile fidelity as fans switch to their smartphones in search of an enhanced Hockey experience.

“We love for people to switch off of a competitor’s platform,” says Paul Brannen, Samsung Canada’s senior vice president of mobile solutions. “It’s become an interesting race in the mobile space. If I can create a compelling reason for you to switch off that platform to my platform, it’s beneficial for us.”

According to Peter Widdis, a marketing professor at George Brown College, sports fans are less affected by sponsorship logos but they gain a tremendous connection to sponsorships that they can experience. This is why Widdis suggests that a technology manufacturer is uniquely positioned to facilitate the type of sponsorship present in the Samsung/NHL partnership.

To see more about how creating customer value relates to upping brand value see the original article here:

http://www.thestar.com/business/sportonomics/2015/03/09/new-nhl-deal-is-heavy-on-content.html

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-Erin Beaudoin

Naming Rights in Public-Private Partnerships

While Naming Rights deals are traditionally linked to the Sports and Entertainment Industry, agents in the public sector have come to realize that partnering with a corporate sponsor opens up a host of unfound revenue streams that could serve to subsidize municipal projects. Such is the case with the Wisconsin Department of National Resources who, faced with a proposal by Republican Candidate Gov. Scott Walker to cut funding to National Parks and raise fees for admission and camping, is considering opening up the parks to Naming Rights sponsors to raise the money required to maintain them.

The proposal follows in the footsteps of other proposals such as that of the city of Golden Valley, MN who are looking to Naming Rights to raise money for updates to their 100-year old Brookview community center. The project is projected to come with a hefty price tag of $38 Million for a complete facility replacement or $10 Million for updates to the existing structure.

Wisconsin

http://www.wisconsingazette.com/wisconsin/wisconsin-may-sell-naming-rights-for-state-parks.html

Golden Valley

http://www.startribune.com/local/west/295434191.html

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-Erin Beaudoin