NHL’s Relevancy Problem

In my last post, I vented frustrations about the NHL’s lockout of its players over contract issues. My conclusion was that the NHL does not care about fans, so why should fans care about the NHL? Yes, I am perturbed by the NHL’s inability to avoid work stoppage and the resulting interruption in hockey, but the league faces a much larger problem that will loom larger with each passing day of the lockout. Hockey is but one sport in the sports entertainment landscape… and a relatively small one at that in the United States. Maintaining relevance as one of the major sports properties will become more difficult for the league if it continues to wage battle at the bargaining table instead of on the ice.

The early fall season is a sports fan’s dream: College football and NFL seasons are underway, MLB is headed toward its postseason, NASCAR is in the homestretch for the Sprint Cup, and the NBA and college hoops are waiting in the wings to get started. On top of all this activity, soccer is enjoying newly found interest in the U.S. through MLS expansion and expanded coverage of the English Premier League. A prolonged absence by the NHL will result in the league losing relevance among casual sports fans, the very ones needed to expand the fan base for hockey.

In a recent blog post, Bleacher Report CEO Brian Grey points out that several U.S. sports properties are on the rise in terms of heightened sponsor interest. Expanded playoff format for MLB, exciting rookie quarterbacks in the NFL, intense geographic rivalries in MLS, and new energy in New York and Los Angeles for the NBA increase the value of associating with these properties for sponsors. In contrast, the NHL sits on the bench as owners and players argue over what percentage of revenues each side should get.

The NHL has a very passionate core fan base, and while we (I have to count myself among this audience) are likely to forgive and return to the sport there are many more sports fans than us for which hockey is a take-it-or-leave-it proposition. The NHL worked diligently since the last lockout to attract people to the sport. In the process, it made the NHL more valuable to corporate sponsors, which is one reason why the league’s annual revenue increased from $2 billion to $3 billion. Sadly, many of the gains made in recent years by the NHL stand to be lost in a relatively short period of time.

The relevance clock is ticking, National Hockey League. Your great sport will become marginalized (some would say marginalized further) if you do not get your product back on the market quickly. Consumers have many other options for sports entertainment, and sponsors have other (and more effective) options to reach and engage their customers.

Let the Games (and Stories) Begin

In a few hours, the 2012 London Olympics will officially begin. For the next 17 days, the world’s top athletes will take to a global stage. Intense competition and drama make the Olympics must-see TV regardless of how many time zones you are away from the action. And, buzz about the Olympics has migrated to social media, creating real time discussion of the Games. But, the most enduring aspect of Olympic competition is the stories of the athletes. Event broadcasts are complemented with profiles of the personalities, going beyond the uniformed competitors to give us glimpses of the people participating in the games.

Stories define athletes perhaps even more than their performances. Their Olympic moments are influential in shaping their personal brand stories. I will never forget speed skater Dan Jansen’s valiant performance at the 1988 Winter Olympics. Jansen competed through the grief of his sister dying and experienced disappointment when he fell during a race. He experienced more disappointment at the 1992 Games before finally winning a gold medal at the 1994 Olympics. Frankly, I could not recall Jansen’s medal count (he only one a single medal in three Olympics). It does not matter – his story eclipses his performances.

Sports marketing expert Jonathan Norman says that an Olympian’s “back story” plays a major role in determining his or her suitability as a product endorser. Brands are comprised of back stories, too, so the more that an athlete’s story resonates with a brand’s values, the more effective the athlete can be as a brand ambassador. Note that while being a gold medalist helps an athlete’s marketability as an endorser, it is not a prerequisite for being a valuable brand asset.

I am eager for the London Olympic Games to begin, not only to watch elite athletes compete for medals but to learn more about the stories of the competitors regardless of whether they medal. A small number of athletes will win gold medals, and an even smaller group of athletes will win marketing gold as their stories attract companies that desire to associate their brands with them. Enjoy the Games!

A Regimen for Brand Positioning Training

A distinct, consistent brand position is instrumental in achieving differentiation from competitors and scoring with customers. Articulating brand position is vital to the success of a positioning strategy. The audience for which the brand should be relevant must recognize and value the point of difference. To that end, the more ways brand position can be communicated, the greater chance that it sticks with the target market.

One of the most effective brand positioning strategies implemented in recent years has been done by Subway. Its “good for you” positioning in the quick service restaurant category has resulted in market share gains and more importantly, ownership of that brand association in consumers’ minds. The linchpin in Subway’s positioning strategy has been Jared Fogle, a Subway customer whose story of how regularly eating at Subway was part of his dramatic weight loss shone a light on the advantages of eating at Subway compared to burger and pizza fast-food restaurants. Jared’s story as an everyday guy who has benefited greatly from Subway’s products resonates with consumers.

Subway is not content to stand on the basic claim of “better for you,” even though it has been successful. In recent years, Subway has used top-tier athletes as endorsers including swimmer Michael Phelps and NASCAR driver Carl Edwards. Now, Subway and Jared have embarked on a marathon effort to promote the nutritional benefits of Subway, as in an association with the ING New York City Marathon. Jared is training to run in the race on November 7, and Subway has partnered with the event as the “Official Training Restaurant.”

The impact of Subway’s sponsorship of the ING New York City Marathon should be positive, but a greater long-term benefit to the brand stands to be realized. The sponsorship status of “official training restaurant” is one that Subway has bought the New England Patriots and exploring opportunities with other sports properties. The greatest opportunity to promote the status of “official training restaurant” seems to lie with the one audience that does not charge sponsorship rights fees: the consumer. A campaign that touts Subway as the official training restaurant of the everyday athlete (like Jared Fogle) would be a natural extension of high profile sponsorships.

Subway’s association with the NYC Marathon and staking the claim of “official training restaurant” demonstrates that work is never complete when it comes to brand positioning. Even when a brand’s position is solid as is the case with Subway, explore opportunities to drive home your brand’s distinctiveness in new ways.

Marketing Daily – “Subway Positions Itself as Athletes’ Training Choice”

Toyota’s Tiny Sports Marketing Play

Toyota is a brand that is heavily involved in sports marketing. It is a force in NASCAR, is naming rights holder of the Houston Rockets home court (Toyota Center), and is a sponsor of NBC’s “Sunday Night Football” telecasts. But, Toyota’s tiniest association with sports may be its most innovative. Toyota rolled out a concept called the Tiny Football League (TFL) that is integrated into its sponsorship of the halftime show on “Sunday Night Football” and supported with a web and social media presence.

The TFL is a lighthearted take on the world of youth football. The TFL website invites youth teams to add photos, stories, and videos. Toyota is running a contest in conjunction with the TFL initiative in which 8 youth teams will receive $5,000 each, and a team selected by fan voting will receive a $10,000 donation. Criteria used to judge teams include evidence of teamwork, determination, and constant improvement.

At a time when it has become very expensive to be associated with top tier sports properties, Toyota’s foray into football via the TFL is brilliant. Toyota enjoys the best of both worlds. On one hand, its tie-in with the NFL via NBC’s Sunday night broadcasts give it the exposure a national brand like Toyota seeks. For Toyota, linking its presence in football to grassroots programs allows the company to show concern for local communities. The potential payoff in terms of how consumers perceive Toyota because of the Tiny Football League may be far greater than a more costly investment as an official sponsor of a major league sports property.

Football is the number one sport in the U.S., but there are ways to be associated with America’s favorite game other than an expensive sponsorship rights deal. Toyota’s TFL is a great example of how to link a brand with consumers’ interests in a creative way, one that taps into the benefits of sponsorship without the typical level of financial commitment.

Marketing Daily – “Toyota Talks Tiny Football in Corporate NFL Push”

Sponsorship Rights Fees: Know When to Say When

In the high stakes game that is NFL sponsorship, MillerCoors has folded. The winner: Anheuser-Busch. A-B signed a 6-year deal to become the official beer of the NFL beginning in 2011 that will pay between $43 and $50 million per year over the life of the contract. The asking price became too high for MillerCoors, and a determined A-B committed the dollars necessary to again partner with the country’s most popular professional sports league. MillerCoors has enjoyed a successful run as NFL sponsor, and during that time it launched the popular ad campaign featuring former NFL coaches’ press conference sound bites used as fodder for offbeat questions asked by Coors Light drinkers.

Did MillerCoors make a mistake by not retaining its NFL rights? Distributors liked the NFL sponsorship because they saw a correlation with sales. And, MillerCoors brands were able to hang on to market share in recent years in a sluggish market for beer sales. Yes, sponsorships like the NFL deal can lead to desired brand impacts such as top-of-mind awareness, brand image enhancement, preference, and increased sales. Sponsorships require a return-on-investment mindset, just as any business investment entails. The situation faced by MillerCoors is not unique. Other companies have walked away from high profile sponsorships of properties such as the Olympics and NASCAR. It is possible to reach a point beyond which sponsorship spending levels do not generate incremental benefits. And, we must remember that the NFL rights of upward of $50 million must be supplemented with additional spending on advertising, sales promotions, social media, and other initiatives to leverage the NFL association.

The partnership with the NFL has been beneficial for MillerCoors. Unfortunately, many business relationships end similar to many personal relationships: divorce. The NFL’s desire for higher rights fees did not mesh with MillerCoors’ needs to responsibly manage its marketing dollars. A consolation for MillerCoors is that it still can tap into the popularity of pro football through its coaches’ ad campaign and separate sponsorship deals it has with 22 of the NFL’s 32 teams, not to mention the possibility of new creative directions.

Anheuser-Busch introduced the idea of “know when to say when” in a responsible drinking campaign in 1982. The advice given in that campaign has applicability in 2010 for MillerCoors as it understood the point at which it had to bow out of negotiations with the NFL. Sponsors must strike a balance between associating their brands with properties that can deliver marketing impact and brand stewardship that allows for balanced allocation of resources.

Market Forces Make Time Right for Microsponsorships

Sponsorship has grown over the past 15 years as a marketing platform to reach and engage audiences. Sponsorship expenditure growth rate has consistently outpaced growth in media advertising expenditures during that period. While sports receive the lion share of sponsorship support (almost 70% of all sponsorship spending is on sports), cause marketing has been the fastest growing type of sponsorship in recent years. Companies are eager to align their brands with causes that matter to their customers.

As sponsorship in general and cause marketing in particular have grown, the sponsor market has become more crowded. It is more difficult today to differentiate a brand from competitors using sponsorship because many more companies are seeking opportunities to partner with nonprofit organizations or charities. At the same time, a weak economy has put a strain on nonprofits of all sizes, but smaller organizations may be hit particularly hard in terms of less funding and resources to carry out their missions.

The combination of a competitive environment for top-tier sponsorships and funding challenges for small nonprofits has sparked growth in a practice called microsponsorships. For example, Pepsi has created the Pepsi Refresh Project, a program that makes grants to community to organizations. This approach is a departure from looking for one or a few nonprofits to sponsor. Microsponsorships reaches customers where they are- at the community level. Sponsors’ involvement in these types of programs are a way to demonstrate concern and caring at a level at which many people can observe it first-hand. And, microsponsorships are a great fit with social media in that communication of a company’s microsponsorship can be spread by creating online communities around the brand-cause partnership.

Will microsponsorships stick, or is it just a marketing gimmick? Procter & Gamble’s Prilosec brand recently kicked off a microsponsorhip campaign with the tag line “The sponsor of everything.” Clever, but the question with microsponsorships is whether sponsors are perceived as sincere and have a genuine interest in helping the causes they sponsor, or is this viewed as just another tactic to attempt to increase sales? Consumers are too savvy today to be fooled. Here’s hoping that microsponsorships benefit the causes they are intended to help and allow sponsors to do well while doing good.

Advertising Age – “Cause Effect: Brands Rush to Save World One Deed at a Time”

When is Re-Branding a Sports Venue for 5th Time not a Problem?

The Nashville Predators have played in the NHL since 1998 and is the main tenant of an arena in the city’s downtown area. Since the venue opened it has had 5 different identities: Nashville Arena, Gaylord Entertainment Center, Nashville Arena (again), Sommet Center, and Bridgestone Arena. The latest name could show up on signage as early as next week following the announcement yesterday of a 5-year agreement between Bridgestone and the Predators. Congratulations, Bridgestone, you have just bought a rather used marketing asset- now what?

If the naming rights to this facility were a dress in a department store, one might think it would be found on the 75% off clearance rack because of its shop-worn condition. Five names in 12 years would be an unwise approach to branding a product, but the name changes happened, leaving the Predators to make the best of the situation. The team has found an ideal naming rights partner for the venue. A company with a strong local presence (Bridgestone’s North American headquarters is in Nashville) that wants to support professional sports in the market fits the bill for a sports venue naming rights partner. A corporate partner with local ties is even more important in a smaller market like Nashville. The benefits of having a corporate name on the venue in terms of media exposure are not as great as it would be in a major market, so the potential buyers for the venue’s naming rights are fewer in number.

While there are challenges in re-branding a sports venue, the frequent changes in names could actually benefit Bridgestone in this case. The length of time the previous corporate names were on the building were relatively short (7 years for Gaylord, 3 years for Sommet) given that the length of naming rights agreements can be 10 years or more. Bridgestone has developed a strong presence in sports in recent years on a national scale as official sponsor of NFL, NHL, MLB, and the Super Bowl halftime show. The company has now extended that presence to its headquarters city. Bridgestone is an excellent fit as naming rights partner for the venue. A 5-year deal gives the company some flexibility in determining the value of sponsoring the venue, but it would not be surprising to see the Bridgestone name on the building for years to come.

Selling Sponsorship ROO in an ROI World

Sponsorships are business relationships, and like personal relationships, many of them end in failure. One of the most frequently cited reasons for sponsorship failure is a lack of clearly defined objectives. In other words, if a sponsor does not have a well defined outcome for a sponsorship it would not be surprising for it to flounder. Related to the problem of lack of objectives is the setting unrealistic outcomes tied to sponsorship. Unlike sales promotions that typically have a call to action, sponsorships may be more beneficial in creating impact in terms of greater brand awareness or defining a brand’s personality. These outcomes move a consumer closer to buying, but it is does not make the cash register ring today. Thus, it is unrealistic to apply return on investment measures to a marketing activity that does not have an action-inducing component.

The view being advocated is not to let sponsors off the hook for the dollars they spend. Accountability is needed greatly today to insure marketing efforts contribute to building strong brands. Sponsorship selection must include clearly stated objectives as to the intended gains in brand relevance among a target market. The length of the selling cycle varies greatly among products, so a “buy now” message that works for soft drinks does not work for more expensive, complex products. But, marketers of such products can reap the benefits of sponsorship. The key is to define the outcomes that are to be experienced from their investments as well as measure whether objectives are achieved.

Marketing Daily – “Return on Objective Key in Sports Partnerships”

Citizen Sponsorships: The Next Big Thing?

The U.S. speed skating team was in a bind. With the Vancouver Winter Olympics less than 100 days away, its team sponsor, Dutch bank DSB, exited its relationship with the team. No worries, Comedy Central talk show host Stephen Colbert comes to the rescue. He challenges his viewers, known as the Colbert Nation, to make donations online to support the team.

Is the grassroots sponsorship of the U.S. speed skating team a sign of things to come in sports sponsorship? The passion of sports fans could be tapped as a sponsorship revenue source, which would be timely given that many corporations have tightened marketing spending that is indirectly related to sales, like sponsorship often is. While Colbert’s gesture scores points for patriotism, it likely does not change the game of sponsorship. Does a sports property want to attempt to get a few dollars apiece from thousands of individual donors, or would it like to strategically align with a small number of sponsors with the resources to underwrite the property?

I believe the latter still applies. Citizen sponsorship would seem to have the best chance of success for niche sports properties, those that do not require substantial sponsor dollars and are typically shunned by traditional corporate sponsors. Hopefully, the exposure the U.S. speed skating team received from Steven Colbert will open the eyes of a corporate sponsor in time to help the team’s efforts in Vancouver.

Sponsorship.com – “Stephen Colbert Sponsors for America”

Cause Marketing Grows Despite Weak Economy

Cause marketing continues to be a tactic used to create emotionally-grounded connection points with consumers. According to the International Events Group (IEG), spending on cause marketing in North America will reach $1.55 billion in 2009, a 2% increase over 2008. While a 2% rise does not seem significant, any increase in marketing spending is noteworthy as companies navigate the recession. The 2009 projection continues a trend of several years of growth in cause marketing expenditures.

What is the appeal of cause marketing compared to other types of sponsorship? Cause marketing can be effective when targeting specific audiences. The success of Yoplait’s Save Lids to Save Lives campaign resides in partnering with a cause (breast cancer awareness and research) that has great relevance to a key segment of Yoplait’s target market: women. The fit, or match between sponsor and cause as well as cause and sponsor’s target market are crucial to the success of cause campaigns. When consumers perceive a fit between sponsor, cause, and their own interests, the potential exists for strengthening the connection between a consumer and the company via their shared interest in the cause.

The marketing implications for supporting a cause or charity include opportunities to attract new customers, enhance loyalty among existing customers, positively impact sales, and even have the potential to sell products at a price premium. Past studies on consumer attitudes toward cause marketing have come to these conclusions. Consumers that desire for their consumption choices to go beyond satisfying their own needs and make a difference through supporting a cause or charity are the very audience that cause marketing seeks to reach. Expect to see cause marketing expenditures continue to grow in the years ahead.

Marketing Daily – “Cause Marketing Expected to Show Growth”