Sports Sponsors Should Keep Low Profile

Citi’s $400 million naming rights sponsorship for the new New York Mets stadium sparked an outcry and greater scrutiny of sponsorship spending. Financial services firms in particular have come under fire for accepting federal bailout money because they are in trouble yet appear to continue a business-as-usual approach to their marketing spending. Is this the view of politicians grandstanding on an issue sure to win favor with voters, or is it the sentiment of the broader population?

Results from a recent survey by Performance Research suggest Americans are not enamored with companies engaged in expensive sports sponsorship deals. Nearly on-third of those surveyed said they pay less attention to corporate sponsorships than they did a year ago. Furthermore, 62% believe companies that are experiencing difficulties should be spending less on sponsorships. It seems that consumers believe the cost-cutting measures they have taken with their household spending should be mirrored by corporations.

Feelings toward sponsors vary depending on the type of sponsorship. Only 13% of the sample said they would have a more favorable opinion of companies if sponsorship of their favorite sporting event were to increase, with 26% reporting they would have a less favorable opinion. The positive opinions about sponsorship involvement were higher for cultural events (20%) and non-profits or causes (41%).

These results indicate sponsorship is not a medium that should be abandoned altogether during these difficult times. However, strategic decisions should be made about the type of property with which a company aligns through sponsorship as well as the scope of involvement. If companies’ support of a property via sponsorship is perceived as integral to the property’s success (which would more likely be the case for a non-profit or cause), the more positive consumer acceptance of that association will be. This trend will hurt the venue naming rights market and other forms of sponsorship that have succeeded in landing eye-popping deals in the past.

Link: Performance Research – “As Consumers Tighten Their Belts, They Expect Corporate Sponsors to Do the Same”

Citi Field: This Park Brought to You by Taxpayers

How cool it would be to have a sports stadium named after me one day. It probably will never happen, especially not a professional sports stadium. But, I can take some comfort in knowing that I may be helping pay for naming rights to a Major League Baseball stadium. The New York Mets are preparing to open their new park, Citi Field, next season. Yes, that is “Citi” as in Citigroup, one of the financial institutions in line to receive a bailout from the federal government.

Citigroup committed to $400 million over 20 years for the rights to have its name on the new park. Engaging in a naming rights sponsorship can be a smart branding move… if you can afford it. Apparently, Citigroup can no longer afford it. What a painful reminder to New York and the country of the excesses of a financial institution that seeks a $300 billion bailout and laid off more than 50,000 employees. The stench is almost as bad as Enron Field in Houston, which disappeared swiftly following that company’s demise in 2001.

One New York lawmaker has called for the name to be changed to “Citi Taxpayer Field.” Here’s a better idea: the New York Mets should renegotiate the deal or walk away from it altogether. The Mets must remember that their marketing partner’s image can impact the image people have of the Mets. If Citigroup is perceived unfavorably, the financial gains of the naming rights deal could be offset by hits to the Mets’ brand image.

Link: Fox News – “Lawmakers Fight to Rename Ballpark after Citibank Bailout”

Ambush Marketing in Full Swing in Beijing

Despite proclamations that ambush marketing would be monitored closely, the Beijing Olympics may become another heavily ambushed top-tier sporting event. Ambush marketing is a tactic used by companies to associate their brands with an event or property to create the perception of an “official” relationship. Ambushing is a thorn in the sides of legitimate sponsors that pay rights fees for the “official sponsor” designation. The ambusher enjoys the marketing benefits without paying the price to be an official sponsor.

In the case of the Beijing Games, official sponsors such as Adidas, Budweiser, and China Mobile have been upstaged by competitors that either created a presence in Beijing away from the event venues or partnered with teams or athletes. While the Beijing Organizing Committee of the 2008 Olympic Games (BOCOG) has issued anti-ambushing rhetoric in the months leading up to the games, it appears that policing ambushers will not be a high priority over the next two weeks. It appears that the International Olympic Committee will need to be more proactive in calling on BOCOG to protect the investments official sponsors have made in the Beijing Olympics and beyond.

Some sponsors have spent an estimated $70-80 million on rights fees alone, plus millions more on advertising and other forms of communication about their Olympic involvement. If the IOC wants its sponsorships to retain the current level of value, steps must be taken to protect sponsors’ significant investments. Ambush marketing on any level is distasteful and unethical; when it involves tens of millions of dollars it can be financially devastating, too.

Link: –“Let the Ambush Games Begin”

Sponsors Should Value Fit over Publicity

Hooters restaurants made big news last week when it announced a deal to sponsor thoroughbred Big Brown in the Belmont Stakes, the final leg in the Triple Crown series. The timing was great for Hooters as Big Brown was hoping to become the first Triple Crown winner in 30 years. Hooters never fully realized the impact the deal could provide as its logo was not allowed to be displayed on the silks of Big Brown’s jockey, Kent Desormeaux.

The Hooters-Big Brown link was not the first quirky marketing deal the chain has undertaken over the years. Remember Hooters Airlines? The exposure Hooters received (as if anyone or anything associated with Hooters needs more exposure) was great in terms of brand mentions and publicity, but those outcomes are not the foundation of a sound sponsorship strategy. Sponsors should seek to associate with properties that are highly relevant to their customers. Linking with a top thoroughbred for a Triple Crown race may be opportunistic, but it has no long-term rationale. When selecting sponsorsorship partners, clearly define the outcomes that are be achieved. Also, remember that the rights fees to be a sponsor are merely a starting point in the investment needed to make a sponsorship successful. Sponsorship is a relationship, not a one-night (or one-race) stand!

Seeing is Believing… and Purchasing

Converting eyeballs to customers is an ongoing challenge marketers face as they first seek to get noticed, then persuade prospective customers that they should buy their products or services. In today’s hypercompetitive environment, how does one break through the clutter and succeed at influencing buyer behavior? According to research released by the Advertising Research Foundation, a key to making it happen is connecting with prospects through events. The research found that customer purchase intent was higher among people who had been exposed to brand-sponsored events such as trade shows, sports, or the arts.

Why do sponsorships have such a positive impact? They give people the opportunity to interact with a company or brand in the case of a trade show. For sponsorship of sports, arts, or a social cause, a brand becomes associated with something to which people are emotionally attached, such as their favorite football team or musical artist.

While the associations sponsors develop when linked to an event or other property being sponsored are the outcomes they seek to attain, it is important to realize that just the mere association is not enough. Being recognized as “the official sponsor of …” does create a desired link, but that link alone is relatively weak. Sponsors must build on the association through investments in advertising campaigns, web site content, sales promotions, sales force, and public relations efforts. In other words, a truly intergrated marketing communications effort is needed. To achieve the extent of brand impact found in the ARF study, sponsorship must go far beyond saturating a venue with signage or a slick booth presentation at a trade show! Link

Advertising on MLB Uniforms: Strike Out or Home Run?

The Boston Red Sox and Oakland A’s will kickoff the 2008 MLB season with a two-game series in Tokyo March 22-23. The games will not only mark the only time the teams will play outside North America, but it will also be the only time their uniforms feature corporate advertising. The Red Sox have struck a deal with EMC, a Massachussetts-based data storage company, for ad patches on their uniform sleeves. Both teams will have logos of Japan’s Ricoh Co. on their helmets.

Advertising on sports teams’ uniforms is not unusual in countries outside of the U.S. In our country, ads have encroached seemingly every inch of space at our sporting venues except for players’ bodies. Venues have corporate names and signage is everywhere from the turnstiles to toilets. Baseball is a sport steeped in tradition, and corporate logos on uniforms certainly is not part of that tradition! An uproar occurred in 2004 when MLB considered putting ads for the “Spider-Man 2” movie on bases for one weekend. It is highly unlikely that American sports fans will change their views just because uniform ads are accepted practice in other countries.

While there is no indication that MLB is considering allowing uniform ads, it may be testing the waters by allowing the Red Sox and A’s to wear ads in Japan. The economic state of baseball is probably as good as it has ever been, so there is not an urgent need to tap into the revenue stream that could come from uniform ads. and considering the game has more important issues to deal with (i.e., steroids), allowing uniform ads would not be a wise move at this point in time. Link

Nationwide is on NASCAR’s Side

NASCAR will have new title sponsors in two of its three major leagues next season. The Cup Series sponsorship is shifting from Nextel to Sprint, which is simply a shift of brand association within the Sprint Nextel family. The other new title sponsor represents a new partner for NASCAR, Nationwide Insurance. Nationwide will replace Anheuser-Busch’s Busch beer brand as title sponsor of NASCAR’s secondary national series. The deal is for 7 years at an estimated $10-12 million annually.

Nationwide’s commitment to auto racing on this scale is noteworthy. Until a few years ago, insurance companies avoided association with motor sports. The widely held view was that sponsoring a sport in which accidents, injuries, and even deaths can occur would not be a congruent association for an insurance company to have. That position has softened as Allstate and State Farm have both had sponsorships with NASCAR Nextel (too early to say Sprint?) Cup drivers and races. The lure of a coveted audience and the presence of major competitors were too great to ignore. Actually, the association can be used in positive ways. Allstate and State Farm have both used their NASCAR platform to promote safe driving. Nationwide will surely use the 7-year association with NASCAR to promote responsible driving as well as its insurance coverage.

This Community Brought to You by Nissan!

Branded communities- the next frontier in corporate sponsorship? If Nissan’s sponsorship of an Arizona development is any indication, the answer is “Yes.” Nissan has entered into an agreement to be “the official automobile” of the Westgate City Center, a residential and commercial development in the Phoenix suburb of Glendale. Among the marketing assets Nissan receives in the deal are three 100-foot billboards and sponsorship of a concert series. The reach of the sponsorship extends beyond the 2,200 residential units of the development; the presence of hotels, shopping, an NHL team and NFL team all will contribute to pulling in audiences to the area.

This deal brings out the best and worst about sponsorship. The positive is that Nissan may have found a great way to reach a desirable demographic through means other than mass media advertising. The sponsorship can be particularly powerful if Nissan has interactive exhibits at the concert series events and sporting events as well as utilize direct mail to target residents in the development in an effort to persuade visits to dealerships. The negative is that another demarcation between commercialism and everyday life has been erased. Are there no limits to aspects of our lives that can be commercialized? Nissan seems to be walking a fine line between reaching an audience and intruding on them. The sponsorship has the potential to be effective… if Nissan is mindful of not commericalizing it too much. Link

NFL’s Policy for Photographers is Marketing Overkill

The National Football League recently announced a new policy that requires photographers working the sidelines of NFL games to wear red vests. You may be wondering, “What’s the big deal about making photographers wear a vest?” The vest itself is not the problem, it is the logos of NFL sponsors Reebok and Canon that appear on them. The American Society of Newspaper Editors and the Associated Press have voiced their displeasure with the new policy. They do not want photographers to become walking billboards for NFL sponsors. The NFL’s weak response to criticism so far has been to point out that photographers have no problem exposing brand names and logos of their equipment or shoes that they wear, so why should they have a problem with a vest containing two small logos on it? Also, the NFL claims the logos are smaller than photographers covering other sports are required to display.

This tactic is marketing overkill that borders on the absurd. It is one thing for the NFL to regulate the brands that can or must be displayed by its teams, players, and coaches. It is quite another matter to require people not directly associated with the NFL to adhere to the league’s sponsorship policies. How far will this go? Will fans be barred from wearing Nike products to games for fear a camera shot could broadcast a non-sponsor’s logo across the airwaves? The NFL has enough problems with player conduct off the field that policing what photographers wear would seem to be a low priority. It does nothing to add value for fans, just sponsors. However, the NFL could suffer negative consequences if it allows its product to become too sponsor driven and fails to take care of more important issues such as the impact of player conduct on the NFL brand. Link

NASCAR Dialing Wrong Number with AT&T Lawsuit

NASCAR has enjoyed tremendous growth in popularity, television audiences, and sponsorship revenues over the past decade. The growth seems to have hit a bump in the road (make that track) as a combination of higher prices for race tickets and gasoline are negatively impacting attendance and leading many race fans to stay home and watch on TV. Check that, they’re not watching on TV either, as ratings for NASCAR Nextel Cup races have been down from 2006 for almost every race so far this season.

If NASCAR didn’t have enough worries with fan interest, it finds itself entangled in a major sponsorship controversy. NASCAR is fighting to keep AT&T from being a sponsor of driver Jeff Burton and Richard Childress Racing. Burton was sponsored by Cingular Wireless, but when the brand was replaced with the AT&T name the company naturally wanted to shift its association with Burton and RCR to the AT&T brand. NASCAR has 700 million reasons to keep out AT&T as a team sponsor, as in the $700 million, 10-year deal NASCAR has with AT&T rival Nextel. Sport properties should take steps to protect their sponsors from having to fight for the audience’s attention. After all, breaking away from media clutter is one of the attractions of sponsorship as a marketing communications vehicle.

It is admirable that NASCAR is vigorously defending the value of its property and seeking to protect category exclusivity for Nextel. However, preoccupation with this issue could be more harmful than helpful. Despite Nextel’s established association with NASCAR, the fact remains that many NASCAR fans are AT&T customers. Taking aggressive measures to shut out fans’ wireless provider may be received negatively. Management focus would seem to be better utilized by examining how to rekindle fan interest in attending NASCAR races and watching races on TV. Otherwise, NASCAR will continue to lose a point of difference it has enjoyed over other professional sports: its intimate relationship with the everyday fan. Other major leagues are viewed as having “sold out” to the interests of corporate sponsors and media partners. While NASCAR may still have an advantage when it comes to fan access to the sport, it could easily lose that advantage if becomes too distracted with sponsorship issues. Link