Latest Thinking from IEG
IEG’s sponsorship experts provide unique perspective on the latest industry developments, news and trends. These posts will make you think, challenge conventional wisdom, give you new ideas, and spark discussion.
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Harsh Words about the Commercialization of Pro Sports
“The commercialization of sports hasn’t reached its nadir, and we know this because the inevitable last step still hasn’t happened-that moment when the Browns and the Rockets become the Cleveland E*Trades and the Houston Mennen Speed Sticks, with logo-embossed jerseys to match.” The column continues…
“This is the year when sports commercialization will finally go from being a cute, quintessentially American subplot (poor small town jock makes it to the big leagues, gets the big hit in the big game, gets rewarded with his face on a Wheaties box) to a disfiguring herpes-like disease that one never stops being aware of and finally sucks the last bits of joy from following pro sports.” And continues…
“It’s not just the preposterous sponsorship tie-ins you see everywhere, so much so that you can literally consume them…I know we are getting there because I love sports but am beginning to hate watching sports. There are so many goddamn ads and tie-ins now, your skull starts to feel like an echo chamber by the end of the game-and you start inadvertently humming beer-company jingles to yourself, against your will. It is enough to make you want to gouge out your own eyeballs with a spoon and eat them raw.” (Don’t hold back, tell us how you really feel.)
Filed under: NASCAR, pro sports, research, sports, beer
Close, but Not Quite a Great Activation Program
An article that appeared in the Detroit Free Press (10/17) about the Ford Taurus Game Day House Party sparked my interest. To summarize the article, Ford partnered with HouseParty.com (a cool idea, but a terrible website, very amateur looking and slow loading) and Ford dealers to throw house parties for groups of guys across the U.S. as they watch football. The house parties were designed to promote the launch of 2010 Ford Taurus. The campaign was expected to reach about 20,000 people at 1,000 house parties. According to the article, the hosts of many of the parties would get to test drive a Taurus for the day and hosts also received a party pack that included banners, thunder sticks and a DVD featuring Fox Sports commentator Michael Strahan. Representatives from local dealers were sent to talk to hosts about the Taurus. The campaign was promoted on websites including FoxSports.com and in print. Ford received 6,000 applications. There is also a contest component and the winner will receive a new Ford Taurus. The House Party is part of a larger campaign that Ford is launching to link the Taurus with pro football. Ford did a similar campaign during American Idol for the Fusion.
Filed under: agency, NASCAR, sports, activation
Reporter’s Notebook: New Spending; Successful Activation Program
Through my conversations with sponsors, properties and reporters, I frequently come across new spending and activation programs that don’t make it into IEG Sponsorship Report. Below are three recent examples.
Aaron’s, Inc. boosts sponsorship budget 10 percent. The limping economy has prompted renewed interest in rent-to-own, dollar stores and other types of retailers that cater to low and middle-income consumers, and that has led to new sponsorship spending by players in those categories.
For its part, Aaron’s largely focuses on motorsports properties, and to a lesser extent properties located near its Atlanta headquarters. The company earlier this year renewed its title of NASCAR Sprint Cup Series and Nationwide Series races at Alabama’s Talladega Superspeedway, a property it has sponsored since ’02.
Filed under: entertainment, how to get sponsorship, motorsports, music, NASCAR, activation
What’s a Sponsor?
It was a sad day in the Kapraun household. With the start of the official NFL season I decided to conduct my own unscientific sponsor research. So, last week, during dinner, I asked my husband if he could name any NFL sponsors. He responded by saying “What’s a sponsor?” I was floored. How could he not know what a sponsor is? I was specifically looking for him to name some NFL league sponsors, but I would have accepted team sponsors as well. In response, I named some NFL league sponsors and he said “oh, yeah”, meaning that when prompted, he knew there was an association between those companies and the NFL.
A few days later I asked him if he could name any NASCAR sponsors and he rattled off at least a handful of sponsors including both series and several team/driver sponsors. At that point, I was feeling like not all hope was lost. However, how did the concept of a sponsor get lost between NASCAR and the NFL? Why would he know what companies sponsor one property and then not even understand what a sponsor is when connected to another property?
Filed under: events, NASCAR, pro sports, research, sports, activation
Hearts And Minds, Not Eyeballs
The news this week that Jack Daniel’s is quitting its NASCAR team and Anheuser-Busch’s Michelob Ultra is not renewing title of its LPGA Tour stop in Virginia are but two examples of the scores of sponsors dropping title of pro golf tournaments and motorsports teams.
It is a tough environment for everyone selling sponsorship, but among the most challenged are pro golf events and motorsports teams. Rightsholders in these sectors have often sold on media visibility, and that’s a dangerous path for anyone in sponsorship.
On merely a CPM basis, sponsorship cannot successfully compete with advertising. When times were flush, marketers were willing to pay the higher CPM because intuitively they understood that sponsorship offered more. But intuition is no longer enough, and treating sponsorship as the “added value” piece and media as the main event, no longer works.
Filed under: assets, digital media, NASCAR, new media, pro sports, selling, social media, activation
Why Sales Alone Should Not Be Used To Measure Sponsorship
Conventional sponsorship wisdom says that one of the best things a property can do to sell/renew deals in a disastrous economic climate is to show the prospect/sponsor that the relationship can result directly in product sales. There is no better ROI measurement or justification for a sponsorship expenditure than proving the connection between the partnership and revenue for the sponsor that goes to its bottom line, so the thinking goes. Seems to makes perfect sense.
There may be a flaw in this logic, however. This thought was spurred by this summer’s news DeWalt tools would not renew its 10-year-old sponsorship of Roush Fenway Racing’s No. 17 NASCAR Sprint Cup Series entry driven by Matt Kenseth. This news called to mind an IEG Sponsorship Report story of a few years ago, in which DeWalt’s then event marketing manager told us the company generated enough profit (not just revenue) from the sponsorship—through securing new trade partners and generating incremental sales at existing accounts—to recoup its annual rights fee, which we estimated then to be about $14 million.
Filed under: motorsports, NASCAR, sponsorship measurement, sponsorship ROI, evaluation
3-D TVs May Prompt New Sponsorship Spending
While many properties have written off the consumer electronics category due to the economy and subsequent pullback in discretionary consumer spending, JVC, LG and other companies may soon start seeking new deals to promote their latest-and-greatest products: 3-D TVs.
At least one company has signed its first deal. Panasonic Consumer Electronics recently announced a tie-in with James Cameron’s new 3-D science fiction film Avatar on behalf of its 3-D-ready plasma screen TV and 3-D-enabled Blu-ray Disc player, both of which it plans to release next year.
Panasonic will activate the tie by hosting Avatar viewing demonstrations in specially-designed trailers in the U.S. and Europe. Sources say the company plans to leverage Panasonic System Solutions Co.’s multi-million dollar partnership with AEG to host screenings at Southern California’s LA Live entertainment complex.
Filed under: entertainment, how to get sponsorship, motorsports, NASCAR, non-traditional categories, pro sports, selling, sports, activation
Is $27 Million Too Much For Primary Status Of A NASCAR Team?
Heard at this past weekend’s NASCAR race that Aflac paid $27 million last year for its primary sponsorship of Carl Edwards’ Roush Fenway Sprint Cup Series team.
Talk about buying at the top of the market.
To be sure, Aflac does a good job activating the sponsorship, at least through TV ads. There’s no escaping that pesky duck.
But really, one has to consider what else that kind of money could buy. Speaking in ballpark terms, $27 million would easily cover the cost of other national marketing platforms—ranging from nonprofits to stick-and-ball pro sports teams—with millions to spare.
Filed under: motorsports, NASCAR, sponsorship measurement
Insights from Lesa Ukman, IEG, and Ann Green, Millward Brown
IEG’s Lesa Ukman and Millward Brown’s Ann Green gave a great presentation today on measuring sponsorship’s return on investment.
Filed under: evaluation, IEG conference, motorsports, NASCAR, sponsorship measurement, sponsorship ROI, sports, activation