Sponsor Profile
AT&T To Redirect NASCAR Spending Across Variety Of Properties
Telco looks to replace NASCAR spending with properties reaching young adults, women, Latinos and/or those over 60.
11/3/08: As its primary sponsorship of a NASCAR Sprint Cup team comes to a close this month, AT&T Inc. is making clear its plans for reallocating the estimated $17 million-plus it has been spending on the deal.
AT&T plans to put those dollars behind properties that reach the following audiences: young adults, women, Latinos and consumers over the age of 60. Certain geographic markets also are in line for increased spending.
“We have identified certain audience segments that have been under-served with our existing sponsorship portfolio,” said Tim McGhee, director of corporate sponsorships, adding that AT&T is in various stages of discussions with several rightsholders.
AT&T may align with properties that reach across two or more of its targeted audience segments, McGhee said.
For example, he discussed the possibility of a partnership with a property such as Major League Baseball, the only pro sports league without a sponsor in the category. The NFL has a partnership with Sprint; the NBA is sponsored by T-Mobile USA, Inc.; and the NHL has a U.S. deal with Verizon Wireless.
If AT&T signed with MLB, or other mass-market properties, it would leverage the relationship with targeted programs to reach particular groups.
“Some properties may have very broad appeal, but with certain entitlements that we could activate against specific audience segments,” McGhee said.
The company also will step up sponsorship activity in geographic markets where it faces competitive pressure, McGhee said, noting the company is not publicly disclosing those areas.
“It could take the form of new partnerships, or increased activation with existing sponsorships, but we are looking at local, regional and national sponsorships to meet our objectives,” he said.
Any new alliances will have to do more than just deliver a targeted audience, McGhee noted.
“If we can’t find the right property at the right price, we won’t enter into a sponsorship just to say we have something geared to a specific segment,” he said.
New deals will be charged with supporting AT&T’s ongoing sponsorship objectives:
• Gain marketing platforms to demonstrate products and services
• Enhance the consumer experience through on-site activation programs
• Secure content for mobile phones, broadband and TV (see sidebar)
• Enhance brand perceptions
The company is exiting its sponsorship of Richard Childress Racing’s No. 31 Sprint Cup entry earlier than it would have liked as the result of its settlement with NASCAR and series title sponsor Sprint Nextel Corp.
Although the 10-year title sponsorship agreement signed by pre-merger Nextel Communications, Inc. in ’03 allowed Cingular Wireless to maintain its Childress sponsorship, it prohibited any new deals in NASCAR from telecommunications competitors. Under those parameters, Sprint Nextel opposed AT&T’s rebranding of the Cingular car following its merger with BellSouth Corp. and takeover of Cingular’s operations in December ’06.
Taking the matter to court in early ’07, AT&T initially won approval to put its name on the car, but that decision was later overturned on appeal, leading the company to reach a settlement last September that kept its branding on the No. 31 car through this year, but cancelled the final two years of a three-year extension it signed with Childress in June ’07.
AT&T Continues To Clear The Lines Of Legacy Sponsorships
Nearly two years after the merger, AT&T still finds itself sorting out a portfolio that has included sponsorships inherited from Bell South, Cingular and SBC Communications, Inc., as well as new deals signed in ’07 and ’08.
“A lot of effort has been spent auditing our existing portfolios,” McGhee said. “We had some redundancies and some gaps, and we’re addressing those.”
Some deals that were maintained in the first year of “the new AT&T” have now been jettisoned, such as sponsorship of Mercedes-Benz Fashion Week in New York City, a Cingular legacy. “There were a number of issues, but it was primarily a result of a budget consolidation,” McGhee said.
In other cases the company has consolidated two contracts into one, such as with The Ohio State University athletics. SBC previously served as the school’s official telecommunications company, but Cingular had a deal for the wireless category.
As it has since the merger, AT&T generally seeks broad exclusivity to cover its wide range of offerings, including its U-verse television service and AT&T Mobile TV packages.
“We’re not just a telecommunications company anymore,” McGhee said. “We have broadband and TV products.”
He said AT&T looks for exclusivity in the following categories: local and long distance phone service, wireless service, IPTV, calling cards, and print and electronic directories, along with pass-through rights for wireless handset manufacturers.
But since AT&T does not offer all of those services in every market–for example, while it provides wireless service in every state, its traditional phone and Internet-based services are available only in 22 states primarily in the Midwest, South and West–it is flexible on what categories it acquires.
“We have to balance our desire to have full exclusivity with the cost of locking out a competitor in a category where we don’t have products and services,” McGhee said. “We take that on a case-by-case basis.”
AT&T measures success by
tracking a number of metrics, including changes in brand affinity and consumers’ willingness to recommend its products and services, McGhee said.
How Sponsorship Works At AT&T
The company restructured its sponsorship department following the June departure of Eric Fernandez, its former executive director of sponsorships and events.
Jamie Butcher, vice president, corporate sponsorships, oversees AT&T’s sponsorship program. She has two direct reports: McGhee and Tom Hughes, director of corporate sponsorships. McGhee is charged with activation, while Hughes is responsible for identifying and negotiating sponsorships, as well as back-end measurement.
Hughes works out of San Antonio, but will soon join Butcher in relocating to Dallas as AT&T moves its corporate headquarters to the Big D by the end of the year. McGhee works out of the company’s Morristown, N.J. office.
All told, AT&T’s corporate sponsorships department has 12 staff members, some of whom work out of the company’s Atlanta office, which is Cingular’s former headquarters and home to the AT&T Mobility wireless unit.
The corporate sponsorships department manages local deals in the four regions that cover its 22-state telephone and broadband Internet service footprint.
Other local deals are funded out of 27 AT&T Mobility offices; local market managers in those offices typically screen deals.
AT&T works with three agencies, all of which help strategize, manage and activate specific relationships: Career Sports & Entertainment manages the company’s NASCAR and rodeo involvement; The Marketing Arm manages AT&T’s USOC and PGA Tour event sponsorships, as well as activation of grassroots properties; while Velocity Sports & Entertainment works on the NCAA and other national sponsorships.
Sources
AT&T Inc., Tel: 210/821-4105