Prospecting
Going Where The Dollars Are
Look to categories where money continues to be spent and research specific companies to understand their financial position.
1/26/09: In today’s environment, targeting prospective sponsors often comes down to following the money, i.e., tracking categories and companies that are still cutting new deals, and looking for a fit between those spenders and your property.
Below, IEG SR identifies activity from industries that are demonstrating interest in new partnerships.
One caveat: Given current economic conditions, sellers cannot assume all the players in an active category are good prospects.
Rightsholders must research specific companies to determine their financial state, as some will not be weathering the storm as well as their competitors.
Take telecommunications: While it may be a good time to target AT&T, Inc.; Verizon Wireless; Samsung Telecommunications America, LLP and others, chances for new dollars from struggling players such as Sprint Nextel Corp. and Motorola, Inc. are probably slim right now.
Shoe Companies
The category has seen recent deals from both established footwear brands as well as newer players on the scene.
For example, The Timberland Co. has signed a first-time deal with the just-concluded Sundance Film Festival, while Masai Marketing & Trading AG inked a new partnership with next month’s Amgen Tour of California cycling race on behalf of its MBT (Masai Barefoot Technology) line of footwear, which it dubs “the anti-shoe.”
Timberland aligned with Sundance to promote its year-old Earthkeepers shoe and apparel line to filmmakers and other cognoscenti. It also is using the tie to promote the environmentally friendly positioning of Earthkeepers, a product made with recycled materials.
“Sundance provided an opportunity to reach influential people and promote our environmental legitimacy,” said Theresa Palermo, Timberland’s senior director of North American marketing.
Timberland tied to the festival’s recycling program and promoted the use of public transportation between venues. It also leveraged the sponsorship by interviewing filmmakers and attendees on green issues to gain content for Timberland.com and Earthkeepers.com.
The company further activated the tie in its corporate-owned specialty retail and factory stores with a sweepstakes offering Sundance-branded gear and other prizes. It also featured the sponsorship on its Web site and through email blasts to consumers.
In addition to reaching athletes, celebrities and other influentials, shoe manufacturers largely use sponsorship to tout new products, reinforce brand positioning and gain promotional platforms to drive retail traffic.
Telecommunications Companies
Consumers can’t get along without their wireless phones, and telcos seemingly can’t survive without sponsorship.
Perhaps more than any other category, wireless service providers and handset manufacturers continue to use sponsorship as their go-to marketing platform. The reason: No other medium provides a better vehicle to showcase new phones and services and demonstrate their capabilities.
Telcos continue to spend money on everything from local festivals to nonprofits to pro sports teams.
For example, Verizon Wireless recently announced a full-season title of a Penske Racing NASCAR Nationwide Series team.
Verizon Wireless inherited a relationship with Penske when it acquired Alltel Wireless–a deal that closed earlier this month–although it did not have the option of renewing and rebranding Alltel’s title of Penske’s No. 12 Sprint Cup entry unless it wanted to try to fight NASCAR and Sprint in a battle identical to one
AT&T eventually gave up on.
On the nonprofit front, AT&T this month announced a new partnership with Share Our Strength.
Both wireless service providers and handset manufacturers use sponsorship to accomplish multiple objectives: promote new products and features, gain content, and prompt text messaging and other revenue-generating functionality.
For example, Verizon Wireless will use its NASCAR team to pipe driver interviews, race recaps and other content to subscribers of its V Cast video service.
For its part, AT&T is leveraging its tie with Share Our Strength through a text-message-based donation program. From January 12 through March 1, any wireless customer can donate $5 to the cause by texting the word “share” on his or her mobile device. AT&T will match donations, up to $100,000.
Dollar Stores
Not surprisingly, dollar store chains such as Dollar General Corp.; Dollar Tree, Inc.; and Family Dollar Stores, Inc. are doing well as consumers look to stretch their money.
Family Dollar, for example, posted a 14.1 percent increase in earnings in the first quarter of its ’09 fiscal year. The company’s stock price rose 38.6 percent in ’08.
Such success in the otherwise moribund retail sector has prompted new sponsorship spending as the companies look to build their brands, grab share, drive store traffic and expand their customer base.
Dollar General has expanded its motorsports program for ’09 with larger deals with IndyCar Series and NASCAR teams.
The company will title Sara Fisher Racing’s IndyCar team in four races this year, up from two in ’08. It also will serve as the primary sponsor of Braun Racing’s Nationwide team for the entire ’09 season, up from 13 races last year.
The category also holds promise for sponsorship of nonprofits, festivals and other types of events as a community relations play.
For example, Dollar General’s sponsorship of the Gaylord Hotels Music City Bowl affords founding status of the property’s youth football program.
The tie helps the retailer demonstrate its community involvement in Tennessee and other states where it operates stores, said Dave Herrell, vice president of development with the Nashville Sports Council and Gaylord Hotels Music City Bowl.
On the nonprofit front, Dollar General has raised more than $2 million through in-store fundraising campaigns for St. Jude Children’s Research Hospital, while Fred’s, Inc. has run similar programs for Children’s Miracle Network.
Like other retailers, dollar stores frequently look for opportunities to tie-in vendor partners.
Dollar General has brought in manufacturer partners for its motorsports programs, while Fred’s has tied in Hershey and other brands to its CMN partnership.
Auto Service Centers And Parts Retailers
With a growing number of consumers opting to drive their cars longer rather than buy or lease new ones, auto service centers and parts retailers are expected to add to their already robust sponsorship portfolios.
The NBA New Orleans Hornets recently used that reasoning to
target and sign NAPA Auto Parts.
Players in the categories have historically focused on pro sports teams, motorsports and other properties that attract their core male target, however both segments have shown recent interest in properties that provide access to a wider audience.
For example, NAPA AutoCare Centers last year leveraged the brand’s $100,000 partnership with Susan G. Komen for the Cure with the Take Care of Yourself and Your Vehicle breast cancer awareness and customer fundraising campaign.
In addition, Midas Int’l Corp. last year inked a
$350,000 sponsorship of the Make-A-Wish Foundation of America to tout its capabilities as a full-service auto care provider.
When prospecting auto service chains and parts retailers, local properties should reach out to a local franchisee or business owner, not a corporate office.
“Ask if they are part of an advertising co-op and find out what kind of support they can get. That way you use the franchisee as a rabbi to shepherd the deal,” said Howard Freeman, president of Promo 1, producer of the QuickChek New Jersey Festival of Ballooning in association with PNC Bank and other events.
Consumer Electronics Manufacturers
While sales of flat-screen TVs and other high-end electronics have taken a hit along with other discretionary products, consumer electronics companies continue to use sponsorship to showcase their technology and gain business from sponsored organizations.
On the new deal front, Panasonic Corp. of North America recently announced a multiyear deal with AEG that affords founding partner status of the L.A. LIVE sports, entertainment and residential development.
The deal also includes a tie to the adjoining Staples Center beginning in August ’09.
Panasonic replaces Syntax-Brillian Corp., which two years ago signed a four-year, multimillion-dollar deal with AEG on behalf of its Olevia-branded LCD high definition TVs, but which then filed for bankruptcy last summer.
Meanwhile, Sony Electronics, Inc. recently renewed its deal with the MLB New York Yankees, which includes presence at the team’s new stadium.
Both companies will leverage those deals as B2C and B2B showcases and will recoup some of their investment in product sales to the properties.
For example, alongside high definition large-screen TVs, Panasonic will install video surveillance and other operations systems in AEG venues.
“From a business perspective, our partnership with AEG represents a significant revenue stream for years to come as new properties are constructed and existing facilities enhanced with new technologies,” said J.M. Allain, president of Panasonic Corp. of North America’s Panasonic System Solutions Co. unit.
For its part, Sony will install more than 550 flat-panel HD TVs and provide PlayStation 3 entertainment systems and VAIO notebook computers throughout the new Yankee Stadium.
The sponsorship affords exclusivity in LCD television, HD television and consumer electronics manufacturer categories.
Sources
Panasonic System Solutions Co., Tel: 201/348-7000
The Timberland Co., Tel: 603/772-9500
Nashville Sports Council, Tel: 615/743-3120
Promo 1, Tel: 973/882-8240