One-on-One
AT&T Ups Investments, Earns Returns From Sponsorship
Current focus of new deals is targeting Hispanic and youth markets.
8/10/09: Already one of the country’s largest sponsors, AT&T Inc. this year has continued to add deals, most recently signing new partnerships with Major League Soccer–including title to the league’s all-star game–and the U.S. Soccer Federation’s men’s and women’s national teams.
Those deals follow a new tie to the MLB New York Yankees and an expanded endorsement deal with Tiger Woods.
IEG SR spoke with AT&T’s Tim McGhee, executive director, corporate sponsorships, about the latest signings and other topics. Below are excerpts from the conversation.
IEG SR: Just two weeks after we reported on the sponsorship portfolios of
wireless service providers, AT&T added another significant deal to its roster: a multiyear partnership with MLS. What’s the gist of that deal?
McGhee: AT&T was a founding sponsor of Major League Soccer in 1996 and we’re returning to the fold. We’ve been in conversations with MLS for quite some time. It was a function of getting a deal that was mutually beneficial to both sides.
We announced the partnership around the MLS All-Star Game. We received tremendous brand exposure from the announcement, as well as visibility at the game from having our brand on players’ jerseys, signage and broadcast exposure.
We’re still running the numbers, but the initial reports show that we received tremendous value. I just learned that Major League Soccer sold out of their AT&T-branded All-Star jersey.
IEG SR: Why return to MLS now?
McGhee: We sat down with our senior marketing executives at the beginning of the year to develop our roadmap and fill in gaps in our portfolio that targeted key market segments. There were two segments where we felt we needed to do more: the youth market and the Hispanic market.
You can approach that in two different ways. One is to secure sponsorships that target those audiences directly. We have segment marketing groups, and all they do is market to those audiences. They have sponsorships in their portfolios targeted to those audiences. For example, we have an existing marketing deal with the Mexican National Soccer Team and InterLiga through our Hispanic marketing group.
The other approach, and the one we chose to take, is to work out from a general market sponsorship and align with properties that allow us to gain benefits and value for our segment marketing groups. We’re in the midst of developing those programs right now.
We negotiate benefits and assets that we’ll share with our segment marketing teams, while the overall sponsorship is consistent with our core strategy for general markets and the corporate sponsorship group.
IEG SR: Is AT&T trying to “own” the sport of soccer?
McGhee: Soccer is a difficult sport to own. Our competitors do a lot of things on the media side. But this gives us a very strong foundation for creating a soccer platform. It also is consistent with our USOC strategy of aligning with key national governing bodies.
IEG SR: How has the economy impacted your sponsorship activity?
McGhee: Budgets are always a concern, and we did a rigorous analysis of the Major League Soccer partnership just like we would any other sponsorship opportunity. We saw value that we believe will far exceed the investment. We take that approach with all properties, whether they’re new properties or existing partnerships that are up for renewal.
Budgets continue to be challenged, but we try to drive as much value out of our sponsorships as we can. We can’t stop marketing in this or any other economic climate.
IEG SR: Content accessed through sponsorships obviously plays a key role for AT&T. What kind of content do you look for, and how do you use it?
McGhee: Content is absolutely important in all of our sponsorship activities. We offer consumers TV, broadband and wireless products, and that is how they want to consume content. They have the desire to watch content wherever they are, whether its short-form videos on handsets or games on their large-screen TVs offered through U-verse.
Virtually every sponsorship we do provides us content that we can distribute across one or more screens. And we want it to be exclusive as a point of differentiation vis-à-vis our competitors.
IEG SR: Can you provide an example?
McGhee: The New York Yankees provide content across three screens. We offer video-on-demand content on U-verse, game recaps on mobile devices, and behind-the-scenes human interest stories about players and Yankees staff on our broadband product, AT&T Fan Zone, as well as on U-Verse.
With Major League Soccer, we’ll have game highlights. Fan clubs are important to soccer, such as Sam’s Army–the unofficial fan club of the U.S. National Team. We’ll work with those clubs to identify opportunities to create user-generated content.
We’ll probably do some personal endorsement deals with players to get content from them, although we haven’t identified anyone yet.
IEG SR: What metrics do you use when determining success?
McGhee: With every property, we find out how we’re impacting consumers’ feelings and thoughts about our brand, and if they believe our sponsorships are consistent with the AT&T brand at large. We use sophisticated statistical analysis to derive monetary value out of consumer feelings about our brand.
How one feels about our involvement with a property can be translated into revenue. The stronger affinity that people have for a brand and a sponsorship ultimately translates into more business, whether it’s retaining our existing customers, gaining new customers or winning back customers we lost in the past.
We consistently find that people who are aware of our sponsorships think more highly of our brand, whether they are customers or not.
We use a number of metrics to determine success, including media exposure, both paid and earned, as well as direct business. That can include properties that have given us their communications business, or the on-site sale of products and services like downloadable content. We also have consumer promotions around a lot of our sponsorships, which include text-message and voting programs, like the Naismith College Player of the Year award.
We also use events to host key customers who generate a significant amount of revenue. We have a group that’s charged with creating business-building opportunities at these events.
Sources
AT&T Inc., Tel: 210/821-4105