IEG SPONSORSHIP REPORT THE LATEST ON SPORTS, ARTS, CAUSE AND ENTERTAINMENT MARKETING

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1 IEG SPONSORSHIP REPORT THE LATEST ON SPORTS, ARTS, CAUSE AND ENTERTAINMENT MARKETING JANUARY 23, STRATEGY PEPSICO S NEW ONE FOR ALL, ALL FOR ONE SPONSORSHIP STRATEGY PepsiCo gains marketing efficiencies by pulling breakfast food and orange juice divisions into existing national sponsorships. Less than one year after taking the reins of PepsiCo Inc. s ( Pepsi Uses New Technology To Take MLB Activation To The Max ) sports marketing department, Jennifer Storms has placed her stamp on the company s sponsorship strategy. Storms, who became PepsiCo s senior vice president of sports marketing in July 2011, is placing more focus on leveraging the beverage giant s sponsorship portfolio across the company s multiple brands. Case in point: PepsiCo last year added The Quaker Oats Co. and Tropicana Products, Inc. as part of its multiyear renewal with the National Football League. Quaker receives exclusivity in the chewy granola bar, oats and rice cake categories, while Tropicana gains exclusivity in the orange juice category. More recently, PepsiCo this month added Quaker Oats and the breakfast food category to its partnership with Major League Soccer. The tie builds on PepsiCo s ownership of the carbonated and non-alcoholic and non-dairy soft drink categories, around which it uses to promote the Aquafina, Gatorade and Pepsi Max brands. Business units also are spearheading their own deals. Quaker Oats is supporting its MLS partnership with a new multiyear tie to the MLS Chicago Fire, a partnership that affords branding on player jerseys. PepsiCo was the largest U.S.-based sponsor in 2010 with a budget of $335 million to $340 million, according to IEG research ( Deep Pockets: The Biggest Sponsorship Spenders Of ). IEG SR spoke with Storms and Candace Mueller-Medina, Quaker Oats director of communications, about the beverage giant s new sponsorship strategy, Quaker Oats new partnership with the Chicago Fire, and other topics. Below are edited excerpts from the conversation. IEG SR: What is the thinking behind PepsiCo s new sponsorship push? 2012 IEG, LLC. ALL RIGHTS RESERVED. 1

2 Storms: PepsiCo has an amazing foundation with sports properties. We are the longest sponsor of the NFL through our Pepsi brand, and we re a founding sponsor of Major League Soccer. We work closely with those organizations day-to-day, and we constantly have conversations about how we can grow business together and do more things. We had the opportunity to bring Quaker Oats and Tropicana into discussions with the NFL so they could be part of our sports marketing family. We have a broad portfolio, and sports leagues reach so many consumers. We want our brands to meet the needs of every consumer and athlete. IEG SR: How will the brands co-mingle? Storms: We want each brand to maintain a distinct voice. That is important when we re working with the National Football League, Major League Soccer or any other property. Our brands can talk to the same consumer through the league partnerships, but their success is based on the ability to have their own voice. IEG SR: When and how will Quaker Oats and Tropicana activate the NFL? Storms: The partnerships start with the season, but you ll likely see Quaker Oats and Tropicana make some announcements at the end of the current season to tease the sponsorships and get things rolling. We re the longest-standing sponsor of the NFL. The relationship is all about good business, not when the contract actually starts. IEG SR: Does Pepsi plan to expand its partnerships with other properties? Storms: We re always looking for the ability to expand our business, and if that involves our partnerships, we ll consider it. We ll evaluate opportunities that help us grow our business and create partnerships that make sense. IEG SR: Candace, what is Quaker Oats take on the NFL and MLS sponsorships? Mueller-Medina: Sports marketing is a great way to reach families and remind them about eating right and getting active. Soccer is one of the country s fastest-growing sports with 18 million active participants. Sponsorship provides a great opportunity to combine nourishing foods with physical activity to provide a holistic way for families to get involved. IEG SR: Tell me about the Fire partnership. Mueller-Medina: The Fire embodies the same spirit, values and vision of the Quaker Oats brand. Our vision is to create a partnership that promotes the health and well-being of Chicago families and the community. The partnership affords a number of assets including in-game features and broadcast elements. Those are all great, but what s really important is what we ll do off the field by engaging and interacting with the Chicago community. As part of the sponsorship, Quaker Oats will title the Chicago Fire Juniors, the team s youth development program. The platform gives us the opportunity to connect with more than six thousand families nationally and locally. IEG SR: What else does that package include? 2012 IEG, LLC. ALL RIGHTS RESERVED. 2

3 Mueller-Medina: The sponsorship includes a dedicated Quaker Corner seating section in Toyota Park. We ll use the seating section to provide great views and the opportunity to sample chewy bars, cookies and other products. IEG SR: What is the thinking behind the jersey sponsorship? Mueller-Medina: Exposure on jerseys is a very important component of the relationship and a coveted spot for any sponsor. We ll use the jersey to promote our word mark and the Quaker man. It s the Quaker face and name that people trust, so it s important to have both on the jerseys. IEG SR: Tell me about Quaker s partnership with Major League Soccer. What does that partnership bring to the marketing table? Mueller-Medina: We re the official breakfast foods partner of Major League Soccer. We ll have a presence at the MLS First Kick, All-Star Game and MLS Cup. We ll have a lot of local activation with the Fire and national activation with the league. IEG SR: Will you activate with retail promotions? Mueller-Medina: It s definitely something we re looking at. The sponsorships are a great way to activate in-store to drive folks to the game, and vice versa. We ll also activate with our employees. We re going to host a pep rally this week to showcase the sponsorship and unveil the jersey. Employees are our greatest asset, and we want to make sure they re included in any sponsorship that we do. Sources PepsiCo Americas Beverages, Tel: 914/ The Quaker Oats Co., Tel: 312/ IEG, LLC. ALL RIGHTS RESERVED. 3

4 IEG SPONSORSHIP REPORT THE LATEST ON SPORTS, ARTS, CAUSE AND ENTERTAINMENT MARKETING JANUARY 23, SPONSOR PROFILE BARRACUDA NETWORKS CHARTS NEW SPONSORSHIP COURSE Technology company views sponsorship as a cost-effective platform to gain new clients and build relations with existing customers. Similar to the way its namesake stalks its prey in a swarm of fish, Barracuda Networks, Inc.is using sponsorship to gain business from team cosponsors. The privately-held technology company recently signed two new global sponsorships: primary status of Bryan Herta Autosport s IZOD IndyCar Series team and co-title of SlipStream Sports Garmin-Barracuda pro cycling team. Barracuda Networks, which markets network security and other products to medium-sized businesses, is using the sponsorships to open doors to team cosponsors. We have a ton of respect for sponsors of Bryan Herta Autosport and Slipstream Sports, and we absolutely want to associate with them, said Michael Perone, Barracuda Network s executive vice president and CMO. BHA sponsors include Group Lotus plc and William Rast, Inc., while SlipStream partners include Clif Bar & Co. ( Snack On This: Nutrition Bars Increase Sponsorship Activity ) and Garmin Ltd. ( GPS Device Makers Find Their Way To New Sponsorships ) The Slipstream sponsorship already has opened a door at Garmin. We have gotten to know the folks who run Garmin s marketing, and we hope to work with them to gain success in both our businesses, said Perone. The company which also will use the ties to host customers and prospects at races also looks to gain business from each sponsored team. Barracuda Networks was drawn to motorsports and professional cycling to play up its performance-driven positioning, added Perone. These are teams that rely on performance to outperform their competitors. That s similar to how we run our business IEG, LLC. ALL RIGHTS RESERVED. 4

5 The BHA emanated from a conversation that begin at the 2011 IZOD IndyCar Series race in Sonoma, Calif., said Bryan Herta, the team s president. We were coming off our win at the Indy 500 as a one-car entry, and we were looking for a partner to help grow our team for a full season this year. We went through an education process, and fortunately they saw great value. The technology company has previously sponsored a handful of pro sports teams in the U.S. and Europe including the Barclays Premier League Fulham FC and the NHL Anaheim Ducks, Boston Bruins and San Jose Sharks. The company dropped those partnerships due to escalating rights fees and/or the lack of return on investment, said Perone. If we re not getting value, we re not serving our shareholders. Sources Barracuda Networks, Inc., Tel: 408/ Bryan Herta Autosport, Tel: 317/ IEG, LLC. ALL RIGHTS RESERVED. 5

6 IEG SPONSORSHIP REPORT THE LATEST ON SPORTS, ARTS, CAUSE AND ENTERTAINMENT MARKETING JANUARY 23, ACTIVATION BIRDS OF A FEATHER: PROPERTIES TEAM UP TO DRIVE RACE REGISTRATION Promotional partnership highlights the need for properties to develop creative promotions that build exposure and drive ticket sales. While pro sports teams have long partnered with other types of local events to raise visibility and drive traffic, most ties typically afford inclusion in marketing materials with little to no activation. In a unique twist, the NBA Atlanta Hawks leveraged its partnership with the March 18 Publix Georgia Marathon with a promotion that dangled a discount on the race registration fee based on the outcome of three games in January. For each Hawks home victory on Jan. 16, 18 and 21, registrants received a discount based on the number of points the Hawks scored over the opposing team. For example, if the Hawks won by 16 points, runners received a $16 discount on the price of the registration the following day. Race registrations range from $95 to $135 depending on when the registration is purchased. Sports teams are always looking for new ways to sell tickets, and we re always looking for new and creative ways to find runners, said Steve Obert, vice president of sales and marketing with US Road Sports & Entertainment Group, which owns and produces the marathon. The Hawks and the marathon both touted the promotion through social media and other marketing efforts. The Hawks also will receive a booth at the marathon expo, while the marathon gained exposure for title sponsor Publix Supermarkets, Inc. in Phillips Arena. The marathon also received Hawks tickets, a benefit it shared with race volunteers. We re continually looking for ways to give back to our volunteers. This helps us give an extra thank you and help build support, said Greg Laird, CEO of US Road Sports & Entertainment Group. Sources Atlanta Hawks, Tel: 404/ US Road Sports & Entertainment Group, Tel: 972/ IEG, LLC. ALL RIGHTS RESERVED. 6

7 IEG SPONSORSHIP REPORT THE LATEST ON SPORTS, ARTS, CAUSE AND ENTERTAINMENT MARKETING JANUARY 23, ADDING VALUE SPONSOR CUE: SUNDANCE ADDS SEVEN NEW PARTNERS Flexibility and a willingness to provide added-value benefits are key to film festival s sponsorship success. New films aren t the only products being screened at the 2012 Sundance Film Festival. The festival also is showcasing a handful of new sponsors. The Jan festival has brought on seven new endemic and non-endemic partners: Adobe Systems Inc.; Bacardi U.S.A., Inc. s Grey Goose vodka; General Electric Co., (General Electric Charges Up Sponsorship Activity ), Hilton Worldwide, Inc.; ( Hotel Chains Make Room for Sponsorships ); Sprint Nextel Corp. ( Wireless Service Providers Call Up New Sponsorships ), Yahoo! Inc. and Unilever s Bertolli frozen soup. Katie Kennedy, Sundance s director of corporate development, attributes the festival s sponsorship success to the following three factors: Flexibility in working with sponsors. As in years past, Sundance tries to accommodate sponsors needs by offering tailored sponsorship and activation programs. We try to have a free flow of communication with our partners. We re never going to do anything that will compromise the integrity of the festival, but we are willing to push boundries, said Kennedy. The festival s willingness to push boundaries often leads to new activation platforms. For example, Yahoo is activating its new partnership by screening nine short films on Consumers can vote on their favorite film, with Yahoo awarding the winning filmmaker a $5,000 prize. We try to have a solution for everything, whether it s aligning with content, accessing a venue on main street or sampling to affluent consumers. We don t say yes to everything, but we rarely say no. Provide added-value benefits. Sundance this year expanded its year-old Festival Co-op program that offers sponsors a presence in a venue in downtown Park City, Utah. The festival launched the program to provide budgetchallenged sponsors a presence in Park City s highly-trafficked downtown area. The co-op gives sponsors a footprint on main street without having to pay exorbitant venue fees, said Kennedy IEG, LLC. ALL RIGHTS RESERVED. 7

8 Companies with a presence in the Festival Co-op include Canon U.S.A., Inc., Hilton; The Timberland Co., and Yahoo! Help enhance the consumer experience. Sundance also has seen success by creating activation programs that enhance the consumer experience. Case in point: The Hewlett-Packard Co. this year is sponsoring the festival s mobile phone app. The technology company is activating the tie by underwriting the app s $4.99 cost. Hewlett-Packard s sponsorship has allowed the app to be more accessible to a much larger audience, said Kennedy. The improving economy and large number of films picked up from the 2011 festival also have played a role in the festival s success, she added. The halo we received helped keep our positive brand attributes in the conversation. SPONSOR ACTIVATION AT THE 2012 SUNDANCE FILM FESTIVAL COMPANY Adobe Systems, Inc. Bertolli General Electric Co. Grey Goose Hilton Worldwide Sprint Nextel Corp. ACTIVATION Adobe aligned with the Sundance Film Festival to promote filmmaking software to young, up-and-coming filmmakers. The company is sponsoring Next, a film series that highlights new talent and independent filmmaking, as well as several sessions and workshops. Unilever brand is using Sundance to promote its five-month-old Bertolli Frozen Meal Soup line extension. The brand is sampling the product at the on-site Bertolli Meal Soup Chalet. Diversified services company is sponsoring Focus Forward, a program of three-to-fiveminute films directed by high-profile filmmakers. Bacardi U.S.A. brand is leveraging the film festival with Behind the Blue Door, an invite-only event. In addition to cocktails, the event features a screening of Iconoclasts, a TV show presented by Grey Goose Entertainment. Hotel chain is hosting private screenings and on-site activation programs on behalf of its Hilton Honors loyalty program. The festival s official telecommunications provider is providing Sundance with product and service. Sprint replaces T-Mobile USA, Inc. Source Sundance Institute, California office, Tel; 310/ IEG, LLC. ALL RIGHTS RESERVED. 8