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 28, ACTIVATION BEST PRACTICES: SPONSORSHIP ACTIVATION Social media joins PR, internal communications, hospitality and traditional media as one of the five most popular activation tools. Ask any property or sponsor for the latest activation trends, and one topic consistently pops up: social media. Not surprisingly, sponsors are increasingly using Twitter, Facebook, Instagram and other online tools to amplify their message and connect with consumers. Case in point: Social media was the fourth most popular leveraging platform in 2012 with 74 percent of sponsors using the medium, according to the most recent IEG/ Performance Research Sponsorship Decision-Makers Survey ( Old Habits Do Die: Sponsor Survey Sees Less Reliance On Ads, Signage ). The three most popular platforms: public relations, internal communications and hospitality. CHART 1: WHICH OF THE FOLLOWING MARKETING COMMUNICATIONS CHANNELS DO YOU USE TO LEVERAGE YOUR SPONSORSHIP PROGRAMS Further demonstrating its growing popularity, social media eclipsed traditional media as an activation platform. Seventy two percent of sponsors activate through print, radio and other forms of traditional media, according to the survey. The major benefit of social media: reaching consumers beyond sponsored events. Every consumer loves to attend events, but sometimes life gets in the way. When that happens, Coca-Cola can bring the experience directly to them, said Sharon Byers, The Coca-Cola Co. s senior vice president of sports and entertainment marketing IEG, LLC. All rights reserved IEG, LLC. ALL RIGHTS RESERVED. 1

2 Byers points to the 2012 Coca-Cola 600 NASCAR Sprint Cup Series race as an example. The beverage giant used Facebook, Twitter and other online channels to engage consumers before and after the race. CHART 2: WHAT IS YOUR COMPANY S TYPICAL PROMOTIONAL SPENDING RATIO We were able to give them real-time updates from the racetrack and let them be a part of an experience they would have otherwise missed. Below, IEG SR highlights three recent examples of how companies are activating through social media--and how properties are helping them. AT&T /ESPN College GameDay. AT&T Inc. in Sept launched the On the Way to Saturday program to engage college football fans IEG, LLC. All rights reserved. The program had four primary objectives: Unite the company s college football properties Showcase the power of the AT&T Network Bring the What You Do With What We Do campaign to life Provide proof points that you can do anything with your phone with the AT&T Network CHART 3: HOW WILL YOUR 2012 LEVERAGING AND ACTIVATION SPENDING COMPARE TO 2011 AT&T leveraged its partnership with ESPN s College GameDay to create On the Way to Saturday, around which the company sent two fans on a road trip to every ESPN College GameDay location. The catch: The two fans earned the road trip by using their phones to compete in weekly football-inspired challenges. AT&T promoted the activities on more than 65 pieces of branded content each week. The telco promoted the content through a dedicated web site way2saturday. com a :60 second feature on ESPN College GameDay, as well as Youtube.com and Facebook. The social media component helped amplify the AT&T message and engage college football fans in a deep and authentic manner, said Travis Dillon, vice president of activation and property management with The Marketing Arm, which developed the program for AT&T IEG, LLC. All rights reserved. HOW TO ENCOURAGE SPONSORS TO ACTIVATE Become a part of the activation plan from the start Share knowledge of audience triggers Proactively suggest activation ideas Offer incentives for leveraging Provide built-in communications vehicles for partners Facilitate cross-promotions between sponsors College GameDay provides a great stage, but social was the glue that connected consumers to the program IEG, LLC. ALL RIGHTS RESERVED. 2

3 THE KEYS TO SUCCESSFUL ACTIVATION With activation playing a critical role in a sponsorship s success, properties need to do all they can to help partners activate. Below, IEG SR highlights five ways properties can take activation to the next level. Discuss activation from the start. To ensure a partnership is a success, properties should discuss activation before signing a contract. Case in point: Major League soccer discusses potential activation platforms during negotiations to ensure that partners have a vision on how to bring the partnership to life and the budget to fund the program. We absolutely want to discuss activation before a deal is done. A sponsor will never have success if they spend all of their money on the rights fee, said Russell Sargeant, senior director of partnership marketing with Soccer United Marketing, MLS s commercial arm. Take an active role in the process. Properties should proactively brainstorm and pitch activation ideas throughout the course of a relationship. Sponsors have so many initiatives on their plate, so it s up to properties to be creative. We meet with sponsors, learn about their marketing calendar and figure out how we can leverage that activity to develop activation programs, said Beth Schnitzer, senior vice president of strategic alliances with Pier 39. Major League Soccer also take an agency-like role in proactively pitching ideas. We don t sit back and wait for partners to come to us. We take a consultative approach by understanding their business and coming to the table with ideas, said Sargeant. When developing platforms, MLS looks for platforms that allow sponsors to engage soccer fans in meaningful, authentic ways. No one understands our sport or property better than we do. They may not always take our advice, but more often than not they do. Offer activation credits. Some properties have found success by including activation budgets in sponsorship contracts. The National Hockey League includes set aside funds in sponsorship agreements. The sanctioning body started to offer the funds four years ago as part of its big event strategy that includes the NHL Winter Classic, Heritage Classic and other ownable marketing platforms. A company may have developed an activation strategy for a single event, but not the entire season. We re willing to set aside funds they can use at a later date, said David Lehanski, the NHL s group vice president of integrated sales. Other properties also have found success with activation credits. Pier 39 allocates roughly five percent to 10 percent of each rights fee to activation expenses. Sponsors can use the money to pay for staffing, premium items and promotions, said Schnitzer. Add value to the event experience. To gain the biggest bang for their buck, sponsors should create programs that enhance the spectator experience. When crafting programs, sponsors and properties should ask themselves the question: Will anyone notice if the sponsor is not there? Our goal is that fans would notice a difference if AT&T was removed from a property. We want to add value to the event experience, said Travis Dillon, vice president of activation and property management with The Marketing Arm, which helps develop strategy and execute deals for AT&T Inc. Dillon points to the AT&T Pebble Beach National Pro-Am as an example. The telco will activate the Feb event with the AT&T Digital Clubhouse, an on-site experiential program where attendees can watch live feeds of the tournament via U-verse; track the leaderboard and recharge their phones. We want to fit into the fabric of the event. Host sponsor summits. Properties can use sponsor summits to share best practices and facilitate cross-promotions. For example, Pier 39 will use this week s summit to highlight success stories and stimulate idea sharing. Some partners are super active while others aren t. We want to stimulate creativity, said Schnitzer. Sources NHL, Tel: 212/ Pier 39, Tel: 415/ IEG, LLC. ALL RIGHTS RESERVED. 3

4 Consumers spent more time consuming content on the dedicated website then previous AT&T programs and returned at a higher rate, he said. General Motors/Live Nation. In addition to providing reach beyond events, social media offers another major advantage: a low cost. For years there was a perception that brands would have to spend $2, $3 or $4 on activation for every dollar in rights fees. Those costs have significantly decreased as a result of the earned media and consumer evangelists you can receive through social media, said Russell Wallach, president of the Live Nation Network. For example, Live Nation helped General Motors Co. s Chevy Sonic ( Chevy Launches Sonic Sponsorship Campaign ) activate its sponsorship of the Dec. 13, 2012 launch party for the music giant s redesigned web site by posting photos of an on-site life-sized Chevy Sonic balloon on LiveNation.com. Attendees also distributed photos of the flying car through Facebook, Twitter, Instagram and other online channels, said Wallach. All of our fans became marketers of the car. Live Nation used geofencing technology to capture content from the concert. Similar to GPS, the technology allows companies and properties to capture content that emanates from a specific geographic area. Similarly, Skype is using geofencing technology to capture content from its sponsorship of Lady Gaga s North American tour. The Microsoft unit is posting the content on EA Sports/Major League Soccer. Major League Soccer uses proprietary events to generate social media content for sponsors. The pro soccer league in September 2012 captured content from the launch party for Electronic Arts Inc. s FIFA 13 video game. The event featured MLS athletes, musicians and other celebrities. MLS and EA Sports posted content from the event on Twitter, Facebook and other social media channels. Content is definitely hot. said Russell Sargeant, senior director of partnership marketing with Soccer United Marketing, MLS commercial arm. Sources The Coca-Cola Co., Tel: 404/ Live Nation Entertainment, Inc., Tel: 310/ Soccer United Marketing, Tel: 212/ The Marketing Arm, Tel: 214/ IEG, LLC. ALL RIGHTS RESERVED. 4

5 IEG SPONSORSHIP REPORT THE LATEST ON SPORTS, ARTS, CAUSE AND ENTERTAINMENT MARKETING JANUARY 28, CATEGORY UPDATE A CATEGORY TO WATCH: LUXURY TIMEPIECES Watch makers increase use of sponsorship to promote brand attributes and tout product functionality. As evidenced by recent deals, the time is right for sponsorship activity in the watch ( Sponsorship Watch: Luxury Timepieces ) category. Timepiece marketers have recently signed a number of new deals ranging from performing arts organizations to national and international sports properties. Recent deals include Tissot and RBS Six Nations; Rolex and the ATP; Graham and the NHL Los Angeles Kings; and Breguet and Carnegie Hall. In addition, Certina this year renewed its long-standing partnership with the Sauber Formula One team. Below, IEG SR highlights the three primary hot buttons for the watch category: Promote product positioning. Watch makers frequently use sponsorship to promote innovation and other brand attributes. For example, Certina uses its long-running Sauber partnership as a platform to support its cutting-edge technology and Swiss roots. Certina has always been strongly committed to cutting-edge technology, and that s an ideology we share, said Monisha Kaltenborn, CEO of the Sauber team, in a statement announcing the partnership. Other watch makers sponsor the arts to promote their artistic and cultural heritage. That includes Breguet, which partnered with Carnegie Hall to support its commitment to arts and culture around the world. Demonstrate product functionality. In addition to promoting brand attributes, watch makers use sponsorship to demonstrate their products in action. Tissot will activate its new three-year partnership with the RBS Six Nations Championship international rugby tournament by providing live on-screen match timing graphics to Six Nations broadcast partners IEG, LLC. ALL RIGHTS RESERVED. 5

6 The luxury Swiss watch company also will present the countdown clock on the RBS Six Nations web site and provide T-Touch Expert watches to referees. Tissot, which previously sponsored the RBS Six Nations championship in 2004 and 2005, replaces Graham, an Anglo- Swiss watch manufacturer. Develop limited-edition products. Watch companies frequently activate sports and entertainment properties with limited-edition watches. Case in point: Tissot last fall leveraged its partnership with Madison Square Garden with a line of exclusive watches. The timepieces feature the MSG logo and Tissot s status as the venue s official timepiece. Tissot is excited to continue its partnership with Madison Square Garden and to be able to help give fans a quality Swiss timepiece inspired by The World s Most Famous Arena, said Francois Thibaud, Tissot president, in a statement. Tissot sells the $675-$695 watch line at Madison Square Garden, Macy s Herald Square and Sources Sauber Motorsports AG, Tel: 41/ Tissot SA, Tel: 41/ IEG, LLC. ALL RIGHTS RESERVED. 6

7 IEG SPONSORSHIP REPORT THE LATEST ON SPORTS, ARTS, CAUSE AND ENTERTAINMENT MARKETING JANUARY 28, SELLING HOW TO LEVERAGE BRAND CAMPAIGNS TO SECURE NEW PARTNERS Rightsholders can access new sponsors and add value to existing partnerships by supporting new brand campaigns. The growing number of companies using sponsorship to support brand campaigns is creating new opportunities for sellers. Indeed, companies are increasingly using sponsorship in integrated marketing campaigns to communicate brand values in a one-to-one environment. Such is the case with Western Union, Inc. The global payments company in 2012 inked a three-year presenting sponsorship of the UEFA Europa League to support the launch of the Moving Money Better global brand campaign. We are convinced that building a brand is no longer about saying things, but doing things. We don t want to shout at people through advertising. We want to engage them in a real way and show them we walk the walk, Marc Audrit, Western Union s vice president, global brand, told IEG SR after announcing the deal. More recently, Office Depot, Inc. used its new partnership with last week s Winter X Games Aspen to bring its Depot Time marketing campaign to life. The retailer activated the tie by showcasing the stopwatch used in its new TV ads on the ESPN schedule board and other on-site locations. The retailer which last year dropped its long-running NASCAR program also used the tie to introduce its new concept stores to young influencers. That included the Office Depot Recharge Lounge and a dedicated Web site that featured photos, promotions and other X Games content. The X Games partnership is one example of many ways that Office Depot is reaching a younger crowd this year, said Bob Moore, Office Depot s executive vice president and chief marketing and merchandising officer. X Games is the perfect partnership to show off the new, fresh side of Office Depot. Sales Tips: How To Leverage New Brand Campaigns While companies are increasingly using sponsorship to support new brand campaigns, it can be a challenge to identify impending initiatives IEG, LLC. ALL RIGHTS RESERVED. 7

8 Many times you don t know about a new campaign until it s launched. Once you read about it in Advertising Age, chances are they have already developed an activation plan, said Jon Podany, CMO of the LPGA. Below, three tips on how properties can identify and leverage new campaigns: Watch for agency reviews. Companies that have launched agency reviews frequently represent prime sponsorship targets, said Podany. Agency reviews often lead to new brand campaigns. Companies currently reviewing media-buying and planning agencies include American Honda Motor Co., Bacardi Ltd. and Walgreen Co. Leverage agency contacts. Properties should network with agency contacts to learn about new brand campaigns and other upcoming initiatives. They can then use that information to craft a tailored sponsorship package that supports the new brand campaign. Help support existing partners. In addition to prospecting new sponsors, sellers should help existing partners support new brand initiatives. Bank of the West last year leveraged a handful of existing ties to support its new Go West brand campaign. The bank launched the initiative at the Bank of the West Classic WTA tournament with an on-site text-message seat upgrade promotion that offered a seat located on the west side of the tennis venue. In addition, BMO Financial Group activated the Calgary Stampede, NHL Toronto Maple Leafs and other properties with the Power of Blue program to support a brand campaign that emphasizes customer service. The banking giant brought the campaign to life by offering customers preferential parking, special entrances and other perks at sponsored properties. Sources Office Depot, Inc., Tel: 561/ The Western Union Co., Tel: 720/ LPGA, Tel: 386/ IEG, LLC. ALL RIGHTS RESERVED. 8

9 ABOUT IEG IEG leads the way in sponsorship solutions. With over 30 years providing insights, evaluation, and guidance, our teams bring unparalleled perspective and proven methodology to every challenge. We partner with top brands and properties to create fresh strategies, evaluate opportunities and maximize results. Our clients redefine what s possible, exceed expectations and achieve lasting impact. A unit of WPP s GroupM, IEG is connected to specialty sibling communications companies in media, digital and activation. GroupM is the leading global media investment management operation that also serves as parent company to WPP media agencies including Maxus, MEC, MediaCom, and Mindshare. INSIGHTS EVALUATION GUIDANCE IEG LEADS THE WAY IN SPONSORSHIP ANALYSIS, INSIGHT, VALUATION & MEASUREMENT For more information about IEG and the sponsorship industry, please visit or call 800/ (outside the U.S. and Canada, 312/ ). WWW. SPONSORSHIP.COM 2013 IEG, LLC. ALL RIGHTS RESERVED. 9