Transcript Sponsorship Foundations

“Show me the Money!”: Sport,
Leisure, and Tourism
Marketing
MKTG.4320
Fall 2008
©Detlev Zwick, Ph.D.
Attention Economy
The Beckham Effect
The Cost
$250m for 10 years
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Base salary of $6.5m
Cut on merchandise, gate receipts,
sponsorship revenues
The Payback?
The Gate:
General admission rises from $15 to $25
Sideline seats from $50 to $75
Sideline Season tickets went for $4000 a
piece and sold out mere 3 weeks after the
announcements
Ticket revenue increase 2006-2007: from
6 to 10 million
The Sponsorship Ticket:
From $3.5m to about $9m a year.
Herbalife with a $20m/5 year deal for
uniform
The Merchandise Ticket:
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Even before playing in a single Major Soccer
League game, more than 300,000 official LA
Galaxy jerseys were sold. At $79.99 a pop,
those initial sales totaled almost $24 million.
Beckham’s track record for merchandise:
During the four years that Beckham played for
Real Madrid, the Spanish club more than doubled
soccer merchandise sales to US$600 million.
One million Beckham-Real Madrid shirts were sold
within the first 6 months of Beckham’s arrival
(Source: Forbes).
In sum:
LA Galaxy generated about $23m in
additional revenue from the Beckham
effect. A good deal despite a $6.5m annual
salary!
How do you explain the Beckham
Economics?
The Olympics Games:
Center of Attention
Who are the ‘Top 12 Olympic
Sponsors’ (“Olympic Partners”)?
Atos Origin
Coca-Cola
General Electric
Manulife
Johnson & Johnson
Kodak
Lenovo
McDonald’s
Omega (Swatch Group)
Panasonic
Samsung
Visa
$70 million for Coke
About $5 to $15 million sponsoring the
torch relay
All together about $900 million.
Sports Sponsorship:
Perspectives, Motives,
Objectives
What is Sports Sponsorship?
Def.: Sponsorship
 When a company pays a cash and/or in-kind fee to a property
in return for access to the exploitable commercial potential
associated with that property
Part of Marketing through Sport Properties
Part of communication strategy through Sport Properties
 Globally: $38 billion spent on corporate sport marketing
 12% Projected Increase in 2007(North American Companies)
Outpacing the estimated <4% growth in sales promotion and
advertising
Why Sponsorship?
Seller Perspective
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Secure broadcast and advertising exposure
Creatively bundle tickets and advertising
Enhanced patron experiences
New source of revenue to offset rising costs
Pepsi Ten Buck Tuesdays
Why Sponsorship?
Buyer perspective
 Unique positioning opportunity
 Cutting through the clutter
 Emotional connection with consumers
Relevant
Experiential
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Sport appeals to diverse consumer groups
Business-to-Consumer (B-2-C)
Business-to-Business (B-2-B)
Optimally, sponsorship represents a promotion &
sales solution!
Sponsorship Philosophy &
Policy
Results Orientation
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Return-on-investment (ROI)
Return-on-objective (ROO)
Servicing
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Less is More
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Activation
Embedded activation
Added activation
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“…ROI will almost always go up when the property focuses on activation
because activation is the substance of the relationship.” Tony Shiller, Paragon
Marketing
Most Important Sponsorship
Objectives
(IEG Sponsor Report, March 12, 2007)
The FedEx Sponsorship Portfolio
Model
Consists of five distinct categories of
corporate marketing objectives
Revenue
Hometown
Key Targets
Leadership
Creatively Financing
Sponsorship
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Multiple year agreements w/escalating rights fees
Discount fee in exchange for promotional
commitment
Co-op arrangement w/vendor, supplier, or brand
Referral rebates
Back
Sponsorship Activation
Generating Media Traffic & Awareness
Hospitality
Creating On-site Programs
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One-on-one/Hosting
Sampling
Branded content
Retail Campaign Execution
Devising Internal Sales Tool(s)
Optimizing Sport Sponsorship
Purpose driven
Mutual benefit
Start small…think big
Identify “hidden treasures”
Back to the “Olympic Partners”
Atos Origin
Coca-Cola
General Electric
Manulife
Johnson & Johnson
Kodak
Lenovo
McDonald’s
Omega (Swatch Group)
Panasonic
Samsung
Visa
In your groups:
Pick on and identify at least one form of
activation this company did with the
Olympics.
Practical Challenges
Identifying Sponsor
Prospects
Look For/Demonstrate Audience
Fit/Relevancy
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Audience Research
Demographics
Psychographics
Sponsor Recognition/Recall
Loyalty To/Attitude Toward Sponsors
Loyalty To/Attitude Toward Property
Determine Who To Contact
Sponsorship/Sports Marketing Manager
Marketing/Advertising Manager
Public/Community Relations Manager
Brand Manager/Business Unit Manager
Owner/President
Account Manager at Sponsor’s Agency
Foundation/Corporate Giving Manager
Be Street Smart In Generating
Leads to Sell Sponsorship
New Product Launches
Classifieds: Who’s Hiring?
Intros by Current Sponsors
Marketing/Business Events and
Publications
Mine Entire Category At Once
Length of decision-making process does
not allow for approaching companies one
at a time
Inform prospects that you have also
contacted their competitors
Sponsorship Fact:
Your Profit Is In Your Renewal
Sponsorship Is About More Than
Benefits
Sponsors Renew Based On Servicing
Key Takeaways To Focus On
Provide turnkey activation platforms
Define success in advance
Educate your audience
Incent activation
Facilitate cross-promotions
Post-Fulfillment Reports
After the sponsorship is before the
sponsorship!
Must be an ongoing process.
Institutionalize regular meetings with
sponsor to discuss recent research and
future services.
Best renewal tool at your disposal.