“show me the money!”: sport, leisure, and tourism marketing mktg.4320 fall 2008 ©detlev zwick,...
TRANSCRIPT
““Show me the Money!”: Sport, Show me the Money!”: Sport, Leisure, and Tourism Leisure, and Tourism
MarketingMarketing
MKTG.4320MKTG.4320
Fall 2008Fall 2008
©©Detlev Zwick, Ph.D.Detlev Zwick, Ph.D.
Attention EconomyAttention Economy
The Beckham EffectThe Beckham Effect
The CostThe Cost
$250m for 10 years$250m for 10 years Base salary of $6.5mBase salary of $6.5m Cut on merchandise, gate receipts, Cut on merchandise, gate receipts,
sponsorship revenuessponsorship revenues
The Payback?The Payback?
The Gate:The Gate:
General admission rises from $15 to $25General admission rises from $15 to $25
Sideline seats from $50 to $75Sideline seats from $50 to $75
Sideline Season tickets went for $4000 a Sideline Season tickets went for $4000 a piece and sold out mere 3 weeks after the piece and sold out mere 3 weeks after the announcementsannouncements
Ticket revenue increase 2006-2007: from Ticket revenue increase 2006-2007: from 6 to 10 million6 to 10 million
The Sponsorship Ticket:The Sponsorship Ticket:
From $3.5m to about $9m a year.From $3.5m to about $9m a year.
Herbalife with a $20m/5 year deal for Herbalife with a $20m/5 year deal for uniformuniform
The Merchandise Ticket:The Merchandise Ticket:
Even before playing in a single Major Soccer Even before playing in a single Major Soccer League game, more than 300,000 official LA League game, more than 300,000 official LA Galaxy jerseys were sold. At $79.99 a pop, Galaxy jerseys were sold. At $79.99 a pop, those initial sales totaled almost $24 million. those initial sales totaled almost $24 million.
Beckham’s track record for merchandise:Beckham’s track record for merchandise:During the four years that Beckham played for During the four years that Beckham played for Real Madrid, the Spanish club more than doubled Real Madrid, the Spanish club more than doubled soccer merchandise sales to US$600 million. soccer merchandise sales to US$600 million. One million Beckham-Real Madrid shirts were sold One million Beckham-Real Madrid shirts were sold within the first 6 months of Beckham’s arrival within the first 6 months of Beckham’s arrival (Source: Forbes). (Source: Forbes).
In sum:In sum:
LA Galaxy generated about $23m in LA Galaxy generated about $23m in additional revenue from the Beckham additional revenue from the Beckham effect. A good deal despite a $6.5m effect. A good deal despite a $6.5m annual salary!annual salary!
How do you explain the Beckham How do you explain the Beckham Economics?Economics?
The Olympics Games:The Olympics Games:
Center of AttentionCenter of Attention
Who are the ‘Top 12 Olympic Who are the ‘Top 12 Olympic Sponsors’ (“Olympic Partners”)?Sponsors’ (“Olympic Partners”)?Atos OriginAtos OriginCoca-ColaCoca-ColaGeneral ElectricGeneral ElectricManulifeManulifeJohnson & JohnsonJohnson & JohnsonKodakKodakLenovoLenovoMcDonald’sMcDonald’sOmega (Swatch Group)Omega (Swatch Group)PanasonicPanasonicSamsungSamsungVisa Visa
$70 million for Coke $70 million for Coke
About $5 to $15 million sponsoring the About $5 to $15 million sponsoring the torch relaytorch relay
All together about $900 million.All together about $900 million.
Sports Sponsorship: Sports Sponsorship: Perspectives, Motives, Perspectives, Motives,
ObjectivesObjectives
What is Sports Sponsorship?What is Sports Sponsorship?
Def.: SponsorshipDef.: Sponsorship When a company pays a cash and/or in-kind fee to a property When a company pays a cash and/or in-kind fee to a property
in return for access to the exploitable commercial potential in return for access to the exploitable commercial potential associated with that propertyassociated with that property
Part of Marketing Part of Marketing through through Sport PropertiesSport Properties
Part of communication strategy Part of communication strategy throughthrough Sport Properties Sport Properties Globally: $38 billion spent on corporate sport marketingGlobally: $38 billion spent on corporate sport marketing 12% Projected Increase in 2007(North American Companies)12% Projected Increase in 2007(North American Companies)
Outpacing the estimated <4% growth in sales promotion and Outpacing the estimated <4% growth in sales promotion and advertising advertising
Why Sponsorship?Why Sponsorship?
Seller Perspective Seller Perspective Secure broadcast and advertising exposureSecure broadcast and advertising exposure Creatively bundle tickets and advertising Creatively bundle tickets and advertising Enhanced patron experiences Enhanced patron experiences New source of revenue to offset rising costsNew source of revenue to offset rising costs
Pepsi Ten Buck Tuesdays
Why Sponsorship?Why Sponsorship?
Buyer perspectiveBuyer perspective Unique positioning opportunity Unique positioning opportunity Cutting through the clutterCutting through the clutter Emotional connection with consumersEmotional connection with consumers
RelevantRelevant
ExperientialExperiential Sport appeals to diverse consumer groupsSport appeals to diverse consumer groups
Business-to-Consumer (B-2-C)Business-to-Consumer (B-2-C)
Business-to-Business (B-2-B)Business-to-Business (B-2-B)
Optimally, sponsorship represents a promotion & Optimally, sponsorship represents a promotion & sales solution!sales solution!
Sponsorship Philosophy & Sponsorship Philosophy & PolicyPolicy
Results OrientationResults Orientation Return-on-investment (ROI)Return-on-investment (ROI) Return-on-objective (ROO)Return-on-objective (ROO)
Servicing Servicing Less is MoreLess is More ActivationActivation
Embedded activationEmbedded activation
Added activationAdded activation “…“…ROI will almost always go up when the property focuses on activation ROI will almost always go up when the property focuses on activation
because activation is the substance of the relationship.”because activation is the substance of the relationship.” Tony Shiller, Paragon Tony Shiller, Paragon MarketingMarketing
Most Important Sponsorship Most Important Sponsorship ObjectivesObjectives
(IEG Sponsor Report, March 12,(IEG Sponsor Report, March 12, 2007)2007)
The FedEx Sponsorship Portfolio The FedEx Sponsorship Portfolio ModelModel
LeadershipR
evenu
eH
omet
own
Key Targets
Hospitality
Consists of five distinct categories of corporate marketing objectives
Creatively Financing Creatively Financing SponsorshipSponsorship
Multiple year agreements w/escalating rights fees Multiple year agreements w/escalating rights fees Discount fee in exchange for promotional Discount fee in exchange for promotional
commitment commitment Co-op arrangement w/vendor, supplier, or brand Co-op arrangement w/vendor, supplier, or brand Referral rebates Referral rebates
Back
Sponsorship ActivationSponsorship Activation
Generating Media Traffic & AwarenessGenerating Media Traffic & AwarenessHospitalityHospitalityCreating On-site Programs Creating On-site Programs One-on-one/HostingOne-on-one/Hosting SamplingSampling
Branded contentBranded contentRetail Campaign ExecutionRetail Campaign ExecutionDevising Internal Sales Tool(s)Devising Internal Sales Tool(s)
Optimizing Sport SponsorshipOptimizing Sport Sponsorship
Purpose drivenPurpose driven
Mutual benefitMutual benefit
Start small…think bigStart small…think big
Identify “hidden treasures”Identify “hidden treasures”
Back to the “Olympic Partners”Back to the “Olympic Partners”
Atos OriginAtos OriginCoca-ColaCoca-ColaGeneral ElectricGeneral ElectricManulifeManulifeJohnson & JohnsonJohnson & JohnsonKodakKodakLenovoLenovoMcDonald’sMcDonald’sOmega (Swatch Group)Omega (Swatch Group)PanasonicPanasonicSamsungSamsungVisa Visa
In your groups:In your groups:
Pick on and identify at least one form of Pick on and identify at least one form of activation this company did with the activation this company did with the Olympics.Olympics.
Practical ChallengesPractical Challenges
Identifying SponsorIdentifying SponsorProspectsProspects
Look For/Demonstrate Audience Look For/Demonstrate Audience Fit/RelevancyFit/Relevancy Audience ResearchAudience Research DemographicsDemographics PsychographicsPsychographics Sponsor Recognition/RecallSponsor Recognition/Recall Loyalty To/Attitude Toward SponsorsLoyalty To/Attitude Toward Sponsors Loyalty To/Attitude Toward PropertyLoyalty To/Attitude Toward Property
Determine Who To ContactDetermine Who To Contact
Sponsorship/Sports Marketing ManagerSponsorship/Sports Marketing Manager
Marketing/Advertising ManagerMarketing/Advertising Manager
Public/Community Relations ManagerPublic/Community Relations Manager
Brand Manager/Business Unit ManagerBrand Manager/Business Unit Manager
Owner/PresidentOwner/President
Account Manager at Sponsor’s AgencyAccount Manager at Sponsor’s Agency
Foundation/Corporate Giving ManagerFoundation/Corporate Giving Manager
Be Street Smart In Generating Be Street Smart In Generating Leads to Sell SponsorshipLeads to Sell Sponsorship
New Product LaunchesNew Product Launches
Classifieds: Who’s Hiring?Classifieds: Who’s Hiring?
Intros by Current SponsorsIntros by Current Sponsors
Marketing/Business Events and Marketing/Business Events and PublicationsPublications
Mine Entire Category At OnceMine Entire Category At Once
Length of decision-making process does Length of decision-making process does not allow for approaching companies one not allow for approaching companies one at a timeat a time
Inform prospects that you have also Inform prospects that you have also contacted their competitorscontacted their competitors
Sponsorship Fact:Sponsorship Fact:
Your Profit Is In Your RenewalYour Profit Is In Your Renewal
Sponsorship Is About More Than Sponsorship Is About More Than BenefitsBenefits
Sponsors Renew Based On ServicingSponsors Renew Based On Servicing
Key Takeaways To Focus OnKey Takeaways To Focus On
Provide turnkey activation platformsProvide turnkey activation platforms
Define success in advanceDefine success in advance
Educate your audienceEducate your audience
Incent activationIncent activation
Facilitate cross-promotionsFacilitate cross-promotions
Post-Fulfillment ReportsPost-Fulfillment Reports
After the sponsorship is before the After the sponsorship is before the sponsorship!sponsorship!
Must be an ongoing process.Must be an ongoing process.
Institutionalize regular meetings with Institutionalize regular meetings with sponsor to discuss recent research and sponsor to discuss recent research and future services.future services.
Best renewal tool at your disposal.Best renewal tool at your disposal.