Chapter 15 Sport Sponsorship

Introduction What is sponsorship? Cash and/or in-kind fee paid to a property in return for access to the exploitable commercial potential associated with that property One of most prolific forms of sport marketing Sponsorship fees often exceed $10,000,000 per year and are structured as multiyear deals Provides a company with association, value, exposure, and opportunities to leverage their affiliation to achieve marketing objectives

History Increasing commercialization of sports has led to tremendous growth in sport sponsorship. $11.3 billion spent on sport sponsorships in 2009 1984 Los Angeles Olympic Games Watershed year in the evolution of sport sponsorship (President Peter Ueberroth) Ueberroth became commissioner of MLB Raised sponsorship bar for major professional sport leagues Less-is-more philosophy 2-2-1 Plan

History: Reasons for Sponsorship Growth Increased media interest in sports. Companies can “break through the clutter” of traditional advertising. Sponsorship can reach its target consumer through consumers’ lifestyles. © Gheorghe Roman/ShutterStock, Inc.

History: Reasons for Sponsorship Growth (cont.) Enable corporate marketers to reach specific segments, such as the following: Heavy users, shareholders, and investors; or specific groups that have similar demographics, psychographics, or geographic commonalities Today sport sponsorship has become a discipline involving serious research, large investments, and strategic planning

Sales Promotion: In-Venue Promotion Increase the amount of “value-added” benefits that teams provide their paying customers Traditional giveaways: Sponsor underwrites the cost of a “premium” item in exchange for its logo on the item and advertising support that prepromotes the event Continuity promotions: Require fans to attend multiple games to obtain giveaways Success of promotion varies widely based on time of season, teams’ win–loss record, day of promotion, opponent, and perceived quality of the item Incremental increase in fans

Sales Promotion: In-Store Promotion Companies often leverage sponsorships at retail level Premiums Merchandise offered free or at a reduced price as an inducement to buy a different item or items Contests/sweepstakes Sampling One of the most effective sales promotion tools to induce consumers to try a product Point-of-sale or point-of-purchase materials Used by marketers to attract consumers’ attention to their product/service and their promotional campaign at the retail level Coupons

Cross-Promotion Joining together of two or more companies to capitalize on a sponsorship is becoming increasingly popular and effective Creates more “bang for their buck” under the premise that two sponsors working together can generate more interest and awareness among targeted sport consumers Used to gain exposure in nontraditional and unexpected retail settings It has become increasingly important to think outside the box as to how sponsors can be joined to increase the overall effectiveness of sponsorship investments

Sponsorship Packages: Sponsor Benefits Exclusivity in one’s product or service category Official designations Leagues and teams offer multiple designations tied to the sport and to the sponsor’s product or service category Rights to utilize the sport organization’s intellectual property in advertising and promotion campaigns Advertising support In-stadium signage and promotional announcements Access to tickets Potential new business through access and opportunity

Sponsorship Packages: League/Team Benefits Rights fee Multiyear commitment Advertising commitment Commitment to team-oriented promotions

Sponsorship Platforms Governing body sponsorship Entails securing “official sponsor” status Team sponsorship Appropriate platform for local/regional companies or companies with smaller marketing budgets Athlete sponsorship Involves some type of endorsement of the sponsor’s product or service F

Sponsorship Platforms Media channel sponsorship Companies that purchase advertising or programming during sport-related broadcasts Facility sponsorship Enables companies to tie directly to the event atmosphere Event sponsorship Tie directly to event atmosphere Sport-specific sponsorship Enables company to direct its sponsorship efforts to a specific sport F

Evaluating Sport Sponsorship Vital due to growing financial commitments necessary to effectively activate sport sponsorship programs No one exact formula for measuring ROI For ROI, companies use the following: Internal feedback, sales/promotion bounceback measures, print media exposure, television media exposure, primary consumer research, dealer/trade response, and syndicated consumer research

Evaluating Sport Sponsorship Difficult to determine precisely how much incremental sales are directly attributable to a specific sponsorship program. Many companies conduct periodic consumer surveys to determine ROI. Companies often hire professional sport research firms to perform media evaluation research that examines corporate sponsorship and brand exposure through television and print media coverage of sports events.

Sponsorship Agencies Many companies engaged in sport sponsorship outsource the negotiation and/or implementation of their sponsorship programs Rely on agencies because they do not possess the expertise, the experience, or the resources to negotiate and implement sponsorship programs

Current Issues Ethnic marketing Sport organizations have begun to adopt strategies to target ethnic groups more effectively. Overcommercialization Do consumers have an emotional threshold for accepting a constant bombardment of corporate names, logos, and messages? Gambling Sport organizations have embraced gambling as a growing source of sponsorship revenue. © Ablestock