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Winning campaigns: Sports marketing in the USA
By
John G. Rodwan, Jr.
Reprinted
from the June 2005 issue of Soft Drinks International (softdrinksinternational.com)
- Click
here for a PDF version of this article
Sports
fans are loyal to their favorite teams and athletes, and beverage
companies hope to tap into that loyalty and extend it to their brands
through sports marketing. The variety of sport-related marketing activities
allows for initiatives at virtually any budgetary level.
In the
United States, beverages geared specifically towards use in connection
with physical activity, such as sports beverages, as well as those
more suited to consumption by spectators, such as carbonated soft
drinks (CSDs), are marketed through sports imagery in advertising.
Sponsorships of leagues, teams, events and individual athletes are
also components of sports marketing programs. To some extent, a brand
name emblazoned across the hood of a racing car, on the canvas of
a boxing ring, or on the wall aside a field, court or rink is little
different from traditional outdoor advertising: it simply gets name
and associated graphic before the public. However, sports-marketing
campaigns also form intangible associations between brands and the
world of sports.
Sports
beverages are the most obvious candidate for a sports marketing campaign,
and the most likely to run one focusing on products' performance-enhancing
properties. For example, Gatorade's entire brand identity is predicated
on its connections with sports and the beverage's purported aid to
active individuals. And the brand's rapid growth over the years may
be the best evidence of the possibilities of success from a well executed
sport-based effort. Gatorade has grown from having wholesale dollar
sales of approximately $715 million in 1993 to more than $2.2 billion
10 years later. In 2003, its volume, which exceeded 470 million cases,
accounted for more than 80% of the beverage category that it pioneered,
and it continues to grow rapidly.
CSDs
are not likely to highlight any functional properties in advertising
campaigns, but are still frequently subjects of aggressive sports
marketing drives. CSD sports marketing is not dramatically different
from conventional CSD marketing: it seeks to reach its audience through
prominent advertising that uses celebrities. Whereas sports beverages
may use known and unknown athletes to intimate isotonics' benefits
to active consumers, CSDs are likely to engage highly recognizable
athletes, much as they use singers or other celebrities of the moment.
Can
reach out and resonate
Whatever
the difference in strategies used, the aims remain the same: to reach
a large audience through marketing connected to high-profile events
or broadcasts, to reach specific consumers or regional markets through
cable television broadcasts or certain sorts of sponsorships, to achieve
and protect sales opportunities, to create brand identities and to
increase visibility in general. The prominence of sports in American
culture means a well designed sport marketing endeavor can reach,
and resonate with, a large audience.
Yet there's
more to sports marketing than airing television ads with athlete endorsers.
Indeed, the high price of air time is one reason marketers sought
alternative means of communicating with consumers. Major beverage
companies remain committed to advertising during high profile sporting
events like the Super Bowl, but sponsorships can complement costly
television advertising or function as a sort of alternative to it.
While
television ads are aimed at viewers at home (or wherever they happen
to tune in), sponsorship activities often try to reach sports spectators
where the game is played - both in terms of communication and actual
libation. Sponsorships of particular teams, leagues or events may
not only involve space for advertising; they may also involve pouring
rights that exclude competitors' products from being promoted or served.
Such
sponsorships can become features of point-of-sale initiatives and
regional marketing activities. For example, in addition to being the
official sponsor of a particular league, companies may become sponsors
of individual teams, which may allow them to put team logos on packages.
Such activities can also serve as the foundation for local-market
endeavors that may include ticket giveaways or other prizes. By such
means, companies gain not only associations with particular sports
but also a sort of home-field advantage by connecting with "my" team.
There's
a sort of hierarchy of sponsorships. While being the "official" or
"exclusive" sponsors may be the most prestigious (and expensive) route
to take, it is not the only way to reach sports fans via sponsorships.
Being a "title" sponsor, as the very name indicates, means the sponsor's
corporate or brand name becomes part of an event's moniker (as in
the Budweiser Irish Derby). All the variations can be observed at
play with both the most popular sports as well as more specialized
ones, as well as with individual athletes.
A recent
trend in sports marketing is the "presenting" sponsorship. "While
many marketers have been involved in one-time sponsorships such as
college-football bowl games, or have purchased stadium- or arena-naming
rights, presenting sponsorships have offered a unique twist on an
old game: more for less," Advertising Age reports. For a
fraction of the cost of a 30-second Super Bowl ad, presenting sponsors
can have their logo or brand name planted on scoreboards and signs
throughout arenas and on ticket stubs, programs and press notes. Deals
may also include mentions in teams TV, radio, print and outdoor advertising.
Presenting sponsorships can also include tickets, which sponsors may
give away to clients or consumers or to charity groups.
Challenges
to consider
Scandals
involving sports, teams or players can cast a dark shadow over even
the best planned sports-marketing program. Without question, endorsement
deals and sponsorships leave companies vulnerable to embarrassment.
As Steven Miller, a former director of sports marketing for Nike,
once observed to a reporter, "Real people get hurt, real people retire,
real people don't perform, they lie and cheat, they cheat on their
wives, all kinds of things." Sponsors can become associated with sports
tainted with doping scandals (baseball, Olympic track and field, the
Tour de France, etc.), athletes taking swings at audience members
(basketball) or sports with a dicey reputation for a variety of reasons
(boxing).
Although
scandals have not dissuaded beverage companies from associating with
the sporting world, they have affected advertisers' and sponsors'
approaches. One response has been to add strict morals clauses to
contracts with athletes. Another has been to opt for presenting sponsorships
rather than endorsements of individual athletes.
Opportunities
presented
A well
conceived endorsement deal with an athlete can help build a brand's
identity through association with a celebrated, attractive personality
with a proven track record who can communicate and embody a brand's
values. Such deals can involve long-term agreements with high-level
celebrities but can also be effective with less prominent individuals
in suitably tailored and targeted efforts. In addition to reaching
a large audience through advertising and developing a desired associations
with celebrity athletes, sports marketing strategies can also be used
in conjunction with other sorts of initiatives. Sports marketing may
be a component of efforts to target particular ethnic groups. These
generally focus on specific markets, cable networks (such as Spanish-language
Telemundo) or particular sporting events.
The flexibility
of sports marketing allows big and small marketers to participate
in America's various popular pastimes, whether through multi-year
endorsement deals and record-high ad spending or through more modest
sponsorships or campaigns using regional or local media. Sports marketing
can also be a means to use a familiar brand name in conjunction with
others brands in a company's portfolio, as CSD marketers have done
to promote bottled water and sports drinks together. Also, sports
facilities offer large venues holding captive audiences through official
sponsorships and exclusive pouring rights arrangements.
Another
consideration concerning television advertising, which has implications
for sports marketing, is the increasing popularity of digital video
recorders (DVRs) like TiVo that allow viewers to record programs and
then to skip the commercials when they watch the shows. As the practice
grows more common, network television could face a crisis, since advertisers
are not going to want to pay for ads no one watches. Television watchers
in the U.S. currently use approximately 6.5 million DVRs and that
number could increase tenfold over the next five years, according
to a report in the Los Angeles Times. Already, at least 70%
of DVR users use them in order to avoid watching commercials.
Already,
sports programming is seen as a sensible investment for advertisers,
and will remain so, since fans prefer to watch games and events live,
not later on, when the outcome might be known. Ads on ring posts or
alongside rings, fields or courts, are visible during the action and
not just during the commercial break. While product placement in television
shows and movies is a route marketers can take to reach commercial
avoiders, negative reviews or waning viewer interest in particular
programs can lessen the effectiveness of such methods. However, sports
broadcasts are proven ratings winners, and such programming, as well
as other sporting events, can be components of effective marketing
efforts for the beverage industry.
John
G. Rodwan, Jr., is editorial director of New York-based Beverage Marketing
Corporation and author of the recently published report Sports
Marketing and the Beverage Industry. Contact Charlene
Salito, Beverage Marketing Corporation, Tel: 212-688-7640 ext. 1962.
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