Natural Evolution of Advertising Hits Golf

ProBagAds might be changing how player sponsorship and advertising for golfers work. SBJ reports the company has released a golf bag with a built-in H-D, weatherproof digital display that can show advertisements, similar to the outdoor digital billboards that are growing in popularity. Tour player Michael Allen debuted the bag in August.

At a time when sports sponsorships have come under fire, hitting golf particularly hard, and with technology innovation creating new, potentially valuable inventory this product is a natural fit. For those who say digital advertising on a golf bag would mar the traditions of the game should go look at what sponsorship has already activated, look at the Fed Ex Cup format, and the purses that golfers earn at each tournament. In the end, if golfers want to earn the big paychecks and support each other, the golf community needs to be open to these ideas.

Don’t expect to see Tiger or Phil walking this course with these bags anytime soon. They don’t need to, since they garner so many top notch sponsorships. It’s targeted to the middle and lower tier players, those scrapping through with less fanfare. Even if those player’s previously had sponsorships, those sponsors have to question the ROI of paying individuals with less media exposure and less probability of contending for wins. This brings those players back in play – and creates potential opportunities for tournaments and the Tour itself to boost revenue.

I envision a formula similar to online ad networks emerging, where ProBagAds (or an agency representing them) will sign players on to use the bags for a percent of revenue generated from their bag. This incentivizes and rewards good play, since golfers who make the cut have four rounds of inventory instead of two, plus national television exposure on the weekend. ProBagAds can find a way to price inventory different for players in contention receiving more media exposure on the weekend, and subsequently pass through the additional revenue to those players.

On the sponsor side, ProBagAds can then go sell a network of inventory across many players to the sponsors. This mitigates the risk of sponsoring an individual, expands the reach and exposure of a golf-based campaign, and reduces the cost of entry by sharing it across many advertisers. Further, the digital component offers space for more compelling creative, calls to action, and better recognition overall thanks to the clarity of the screen. Inventory is probably best sold on a time basis, similar to TV.

While more complicated, tournaments and the PGA Tour could potentially get a stake in the process by signing up players without other sponsorships and offering some form of compensation. Then they could sell advertising or create more value for current sponsors, and use that to help underwrite the growing purses that have put some tournaments at risk.

Outdoor digital advertising works, and works well. The economics are sounds – the screen only costs $2500-$4000 to install, which the product will easily make it back in short order. It’s a great way for brands to get involved with the sport without committing big money, a way for players not earning millions to supplement income, and golf properties to earn incremental revenue. The questions remains though, who will play the role in sales and representation as the product evolves.

Nets Ticket Deal Defies Marketing Principles

Below is an adaption of the previous post with edits and more structured arguments:

Nobody will ever accuse Nets CEO Brett Yormark of lacking creativity or innovation. However, the recently announced “Match-Up” 10-game ticket plan raised eyebrows and drew some criticism. The plan bundles arguably the ten biggest draws on the Nets schedule – Lakers, Celtics, Cavs twice, Magic, Spurs, Heat, among others – plus, fans receive five reversible jerseys with Nets player on one side and an opposing superstar on the other.

Team marketing veterans will question marketing other team’s players through a ticket promotion because it defies building brand loyalty and not using marquee games to increase sales for less attractive matchups, for instance forcing fans to buy Indiana and Sacramento tickets in order to see Lebron’s Cavs.

Before overtly criticizing the Nets on these points, teams must come to accept and act on the following facts: 1) success is the top driver of sustainable attendance, not ticket deals; 2) marketing’s top fear should be price cuts (applies to any business); 3) fans will buy jerseys of top players, often regardless of what team they root for. Now, look at New Jersey’s situation, who like many teams is rebuilding. Off two straight seasons out of the playoffs, it traded its marquee superstar in Vince Carter (though Devin Harris is a rising star), and have all but deserted its current fans with the planned move to Brooklyn. Further, they play across the river from Madison Square Garden, in the worst NBA arena. Few jobs could be tougher than selling Nets tickets, especially in the current economy.

Given these circumstances, why not market some of the teams and superstars the Nets play to get fans out to the arena. The annual list of top jersey sellers indicate fans value certain individuals, so the Nets are leveraging that to add value to potential customers. In fact, the team improved its own marketing by attaching a Nets jersey on the reverse side, rather than having fans go to the NBA Store and just buy the Kobe jersey with no Nets branding.

Packaging the ten best games into the same package is another way the Nets differentiated the offer. Teams have trained fans to expect the Cavs and Lakers games tied to Charlotte, Minnesota, Memphis, and the rest of the NBA Lottery. It does not excite fans, and they face a tough decision deciding whether to buy that package. The Nets eliminated any question about the value – every game in this deal has an attraction, so fans feel like they are getting a deal, rather than judging if one ticket to see Kobe is worth buying four games I do not care about. Ticket offers have become a dime a dozen, but this package rises above the clutter, and gives fans that “wow” moment. By combining the best teams with the most sought after jerseys, the Nets added value for customers and increased the fan’s willingness to pay for the offer. This approach should boost sales above what teams typically see for ticket deals.

Further, the Nets did not slash prices by bundling ten games they are selling quarter-season ticket packages at or near full price, a quick way to boost your full-season equivalents. Arguably, the team will net more revenue than had they separated these games, paired them with less attractive opponents that drive fans away, and been forced to cut prices later on.

Teams need to accept reality, as the Nets have, that fans want to see Kobe and Lebron and want to buy their jerseys, and some fans only want to see the NBA stars, not a watered down package of lottery teams. Rather than continue to ignore these facts, teams need to find ways to capitalize on it, earn brand favorability, maintain a sustainable business, and be ready to maximize profits when your team is on the short list of NBA elite. Each team holds a monopoly or duopoly in its market, so jointly promoting your team and an opponent will not lose that fan in the future. For all those who criticize the Nets, I will place my bets on their average ticket price and overall attendance for those ten games, the true measures of success.

Nets Ticket Deal: Inappropriate or Innovative?

The Nets set off a buzz around NBA and sports marketing circles last week when they released the Match-Up ticket plan – 10 games against the NBA’s biggest attractions and 5 reversible jerseys with Nets player on one side and opposing superstar on the other side. Traditionalists didn’t know where to start, with promoting opposing teams players or attaching all the big games to the same ticket plan instead of forcing fans to buy the unsellable games in order to see Lebron. Brett Yormark broke basic ticket sales and marketing rules NBA teams have followed for years in one announcement.

Nobody has ever accused the Nets or their CEO for lack of creativity and innovation, but that only proves even the best salesmen can’t fill the arena with a bad team and a bad arena. That said, this deal makes sense for the team. Before addressing the potential negatives, some positives. Immediate awareness of the ticket plan with a splashy, unique offering, so everyone knows it exists. It’s generated interest. Though not scientific and not a large sample, I’ve heard numerous people say, “Wow, I’m thinking about buying that.” For how many ticket plans, and ticket price cuts scroll through, rarely does it actually elicit excitement – this one has.

On the flip side, the Nets are promoting other team’s players, not the best way of marketing your own team. Before digging in, keep two important points in mind that have proven themselves over time: 1) team success drives sustainable attendance, not ticket deals; 2) marketing’s top fear is cutting prices (applies to any business). New Jersey is coming off two straight seasons out of the playoffs, traded away its marquee superstar in Vince Carter (though arguably Devin Harris is a better player now), and have all but deserted its current fans by threatening to move to Brooklyn. Oh yeah, they play across the river from Madison Square Garden in the worst arena in the NBA. Like showing up for a gun duel with two fists, they have no chance to succeed under these circumstances.

Given these circumstances, why not market some of the teams the Nets are playing to get fans out to the arena. I have always felt small market teams struggling for attendance should leverage opposing teams and opposing stars more than they do. Face reality, a giveaway for the 5 Nets uniforms would not generate any excitement (nor would that same giveaway in most arenas). Add in Kobe, Lebron, KG, Dwight, and Wade, and you have added value for your fans, you increased their willingness to pay with the promotion. [I argue teams should consider marketing alliances to push travel packages in opponent cities, i.e. Nets market to Cleveland fans, or Boston fans, to capture revenue from fans with peak interest when a team’s own fan base can’t fill the arena – another subject for another day.]

Without running an analysis on sales numbers it’s hard to draw conclusions about the bundling all quality games together in one package vs. leveraging each game to upsell less attractive games. At a high-level, fans are now trained to expect the Cavs game packaged with Sacramento, Indiana, and Memphis. They don’t get excited about that, its still a tough decision to buy that package. The Nets took away any question – every game in this deal has an attraction, so fans feel like they are actually getting a deal, and are not left to judge if buying 4 games I don’t care about is worth the ticket to see Kobe play. This approach should boost sales for this package above what teams typically see for ticket deals.

Further, the Nets didn’t slash prices and they bundled 10 games together, so they are selling quarter-season ticket packages at or near full price. From that perspective, it’s a quick way to boost your full-season equivalents. Arguably, a bigger revenue bump than would have been received by separating these games and pairing them with less attractive opponents that drive fans away.

Time will tell if the plan succeeds, as measure by attendance numbers and revenue generated. Teams need to accept reality, as the Nets have, that fans want to see Kobe and Lebron and want to buy their jersey’s not necessarily those of the home team. And some fans only want to see the NBA stars, not a watered down package of lottery teams. Rather than continue to ignore these facts, teams need to find ways to capitalize on it, earn brand favorability for your team, maintain a sustainable business, and be ready to maximize profits when your team is one of those on the short list of NBA elite. For all those who criticize the Nets, I’ll place my bets on their average ticket price and overall attendance for those 10 games.

Teams Not Adding Value, Exhibiting Innovation With Ticket Offers

Darren Rovell wrote this week that only a handful of teams immediately offered partial season ticket plans following the release of the full NBA schedule, a somewhat surprising revelation given the expected difficult ticket market projected for the upcoming season. It begs the question if teams are doing enough, and how risky is lowering prices on the long-term stability of ticket sales.

First, I’m shocked that in this day of emerging social media and fan engagement that no team (from the information I gathered) ran any prediction contest to win tickets. Here’s 41 home dates, pick who we play on which dates, most right gets tickets to the game of their choice, second best gets the option to buy tickets to any game at any price point, or something along those lines – what day will the team first host Lebron, closest date wins tickets, etc. That would at least serve to stir up engagement, incentivize fans to start to following on its various platforms building the customer database, and serve as a platform to publicize ticket offers. The perfect engagement opportunity during what amounts to a dead period in the NBA, but little action.

Next, teams should be wary of aggressive price cuts this early in the sales cycle, yet need to flex innovation to move tickets. Creating multi-game plans that force fans to buy 6 games in order to see Lebron or Kobe is old hat. A still fledgling, unproven is bundling tickets from multiple sports – a Hawks-Braves partnership, or a Rangers-Mavs bundle. Another popular plan is the “Pick-A-Plan”, essentially an a la carte multi-game ticket package. Teams could put a different spin on this, allowing fans that purchase this a la cart plan before a specified date to create a theme around the games they pick, then the team can pick the best four and put them for sale for one month, the person whose plan sells the most gets a full refund on the tickets. You can try to unify the fans that buy each of these ticket packages into the same section, create some camaraderie, and make the experience meaningful.

What teams should avoid is slashing prices too early or without recourse. This week, the Texas Rangers announced discounts up to 75% on some weekday games the rest of the season – mind you, this is a team in the playoff race with improved attendance over last season. But offering these cheap tickets without adding value to the early buyers sets bad precedent for future fan action. In conjunction with this offer, teams unloading last minute ticket inventory should offer current ticket holders seat upgrades at low prices, making upgrades available only to fans that purchased prior to a certain date, or to season ticket holders in less preferred ticket positions. Provide an incentive to hold a ticket, and give those that purchased an advantage. Then back fill available tickets that upgraded in the low price, last minute offering. It’s possible to double incremental revenue, while maintaining the incentive for early purchases.

Many teams are publicly stating financial losses. It will be interesting to see what, if anything, struggling baseball teams due to lure fans out down the stretch, and what the numerous NBA teams that did nothing to improve during the off-season

NBA Warning Signals Premature

The NBA fired off the first Class of 2010 free agent salvo, one year before the festivities begin, with a warning about a lower salary cap. It’s SOP to issue a forecast in the annual league memo, and it’s obvious where the warning stems from, but these projections seem premature.

Flash back to last year, same time, same memo, could anyone have predicted the economic situation 3, 6, 9, and now 12 months later. No way. I think the same holds true now, its unpredictable. The recession has definitely affected sports more than past economic slow downs, and 2009-10 will be the first full NBA season played since the financial crisis, however in sports flat could be the same as down.

Of the major items that contribute to BRI, the league has all major national TV deals, and teams have most, if not all, local TV deals locked in. While harder to come by, most major league and team sponsorship deals are multi-year contracts, guaranteeing that revenue. Plus, the NBA is not the LPGA, renewals continue to occur. That’s a significant amount of BRI that will increase next year due to annual escalator clauses in long-term deals.

Ticket sales, and related income such as parking and concessions, represent the wild cards. Despite the problems, the NBA posted strong attendance numbers last season, right near the record setting pace of the past few years. Off-season transactions thus far indicate a growing disparity in the league, a few teams getting stronger, many teams choosing to rebuild. Attendance figures should follow that, with the good teams filling the house every night (Cleveland, LA, Orlando, Boston, San Antonio), while bad teams in bad markets see attendance drop (Sacramento, New Jersey, Indiana). It’s the middle of the road teams that will swing revenue, mostly coming down to performance.

A few perennial disasters with renewed hope could give the league hope, and stabilize BRI. Memphis finally has some players to get excited about, the Clippers took the only prize from the draft, while Denver has room to grow after a deep playoff run, and Washington should bounce back from a poor season. Charlotte even has some hope. To put a spin on the negative teams, Indiana, Sac-town, and NJ can’t go much lower, so if they find a way to stay flat, and a few other teams get a lift it should off-set the lower overall ticket prices.

My point here, it’s all hypothetical. The NBA’s projection, my scenarios, Wall Street experts, everyone. Another key component, the NBA CBA is the most convoluted in sports, making it easy to manipulate. Heck, even Larry Bird has a rule named after him. Finding ways to exceed the salary cap are not difficult. If it comes to that, teams will find a way – the Knicks have done it the past decade for players not even on the team, I think they can find a way for Lebron and whoever else they want.

As a league, the NBA should not take to defusing the anticipation of next year’s free agent season. If it plays out well, it could be the tipping point to catapult the NBA to become the prominent league in US sports. It has the potential to be that big. They should go out of there way to make sure the media gives it front page coverage for the whole season and then every day next July, leading into the biggest Opening Night in league history. All the cards are in place, the league should do everything it can to leverage it. Not to mention that stirring the pot with the union for a possible strike/lockout standoff the following off-season could be debilitating.

Can Advertisers Digg It?

Digg’s announcement last week that it will launch Digg Ads, handing over control of advertisements to the users is more than the latest idea in online advertising – it’s the start of a paradigm shift.

I have a few ideas on where I’d like to see web advertising go towards in order to close the gap in revenue and improve ad engagement, and this is one. By putting users in control, not of IF they see advertisers, but WHAT advertisements they see, the publishers put the onus on advertisers to improve their creative. It gives both parties another way to measure engagement, thus more data, and more pricing models.

This is not the end all, be all. User control is one part of the equation, though this change alone could set off a chain reaction of improvements for all parties involved. Publishers are indirectly incentivizing advertisers to create engaging, entertaining ads, or few people will see their ads. Advertisers and publishers will both have it in their best interest to make sure to target the appropriate users, and should lead to a more relevant match between content and ads. Advertisers get a more effective medium, publishers earn more revenue from the improved effectiveness, and consumers presumably benefit from seeing ads of interest and can view the ads as entertainment if the creative improves.

Digg has decided to make the ads appear as regular Digg content and to have a reverse pricing mechanism, where the more popular an ad gets, the less it costs the advertisers, thus high prices will trigger the removal of unpopular ads. I’m not sold on this, and I’d like to learn more to see how they plan to increase revenue with this model. Further, its debatable if blending the ads in as content will increase or decrease engagement. They have the risk of users not identifying the ads, and bypassing them.

Overall, Digg is setting the path for one avenue online advertisers need to explore. This one change could set off a reaction that forces advertisers to adjust to what users want to see, and improve their content – because in the end, advertisements are content too. It brings users into the process so they can benefit from the ads and advertisers benefit from more users interacting with the ads, and publishers can drive more revenue, plus keep users on the site longer with less intrusive advertising.

Nets Trade Opens Doors

When New Jersey acquired Yi Jianlian from Milwaukee (with Bobby Simmons) for franchise stalwart Richard Jefferson last week, the trade achieved a lot more than clear up cap space for the Lebron chase in 2010. Yi becomes the first Chinese born NBA player in the heavily Chinese populated New York City area. If Yi can deliver on the court the Nets have opened up a new “world” of business opportunities.

A team that has long struggled to sell tickets, even with playoff caliber teams, in the dark, dank, Izod Center now has an entirely new demographic to tap into. As proven by Yao, Matsui, and other prominent Asian athletes playing in major American leagues, locals of the same nationality will flock to see their fellow countryman. The Nets may also benefit from the wave of momentum built by the Olympics, where Yi will not only play but which will be held in his native China.

Along with increased attendance, the Nets have an opportunity to increase sales of corporate suites by tapping on Chinese-owned companies with New York offices. An opportunity to entertain businessmen traveling from China – the perfect selling point.

Never at a loss for marketing creativity, Brett Yorkmark, who seems to have every piece of the Izod Center and ever possible event sponsored, now has a major asset to market to a new clientele. Expect Yorkmark to leverage Yi’s presence to add major Chinese corporations into the Barclay’s Center sponsorship portfolio, quickly becoming one of the most internationally oriented sports buildings in North America.

Indirectly the Nets just added over 1 billion potential viewers without signing a TV contract. With the unprecedented exposure in China that Yi’s presence will bring, Nets mercandise sales and sponsorships in China will soar. Case in point, last year the highest selling NBA jersey in China: Tracy McGrady, Yao’s teammate. Vince Carter, Devin Harris, Brook Lopez – Hello, World!

Merchandise should pick up steam closer to home, both due to Yi’s popularity among Chinese-Americans, and the increased exposure the Nets will receive within the basketball community. Sponsorships, marketing opportunities (local and abroad), ticket sales, merchandise sales – the Nets and their players have an opportunity to significantly jolt revenue…and maybe even improve on the court.

China is clearly one of the NBA’s top initiatives. In recent years, the league hired a top executive to run NBA China and is partnering with AEG to build 12 new arenas in China. Now the Nets are deftly positioned to capitalize as the league expands the game within the world’s most populated country. When partnership opportunities arise with Chinese businesses, or a chance to play an exhibition game in the country, with Yi on the roster the Nets move to the front of the list – not a bad place to be with the potential revenue at stake.

Before we get ahead of ourselves, one small prerequisite exists. Yi needs to become a star. Averaging eight points a game coming off the bench will not cut it, he needs to elevate his game, become an All-Star. If not, he’ll go the way of Wang Zhizhi, the bally-hooed Chinese star who became the first Chinese player in the NBA. He never lived up to the hype, became an NBA journeyman, and disappeared into oblivion, never capitalizing on his on-court or off-court potential. In the next two or three seasons Yi will either go the way of Yao and star in commercials, or the way of Zhizhi and disappear. The Nets will be right there riding his coattails.