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.

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IBM Continues Model Sports Sponsorship Plan

Sometimes they fly under the radar in sports sponsorship coverage because they don’t resort to flashy activations, gimmicky promotions, or execute groundbreaking deals. Still, dollar for dollar, IBM is arguably the leader in integrated sports sponsorships that create a dual value-add for both sports property and brand. In the current world of scrutinized spending and ROI debate, brands and properties should look to IBM as the standard.

This week’s US Open completes IBM’s own grand slam of major sports events – the Master’s, Wimbledon, and both tennis and golf’s national championships. IBM uses each event as a platform to show off its technology, as well as extend its branding. Operating in the B-to-B market makes sports sponsorships trickier than for the traditional B-to-C brands. However, IBM successfully segmented the market, identifying two sports that have a high yield of decision makers as fans and whose overall audiences skew older and wealthier, aligning with IBM’s target customer.

Besides segmentation, IBM sets itself apart by creating a true partnership through technology. They don’t simply come in and do the basics for sports partners, IBM builds cutting-edge iPhone applications, implements back-end systems for streaming media, manages a website that will garner tens of millions of hits in the next few weeks, and even shows off its green efficiency. Behind the scenes they use IBM servers, storage systems, and various other enterprise technologies to help bring the events to life.

Here’s where the target segmentation comes in handy – IBM then has access to the biggest multi-day events in the world to entertain prospective clients and show them the technology at work. That is how you create ROI.

On the flip side, the sports property benefits from sitting at the cutting edge of technology, which drives engagement numbers, creates more advertising opportunities, and creates new sales revenue opportunities. Thus, if executed correctly, the property could actually recognize significantly more revenue from the IBM deal than just what IBM pays out.

Another successful part of IBM’s strategy is they know when to exit. In the past decade, they ended relationships with the Olympics and NFL, recognizing they had extracted as much as they could from the relationship and it no longer created a significant return. IBM built solid technology platforms for both entities, developed partnerships similar to the golf and tennis ventures outlined above, but after a number of years knew they had penetrated those particular audiences and taken the technology as far it could go for those properties at this time, so they decided to reallocate the investment.

While soda, beer, and QSR’s get most of the attention, IBM may get the most bang for the buck in top-level sports sponsorship. They put their technology in the places people look for it (ie iPhone and digital media) to maximize brand exposure outside of the traditional signage and media, and create a real-life sales presentation for potential customers.

Buick Open Worth Saving (Sponsors Needed)

Did you see today’s Final Round of the Buick Open, likely the last of the annual event in the Detroit area? Outside of Happy Gilmore, never have I seen a golf crowd (gallery for those golf insiders) so into the tournament, having so much fun, yet still respecting the game. Not Bethpage, not the Ryder Cup, nowhere ever. Tiger charging down the stretch with the lead helps any tournament, but this was different. Even through the TV, you can feel the passion of the fans – for the golf, for car industry, and the pride in where they live. Chants of “Let’s Go Buick” emanated from the stands.

After watching this unfold, how could the PGA let this tournament die? Maybe it would have been different if it wasn’t going to be the last year, or if Tiger didn’t play and carry the lead on Sunday, but they deserve another shot.

For the right brand, it’s a great sponsorship opportunity. Seeing the passion the fans showed for Buick today, another brand with the right fit could generate tremendous positive recognition and yield a measurable return by partnering with Buick to sponsor next year’s tournament. GM is significantly cutting back its sports sponsorship commitments, though not to $0. If they were to kick in a percent (say 10-25) of the title sponsor fee, another brand could pay the rest, and they would share tournament naming rights (i.e. Buick Open presented by Brand or The Buick-Brand Open). Tournament officials could manage expenses by minimizing big hospitality expenditures and working with the tour on purse money. Maybe not the most extravagant tournament, however positive PR for the tour, for players, and for the partner brand.

After seeing the passion in that crowd today, if the right brand steps in, that entire region would view them as saviors. It’s a good way to generate brand awareness or shed positive light on a troubled brand. The Communications teams can publicize how the company stepped in to help Buick, how committed they are to the area, and engage in community activities to solidify that. At that point, the brand has a highly engaged audience in the Detroit area, plus a compassionate national audience, they could deliver product messages and position the brand. The end game is sales, and when you bring a brand to the forefront in such a positive manner, customers will listen to the message and are more likely to follow through with purchases.

Without seeing TV ratings, attendance figures, and other measurement data, or understanding corporate performance and company strategy’s for that region, it’s hard to pinpoint potential partners and target price tags. It could be as straight forward as a retailer, like Walmart, on solid standing and marketable to people looking to cut expenses, or a big name QSR could find an angle to work with Buick or use the time to intro a new product.

Without more analysis, I don’t know the best answer. But I do know that after watching that crowd, any brand that partners with Buick and rescues this tournament will be embraced with open arms. Do any of these media exposure valuation companies put a dollar value on having an entire gallery chanting your brands name on national television with Tiger Woods walking on the screen?

Athlete In-Game Twitter Use: Teams Need to Take Control

With every passing day Twitter is gaining more traction in the sports world, not less, so for all those that said it’s a passing a fad and ignored it, open your eyes. It will have a growing place in sports over the next year, like it or not. Chad Ochocinco proclaims he plans to tweet during games, and though we usually take his comments with a grain of salt, this has some merit. NBA players already started this past season, countless athletes are tweeting before or after playing, and many times in between, coaches are there, the list of tweeters is an almost endless cross-section of society.

Rather than prevent it or ignore it, teams and leagues need to take control of it. As silly as some people think it is, Twitter is a perfect in-game tool to further fan engagement. Fans consume media on multiple screens using multiple mediums, sometimes simultaneously, sports either needs to find a way to provide multiple engagement points, or make way to share its fans with other forms of entertainment and communication.

Teams should allow players to Tweet, however control the platform they use during games. Develop a branded Twitter extension that fans of the team need to register to use and that only displays tweets among fans and players on your team. Maybe it has an extension that can tie in with a similar system that manages tweets for your opponent that night so you can see those player tweets and maybe do some smack talk with the opponents fans. Don’t you think fans attending a game would be interested in what a player has to say after coming off the court, or about what happened on the last play, or even deliver a message to solicit more noise from the home crowd?

If sports properties can intelligently, and unobtrusively insert themselves into the process while still giving players as much free reign to speak as they have now, its creates an opportunity to add those 1 million Shaq followers, or at least a subset that’s willing to deal with a small registration process, into your team marketing database. That’s valuable. Armed with that marketing info, and an undoubtedly engaged audience given the research on how tribal and passionate fans are, especially during a game, it’s a great sponsorship opportunity. Brands can certainly extract value from this type of engagement – especially brands already associated with the team that can inject calls to action, or a brand the players believe in and can inject into their Tweets. Smells like measureable ROI.

Forget the argument that player’s should focus on the game, not Twitter. Tell me that next time some sideline reporter stops a player between quarters to ask pointless questions. I’d much rather give the athlete an open mic and let journalists report on the game and describe the action, not try to dictate what the player is thinking.

More to come on this, but I think its ripe for its own platform.

Islanders Blackberry Deal Makes For Strange Bedfellows

Last week the revenue starved New York Islanders reached a one-year wireless deal with Blackberry to sponsor the chance to text its prized top draft pick John Tavares. On the surface, it sounds like a good integrated sponsorship deal that adds value for both sides – good marketing for the team, promoting its new star and providing a platform to connect him with fans, while Blackberry gives an exclusive to owners of the device and another channel to promote its product to a key target audience in the ever-competitive smart phone market.

Digging slightly deeper, it’s a deal between an owner indirectly threatening the league to move his team due to mounting financial losses and an inability to get approval to build a stadium, and a CEO currently battling the league in court over the future of another financially doomed NHL team. Though it’s tough to question the deal, which also includes some Blackberry promotions linked to on ice performance and ticket giveaways at retail outlets, however its at least somewhat ironic that these two particular businessmen linked up on deal.

From a pure sports sponsorship perspective, the deal should actually be lauded and held as an example of good product integration into sports. It’s a strategic business partnership between two partners who have aligned goals. Balsillie could make things even more interesting than they already are by signing a slew of deals with NHL teams, smattering his company all over the league then using it as a mini-platform to continue to get his message out.

Would be interesting, just saying…

Athlete Actions Feed the Sponsorship Stereotype

One action served as a good example of why two stereotypes currently plague the world of sports sponsorship. As the public continues to criticize public companies for frivolous spending during a recession and the people cringe at the ever escalating salaries of athletes in walks Vijay Singh sporting his Stanford Financial sponsored apparel.

The same Stanford Financial wrangled in Federal case into a Ponzi scheme run by its leader. Ironically, the same day articles about Allen Stanford’s trial ran prominently in the Wall Street Journal.

It shows poor judgment by Singh and his representation. By adorning Stanford gear he is essentially advocating the brand and associating himself with the company – one that lied to customers and lost lots of money for lots of people. In fact, the very $8m paid to Singh to sport the company logo could have come from this fraudulent activity. Does Vijay Singh advocate how Stanford runs its business? I have a hard time believing otherwise considering he is well aware of the news and still wears it.

Earlier this year, Stanford pulled its sponsorship of an LPGA tournament, so why is the company allowing Singh to flaunt its logo during what should be dark days for the firm. It’s not the time to build brand awareness or try to repair public perception. I’m sure lawyers and agents can work out a deal to get Singh the money he’s owed and prevent him from this negative association.

Thoughtless actions like this are what increases public outcry against sponsorships and pressure companies to avoid sports sponsorships. Athletes should act more responsible. Companies should step in and control the situation more. One negative action like this can damage the efforts of everyone else trying to make good.

What’s In A Word: For Sports Sponsorships and Sales – Everything

Bill Sutton penned an interesting piece in this week’s Sports Business Journal that addresses a concept, which has likely hurt sponsorships more than the recession – perception is reality. Since TARP became a part of American lexicon, firms have tried to run from public affiliation with anything deemed luxury, premium, or naming rights. The result is a negativity surrounding the sports sponsorship landscape that threatens a critical revenue stream for its properties.

GM left its suites at the Final Four dark, the US Open has cut back its hospitality offerings due to lack of demand, golf title sponsors have pulled their names off tournaments, and teams have struggled with renewal deals.

Experts in various fields from finance and economics to sports have advanced a theory that this recession is good in the long run because it will force process improvement and lead to more efficiency and better decisions down the road. This directly applies to sports sponsorships – and more directly to suite sales.

Sutton is right, teams need to find better terminology to replace the word ‘luxury suites’ and ‘premium tickets’. But more than the name, they need to change what it stands for because up to this point for many firms luxury suites has been appropriate. That is the part about to change. Going forward, executives can no longer make luxury expenses on behalf of the company – at least publicly – without nasty repercussions and government threats.

Sports teams need to find ways for businesses to link suite purchases to sales numbers, and a positive brand affiliation with the team. Technology creates more options, for example LED signs throughout the stadium that allow for dynamic signage, creating more inventory in smaller increments and allowing ads to pump through all suites. One way to foster change is selling suites with customizable features that allow companies to transform it into a mini-sales center that showcases their product or service, and can even allow for client presentations. In this scenario, each suite would have a slightly different look and feel, maybe company logos or product displays, and would serve the dual purpose of boardroom and stadium seat.

Give buyers access to hold client meetings on non-game days, or during the afternoon of a game, so they can focus on business. The business can they view it as a office real estate, measure it against a portion of the sales deals it closes on these visits, and teams can truthfully change the name from luxury suite to ‘Arena Executive Room’ or ‘Offsite Corporate Sales Center’. Those names emit business related tones, and match what business need to get in return for these expensive investments.

On the sponsorship side, the focus should be brand integration and strategy alignment. Sports properties need to find ways to connect sponsors directly with fans in a way that achieves the sponsors goal and showcases their product. IBM is a great example. It developed the USGA’s US Open iPhone application and handled data storage technology for the NFL for many years. IBM used both sponsorships to exhibit what its technology is capable of, creating a selling point when it looks for customers. Strategy alignment pertains to partnering with brands that share the same goals and have a value position in the target market of your sport. For IBM, golf makes sense, as many executives who make purchasing decisions on technology will interact with the US Open. While beer promotions on the LPGA tour are not the quality activations, since the sport is trying to attract a younger, female demographic, not as interested in beer as their male counterparts.

Words are powerful, though in the end changing the words alone will not lift all the preconceived notions unless sports properties change what the words stand for. It may be an old axiom, but they can only change this one customer/sale/sponsor at a time.