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.

PGA Shows Online’s Ability to Attract International Fans

Omniture data showed South Korea accounted for .9% of Turner’s record setting web traffic for Thursday of last weekend’s PGA Championship, ranging up to 2.3% for Sunday’s final round. In absolute numbers the 30-50k unique users may not move the needle, and Y.E. Yang may not be the player that captivates a nation (at least yet). However, take South Korea, add in the many other countries on that side of the globe with an interest in the sport, either because of Tiger or country representation in the tournament, and on the aggregate these fans add significant valuable.

I’ve wrote about this in the past – golf and tennis are two of the sports that can most benefit from live streaming and in-depth, user oriented online coverage. The individual play that creates simultaneous action in multiple locations, and international tilt of the players create an opportunity. Golf embraced live, free online streaming last year, tennis more so this year, thankfully removing the pay wall from Wimbledon – or maybe not. Live streaming does call for a “fremmium” model, free sampling of coverage provided by the network, then a fee-based service to give users the opportunity to control their own experience, follow who they want, get advanced stats, etc.

Neither sport is their yet. South Korea tunes in and they want to Yang. England tunes in to tennis and they only care about Andy Murray. Digital providers need to allow fans to really customize their experience and give them the tools to watch any player they want online. Provide access to archives of that player, let them see his/her greatest shots, past performance at the tournament, even throw a camera on the practice range. An all-encompassing experience needs to be possible.

Not everything must be HD or professionally shot, sometimes a web-cam in the sky is sufficient for a tertiary view to feed the long-tail of viewer interest. Leagues can generate engagement with the data and archived video they already own. Once they put all of that online in an accessible format, expenses to provide the customized experience should remain low, with potential revenue increasing.

As a marketing tool, which digital is though people often forget this point, it promotes the game in these various countries. Live streaming, minimal spending on aggressive viral awareness campaigns can lead to audience sampling, and if they like what they see these sports can start to build a sustainable audience into the future. This increases the value of holding international events, selling international television rights, selling separate sponsorships through the digital platform, and someday integrating more overseas sponsors into live events), if they can generate enough interest.

With TV ratings suffering, particularly on the women’s side, and TV coverage waning between majors, online is a critical component to the long-time sustainability of these sports. It can drive attendance, introduce new revenue streams, enhance ancillary revenue streams, and most importantly build a new fan base.

More Golf Commentary: Turner Extends PGA Partnership, US Open Decisions

Turner announced a long-term extension to continue carrying the PGA Championship and operating PGA.com. The burning question – when will they start to leverage the asset for the value its worth? Turner should take a note from the USGA’s digital presentation of the US Open – then take it up a notch from there.

Golf is event driven, the website should reflect this with tons of in-event interaction for fans. Golf should embrace live streaming, and give the user more opportunities to customize the experience. A golf event is a microcosm of the “long-tail” effect of digital media – many story lines simultaneously playing, each with some interest. Put small, low cost cameras out on each hole, so a fan can follow players around the course, watch a mosaic view and skip around to holes, or view a specific hole. It doesn’t need to be HD production, since viewers still have the TV coverage, but supplement it.

In addition, unlock the archives and all its potential. Let users watching a hole call up shots that the same player hit in past years on that hole, or check what recent champs did on that same shot, or watch the best all-time shots on that hole or by that player or on that course – get the point, endless options. Get the footage online and tagged. Building on that, have a player instruction section with tips, have caddie’s blog, make more interactive games like the US Open, also put Fantasy games to generate more interest, allow fans to debate golf strategy and club selection during an event. Bottom line, digital media is more than throwing up some video and a Twitter feed. The PGA and Turner are behind the curve, and need to make progress for this partnership to succeed.

Back to US Open for a second, one of the most poorly run big sports events in history. Lessons. Be proactive, not reactive to potentially damaging situations. The USGA was shamed into allowing fans from Thursday’s rainout use their tickets on Monday, and were lucky to have a Monday. They should have a contingency ready for what is obviously a possible situation.

Another lesson, be content with not finishing on Sunday. Starting the third round at 7 PM on Saturday night, and the 4th round late on Sunday made NO SENSE. Golf is meant to be played in 18 hole increments, don’t start when you have no chance to finish. Fans had trouble following the tournament, players were not in the same rhythm they follow each week. Live with the fact you need Monday to finish. People will flock to the US Open, don’t put a low-quality product out to meet time constraints. It hurt the ratings, and hurt the tournament.

Another comment on fan experience, outlawing cell phones does not work in 2009. Fans complained about not being able to meet each other, not knowing the weather situation, and not knowing what’s going in general. They need to change this.

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.

US Open Makes Strong Push Into Digital and Social Media, Supplemental TV

Heading into the final week before the US Open at Bethpage Black, the USGA has pieced together the most coherent, immersive digital media experience of any major sports even in the fledgling digital age. I’ve ranted about the unique position of golf and tennis to capitalize on digital media because of the international appeal, simultaneous play that TV can’t capture, depth of stats and strategy that invoke discussion, and multitude of different ways fans can experience a tournament. The USGA has stepped up to start attacking this user opportunity.

After the Masters, the USGA launched a casual online game at USOpen.com that allowed fans to play Bethpage Black. They setup various golf related competitions with leaderboards and prizes attached. Graphically, the game does a fantastic job of recreating the course and will attract fans just interested in looking at the hole layout. It also has many critical characteristics to create an attractive, sustainable gaming experience – element of competition, easy to play, ability to play in small chunks of time, and the aspect of interacting with reality in the form of the golf course.

Games have become a necessity in the online experience as users spend more and more time immersed in games, and games create new revenue opportunities. Same can be said for social media, its become a necessity. However, that has led to many useless implementations. Commend the USGA for creating a strategy, and then aligning its use of each tool with that strategy.

SBJ reports the tournament will use four Twitter feeds – one with general tournament information, which they have used well to disseminate information thus far, and three others that will follow three individual players selected by the fans around the course. Interactivity is one of the pillars of digital media. Giving the fans the vote on who they want to see is a good implementation. The next step is following each group and letting each fan follow who they want.

In partnership with IBM, the USGA has launched a free iPhone app that will stream live video and provide news and information (scores, updates, etc.). Mobile is a perfect distribution platform for golf. Fans at the event can use it because they can only see one or two holes at a time, while almost every hole has action, so it allows them to follow the entire tournament. The way fans view golf, one shot at a time, makes it a great mobile video play, fitting the short-form paradigm that has proven successful. It’s also a no-brainer because of the constant leaderboard changes and scoring updates.

Unfiltered message boards and online video will supplement the offering to create a complete package of interaction points for fans.

On the TV side, in addition to the ESPN and NBC coverage, DirecTV will offer three additional channels, similar to its Masters coverage. With one channel focused on a marquee group, one at a signature hole, and the third providing updates and presumably going around the course. While great for the golf fan, I view this coverage setup as a prelude to how the USGA – and golf in general – should approach online streaming. Add more user choice (as they are doing with Twitter), give the option for access to archives of past highlights from either the hole or the player, throw in some statistic applications, integrate the Twitter feed and/or the message board thread for the hole/player and its full-functional interactive experience. Fans will likely be willing to sacrifice quality for quantity and choice, so lower quality cameras, but more coverage. Golf should consider that as an online or interactive television play.

While the US Open deserves commendation on creating a solid strategic plan before delving into the digital space, they still need to execute and eventually monetize – a discussion I held off on here, but its certainly top of mind. One note, they did release the iPhone app with IBM, a great value-add sponsor integration for both sides. More to come as the Open plays out.

Nadal Makes Smart Marketing Decision By Keeping Current Look

As the US Open began Monday, word leaked that Rafael Nadal, fresh off his gold medal and carrying the #1 ranking for the first time, was leaving his teen idol days behind for the more conservative traditional tennis look. When he took the court we saw Nadal and Nike scrapped the plan. Top-seeded Nadal decided to stick with his current wardrobe through the Open, preferring not to change on short notice before a big tournament.

Whether he didn’t have time to break in the new duds, or he simply doesn’t like the idea, Nadal should make this a permanent decision. Tennis oozes conservatism and lacks popularity. Each generation boasts a champion with flair – from McEnroe to Connors to Agassi, even Boris Becker brought a certain energy to the court. Federer and Sampras are all-time great players, but their stoicism only garners the interest and respect of the most die-hard tennis followers. Tennis needs Nadal to hold the torch for this generation.

His management team and endorsers may want Nadal to move away from the teen heartthrob days, but they can do it without losing style or deferring to the traditional tennis white uniform. Right now to the casual tennis fan, Nadal is the new kid on the block, the upstart that unseated Federer. Long shorts and bright shirts with cut-off sleeves to show off his muscular build define Rafa. Like they say in Vegas, let it ride. He just ascended to the top, take advantage for awhile, sell him as the top player before deciding he needs to phase into a new part of his career.

He stands out in a sport defined by blandness. Nadal’s look is unique, his game elite, and his accolades rank among the best. He could draw the casual sports fans back to the tennis courts. He may not display the passionate behavior of a McEnroe, but his image pervades it. In addition, Nadal speaks at least three languages and has the looks to appeal to the broader audience.

Traditional tennis sponsors like high end watch retailers and luxury car brands can still leverage Nadal because his personality is polished and professional, while his attire and fan base attract a different set of marketers. The conflict may not work forever, but now it opens the door to marketing deals from two diverse sets of endorsers. Nadal can have that younger appeal to move tennis into the Web 2.0 era of social networking. Important, not because of the additional revenue it may generate, but because that’s where the young fans are, the fans tennis needs to sustain itself in the future, the age group tennis executives want playing the game now.

And while we haven’t seen the new wardrobe Nike planned for Nadal, there are ways to remain on the cutting edge of style without going to the boring all-white tennis look.