IMG World Congress Of Sports: Consumer Insights Roundtable

Consumer Insights Roundtable Says Brands Have Had To Rethink Sports Marketing Spending

The anxiety of the consumer in the current recession is causing brands like Coca-Cola, Visa and Anheuser-Busch to rethink how they spend on sports marketing, a group of brand marketers and researchers said during the roundtable discussion, "Perspectives From Brand-Side Sports Marketers, Agencies and Market Researchers" at the IMG World Congress of Sports presented by SportsBusiness Journal/Daily. Panelists included Euro RSCG Managing Dir of Strategy Michael Fanuele, TBA Worldwide Chief Strategy Officer Rich Luker, Visa Head of Global Sponsorship Management Michael Lynch, Coca-Cola Senior VP/Integrated Marketing Bea Perez and A-B InBev VP/Global Sports & Entertainment Marketing Tim Schoen.

Perez Says Coke Has Had To Rethink Spending

CONCERNED CONSUMERS: The result of the re-evaluation by the brands is a greater emphasis on communities and activation programs that deliver value to consumers. Citing research he conducted, Luker said data has shown a shift in the way consumers view spending in sports. During the dot-com and 9/11 recessions, 70% of consumers approved of companies’ spending in sports during challenging economic times. But in a December survey, 50% of Americans said sponsors should either cut back or get out all together. “Four out of five Americans believe they know someone who's been laid off or gone through foreclosure,” Luker said. “There is a palpable fear that they have that makes this one personal in a way other recessions have not been, and they've seen heightened tension in brands that supposedly did things well. Their concerns are, 'I don't want you to waste my money.'” Fanuele agreed, saying, “People are nervous, and ... there's a palpable distrust of institutions, so of course they're going to say, ‘Don't waste my hard-earned money slapping your logo here.’ The implication for marketers is to regain that trust.” Companies have reacted to that by spending in different ways. “Companies like Coke are having to rethink the way we've activated,” Perez said. “We need to shift and allocate more of our dollars into working spends. ... The consumer has to benefit or we can't participate.” Schoen added, “If you can't afford to activate, you might as well get out of the game.” Lynch noted Visa is watching several trends occurring as a result of the recession and trying to respond accordingly. Lynch: “This is now a 'we' generation as opposed to an 'I' generation. The 'I' generation is what got so much of us in trouble in the past.” 

Scott Says Divisions In Tennis Have Limited Its Revenue

Earlier in the afternoon, experts during the panel discussion, "Tennis As A Global Sport," agreed that the sport has enjoyed prosperity in the last few years, but its future is clouded by the divide between organizers like the ATP, WTA and USTA. Panelists included Sony Ericsson Corporate VP and Head of Global Communications & PR Aldo Liguori, outgoing Sony Ericsson WTA Tour Chair & CEO Larry Scott, IMG Tennis Worldwide Senior VP & Managing Dir Fernando Soler, Tennis Channel Chair & CEO Ken Solomon, ATP World Tour CEO of the Americas Mark Young and USTA GM of Elite Player Development Patrick McEnroe.

CHANGE WILL DO YOU GOOD: Division between stakeholders in the sport has limited its ability to drive new revenue by expanding its sponsorship base, fan base and media rights, said Scott. "Tennis is doing extremely well, but it can do better,” Scott added. “It can do better if there's greater cooperation, not only between the ATP and WTA but also these four iconic events we've got called the Grand Slam. ... But the more we can do together, the more power we'll have in the market.” Scott pointed to the U.S. Open Series as an example. Young echoed Scott, saying that his organization had worked to do everything from creating economic efficiencies with the WTA to working on anti-doping initiatives. But Young said, “There are a lot of very complex issues to be resolved (in a potential merger of the men’s and women’s tours), many of them economic.” Liguori said that sponsors would welcome changes and looking “at how an activity like tennis can be more interesting, more exciting and more energetic. ... From our bigger point of view, change is actually good.” The repercussions of the barriers between the men’s and women’s tours have created challenges for the sport as it tries to develop a Web presence. According to panelists, no single tennis site drives the kind of significant traffic that other sports leagues and successful Web sites generate. “This is a place where alignment (between organizations like the WTA and ATP would help) and more of it is necessary,” Solomon said. “What we have not done is be able to create a singular platform where splits are done.” McEnroe said that while that could be interpreted as a weakness he considered it a strength because certain tennis Web sites do well during their respective tournaments. “We're sort of competing against ourselves, which isn't a bad thing,” McEnroe said.

China Continues To Dominate Discussions For "Globalization Of Sports" Panel

China continues to dominate the discussion about the international future of sports, based on comments made by members of the panel discussion, "The Globalization Of Sports: How The World Watches Sports And The Big Events." Panelists included GE President of Olympic Sponsorship & Corporate Sales Peter Foss, MLS Commissioner Don Garber, The PGA Of America CEO Joe Steranka, NBA President of Global Marketing Partnerships & Int'l Business Operations Heidi Ueberroth and Seymour Pierce Exec Chair Keith Harris.

HOW THE EAST WILL BE WON: Four of the five participants and 40% of the audience identified China as the international market or region most ripe for development. Other emerging markets, like Dubai and Russia, are weakening, said Harris. The NBA has the most robust operation in the country, creating NBA China last year and selling an 11% interest in the organization to five stakeholders for a total of $253M, a model that will likely be used for growth into other geographical regions, said Ueberroth. “I think the NBA has done it right,” said Garber. MLS has expanded outside the U.S. to Canada, and Garber floated the concept of building a North American soccer league with Mexico’s soccer federation. MLS turned down a proposal to allow that federation to put a team in L.A. in exchange for letting MLS put a franchise in Mexico City. He also said that MLS will use expansion franchises in Seattle and Vancouver as a gateway to the Far East. The NBA and professional golf drew an interesting comparison, with the NBA’s international growth traced to the '92 Dream Team and golf trying to re-create such a curve by bidding to join the Olympic program in '16. “There’s no single event that would be bigger for golf’s globalization,” said Steranka. He said Web traffic for the '09 PGA Championship showed the most growth in areas like China and India. Additionally, Foss said 50% of his company’s revenue now comes from outside the U.S., fueling the interest for more international sponsorships. “We became an Olympic sponsor because of Beijing,” he said.

Bankoff Recognizes Popularity Of Twitter

Twitter, the popular social-messaging service, can serve sports brands and properties as a customer-service tool that offers a real-time perspective on how people react to a game, a deal or a critical decision, a group of new media experts said during the panel "Social Media: The Impact on Sports and Sports Marketing." Panelists included SB Nation Chair & CEO Jim Bankoff, StrawberryFrog Partner Heather Fullerton, SportsFanLive.com Founder David Katz, OPEN Sports Chair & CEO Mike Levy, Citizen Sports co-Founder Jeff Ma and Pluck CEO Dave Panos.

TWEET, TWEET: Bankoff said of the Twitter craze, "If we did a search right now on IMG World Congress, you would see a big green arrow because people are going to be tweeting about it in this room." Panos recommended that teams, properties and brands should use Twitter to communicate with fans about what they're doing as an organization and also rely on fans who are using the service as "distribution points." Ma added, "This new Twitter-type news feed or Facebook-style profile update is the new way people are going to find information on the Web because they're no longer going to have to Google things anymore." In their free-ranging discussion about social media, the panelists also advised brands and properties that influential fans are the ones that the brands and properties can reach through social media. "Where a lot of community-oriented sports sites have fallen flat is they build a sandbox and say, 'All right, everyone, you're a sports fan. Talk sports. Debate. Discuss. Here's the place to do it,'" said Katz. And you end up having to go someplace else to do it." Katz said that innovating and creating a different environment is one way to solve that problem. Also, as the migration to social media continues in sports, panelists called on sponsors to re-evaluate how they measure the value of their advertising online. Levy said he has circumvented that in the past by developing the campaign for a brand and pitching that drafted format to advertisers. He added that he made the sale "more about putting the brand in front of the right demographic." Fullerton added, "We talk to our clients now and say, 'You're not going to measure this with click-through. You're going to measure this with awareness like you do in television.' I think that it behooves the agencies and clients to ask the right questions. Sometimes you don't want them to click through. There's nowhere to go."