SBJ/November 24 - 30, 2003/SBJ In Depth
MasterCard finds an opportunity deep in the heart of Texas
Published November 24, 2003
Alamo Bowl President and CEO Derrick Fox didn't know it, but his timing was perfect when he pitched MasterCard on a title sponsorship package for the Alamo Bowl.
Well, almost perfect.
Location: San Antonio
President/CEO: Derrick Fox
Title sponsor: MasterCard
2003 payout: $1.45 million per team minimum
Matchup: Big Ten vs. Big 12
First played: 1993
Past title sponsors: Sylvania (1999-2001); Builders Square (1993-1998)
Fox's proposal took place in late July 2002 — a couple of months after MasterCard had completed an evaluation of U.S. sports properties that suggested the company might want to add college football to its portfolio of sponsorships. At that time, MasterCard did not have any sponsorships in college sports.
By September, Alamo Bowl officials were able to secure a four-year sponsorship with MasterCard valued at more than $1 million a year.
The deal wasn't for a title sponsorship; it was a four-year deal for a presenting sponsorship, which costs roughly half that of a title sponsorship for the game. Even so, Alamo Bowl officials were keen on having MasterCard as their sponsor. The belief was that a brand as powerful and as sports marketing savvy as MasterCard could only help grow the game, Fox said.
Bowl officials also were confident in their product and believed that after one year as presenting sponsor, MasterCard would see the value in its Alamo association and want to step up to title sponsor.
Their confidence paid off — MasterCard upgraded to title sponsor earlier this year.
MasterCard sees college football sponsorship as a way to reach a large audience that fits the company's target demographic (men ages 18 to 34 and men and women ages 25 to 54), said Bob Cramer, vice president of global sponsorships and event marketing for MasterCard. At the time the presenting sponsorship was signed, the deal was an opportunity for the company to round out its sponsorship calendar by entering into a partnership for the fourth quarter, Cramer said.
Stepping up to title sponsor this year was a result of last year's success.
"They proved to us last year that they were going to be great business partners," Cramer said. "When we went in to negotiate in that first year, we really based it upon the media value alone. Not only did we get incremental to that value in the first year, but we got other benefits as well.
"So when they asked us, as any good partner would, if we'd consider upgrading, we determined based on the incremental exposure and where the bowl was heading that if we could get creative we could justify going into the title sponsorship role. Really it was about trying to make it work in the name of a great partnership."
Neither MasterCard nor Alamo Bowl officials would disclose financial terms of the deal, but sources familiar with the agreement said MasterCard's title sponsorship agreement, inclusive of spots during ESPN's coverage of the game, is in the $1 million to $1.5 million a year range.
To persuade MasterCard to upgrade to title sponsor, Alamo Bowl officials sought to quantify the benefits of being the title sponsor versus the presenting sponsor by hiring outside firms to conduct comparative exposure analysis and valuations of the property.
Material prepared for the bowl by Joyce Julius & Associates showed that MasterCard, as presenting sponsor, had $2.7 million in exposure value during the ESPN broadcast alone, which does not include ad units during the game. Joyce Julius determined that MasterCard would have received $3.5 million in exposure value if it were the title sponsor.
Bowl officials also had IEG Valuation Services determine the fair market value of their property from both a presenting sponsorship and title sponsorship standpoint. Bowl officials declined to reveal those figures.
Last year the Alamo Bowl's rating on ESPN was a 4.4, which made it the seventh-highest-rated bowl game for the 2002-03 bowl season and the third-highest-rated game when you exclude the four Bowl Championship Series games. Last year, 28 bowl games were played.
Beyond media exposure, the Alamo Bowl sponsorship provides a successful regional marketing platform for MasterCard. Last year the company's regional presence centered on hospitality in the form of entertaining about 600 key clients and partners.
"Texas is an important market for us," Cramer said. "We have a lot of partners in Texas, so it's an easy drive or a short flight [to San Antonio] for them."
MasterCard is making a push for brand presence among San Antonio merchants. This year the company plans to create a usage program, where customers will have the opportunity to get a commemorative MasterCard Alamo Bowl poster by purchasing items with their MasterCard at certain stores throughout December.
For now MasterCard has no immediate plans to expand its college presence, Cramer said.
"At some point in time we may like to take advantage of it in a bigger way, but it's still too fragmented to really get our arms around," he said. "The best approach, we think, is this regional approach with a good national following from a media perspective."