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Making the connection
Published June 29, 2009
Everyone agrees that engagement marketing is about putting a brand in direct contact with a buyer, and doing so in an environment that the consumer chooses. The agreement pretty much ends there.
Some call it the next step in the evolution from event marketing and experiential marketing. Others believe its roots lie in the advent of social networking. At least one marketer calls it the latest buzz phrase for something that good marketers have always done.
“Every couple of years we, as marketers, get bored and rename a piece of what we should have been doing all along, which is having a real, honest dialogue with consumers in their language on their terms and timelines,” said Elizabeth Lindsey, senior vice president at Wasserman Media Group.
Whatever the definition, there is no question that engagement marketing is changing the way that brands, agencies and sports properties are doing business. It is forcing a dialogue on how to customize sponsorship deals to put brands in direct contact with consumers.
“In today’s world, brands have the ability to engage with consumers at all levels, whether it’s at the beginning from a research standpoint, whether it be through digital and social media, all the way up through the retail experience and the point of purchase,” said John Shea, executive vice president of consulting for Octagon.
Brands issue a challenge
The roots of engagement marketing are a combination of the emergence of event marketing in the early 1990s, experiential marketing around the turn of the millennium, and social networking a few years ago. Today, engagement marketing is affecting everything on the spectrum of a sports sponsorship, from negotiation to planning, activation to measurement.
John Von Stade, Velocity Sports & Entertainment senior vice president and group director, estimates that engagement platforms among Velocity’s consumer brand clients have grown from 15 percent of the marketing mix three years ago to roughly 50 percent this year. He expects that to grow to 70 percent in the next three years.
Rather than negotiating strictly against rights fees, brands and agencies are now spending more time negotiating activation of the brand and engagement elements. Brands like AT&T also are trying to keep activation budgets flexible to turn engagement components on and off, as necessary.
“We are challenging properties to deliver different ways to engage their fans or their consumers using our technology,” said Tom Hughes, director of sponsorships and events for AT&T. “If we’re doing our job right working with the properties, if AT&T were to stop doing sponsorships, we want the fans to feel a loss.”
At this year’s College World Series, AT&T’s interactive zone near Rosenblatt Stadium in Omaha, Neb., immersed attendees in the company’s products. Fans could measure distances to their respective campuses using AT&T Navigator (a mobile directional device) or watch live television via wireless devices provided by AT&T. They also could sign up for exclusive text updates.
Engagement marketing is further pushing brands away from traditional inventory in a sports sponsorship to custom programs that offer an authentic feel. In turn, properties are ditching the age-old practice of regurgitated sponsorship decks with a company’s logo on the front.
That means negotiations are becoming more like planning or activation meetings to educate properties about brand identity. For example, Cisco was involved early on with the development of the new stadiums built by the New York Yankees and Dallas Cowboys to wire the buildings with the company’s StadiumVision. The system integrates video, voice, data and wireless services into the venues to enhance the fan experience.
The tenets of engagement marketing vary widely depending on the client, but a good engagement marketing program uses basics like sampling and builds a layered program that immerses a consumer in a brand. The goal: engage consumers in a dialogue to create awareness and ultimately drive purchases.
What makes it difficult to build a successful engagement marketing campaign is that there are no set group of elements to choose from. “If there were five or six standard components, then it would be no different than any other standard marketing tactic and people would forget about it,” Lindsey said. “It’s unpredictable, which is what makes it so unforgettable.”
Keep it real
Authenticity is an underlying factor in the success of any engagement marketing campaign. Lexus as a courtesy car provider at the U.S. Open is an authentic association between a brand and the needs of a property; Major League Baseball selling advertising space on its bases to a Spider-Man movie is not.
“In general advertising, consumers are going to smell inauthentic from a mile away,” Lindsey said. “If you’re asking them to participate in it, they’ll smell it from 10 miles away.”
American Express has built an entire marketing platform by using its sports and entertainment sponsorships to benefit its card members from the point of ticket transaction through the end of an event experience. For example, as a U.S. Golf Association and U.S. Tennis Association sponsor, American Express cardmembers can use their cards to buy tickets to the U.S. Open of golf and tennis earlier than the general public, and can watch the tournaments from special hospitality areas.
Teams and individual tournaments or races, as opposed to league properties, are more apt to build custom activation programs into sponsorships, said brand consultants, with NASCAR, its teams and tracks the model for their willingness to provide access to brands.
“It’s a blank sheet of paper,” said Mike Boykin, executive vice president of sports marketing at GMR Marketing. “You have the ability to include the brand at pretty much every touchpoint: the race car, the driver, taking the driver to the fans, to the customer, to the retailer. Point-of-sale materials. Interactive-themed activities like simulators or another race-related activity that fans can participate in. And the budget flexibility. If somebody wants to go over the top, they can. Or for somebody operating on a tight budget, NASCAR affords those opportunities as well.”
At the Coca-Cola 600 NASCAR race near Charlotte over Memorial Day weekend, Coca-Cola and Jim Beam hosted separate functions that allowed thousands of employees, race fans and corporate guests to sample their products in branded areas.
Coca-Cola, working with IMG, built a quarter-mile-long oval grill at the track on Friday afternoon and served free food and Coke to an estimated 5,000 to 7,000 fans. Clint Bowyer, Bobby Labonte and Kyle Petty — each a Coca-Cola-affiliated driver — helped man the grill. Attendees were encouraged to visit MyCokeRewards.com for summer grilling tips from celebrity chef Tyler Florence, who was also in attendance.
Jim Beam and GMR Marketing erected a 2,400-square-foot tent with branded umbrella tables and a 20-foot-tall inflated bottle. An estimated 3,800 people over the age of 21 entered the tent, which featured a live band, racing simulators, a Jim Beam race car and a mechanical bull. The second-biggest seller at the 25-foot-long branded bar was Red Stag, a new cherry-infused bourbon that Jim Beam is using NASCAR to help launch.
There isn’t a category that wouldn’t benefit from some form of engagement marketing, said agency executives, but such campaigns are more popular among consumer brands.
Cross-promotions between brands are also becoming more prevalent, especially in the restaurant category. P.F. Chang’s China Bistro received national exposure in May for a promotion with golfer Briny Baird, who landed eight of 10 golf shots from the top of the Omni Hotel to a bull’s-eye in Petco Park. In exchange for handing over an e-mail address, consumers received a printable coupon for a free appetizer.
Engagement marketing primarily remains a tool for business-to-consumer marketing, but there are examples in sports where brands are able to use the same tenets on the business-to-business side. IBM, the IT partner for both the Masters and the U.S. Open golf tournaments, takes clients through the back-end operations of the event infrastructure and how IBM technology is used.
“It’s a powerful tool on the B2B side if you can demonstrate your product in motion,” said David Abrutyn, head of global consulting at IMG.
Congressional backlash against sports sponsorship and concerns by brands that shareholders might perceive such spending as a “boondoggle” is also leading some companies to turn to charity to engage clients and consumers.
“One of the biggest things I’m seeing now — both in terms of engaging on the B2B side and consumers — is the whole issue of social responsibility, charity and philanthropic work,” said Jan Katzoff, head of sports and entertainment at The Radiate Group. He estimates the shift started 18 months ago.
Mercedes-Benz passed on an endorsement deal with Tiger Woods and ended up aligning with his foundation by donating proceeds from its nationwide dealer golf tournament.
A natural for social media
At its core, engagement marketing is about building a community around a brand, and social media is changing how brands reach consumers on a daily basis as networking tools such as Facebook and Twitter become more ingrained in popular culture.
The Joga Bonita branding campaign created by Nike and Google during the 2006 World Cup is credited as one of the more successful early versions of an online community in sports. The site targeted teenagers and provided a platform for soccer fans to congregate and discuss the World Cup in 14 different languages. It also provided content like ads and videos that were unavailable elsewhere, creating a key differentiator.
Social media is giving brands and their endorsers a way to have a one-on-one dialogue with consumers who are avid followers of their products, and is one more vehicle to communicate with an audience at a time of their choosing.
“Last year social networking was still an afterthought or an add-on,” said Kit Geis, senior vice president at Genesco Sports Enterprises. “This is the first year where it’s part of the original plan and it’s as important as the retail component, the media plan, the PR plan.”
Vitaminwater piggybacked on the Kobe Bryant vs. LeBron James argument by allowing its Facebook fans to upload their own 24-second videos making the case for either Vitaminwater endorser. The videos and accompanying message boards attracted more than 4,000 comments during the NBA playoffs.
Brands are still struggling with how to take an engagement program and double and triple that audience through an online campaign. The social media components are often less expensive than event marketing but the results are harder to measure, said brand consultants, all of which makes it a tough sell to brands with pinched marketing budgets.
“Social networking is more of a gamble,” Geis said. “If we go on site to the Super Bowl or a Wal-Mart or to a race, you know the attendance there and you can predict your impressions and how many samples you’re going to do. You know what you’re getting into before you do it.”
There are also potential pitfalls in giving the general free rein to publicly comment about a product on a site owned or managed by that product where others will see negative statements.
Engagement marketing as a whole is more difficult to draw a direct return on investment, said brand consultants, so much of the measurement is return on objectives, or setting nonfinancial benchmarks that can be measured and evaluated.
Velocity has found its programs produce greater recall, better positioning, more intent to purchase, and a higher purchase rate than standard marketing campaigns. A study after last year’s ING New York Marathon found runners who interacted during the race with sponsors Powerbar and Poland Spring had recall percentage rates in the 90s.
“Engagement marketing sticks with the consumer far greater than any other marketing tool,” Von Stade said.
Marketers said social media campaigns, and engagement marketing efforts overall, work best when paired with traditional marketing campaigns and therefore are not expected to replace tenured practices.
“It’s a powerful tool that is probably in its infancy in terms of what it really means for marketers,” Abrutyn said.