SBJ/March 26-April 1, 2012/In Depth

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  • Employee benefits

    Two years ago, after the Chicago Blackhawks won the Stanley Cup championship, hometown company Discover Financial Services wanted to do something special to help its employees celebrate.

    The credit card company had more to bank on than mere enthusiasm. It also happened to be an official sponsor of the NHL, which explains how and why the highly revered Stanley Cup trophy wound up at the Discover headquarters in nearby Riverwoods, Ill., for a half-day visit.

    About 1,000 employees, or one-third of the main campus staff, paid homage to the trophy, with Discover providing custom photos of workers posing with the Cup. Earlier this month, a similar ceremony played out in New Castle, Del., where an internal contest among Discover call centers offered a Cup visit as the top prize.

    For its title sponsorship of college football’s Bowl Championship Series game in Miami, Discover awarded employees eight all-expenses-paid trips to South Florida.

    “Having our employees have fun at work is really the foundation of what all of this is,” said Cathy Edwards, a company spokeswoman.

    Across the Atlantic, Ricoh Europe held an internal sales competition among employees to attend one of the 13 ATP Tour events the company backs. A separate internal contest attracted more than 20 percent of the company’s European employees, all vying for VIP tickets to the tour finals in London.

    NHL sponsor Discover brought the Stanley Cup to the company’s headquarters in Riverwoods, Ill., where employees could pose with the trophy.
    Photo by: Discover Financial Services
    From putting the Stanley Cup in the company cafeteria to sending staffers to tennis matches for selling more copiers and printers, more companies want to use sports alliances to motivate employees as well as customers.

    Experts say a successful internal marketing plan with a sponsorship can pay dividends in several ways. Among the most valuable advantages: boosting morale, inculcating a sense of why the company invests in a particular sponsorship, providing perks and, in some cases, creating forums for corporate philanthropy and recruiting.

    “It’s a practice that’s actually pretty common and very important,” said Dave Grant, principal at consulting firm Team Epic. “In this day and age, most companies will tell you that their workforce is one of their most critical assets. So if you have a sponsorship in your portfolio and you can make that work to your advantage with your internal constituencies, I think that’s critical.”

    Examples abound, with companies trumpeting the chance to rally workers through various ties to sports teams, leagues and events.

    IMG College, adviser to delivery company UPS on a portfolio of college teams, helped create an employee-recognition program that provides a memorable reward while reinforcing the company’s mission with sports fans.

    At 62 schools the delivery company sponsors, UPS has one of its delivery drivers hand the game ball to the referee at the start of football and basketball games. The promotion includes a meet-and-greet and tickets for the driver and his family as a reward for accruing an exemplary safety record. Making the delivery in front of the home crowd accentuates the notion that important business doesn’t get done without reliable delivery.

    Sponsors in NASCAR have become accustomed to unprecedented access to the stars of the sport, including hospitality sessions just moments before drivers take to the track. Even in a sport where business-to-business networking long ago became routine, pressure remains intense to keep corporate backers happy. One way to foster good will: creating a microsite online aimed at sponsor employees.

    NASCAR Fuel for Employees now counts a baker’s dozen of blue-chip sponsors as participants, including Sprint,
    Dodge, Ford, Mars and Bank of America. Intranet sites for each sponsor also can access the site, which is designed and maintained by NASCAR. In addition to explaining the various elements of a company’s investment in stock car racing, Fuel for Employees offers discounted race tickets, merchandise in the NASCAR online souvenir shop, and special offers on products sold by fellow sponsors such as Office Depot and SiriusXM.

    Ford uses the site to highlight, among other things, $200 million in NASCAR-related sales generated through the sport’s business-to-business sales forums. Dodge attracted 1,200 employees to its NASCAR site within a day of launch.

    “This is becoming a really hot asset in a lot of ways,” said Norris Scott, NASCAR vice president of partnership marketing and business solutions. “The interest is spiking.”

    UPS driver Wyndell Jenkins delivers the ball at a Florida Gators basketball game. Jenkins actually played basketball at the school in the 1980s. UPS uses its school sponsorships to reward employees for safety, allowing them to deliver game balls to basketball and football games.
    Photo by: IMG
    Tire company Bridgestone has used its extensive ties to the NFL and the NHL as carrots for sales programs in recent years.

    As title sponsor of the Super Bowl halftime show, Bridge-stone launched a “Performance Moment” sweepstakes for U.S. employees and dealers. The lead-in contest awarded a trip to the game.

    Strong response to the NFL promotion led to a companion program in Canada just under way. Between March 28 and April 25, Bridgestone dealers and employees can visit a dedicated website pairing the same performance moments theme of the company’s tire lines with historical hockey moments. Winners receive a trip to Game 4 of the Stanley Cup Final.

    In addition, the tire maker is launching a hockey tournament at Air Canada Centre, home of the Toronto Maple Leafs. Forty-six dealers who sell Bridgestone tires will be divided into four teams, with each led by a designated Bridgestone captain. The four-game, single-elimination tournament will award the winner the Bridgestone Cup.

    “It’s an opportunity to engage the single best spokesperson a company can have,” said Kyle McMann, the NHL’s vice president of partnership marketing. “The person on the ground, in the store, actually making the sale for tires. And it wraps it into a passion point. We think it’s phenomenal.”

    Electronics retailer Best Buy uses its racing ties to boost both sales and charity work. Three years ago, the company formed a pit crew of 15 to 20 employees who serve as advisers to Paul Zindrick, Best Buy senior manager of event marketing and racing.

    Turnkey Sports Poll
    The following are results of the Turnkey Sports Poll taken in February. The survey covered more than 1,100 senior-level sports industry executives spanning professional and college sports.
    What is the more important contributor to renewing a sponsor?
    Demonstrating ROI for the sponsor
    Treating sponsor contacts like VIPs
    Not sure / No response

    When will NFL teams be allowed to pursue ...
      Within 2 years 3-5 years 6-10 years 11+ years Never Not sure
    Casinos as sponsors 23% 28% 9% 7% 27% 6%
    Game-day jersey sponsors 7% 31% 22% 11% 24% 5%

    Source: Turnkey Sports & Entertainment in conjunction with SportsBusiness Journal. Turnkey Intelligence specializes in research, measurement and lead generation for brands and properties. Visit www.turnkeyse.com.
    The core group of advisers, which helps with increasing employee participation in the NASCAR sponsorship, works with eight territorial pit crews made up of 10 to 30 people each. The latter group represents Best Buy employees from various regions of the country.

    Those groups then work on sales incentives contests when races are in their territory. In similar fashion, The NASCAR Foundation coordinates with the groups of Best Buy employees to organize volunteer outings for various charities. At the end of the season, the company awards grants to the racing foundation based on how many hours Best Buy employees donated to charity work.

    Then, too, winning never hurts. Zindrick said interest has soared among employees since Best Buy driver Matt Kenseth won the Daytona 500 last month.

    Doing good and doing business, as Best Buy has demonstrated, could be the next wave of employee-sponsorship campaigns, some believe.

    “Traditionally, philanthropy and marketing were two distinct areas of a corporation with two distinct staffs,” said Grant, the industry consultant. “A trend you’re going to see in the future is those two things coming together. I call it strategic philanthropy.”

    Erik Spanberg writes for the Charlotte Business Journal, an affiliated publication.

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  • The challenge: Stand out amid the clutter

    Sponsors continue to voice concerns over clutter as sports properties carve up categories and make it ever more difficult to stand out to consumers.

    While a recent survey presented by GMR Marketing found that executives on both the team and property side agree with corporate marketers that clutter poses a serious threat to the viability of sports sponsorships, the problem persists.

    Industry experts say the issue is complicated by the endless barrage of media — smartphones, tablets and computers are as aggressive as anything pumped out by TV, radio and signs — which creates more of a wallpaper effect that leaves consumers fatigued and uninterested. All of the new and expanded marketing avenues also mean that the chances of owning a category or a sport has all but evaporated.

    Capital One wants consumers to associate the company with college sports and uses multiple programs, including the annual Mascot Challenge, to drive home that connection.
    Peter Laatz, vice president at Repucom International, an industry consultant, points to the difficulty of sorting sponsors from advertisers in NASCAR as an example.

    Sprint owns the wireless category as NASCAR’s largest sponsor, including naming rights to the top-level series. Yet targeted ads and in-broadcast statistics featured during Fox telecasts leave many viewers with the impression that AT&T is immersed in NASCAR. Pizza Hut has taken a similar tack.

    “Certainly the Pizza Huts and the AT&Ts of the world don’t have all the other trappings of a sponsorship,” Laatz said. “They don’t have driver appearances and they don’t have all the [business-to-business] opportunities. But if the name of the game is eyeballs and integration, those are two examples of brands that have come in and sat on top of some stuff that’s been done ahead of time and certainly for potentially more money and certainly more effort.”

    Repucom research determined that 1,800 to 2,000 brands, on average, are seen during a NASCAR race, compared with 200 for a typical Major League Baseball game. Still, the company’s research also found that among major sports properties, NASCAR fans are the best at sponsor recall (see chart).

    Even when fans learn the nuances of advertising versus sponsorship, however, the lesson rarely sticks.

    David Bohnsack, vice president of insights and analytics at GMR Marketing, said he has watched plenty of focus-group discussions that begin with an explanation of how the two differ, only to find by the end of a session that the two terms are routinely intermingled without distinction. Such are the nightmares of marketing and sales executives alike.

    Another concern is the endless slicing and dicing of what exactly an exclusive category can be as teams and leagues
    search for more revenue. “A property might say, ‘OK, we’re going to have the alcoholic beverage category,’ and promise exclusivity to a beer manufacturer,” Bohnsack said. “Then the property might decide we can have a malt beverage category and a distilled spirits category. That way they can promise exclusivity to two different brands.”

    All of which makes it harder to stand out. Dave Grant, principal at Team Epic, tells clients to forget about ambush concerns and to stick to an objective with consistent, effective tactics.

    It’s a strategy that seems to be working for Procter & Gamble’s sports campaigns. Between this summer’s London Games and 2020, the $80 billion consumer goods company will use the Olympics to push brands including Tide, Pampers and Pantene, among others.

    Clutter demands that companies create a cohesive theme that resonates with the audience, P&G believes. In this case, the emphasis is on the moms who raised the latest crop of Olympic athletes, or on athletes who are now mothers themselves (SportsBusiness Journal, March 19-25).

    “The insight is that for every athlete out there, there is an equally fantastic mom behind that athlete,” said spokesman Glenn Williams. “If you look at P&G’s products, we are in the business of serving moms.”

    Financial services company Capital One gets around clutter in college sports by deploying a multipronged approach to help consumers make the connection.

    Capital One started placing its name on an upper-tier college football game 11 years ago and is an official NCAA corporate champion, a designation that makes Capital One part of all of the major title events. But those milestones mark the beginning of its links to college athletics, not the end.

    If you have any interest in March Madness, the College World Series or college football, it is all but impossible to avoid the ubiquitous Capital One ads accompanying almost any televised game. Then, too, there is the Capital One Mascot Challenge, an online contest held each fall as a companion to football season.

    Other threads include the Capital One-backed Academic All-America program, honoring student athletes for matching brawn with brains, and a points competition among Division I schools to determine the best overall men’s and women’s athletic performances over the course of a year.

    All of which is by design: Capital One never wants anyone to forget the company when it comes to college sports.
    “There’s definitely some increased sponsor clutter in the college sports space,” said Byron Daub, Capital One director of sponsorships. “We feel like we’ve really created a platform that gives us the opportunity to create a sustained program throughout the year. We’re not just in college athletics in one season; we look to create a robust program.”

    Erik Spanberg writes for the Charlotte Business Journal, an affiliated publication.



    The greatest threat to sponsorships

    GMR Marketing presented results of a survey in which top sports sponsors and advertisers were asked: What are the greatest threats to traditional sports sponsorships? The following are highlights of the results, and some of the comments submitted by the respondents:

    1.  Lack of measurement  (31%): “The biggest threat is the inability to completely track the impact of the spending in terms of sales. We have a hard time measuring the impact all the way through the cycle.”

    2.  Clutter  (28%): “There are too many other [sponsors] involved. You’ve got teams running other peoples’ sponsorships at the same time as they’re running ours. After a while [fans] stop listening to our message during the games.”

    3.  Cost  (15%): “Sports price themselves out of the market — the cost per customer is too much.”

    4.  Activation  (11%): “As rights fees rise, there are not as many dollars for activation, and under-activating a property is the death of it. When properties are doing partnerships, they should have as much in the purchasing as in the activation.”

    5.  ROI  (11%): “Properties and rights holders need to understand that they need to help their partners sell more products instead of just focusing on their own business objectives of reaching their sponsorship revenue goals.”

    6.  Category exclusivity  (4%): “You have to look at properties that continue to carve up their categories. It used to be the ‘official car’ or whatever. But now it’s the ‘official foreign car,’ the ‘official domestic car’ … the ‘official truck.’ Sponsors will end up saying, ‘Enough.’”

    Note: Survey was conducted in the fall of 2011 with 54 sports sponsors and/or advertisers.
    Source: GMR Marketing, NSF Corporate & Industry Survey



    SPONSOR RECALL

    Repucom asked consumers if, over the past 12 months, they could recall seeing or hearing any sponsorship while watching a game/event on television. This would include signage on or around the field of play as well as any sponsored segments of the broadcasts, such as a halftime show or play of the game. Television commercials were not included.

    The survey found that the highest sponsor recall on television was among NASCAR and NFL viewers. Here are the overall highlights:


    * Men and women
    Note: Repucom, through its SponsorLink product, conducts an online survey each month among 1,000 sports enthusiasts. The results shown are for the January 2012-March 2012 waves.
    Source: Repucom International


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