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SBJ/September 3-9, 2012/Marketing and Sponsorship
Big college buys for Lowe's, Hershey
Published September 3, 2012, Page 1
Lowe’s and Hershey, a pair of companies with heavy spends in the college space already, have struck large multimillion-dollar sponsorship deals with several schools in IMG College’s portfolio. IMG College is the multimedia rights holder for 77 colleges, as well as several conferences, bowl games and other college properties.
The Lowe’s four-year deal, thought to be the largest non-network TV sponsorship in college sports, covers all 77 schools and gives the home improvement retailer exclusive rights to sponsor each school’s mobile app and homecoming activities. The North Carolina-based company also will have status with each school as the official home improvement store.
The Lowe’s deal is the first to go across all of IMG College’s schools. Previously, the broadest deal IMG College had closed was with UPS for 68 schools and close to $60 million in annual fees and activation. Annual spending for Lowe’s was not released, but industry sources say it will be in the same ballpark as the UPS deal.
Hershey’s contract has been finalized, industry sources say, but the company and IMG College would not comment last week. An announcement is expected in the coming weeks.
Industry sources say that Hershey will activate heavily at retail with the college marks it has acquired in the deal, primarily with its Reese’s brand. The number of schools in Hershey’s deal is thought to be in the 40 to 45 range and the company will own the confections category for those schools.
Its focus will be mostly on in-store merchandising, with use of the schools’ logos on packaging, and radio advertising across those schools. The point-of-sale materials will utilize Hershey’s new relationship with the schools in each market, giving it the ability to localize its marketing.
The college deal also enables Hershey to use more than one school mark on a single product, in cases where multiple schools might be in the same market.
Hershey is the first consumer packaged goods company to sign a comprehensive deal with IMG College. UPS, MillerCoors, and Hyundai were the first major brands to sign deals with IMG College last year.
Hershey and Lowe’s, both of which are represented by GMR Marketing, also have NCAA corporate partnerships, which are separate from their deals with IMG College.
Lowe’s has been an NCAA sponsor since November 2005 and its most recent extension will end in 2013. The company, which reported lower-than-expected second-quarter earnings last month, is evaluating its NCAA deal and whether it should renew. Lowe’s already has decided not to renew sponsorship of the Senior Class Award, which it had sponsored since 2006.
Hershey has been with the NCAA since 2008.
Turner Sports and CBS represent the NCAA on its corporate partner program. Those deals can range from $10 million to $15 million a year and they’re heavy in media, but the IMG College deal will give Lowe’s and Hershey more on-the-ground activation opportunities with their schools.
Business has been sluggish for Lowe’s as it tries to hold its ground against industry front-runner Home Depot. Lowe’s, the world’s No. 2 home improvement chain, had to cut its profit projections for the fiscal year after second-quarter sales dropped versus the same period a year ago. This was on the heels of a better-than-expected report from Home Depot.
But the IMG deal with Lowe’s had been in the works for most of this year and sources said they initially reached an agreement in New Orleans at the Final Four in April. They spent the rest of the summer finalizing details on how Lowe’s could own the mobile app and homecoming space across all of IMG College’s schools.
“This is a really unique way for Lowe’s to reach the alumni,” said Roger VanDerSnick, IMG College’s chief sales and marketing officer. “You’ll see big activation parties on site at the games and a host of other assets. When we started these conversations with Lowe’s, they expressed a desire to reach the recent college graduate and that’s what led to the homecoming idea. I think you’ll see more nontraditional designs like that if it meets the sponsor’s needs.”
The school apps typically provide fans with game-day information like parking, traffic, maps, stadium information and other game features, including lineups, stats, schedules and video offerings. IMG College has been working with Chicago-based Silver Chalice to create an app for schools that don’t already have one.
The Lowe’s-sponsored apps are expected to be free to fans, while a premium version will likely include the radio broadcast.
“Reaching fans through their schools’ official social media channels, from apps to Facebook and Twitter, helps us join passionate conversations that are all about fun and memorable experiences,” Tom Lamb, Lowe’s chief marketing officer, said in a statement released by the company. “This unprecedented agreement puts Lowe’s in a position to be top of mind for college sports fans.”
IMG College’s VanDerSnick and Lawton Logan, senior vice president for U.S. business development, worked with the Lowe’s marketing team — primarily Lamb and marketing manager Brian Harris — to close the deal.
“It’s encouraging that blue-chip companies are seeing the power of this national platform,” VanDerSnick said.