SBJ/September 24-30, 2012/Marketing and Sponsorship

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  • Big Red soda sees sales boost after using Dynamo to target Hispanic fans

    The marketers of Big Red soda have used the partnership between parent company Dr Pepper Snapple Group and the Houston Dynamo for promotion of the soft drink to the MLS club’s Hispanic fan base this year.

    And as the 2012 MLS season winds down, results are coming in.

    Big Red “targeted a market and hit it effectively” with help from Dr Pepper Snapple.
    According to Thomas Oh, Big Red senior vice president of marketing, an estimated 500,000 Hispanic consumers will be exposed to the brand through the team-related efforts, and sales volume is up more than 40 percent at the company’s key retailers in the Houston market.

    Looking to develop soccer-themed point-of-sale activations and targeting the Hispanic market, Big Red first reached out to Dr Pepper Snapple Group in the spring about use of the Dynamo marks. Once Dr Pepper Snapple provided the pass-through rights to the partnership with the club, Big Red placed the Dynamo logo on activations at several markets in the Houston area that tailor to Hispanic customers, including Fiesta Mart and El Ahorro locations. It ran an extensive advertising campaign in Houston on Univision Radio, with ticket giveaways for Dynamo games and live remotes from the grocery stores. It also placed branded kiosks at BBVA Compass Stadium, the Dynamo’s first-year facility.

    “Our sales were strong in San Antonio and Dallas, but we needed to make a strong push in Houston,” Oh said. “Our flavor profile matches up well with Hispanic customers, and we knew the Dynamo was a very popular team in Houston, with a new stadium. The program really resonated with their Hispanic fans, and I thought the deal was good for the team, too.”

    Texas-based Dr Pepper Snapple Group is in the first year of its partnership with the Dynamo as a founding partner of BBVA Compass Stadium. The deal runs through the 2016 MLS season. Oh said Dr Pepper Snapple was the primary liaison with the Dynamo and secured approval for all elements of the Big Red activation. Big Red’s corporate offices are in Austin, Texas.

    “It was a fairly straightforward activation, but it was executed well by Big Red and DPSG,” said Kristen Gambetta, director of partnership activation for the Dynamo. “Going to the supermarkets, doing radio with Univision, they targeted a market and hit it effectively.”

    According to Gambetta, Hispanics make up 45 percent of the Dynamo’s fan base — defined by the club as anyone who has purchased a ticket for a game. In the club’s first season at the 22,000-seat BBVA Compass Stadium, the Dynamo is averaging just under 21,000 fans per game.

    Dynamo President Chris Canetti called Dr Pepper Snapple “one of our most active partners,” pointing out a commemorative Dr Pepper bottle produced by the beverage group for the opening of BBVA Compass Stadium in May.

    In recent years, Big Red has sponsored golfer John Daly as well as NASCAR’s Tommy Baldwin Racing and driver Jeremy Mayfield, but this was the brand’s first venture in soccer. Calling the campaign “a huge success,” but also “our toe in the water,” Big Red’s Oh said discussions have already begun about more expansive activation with the Dynamo in 2013, possibly with the participation of some of the team’s players.

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  • Gatorade to extend deal with ISC, maintain victory lane sponsorship at 12 NASCAR tracks

    Gatorade dropped its title sponsorship of Daytona International Speedway’s annual Daytona 500 qualifying races earlier this year, but the PepsiCo brand plans to extend its sponsorship of NASCAR’s victory lane at 12 racetracks.

    The Chicago-based brand has agreed in principle to a deal with International Speedway Corp. that will see it continue to be associated with one of NASCAR’s most visible locations, Gatorade Victory Lane. The company will have branding in victory lane at ISC’s 12 Sprint Cup tracks and have the location described as Gatorade Victory Lane on radio broadcasts from those facilities. It also will receive tickets and hospitality at the tracks.

    Gatorade dropped its Daytona race sponsorship but kept victory lane.
    Photo by: GETTY IMAGES
    Financial terms of the new, multiyear deal were not available. The last deal, which included the Gatorade Duels title sponsorship, was a 10-year agreement valued at more than $2 million a year.

    Gatorade declined to comment, and ISC did not respond for comment.

    Under terms of the new agreement, Gatorade will be the official isotonic beverage of ISC’stracks: Daytona, Martinsville, Richmond, Phoenix, Talladega, Darlington, Homestead-Miami, Kansas, Chicagoland, Michigan, Watkins Glen and Auto Club Speedway in California. It also will add the sports nutrition category to its deal so that it can promote its line of energy chews, gels and bars.

    In exchange for expanding into sports nutrition, Gatorade gave up the rights to the energy drink category, allowing ISC to sell that for the first time in the last decade. The speedway company has approached 5-Hour Energy, Red Bull and others to gauge their interest in becoming the official energy drink of ISC, sources said.

    Gatorade earlier this year opted to drop its sponsorship of the annual duels qualifying races. The title rights to that preliminary event, which determines qualifying order for the Daytona 500, was picked up by Budweiser.

    The sports beverage brand didn’t offer any reasons for dropping the title sponsorship, but sources familiar with the brand’s decision said that its marketing team wrestled with whether it should stay in NASCAR. Most of its marketing focus is put against participant sports, and as the brand’s product line expanded to include a pre-competition, a during competition and a post-competition drink, its emphasis on participant-based sports has increased.

    Ultimately, sources said Gatorade opted not to leave NASCAR because its distributors saw value in the program. They have activated at retail in race markets during the last decade and used the hospitality and tickets included in the package to reward retailers, sources said.

    In addition to the victory lane deal, Gatorade has endorsement agreements with drivers Jimmie Johnson, who drives Hendrick Motorsports’ No. 48 car, and Matt Kenseth, who is leaving Roush Fenway Racing for Joe Gibbs Racing after this season.

    Its parent company, PepsiCo, is in the midst of renewal negotiations with Hendrick Motorsports, and the future of Gatorade’s relationship with Johnson and other Hendrick drivers is expected to be determined by that deal.

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  • NBA clubs’ revenue thirst may make for crowded stanchions

    Terry Lefton
    Call it a sign of the times. At every league, there’s a continuing demand for new team revenue in local markets. Considering how soft the economy is and the maturity of the ticketing, suites and sponsorship businesses, that need is now at record levels.

    Over the years, we’ve become accustomed to the NBA waiting for others to pioneer ventures and then coming in after mistakes have been made and applying the lessons learned. It’s a considered approach we’ve learned to expect from the NBA, which we have long maintained with tongue only partly in cheek really stands for Nothing But Attorneys.

    Static signs will share some NBA stanchions with LED signs, rather than be replaced by them.
    Photo by: HUNTLEY PATON
    Things at the NBA have changed as local team revenue imperatives have become more, um, imperative. The most recent manifestation of this comes in the form of the NBA looking to be the first of the big four stick-and-ball properties to accept non-endemic advertising on its uniforms. An even more timely example will be seen imminently in the somewhat arcane world of NBA stanchion signage, the most camera-visible signs on NBA courts. ANC pioneered NBA static stanchion signage in 2007, with State Farm taking most of the positions in the 21 NBA arenas where it has been installed.

    Competitor Van Wagner is launching Daktronics’ digital LED stanchion sign this year (SportsBusiness Journal, May 14-20). So naturally, we assumed it would be a zero-sum game: NBA teams would opt for either static or electronic signage. That’s where we miscalculated the demand for incremental team revenue. Sources in which we have absolute confidence tell us as many as 15 NBA teams will begin this season with both electronic and static signage on their NBA stanchions. The additional LED stanchion signage will be near the basket support that holds the static signage, but farther back, and facing the corner of the court.

    We’re fairly certain that the LED signs will not read Geico while the permanent sign touts State Farm. Keep in mind, however, that the NBA also allows an ad “wrap” around the basket support, and there is team branding on the top of the backboard and the league’s logo on the backboard. Call it “stanchion and backboard clutter.”

    “Generally, the league and teams have held off on new [marketing/advertising] inventory, but we all see salaries and other expenses going up every year — it’s tough to say no anymore,” said Lara Price, Philadelphia 76ers senior vice president of business operations.

    But there is more to the story.

    ANC has developed its own digital stanchion signage, which was tested before a New York Liberty game in September. It has yet to be approved for NBA use, but we expect that will happen before the start of the coming season. So not only do we have clutter in stanchion signage, we have a cluttered market among stanchion signage providers. Of course, one man’s clutter is another man’s opportunity.

    “What you are seeing is that teams and league over the course of a couple of years have realized that the stanchion advertising position has been undermonetized,” said Van Wagner Sports President Cliff Kaplan.
    Lesson learned here: Never underestimate a mature industry’s interest in new revenue.

    > SPONSOR FRIENDLY: Early on, licensees and sponsors are giving the NHL high marks for transparency in a lockout that few on the business side believe will end before the holidays.

    Sponsors tell us transparency is there via highly secure conference calls with top league officials, including Commissioner Gary Bettman.

    “They are being open, saying, ‘Ask me anything,’ and so sponsors are in the loop, even when there is not a lot of news,” said Kern Egan, who heads Haymaker, the sports agency for NHL Winter Classic title sponsor Bridgestone. Since many believe that the next NHL season will begin with the annual Jan. 1 outdoor game (if at all), the next big question from every NHL business partner is what the drop-dead date is for canceling the Winter Classic. Thanksgiving? Or is missing the Classic a sign that the season is dead. There are no answers, but these are just the leading questions among league business partners.

    “The problems are so fundamental, it is hard to believe missing any particular time period will have any greater impact,” said Ed Horne, COO of Madison Avenue Sports and Entertainment and former NHL Enterprises president.

    > COSTUME BALL: In a search for new categories, team marketers have ignored costume jewelry, but not the Boston Celtics. The team has signed Cranston, R.I.-based bangle, beads and bracelet maker Alex and Ani to a team sponsorship that Ted Dalton, Celtics vice president of corporate partnerships and business development, tells us is as significant as many of the team’s other partnerships. Alex and Ani, which is a licensee of the U.S. Olympic Committee, MLB and the Collegiate Licensing Co., but not the NBA (at least not yet), becomes the first presenting sponsor of the Celtics’ dance team and will get exposure on their uniforms, along with digital inventory, team social media inclusion and product exposure in the Celtics Dancers Calendar. Alex and Ani did a playoff deal with the Celtics last spring, a relationship that started when the jewelry maker leased retail space from a Celtics owner.

    Terry Lefton can be reached at tlefton@sportsbusinessjournal.com.

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  • Lots to buy: Toyota expands Kroenke Sports deal by putting names of models on Pepsi Center parking areas

    Kroenke Sports Enterprises has signed a three-year renewal with Toyota that gives the automaker naming rights to several parking lots surrounding Pepsi Center in Denver.

    The sponsorship is valued at seven figures annually, said Tom Philand, Kroenke Sports’ senior vice president of marketing and media sales.

    Toyota also adds the rights to display its vehicles at the Denver arena during most games.
    Photo by: KROENKE SPORTS & ENTERTAINMENT
    Toyota was already a sponsor on the media side with Altitude, the sports television network owned by Kroenke Sports that covers the Avalanche, the Nuggets and the Colorado Mammoth of the National Lacrosse League.

    The bigger news is that the renewal marks the first expanded sponsorship for Kroenke Sports after the company integrated marketing inventory of both the media and sports groups earlier this year, Philand said.

    “This is the first deal that went across all boundaries,” he said. “The nice thing is that we have consolidated to the point where we can sell it all for TV, radio, the teams and the building.”

    The deal’s main component is the parking lots. Toyota bought the rights to brand 10 lots for its Camry, Corolla, Highlander, Prius, Rav4, Tacoma and Tundra models. The Prius brand is tied to three lots, and Camry’s name is on two. In total, there are about 6,000 parking spaces.

    There will be signs and pole banners designating each lot. “We got the idea from rental car companies branding their lots,” Philand said.

    In other markets, Lexus and Mazda have done deals with teams and facilities tied to lots where only those brands are allowed to park. In Denver, all lots are open to the public with no spaces reserved for arena patrons driving those Toyota models, Philand said.

    The deal extends to special offers tied to new car sales and vehicle service printed on the backs of parking passes for season-ticket holders and other arena patrons.

    In addition, Toyota now owns the rights to display its vehicles in the arena’s grand atrium and on both public concourses during most events. The exception is six Nuggets games, where NBA sponsor Kia has the right to display vehicles, Philand said. Toyota has the rights for all other NBA games.

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