American Express Co. may not be as visible as its competition when it comes to sports marketing, but the company is quietly rewriting the book on how to execute a sponsorship, with methods that personify what the American Express brand is all about.
The $19 billion company has taken the concept behind corporate hospitality and extended it to the consumer level by using its relationships with sports properties to offer special services and amenities to American Express cardholders.
While the classic approach to sports marketing calls for the sponsor to ride the coattails of a property in order to generate exposure and consumer affinity and separately use specific events to entertain key clients, American Express combines the two disciplines, tapping into sports as a way to treat all of its customers like members of an elite club.
"We think about what's going to enhance the card member's experience," said Nancy Smith, vice president of global media and sponsorship marketing at American Express. "That's the piece that makes a sponsorship work — an experiential element."
That means lending cardholders American Express-branded periscopes at the World Golf Championships to see over the crowds and get a better look at Tiger Woods. Or offering cardholders a special chance to buy tickets for the NCAA Men's Basketball Tournament regional games.
It all plays into the company's corporate vision statement, which is to be the world's most respected service brand.
This approach to sports has developed at American Express in just the last several years. Like many large corporations, the company once had a sponsorship portfolio that was all over the map and had little to do with its overall brand strategy.
"We've spent a lot of time trying to solidify and crystallize what our objectives are," said Smith. "Once you know where you're going it's easier to get there."
The company dropped its sponsorships of the American Express Invitational on the Senior PGA Tour, as well as the Phoenix Open, and actually stayed out of golf sponsorships for several years. Then, when the right opportunity came along in the World Golf Championships, the company jumped on it.
When the first of three events was held in San Diego this year, American Express was able to offer special access to its cardholders and even invited a select group to an afternoon they'd never forget — a private clinic with American Express endorser Woods. Each participant received a special laminated pass to the event, adding to the VIP feel that American Express wants all of its services to provide.
When negotiating sponsorship deals, signage and media value are not the first thing the company looks for. Instead, officials look for perks — anything that will bring customers "inside the ropes," as the 18-person sponsorship marketing staff likes to call it.
Cardholders who use American Express to buy season tickets for a WNBA team or one of eight NBA teams are invited to free coaches clinics. If they show up to the U.S. Open and want to check their bags or coats, all they need to do is show an American Express card and the service is free.
"Sponsorships have evolved for us in terms of going beyond logo integration and brand awareness," said Derrick Murphy, who reports to Smith as vice president of sponsorship marketing. "People understand who we are; now they want to understand what we're doing for them."
To cardholders who receive newsletters and special inserts in their monthly statements, these benefits are now clearly apparent. But to the majority of Americans who don't own an American Express card, the company's sponsorship activity is almost invisible.
For the most part, American Express has not integrated its sports sponsorships into its national advertising campaigns and lacks the consistent consumer message that MasterCard International Inc. has delivered with its "priceless" campaign and Visa has with its "everywhere you want to be" slogan.
Last year American Express spent a healthy $295.9 million on advertising, according to Competitive Media Reporting. But with many divisions and many different advertising messages, the company did not put the sort of weight behind its "Do More" tag line that the competition did with their lead campaigns. The card division decreased spending by 10 percent to $173.2 million.
American Express has managed to slip some of its sports affiliations into national advertising, running an NBA-themed Do More print ad and using Woods and Joe Torre in billboards that ask "Are you a member?" But compared to how seamlessly MasterCard dropped the Major League Baseball home run race into the priceless campaign, American Express has clearly not embraced the idea of leveraging its sponsorships through national mass media.
Most of the company's sports-themed advertising can be found on the local level, such as a clever U.S. Open campaign that made its way to New York subways and local publications but never found a national stage beyond tennis media.
That, however, is by design and an outgrowth of an ultra-targeted approach that makes more use of the company's extensive database than it does of network television.
"It's quite the antithesis of the strategy Visa has, which is spend, spend, spend and let everyone know who you're associated with," said Mark Dowley, CEO of American Express' sports marketing firm, Momentum IMC.
American Express brings a strong sports presence to its Membership Rewards loyalty program, offering everything from NBA-licensed merchandise to a one-on-one match with Woods, depending on how much a customer spends with his or her card.
The company also localizes its message, bringing offers to card members based on where they live, as well as past spending habits and preferences. A cardholder living in Southern California will get the invitation to the World Golf Championships. In New Jersey, the offer will be for tickets to the NCAA Men's Basketball regionals. This sort of activity is only expected to increase.
"They're in a wonderful position to start really leveraging their database," said Claire Taylor, senior editor of the industry newsletter Card News. "Instead of doing the buckshot method, television advertising, which is so much less exact and so much more expensive, they're getting word out to people who really care."
Perhaps surprisingly, American Express has not pursued the affinity cards business to any great degree — a major element of how MasterCard and Visa team with banks to leverage their sports sponsorships. American Express offers New York Knicks and Rangers cards on a regional basis, part of an overall Madison Square Garden sponsorship in which cardholders receive discounts at the arena and lots of other little goodies. But the company has not extended this program to the other six NBA teams it sponsors.
The NBA sponsorship, as a whole, is a challenging one for American Express. Only the teams can deliver the direct sort of consumer access and experiential marketing the company covets, but American Express has a league deal with NBA Properties Inc. that runs through 2002.
Although the company says the NBA is an important sponsorship because so many of its cardholders are basketball fans, just being associated with the league does not really fit in with the way American Express markets itself.
So all parties are now trying to find an entirely new way to execute an NBA sponsorship, honing in on Internet commerce and the NBA Store as avenues to fit the NBA into the American Express model.
"They keep pushing us to find new and different ways we can incorporate card member benefits," said Rick Welts, the NBA's chief marketing officer. "We're talking to them a lot about future e-commerce plans, places where we're involved in transactions. It takes us to some interesting places."
