Technology’s two-edged sword cuts a wide swath through the sports marketing industry.
On one hand, the Internet is robbing sports TV of viewers by providing more interactive and personalized entertainment choices to the public. Yet emerging entertainment and communication technologies are bringing TV viewers back by engaging them in TV programming like never before.
Online gaming is taking an increasingly larger share of consumers’ precious leisure time. According to adage.com, it’s a $9.4 billion business in the United States.
Video games drive more revenue than movies. And you can be sure that sports sponsors are doing their best to intercept customers in that space. Last year, video games attracted $414 million in advertising revenue, according to Ad Age.
Sports advertisers already involved with reaching customers through gaming include Coca-Cola, BMW, Nokia, Kraft Foods, Nabisco, Procter & Gamble, DaimlerChrysler, Sony, Levi Strauss and Nike.
Even dowdy old Volvo is hooked up. The Ford-owned Swedish car company is known for building safe, boring cars. Volvo has taken steps to reinvigorate its line and reach younger customers.
For example, Volvo recently teamed with Microsoft’s Xbox home gaming system to feature the carmaker’s hot new S40 sedan in one of Xbox’s best-selling racing games, Rallisport Challenge 2. It’s a powerful way to give customers in the 18-34 age bracket a virtual brand experience.
But lest you believe that online gaming is the exclusive domain of male adrenaline junkies, think again. A recent AOL study said that females spend more time playing online games than men. In fact, women spend nine hours a week gaming on the Internet while men spend an average of six hours a week.
While online gaming is taking the public away from television, another form of technology could drive sports viewers back to the boob tube.
According to a 2004 study published by the McKinsey Quarterly, Short Message Service (SMS), or instant text messaging, could significantly boost sports TV ratings and advertising revenue. SMS allows anyone with a mobile phone, personal digital assistant or glorified beeper to send and receive brief messages.
The McKinsey study noted that last year, 1 billion text messages were sent daily worldwide. By 2006, Western Europe alone is expected to send 1 billion messages daily.
The study said that 42 percent of all European mobile phone users (and 70 percent of European teenagers) are interested in interaction between their cell phones and the TV programs they watch.
With SMS, fans can vote on opinion polls and the broadcaster can run a graphic “crawl” across the bottom of the screen to express fans’ opinions. SMS can also draw the public into the competition.
Fans can communicate with participants and officials. They can gamble on instant wagers. They can buy jerseys, caps, programs, posters, artwork, T-shirts and anything else that could be delivered to their doorsteps the next day.
McKinsey said that SMS interactivity on free TV could increase viewership by up to 20 percent. The report said niche cable programming could expect ratings spikes of 50 percent to 100 percent.
McKinsey also said that 5 percent to 15 percent of a television show’s viewers can be drawn into active participation through SMS. This is a much more powerful participation rate compared with toll-free telephone (3 percent to 8 percent) and Internet (1 percent to 4 percent) live-communication techniques.
Except for occasional ratings spikes generated by big sports TV events such as the Super Bowl and the Olympics, television ratings are in a malaise. Consumers have limited leisure time and too many entertainment options on how to spend it.
Successful sports marketers will always have to take their value message to the customer, no matter where the customer goes. The trick is to anticipate customers’ movements, have the product and the resources to meet their needs and stay clear of the swath of that high-tech sword no matter which way it swings.
Mel Poole (mpoole@sportsbusinessjournal.com) is president of consulting and marketing firm SponsorLogic.
