A-B InBev's Nick Kelly Discusses Incentive-Laden Sponsorships
Sports marketing has evolved over the years, as companies and CMOs have had no choice but to adopt new models and practices for engaging with partners. One company which has embraced a new way of working together with its partners is A-B InBev. The beer company has now implemented incentive-laden sponsorships with its partners as part of a program that began in April '18, according to the company's VP/Partnerships, Beer Culture & Community Nick Kelly. Kelly, speaking on Day 2 of the Octagon Sports Marketing Symposium, said that it took about a year for the program to get up and running, but that it was a rather easy sell internally because of the company's familiarity with the new model. Kelly: "The culture is there internally for us. We basically have to sell the fact that our agencies are built off of a variable. So, all of our agencies had that model in place. Our employees had it, our media partners have it with ratings guarantees, the Facebooks and Twitters of the world have the same thing with reach. The only thing that was guaranteed no matter how poor or positive it was was partnerships. So the internal sale was easy."
BUYING IN: The most difficult part of implementing a new sponsorship strategy was convincing partners that it can work, Kelly said. "The hard part was actually on the team side and the league side," he said. "We had to have some believers to jump on board at first." A-B InBev has implemented daily forecasting to see which partnerships will work and which will not. Kelly: "We had about 18 teams who had an incentive to make the (MLB) playoffs. Well, they're all not going to make it. So, then all of a sudden that immediately frees up x amount of dollars on that date. ... Now I can go buy more postseason inventory. I can go reallocate those dollars and have real working dollars." Kelly said that teams have come around to the new sponsorship model. "Fewer and fewer teams are scared of it because what we've been able to show them is you can control your own destiny for probably, if we're taking 10-20% of the contract, you can probably control 80-90% of it just off of the assets that we have," Kelly said. "You're asking me to bet on you, but you need to bet on yourself." Kelly said that the company has done 83 deals under the new model with all of their clients and partners. The only partners that A-B InBev has not touched yet with the new model is college sports.