7 THEME 7: PROMOTION AND SPONSORSHIP IN COLLEGIATE ATHLETICS
Learning Objectives
*Understand the element of the promotion mix and emerging forms of promotion
*Specify the importance of public or community relations to sports marketers
*Understand the importance, effectiveness, and objectives of sponsorship
*Develop a sponsorship idea as a promotion mix element
Introduction
The term, promotion, is often viewed as interchangeable with words such as “marketing” and “advertising.” By definition, promotion can be seen as all corporate activities aimed at influencing consumer-purchasing attitudes and behaviors (Shank & Lyberger, 2015). In order to influence the consumers, a process of communication is established to connect the sender of the message (encoder) and the receiver (decoder) as one entity (oneness). Figure 1 illustrates how this communication process is achieved through a sequence of steps. The authors will use a self-created acronym, ADIDAS, to express the purpose and objectives of promotional activities. Simply stated, each promotional program intends to create consumers’ Awareness (A), identify their Desire/Interest (D/I), recognize the consumers’ decision/determination and choices (D), rate consumers’ preference on their product Adoption (A), and evaluate their overall Satisfaction (S). The management of promotion usually focuses on several promotional mix elements of the marketing mix. A brief description of those common promotional elements is listed in Table 1.
Table 1. Sports Promotional Mix
Term | Definition |
Sales Promotions | Short terms incentives designed to stimulate immediate demand for sports products or services (Shank & Lyberger, 2015) |
Public or Community Relations | A promotional strategy which identifies, establishes, and maintain mutually beneficial relationships between the sport organizations and the publics |
Personal Selling | A salesperson uses the person-to-person communication to work with buyers in order to influence their purchase needs |
Advertising | A form of promotional mix that create and maintain brand awareness and brand loyalty |
Publicity | Free media exposure for the sport organization |
Sponsorship | (See Sponsorship section below) |
(Q1) The Lexus car company has just produced a series of commercials to be aired during the NCAA March Madness men’s basketball tournament. The firm would be considered to be the _____ for those messages.
- (a) presenter
- (b) source
- (c) channel
- (d) encoder
- (e) receiver
DYK: NFL’s Five Main Marketing Strategies 1) Branding is the key; be consistent 2) Connect with fans: The “helmet-off” approach (players are people, too) 3) Reward the most loyal fans 4) Partner with influencers (on social media) 5) Partner with other brands Reference News Desk (2022, Nov. 2). Get the ball rolling: 5 things you can learn from the NFL marketing strategy. https://www.newsanyway.com/2022/11/02/get-the-ball-rolling-5-things-you-can-learn-from-the-nfl-marketing-strategy/#:~:text=NFL%20marketing%20strategy%20utilises%20a,they’re%20wearing%20a%20helmet. |
Sports Promotional Mix
Advertising, Publicity, and Media Exposure
Advertising is perhaps the most popular form of promotion utilized to persuade consumers to engage in purchasing behaviors. They come in forms of signage (i.e., printed message or logos, banners, and billboards), outdoor media (i.e, blimps, buses, and drones), celebrity endorsements, print media (i.e., newspapers, magazines, brochures, posters, game programs, and direct mailings), and broadcast media (broadcast messages through radio and television). In America, these five gigantic corporate industries are the highest spenders in advertising in sport marketing and sporting events: (1) automobiles (e.g., GMC and Ford), (2) telecommunications (i.e., AT&T, Verizon, and Sprint), (3) foods (McDonald & Frito-Lay), (4) alcohol/beer (e.g., Anheuser-Busch, Miller Lite, and Coors Lights) , and (5) insurance agencies (e.g., Allstate, State Farm, and GEICO). In 2007, various divisions under GMC spent a total of $353 million in sports advertising (SportsBusiness Journal, 2007). More importantly, companies have realized the great influence of social media in our daily life and began to spend tons of money advertising in those new technology platforms. In 2017, Facebook alone obtained approximately $40 billion in revenue from advertising (Kirkpatrick, 2018). It would be interesting to examine the shift of advertising dollars from television to social media and how sports organizations would be impacted by the redistribution of advertising spending among different media platforms.
In terms of building a successful advertising strategy, basic objectives such as creating awareness, informing consumers about the product, influencing consumers’ attitudes, and purchasing desire all need to be carried out. In addition, advertising also has another indirect and subtle goal in enhancing corporate image. Many different types of creative appeals and themes can be observed to guide audience identifying the competitive advantages or benefits of the product or service. Table 2 listed those popular themes that we have often seen from television commercials. They are all innovative ideas that the marketers can adopt to design an appealing advertisement. The presentation of advertising messages is also a special area that experts have spent a lot of effort to conduct research and conclude findings. In general, there are five prevalent approaches for sending the communicative message to the consumers.
- (1) One-sided message focuses on disseminating information from an organization as a monologue.
- (2) Two-sided messages place much more emphasis on interaction and dialogue between the consumers and sports organizations.
- (3) Comparative message often directly or indirectly contrasts one’s product and service with other (e.g., A person needs to eat five bowls of A-brand cereal to get the equal amount of nutrition of one bowl of Total Brand cereals)
- (4) Slice-of-Life or Lifestyle messages show an athlete or consumer may use the advertised product (or service) in daily life situation.
- (5) Testimonials refers to statements given by a spokesperson (or endorser) about the sports product. They are often given by celebrity athletes (e.g., star-golfer Phil Nicholson’s testimony about the effect of Embrel on his arthritis.)
Table 2. Effective Themes and Appeals for Advertisement
Theme | Example of the Sport Advertisement |
Health Appeals | Certain energy bars contain more nutritional ingredients and fibers |
Emotional Appeals | Dick’s Sporting Goods: Young athletes strive for excellence to pursue a future playing career |
Fear Appeals | Warning young athletes not to use dips (smokeless tobacco) |
Sex Appeals | Various commercials of Axe (a male deodorant brand/product) |
Pleasure or Fun Appeals | All State: Mayhem may occur in football tailgate parties (The majority of the Super Bowl commercials may fall in this category.) |
Scientific Appeals | KTTape: Stress the therapeutic effect of the product (endorsed by Beach Volleyball Olympian Kerri Walsh Jennings) |
(Q2) _____ show(s) a “common” athlete or consumer in a common, everyday situation where the consumer might be using the advertised sports or non-sports product.
- (a) Slice-of-life advertisements
- (b) Comparative advertising
- (c) Scientific advertisements
- (d) Non-specific advertisements
- (e) Subjective advertising
(Q3) Typically, creative strategy emphasizes_____.
- (a) entertainment
- (b) novelty
- (c) the product’s competitive advantage or benefits
- (d) media selection
- (e) none of the above
To achieve media exposure for promotional purpose, the sports marketers should carefully select the media vehicles and develop effective objectives. It is important to ensure the messages will be broadcast with continuity and received by the audience during the prime-time schedule. Publicity refers to the free media exposure for the sports organizations. Sports organizations may have valuable and interesting information to give to mass media through news releases or press conferences. However, sports organizations usually need to pay a fee to create media exposure. Traditionally, two specific measures, reach and frequency, are available to marketers to determine the effectiveness of advertisement or promotion. Reach identifies the total number of audiences exposed to an advertisement in a given medium. Nielson Media Research Agency is a famous entity that has conducted television audience ratings for over 50 years. The common results of total reaches are often presented by two types of data, rating and share. In general, 1% of TV rating represents about 2 million people watching a specific program during a given time in this country. Please check the FYI box below to learn more about calculation of rating and share. Another way to determine the effectiveness of advertisement is to calculate the “cost per thousand.” For example, if the company SC invests $2 million to produce a commercial that receives 1% of TV ratings, this means the cost for SC to reach an individual audience is $1. The cost per thousand in this case will be $1000. Obviously, the higher the cost to reach an individual, the less effective the advertisement is. Frequency focuses on the number of times an individual or household is exposed to the media vehicle.
FYI: Calculation of TV Raging and Share
Here is the breakdown of TV audiences as a specific given time (n = 100)
Program | Number of Viewer |
Channel 140 | 30 |
Channel 20 | 15 |
Channel 130 | 10 |
Channel 102 | 5 |
Did not watch | 40 |
Rating of Channel 140 = (Number of Viewers) / (Total Population) = 30/100 = 30%
Share of Channel 140 = (Number of Viewers) / (Total Viewers who watch TV) = 30/60 = 50%
(Q4) The number of times a person or household is exposed to a communication vehicle is called _____.
- (a) reach
- (b) frequency
- (c) exposed rate
- (d) the repetition factor
- (e) the novelty factor
Technology upgrades for stadiums and arenas really help the teams and organizations enhance their promotional agenda. Studies have shown that digital displays can increase brand awareness by 48%. Digital displays can reduce fans’ perceived wait time in long concession lines. They can offer entertainment and deliver great interactive experiences. Furthermore, the teams no longer need to waste time and space to place traditional print advertising signage (Belcore, 2019). There is clear cost-related benefits for the tech decision-makers to adopt digital technology for doing promotions.
Other Forms of Promotional Mix
Personal selling is a common promotional strategy in sports ticket sales. Franchises often have agents and representatives deal with season-ticket and group ticket sales. In addition, these staff also negotiate and secure major corporate sponsorship deals, lease of luxury suites and luxury boxes, and naming rights deals. The concept of “sales funnel” should be highlighted while engaging in personal selling, because this practice helps the sales agents organize and allocate ideal clients to achieve maximum sales (Shank & Lyberger, 2015).
Celebrity endorsements can be viewed as a unique mixture of sponsorship and advertisement. In this promotional strategy, a celebrity is used to sell an organization’s products and services. The organization can also support the involved celebrity or the team of the celebrity as a sponsor. The amount of celebrity endorsement for renowned sport stars are gigantic. The sports apparel giant, Nike, realizes the strong influence on basketball fans that LeBron James has generated, the company is willing to pay $90 million for seven years for his endorsing contract. It is estimated that tennis star Roger Federer’s 10-year deal with Uniqlo has a value of $300 million (Time, 2018). In addition, his another endorsement contract is worth of $13 million for 10 years (Hancock, 2017). Derrick Rose’s amazing Rookie of the Year and MVP status earned him a $210 million deal with Adidas. During the year of a specific Olympics or other mega international sporting events (such as FIFA World cup), we can easily identify several star athletes endorsing products for various companies. Australian swimmer, Ian Thorpe, became the official endorser of Lenovo Computer and Rosetta Stone language software program. The campaign showed Ian learning Chinese and getting ready for the 2008 Beijing Olympics. In 2016 Rio Games, Allyson Felix (Olympic sprinter), Jordan Burroughs (Olympic gold medalist and 3-time World Champion wrestler), Donnell Whittenburg and Sam Mikulak (Olympic gymnasts) all were identified as the most marketable athletes at that time. In 2019, Beyond Meat, producer of plant-based burgers and sausages, has attracted several NBA players as endorsers and investors. The cohort include several famous players such as Chris Paul, Kyrie Irving, JJ Redick, DeAndre, Jordan, Harrison Barnes, and Victor Oladipo. The CEO, Ethan Brown, believe that his veggie burgers will provide elements, such as protein, amino acids lipids, vitamins, trace minerals, and water to benefit elite athletes. With the endorsement and investments of those players, the company’s stock price reached $230 a share in July 2019 on the NASDAQ’s IPO (Ballard, 2019).
Practical Exercise: Your Ultimate Choice
According to Bush, Martin, and Bush (2004), celebrity endorsers’ or athletes’ role model influence is positively related to teenagers’ favorable word-of-mouth communication and brand loyalty. You are a new employee for a financial advising firm (or sports business organization). The CEO wants to do a national marketing campaign using a sports figure as the spokesperson. Even though you are not in the marketing department, the CEO knows you played college sports and has asked you to submit the names of four sports figures you would use for the marketing campaign along with a short discussion of why you chose each one in order from #1 to #4. An example of the format is shown below. #1 Tiger Woods: I think Tiger Woods would be an excellent spokesperson for our firm because…..
Useful websites and articles related to celebrity endorsement (about examples, best practices and evaluation for effectiveness)
http://www.athletepromotions.com/athlete-product-endorsements.php
http://www.cnbc.com/id/43398070
http://quod.lib.umich.edu/j/jsas/6776111.0001.110?rgn=main;view=fulltext
http://www.cbsnews.com/news/good-sports-using-athlete-endorsements/
http://connection.ebscohost.com/c/articles/13495179/athletes-as-product-endorsers-effect-gender-product-relatedness
http://www.milb.com/news/article.jsp?ymd=20160209&content_id=164014788&fext=.jsp&vkey=news_t495&sid=t495
Bush, A. J., Martin, C. A., & Bush, V. D. (2004). Sports celebrity influence on the behavioral intentions of generation Y. Journal of Advertising Research, 44(1), 108-119.
FYI: Factors impact endorsement effectiveness (Fullerton, 2022)
A number of factors may impact the potential effectiveness for using a celebrity endorsement campaign. Here are a list of important concerns: *Is the endorser a high achiever? *Does the endorser have credibility (believability)? *Is the endorser well known? *Is the endorser likable? popular? attractive? recognizable? and admired? *Does the endorser provide ease of recall? *Is the endorser congruent with target market? *Is the endorser a continuity prospect? |
Sales promotions are short-term incentives that are designed to stimulate immediate consumption demand. Different methods for offering incentives may include providing premiums to selected individuals, offering contests and sweepstakes for mass-participants, adopting sampling to choose luck winners, and giving away coupons and discounts. Today, displaying products at the point-of-purchase can also be viewed as an activation technique utilized by many event sponsors. It is quite common to see local sponsors (business) around college campuses offer discounted coupons to students and fans after wins or certain types of remarkable performances. Here is a list of examples.
*Ice cream give away for opponents missing two consecutive free-throws in a basketball game.
*A discounted coupon for buffet after a home win.
*A free food item for scoring over 100 points at the basketball game.
*A free hot-wing order for hitting a home-run in a designated inning.
(Q5) All of the following are common sales promotion tools EXCEPT _____.
(a) rebates
(b) coupons
(c) buy one get one free
(d) contests
(e) publicity releases
Promotion Planning
While planning an effective promotional campaign or strategy, the sport marketers first must clearly understand all the concerns associated with the target market. The plan should have well defined objectives to examine the effects, inspire awareness of various groups of audiences, communicate educational messages and information with the consumers, and establish the best means to reach out and influence the consumers. Two popular strategies, push and pull strategy, are often utilized by the sport organizations to communicate with the prospective consumers. The pull strategy is a customer-focused method that a sports organization uses to create and entice consumers’ demand for a product (Parkhouse et al., 2012). This strategy is popularly used by the pharmaceutical industries while trying to attract specific types of patients for newly developed medicines. In the collegiate athletics, we see more schools begin to off personal seat licenses (PSL) to avid season ticket holders. This is a great way to generate ticket revenues by encouraging those who have special seating preference to spend more for their privately-owned premiere seating locations. The push strategy emphasizes taking the product through different distribution channels to the consumers and putting the product (or service) in front of them at the point of sale. A simple example for this strategy is schools and teams regularly offering giveaway items and souvenirs at the ball games (events) to the fans.
It is vital for any sports organization to establish an appropriate promotional budget, since the plan and ideas cannot be executed without the financial support. Several budgeting methods are available for the organizations to adopt based on their financial resources, intended business goals, and business environment. Here are examples of budgeting methods highlighted by sport marketing experts (Shank & Lyberger, 2015)
*Arbitrary allocation—Designating a certain amount of the business budget for promotion;
*Competitive parity—Determining the amount of promotional budget after reviewing the spending of main competitors;
*Percentage of sales—Designating a certain amount or percentage of sales revenue back to promotion;
*Objective and task method—Determining the promotional budget based on the intended business objectives;
*All you can afford—Spending as much as the organization can afford on promotion.
The integrated marketing communications refers to the concept by which a sports organization carefully integrates and coordinates various promotional mix elements to deliver a unified message about the organization and its products. This is probably the most common and practical strategy adopted by the modern sports franchises and organizations.
FYI. Minor League Baseball and MLB are considered to be the most entertaining family-oriented sporting events by many. Let’s take a look at their practices (Guertin, 2015; Snyder, 2017; Brooughton, 2012).
MLB’s practices:
- (1) 798 giveaway dates in 2011: A 11% increase from 2010
- (2) 1891 non-giveaway promotion in 2011: 33% increase from previous year
- (3) More than 80% of MLB marketing managers believe that giveaway promotions have a positive impact on game attendance.
Figure 2. MLB Most Frequent Giveaway (Brooughton, 2012)
(Q6) Promotion planning begins with _____.
- (a) a situation analysis
- (b) target market considerations
- (c) communication process analysis
- (d) budget development
- (e) financial acquirement
Public Relations
The importance of public relations to sports organizations has increased rapidly as the communication technologies continue to improve. This unique promotional mix identifies, establishes, and maintains mutually beneficial relationships between the sports organizations and the public. In most cases, sports audiences or fans are recognized as the “stakeholder” or “public” by the sport organizations. These stakeholders are the individuals who the organizations need to communicate with. By winning the public’s approval, the sports organizations get the “license” to operate and are able to sustain their business or service within a supportive operating environment (Hopwood, 2007). Community relations (CRs) is a significant and influential component of public relations. Activities within CRs are designed and intended to develop long-term two-way relationships between the public and sports organizations. Sport organizations have learned from research to understand the importance of engaging in social responsibility. This practice signifies the sport organizations are now involved in “cause-related marketing” (Bradish & Cronin, 2009; Roy & Graeff, 2003; Satinover & Gardner, 2017). Cause related marketing is a practice that takes one’s story or situation and uses it to bring a social cause in our society (Santiover & Gardner, 2017). In America, many professional sport teams have taken on five common types of social responsibility to demonstrate their corporate citizenry. These examples are: (1) donating to charity, (2) supporting social causes, (3) conserving resources and reducing wastes, (4) treating employees fairly, and (5) complying with equal employment opportunity practices (Parkhouse et al., 2012). Methods for engaging in desired social causes or social responsibility may include participation in community events, producing written materials and statements (i.e., press guides), hosting educational seminars, and lobbying. Readers can find more examples of PRs and CRs organized and practiced by professional leagues and college athletic programs in Table 3.
Table 3. Examples of Community Relations Project by Professional and College Sports
Professional | College Sports |
NBA earth is here: Facility and environment | Reading to elementary school students |
NBA’s Green | Coaches vs. Cancer & Strikeout Cancer |
NBA Care and NBA Net | Tot to Toddlers |
Basketball Without Borders | Runaway from Drugs, charity 5K runs |
Hockey Fights Cancer | Local establishment of Make a Wish Foundation |
Cincinnati Bengals | Devon Still and his son (care for pediatric cancer) |
Boston Red Sox | Care for ALS (the famous Ice Bucket Challenge) |
Photo 1. Example of NFL Community Relations Programs
FYI: Grassroots Sports Marketing
https://www.jobsinsports.com/blog/2013/05/19/grassroots-sports-marketing/ *This is a free or low-cost strategy that starts from the ground up. *Often uses nontraditional strategies to get a message out to existing fans *Social Media is widely used as a tool to spread announcements and messages *Most influential use: engage the fans in conversation *Make fans an extension of the team. Getting their interactions and ideas *Utilize viral marketing and community Marketing *Create ”walking advertisements” *As a team, always wearing the team merchandises *Hire “field marketing representatives” *Give out free t-shirts, hats, water bottles… to potential fans, gets apparel out on the street |
(Q7) A college athletic program that champions for hiring of the African-American head coaches can be considered as engaging in cause-related marketing practice. True/False
Sponsorship
Instead of spending a great amount of money on sports advertising that is hard to know the effect, sports product manufacturers and sport organizations have all embraced sponsorship as the key focal point of their marketing strategies. The growth of sponsorship exceeds traditional forms of promotion in this decade. Sponsorship has become a driver of revenue for sports entities, even in the midst of business recession. It is a form of investment in cash, in kind or in activity by a sports entity to support overall organizational objectives (of itself and others), marketing goals and promotional strategies. Since sponsorship has become a core issue and concern for mega event management and marketing, there is also growing recognition that tourism and hospitality industries can play an active role in attracting sponsors and achieving positive outcome for events’ host city/country (Brown, 2008). Unlike other forms of communication such as advertising and publicity, sponsors must fight the clutter and find the perfect match. So while executing sponsorship programs at the collegiate institutions, sport marketers should not treat sponsorship as a replacement of advertisement, or simply treat the sponsors as philanthropist for donating money to the program.
According to the report of IEG (2014), $20.6 billion was spent on sponsorship in North America, and of that amount, about $14.4 billion spent on sports and about 10% in other entertainment. As for sponsorship in professional sports, the NFL still has the largest part (7% = $870M) and the NHL has the fastest growth. For the international events, $20M is a common price for landing a sponsorship deal. According to the sport fans’ perspective, NASCAR, NBA, and PGA are all highly recognized entities in using sponsorship as a promotional means (Irwin & Asimakopoulos, 1992). Sponsors are often categorized into different tiers (i.e., Platinum, Gold, Silver and Bronze) based on the level of financial contribution and business function (i.e., title sponsor, official sponsor, and official supplier).
Sports sponsorships in collegiate athletics are thriving as well. According to the SportsBusiness Journal (2008), there were 114 brands and 11000 sponsors involved in college bowl games, not including Southwest Airlines and Ford. The total sponsorship value was around $475 million. In addition, All-State Insurance replaced Nokia and became the title sponsor of the Sugar Bowl that year. The cost that year for that sponsorship deal and extra advertising campaigns was $20M a year. Other contenders joined in the bidding war including State Farm and GEICO. In the 2014-15 academic year, sponsorship dollars in college athletics totaled $1.1 billion, most of the sponsorship dollars are centered on football and basketball. A past study has shown Coke (34% of accurate identification by the patrons), Pizza Hut (25%), All Sport (21%), Rawlings (18%), and Foot Locker (14%) were all popular corporate partner/sponsors recognized by the NCAA patrons and fans (White & Irwin, 1996).
FYI: Worldwide spending in sponsorship in 2018 (Fullerton, 2020, p.129)
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FYI: 10 common methods for executing sponsorships (Kros, Moore, & Zemanek, 2021).
Asset | Example |
1 Intellectual Property | Use of team logos and other trademarked symbols |
2 Category Exclusivity | Not allowing a sponsor’s competitors to promote their business or products within the sport organization’s events or facilities |
3 Media | The opportunity to advertise during team-controlled media broadcasts, such as a pre-game coaches’ show |
4 Tickets/Hospitality | Sponsor receives tickets/access for guests to attend events |
5 Venue Signage | Sponsor messaging is displayed within the sport venue |
6 Sponsor Identification | Sport organization acknowledges sponsor as official partner in certain communications with the media and the public |
7 Event Marketing/ Special Events | Sponsor has a presence at sport organization’s special events such as fan fests, press conferences, or team tailgate parties |
8 In-Game Promotions | Sponsor recognized as provider of fan-centric activities during the event such as giveaways or contests |
9 Pass-Through Rights | Benefits from sport organization that sponsor gives to its business partners. For example, if a soft drink company is a sponsor of a team, it might receive tickets, which it gives to grocery stores to use in promoting sales of the soft drink |
10 Direct Marketing/Use of Property’s Database | Sponsors gain access to the sport organization’s member database (season ticket holders, marathon participants) allowing the sponsor to market directly to those potential consumer |
As for sport sponsorship on the online platforms, banks and companies in motor, telecommunication, broadcasting industries are all well-recognized sponsors. However, the top sponsor often come from the computer related services and agencies. Marketing (50-60%) and advertising (10-35%) managers are often the two most important decision makers on budget and approval in sponsoring the sport team websites.
It was noted that sports fans are very loyal to sponsors’ brand. This is why so many sponsors dived in to sponsored NASCAR races to seek for exposure. According to the report of Sport Market Analytics (2019, Issue 11), over the last few years, various types of the NFL fans , such as frequent attendees (attending games more than four times a year), young fans, adult ages 35, and fans view games online, were all favorable toward purchasing sports sponsors’ products.
Sponsorship Process
The procurement of sponsorship deals usually need to carry out the four-step process: (1) establishing objectives, (2) establishing budget, (3) actualizing acquisition, and (4) implementing and evaluating effectiveness. While deciding on the best sponsorship opportunities, the sports organizations need to determine the level of sponsorship involvement (determining the scope of the sponsorship, types of platforms (e.g., boxing ring and stadium scoreboard), events (i.e., global, international, national, regional, and local events), and engagements for the athletes, and methods for evaluating effectiveness.
Frankly, the main objectives of sponsorships are not much different from the general promotional objectives. Morris and Irwin (1996) addressed several important sponsorship objectives that are emphasized by the sponsors. The top-5 objectives include: (1) increase sales and market share (the most direct form), (2) increase target market awareness, (3) enhance general public awareness, (4) enhance general company image, and (5) enhance trade relations. There are also additional relevant objectives associated with sponsorship such as involving community, blocking competition, and developing, developing corporate philanthropy (Shank & Lyberger, 2015). In general, most corporate sponsors/companies also decide to engage in web sponsorship for sport teams for the similar reasons. On the other hands, sports teams/organizations also choose sponsorship opportunities that offer the most valued rewards with the greatest probability of success (McCarville & Copeland, 1994). The past success will likely to dictate future sponsorship decisions. In this case, the partners within the sponsorship deals are practicing the exchange theory to execute their partnership.
In order to achieve those aforementioned important objectives, the sponsors usually aggressively conduct activation strategy activities to increase sales opportunity and generate product and public awareness. Activation strategies or plans help to build connections with consumers and ensure various sponsorship components are utilized in a manner that meets sponsorship objectives (Parkhouse et al., 2012). Simple activities and examples of activation can be witnessed in stadiums and arenas all over the country. They include giving cups to the fans, setting up virtual reality games to promote playing experiences, selecting fans to join coin toss huddles, bringing fans to the locker room to visit, conducting text-to-win competitions, exhibiting cars in the park (for future drawings), setting up kiosks to solicit opinions, and offering transportation pick-up. To foster a good mutual relationship, the sports franchises often provide hospitality and ticket privileges to the sponsors. However, the sponsors usually do not perceive this practice as an important goal to establish. The following table provides examples of cost for different types of sponsorship agreements. Notice these suggested prices are initial costs. There are additional costs for maintenance and leveraging (a communication process that help market a sponsorship to consumers).
Table 4. Examples of cost for sponsorship agreements
Type of Sponsorship | Fee |
Corporate Box at the United Center | $220,000 |
Title sponsor of Tot Trot | $7500 |
Official Supplier for MLB | $10 million |
British Premier League sponsor | $15 million |
Table 5. Break Down of a Sponsorship Budget
More Costly Key Item (%) | Less Costly Key Item (%) |
Agency fees (5-40%) | Evaluation (1-10%) |
Hospitality (5-30%) | Design/Print (2-8%) |
Promotions (10-20%) | Insurance (1-5%) |
Merchandizing (5-15%) | Others (2-8%) |
Signage (5-10%) |
During the sponsorship acquisition phase, sales agents and representatives often work hard to learn about the needs and wants of both sides to further negotiate the benefits in detail. Agents will need to recognize important individuals such as gatekeepers, influencers, and decision makers. Like any other sports consumers, event sponsors also have expectations and needs when bidding for a deal. Based on 1,100 senior executives’ responses listed in the SportsBusiness Journal (Lofton, 2010), here are most the important needs recognized by sponsors when securing a sponsorship agreement. They would love to have more activation (24%), low rights fees (23%), payment for performance clauses (23%), exclusivity (12%) and short-term agreement (10%).
Video Clip: Most Ridiculous Sports Sponsorship |
FYI: Number of active sponsorship deals in sport (based on SportBusiness)
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Since the sponsorship prices are so expensive and excessively spent, sponsorship assessment and evaluation of effectiveness should be performed regularly to understand the sponsors’ return on investment (Irwin, & Asimakopoulos, 1992). However, to accurately measure the effectiveness of a sponsorship is quite a challenging task. Common methods for measuring sponsorship effectiveness include: (1) direct measurement of pre and post sales figures, (2) number of mentions in popular media (a form of media exposure), (3) media equivalencies (transforming media exposure into dollar figures), (4) measurement of pre and post attitude change (about brand perception), (5) public relations efforts, (6) examination of the changed number of distributors (pre and post event), (7) improvement of corporate image, and market share (Copeland, Frisby, & McCarville, 1996; Irwin & Asimakopoulos, 1992; O’Reilly & Madill, 2009; Shank & Lyberger, 2015). Studies has shown that individuals who had past sport involvement experience and positive beliefs about sponsorship would likely to purchase the products offered by the sponsors (Nassis, Theodorakis, Afthinos, & Kolyballs, 2014). However, it is not uncommon that event patrons cannot properly identify the event sponsors. For example, a past study of the Southern Heritage Classic event had shown at least 10% of patrons could not really associate any corporate company with the event (Irwin Sutton & McCarthy, 2008). Sport marketers must diligently learn about best practices and avoid possible mistakes to sustain the longevity of a sponsorship deal. The following nine primary reasons explained why sponsorships fail according to experts (Copeland et al., 1996; Lefton, 2010).
(1) Little value (and no communication of added values);
(2) No measurable objectives;
(3) The program is not planned for long-term;
(4) Too brand-centric;
(5) Too much competition;
(6) No budget for activation (and increased cost)
(7) Failure to excite the sales chain;
(8) Insufficient staff for executing the plan; and
(9) No local extensions.
FYI: Examples of sport sponsorship in the airline sector, 2017-2018
*Total worth: $496.4M *Emirates had 54 active deals and has 31 more than the 2nd placed US airline, Delta. Emirates spent about €140M alone on soccer (i.e., €30M with Arsenal, €27M with Real Madrid) and €31M with Formula One Qartar Airline spent €25M on FIFA
FYI: Largest sponsorship spenders in the U.S. in 2021 (Fullerton, 2020) No. 1 AnHeuser-Busch; No. 2 Pepsi Co; No. 3 Coca-Cola; No. 4 Nike; No. 5 Adidas; No. 6 AT&T; No. 7 Ford Motors; No. 8 Toyota USA; No. 9 Verizon & No. 10 General Motors |
(Q8) One of the most basic objective of any sport sponsor is to generate _____.
(a) competition
(b) awareness
(c) image building
(d) relationships with its product
(e) none of the above
(Q9) According to the text, the final stage of the sports sponsorship process involves _____ and _____.
(a) implementation; segmentation
(b) implementation; evaluation
(c) evaluation; segmentation
(d) implementation; processing
(e) processing; marketing
FYI: A comparison of marketing techniques Used by the NBA marketers Now and Then
This is a comparison of the priority of marketing techniques used to promote attendance by the NBA Marketing Directors. Is there any new tricks for us to learn here for colleague sports?
1994 | 2020 |
Focused on two areas: season ticket option and business sponsorship
Used strategic planning process” and “newspaper advertising Key elements: Telemarketing, strong customer service, game entertainment, and personal selling |
Top practices: Face to face meetings with businesses, Email Offer, group sales, social media, promoting star players, referrals, preliminary and post-game Events, mini packs, grass roots marketing, TV commercials |
Ambush Marketing
In the earlier sections, the authors had mentioned about blocking competition as a subtle role of sponsorship. In a competitive sport marketing environment, corporate companies are willing to put in several tens of hundred-millions of dollars to gain competitive edge in the form of sponsorship to obtain the licensing rights and exclusivity. However, a form of unfair competition, ambush marketing, has become more prevalent in sport marketing, particularly in mega sporting events and entertainment businesses. Ambush marketing is a planned effort to associate an organization indirectly with an event to gain some recognition and benefits like the official sponsors have (Shank & Lyberger, 2015). In many ambush marketing cases, the ambushers often did not involve payment of sponsorship fee for media exposure. In general, the ambushing tactics by the non-sponsor competing brands may include the following forms: (1) buying commercial time prior to or during the event broadcasts, (2) sponsoring broadcasts of events rather than directly sponsoring the event, (3) sponsoring individual teams and athletes alone, and (4) sponsoring giveaways, sweepstakes or contests to hand out event tickets (Shank & Lyberger, 2015). The terrible fact that the official sponsors are scared to face is that these ambush tactics really have great impact in stealing attention and creating confusion (Pitt, Parent, Berthon, & Steyn, 2010). Studies have found that most consumers cannot correctly identify the official sponsors who are truly associated with the events between the official sponsors and the ambushers.
One of the earliest examples of this practice was Nike’s 1984 “I Love LA” campaign. During that time, Nike was not even a sponsor of the 1984 Los Angeles Olympics. Since then, examples of ambush marketing have continued to grow and exist. Famous brands such as Nike, Wendy’s and Pepsi have all been quality ambushers that violate the official sponsors’ rights. Table 6 presents some notorious ambush marketing cases in recent sporting events. With the rise of the ambush marketing cases, sport marketers also employ more stringent legislation to combat ambushing tactics. The 2006 Act proposed by the UK government prohibits any entity from creating an association with the Games and the use of words, London Olympics unless authorized by the London Olympics Committee. Rule 40 of the Olympic charter also states no athlete may allow his/her image being used for advertising purposes during the event.
Table 6. Examples of Ambush Marketing Cases
Ambusher | Example and Practice |
Bavaria beer | Ambushed Budweiser in 2010 FIFA World Cup by bringing in 36 attractive ladies dressing orange miniskirt to steal the show during the Holland vs. Denmark match |
Li Ning | Ambushed Adidas in 2008 Beijing Olympics. The company’s founder was the most decorated Chinese Gymnast who lit the Olympic flame at the Beijing Olympiad. |
Nike | Ambushed Reebok by sponsoring the broadcast of press conference and ceremonies featuring the Dream Team in 1992 Summer Olympics |
Lufthansa | Painted a soccer ball on the nose of many planes during 2006 World Cup |
Pringles | Introduced tennis ball canister and placed 24,000 cans outside Wimbledon court |
The Sport Authority | Ambushed Dick’s Sporting Goods by advertising in 2010 World Cup |
Despite the most stringent anti-ambush marketing laws being been introduced, many believe that ambushers still seem interested in circumventing the rules. At the collegiate level, similar examples like ambush marketing also occur everywhere. Researchers address this problem as freeloading. There are many local businesses around the college campus who are acting as freeloaders. They will associate their business with the university by posting the athletic flyers and posters all over their walls and windows. They hang jerseys, calendars and pictures to demonstrate their school spirit. But in reality, most of them probably do not pay a fee to become sponsors of the school. In your viewpoint, do you think the college or university should take actions against their freeloading practice?? Will the action of cracking down the freeloaders hurt the community relations among various local franchises and the university? This is probably one of the most difficult marketing dilemmas that a collegiate marketing director will have to handle.
(Q10) _______ is a planned effort to associate an organization indirectly with an event to gain some recognition and benefits like the official sponsors have. (Fill in the blank:)
Video Clip: Ambush Marketing |
A Case Study: NBA Marketers’ Thoughts on Effective Marketing Strategies
The following two studies show us how NBA has evolved through time with the use and support of technology and new ideas of its workforce (Mawson, 1994; Rankartz et al, 2018). Since 1994, NBA has utilized social media, a low-cost way, (a non-traditional strategy during that time) to get a message out to existing fans. Marketers believed its most influential use is engaging the fans in conversation and making fans an extension of the team. The goal was to get fans’ interactions and ideas. Viral marketing is a practice that every marketer has expected to perform. Community marketing and grassroots sports marketing are also popular philosophies held by many marketers. Teams often hired “field marketing representatives” to give out free t-shirts, hats, apparels, water bottles to potential fans on the street. Marketers wished to create “walking advertisements” and wanted fans to always wear the team merchandises.
Believe it or not, as time passes by, many marketing techniques for promoting attendance at NBA home basketball games remain the same today. According to the opinions of Marketing Directors of 22 NBA franchises (Ronkartz et al., 2018), Top 2 popular marketing strategies recognized by all marketers were “season ticket option” and “business sponsorship”. Two methods, “a strategic planning process” and “newspaper advertising”, were perceived quite differently based on the size of attendance. Marketing directors with low attendance franchises tended to believe that those two practices were more effective. In general, the use of diversified marketing strategies (i.e. telemarketing, strong customer service, game entertainment, and personal selling) were the best ways to enhance attendance. Reference To learn more about grassroots marketing: https://www.jobsinsports.com/blog/2013/05/19/grassroots-sports-marketing/ |
Brainstorming Activities
(1) Identify an advertisement or commercial that you can remember/recognize. Explain why that specific advertisement or commercial is effective and memorable. Could you analyze that specific advertisement based on theories and concepts from the aforementioned readings?
Is there any suggestion or improvement that you would like to make?
(2) Sponsorships on sports jerseys have been popular in European professional soccer. Today, even NBA, WNBA, and MLB all have adopted new rules for jersey sponsorships (Footer, 2016). Although there are specific rules restricting sponsorship logos on college sports jerseys, the NCAA and NAIA apparently do not have specific regulations about logo placement on shooting shirts or athletic backpacks. Perhaps this is an extra revenue stream that regional and small colleges and universities may take advantages of by securing logo sponsorships on T-shirts. The authors would like you to discuss this idea and conduct a simple research to find out local venders’ perception of jersey sponsorship. Could you create a plan to conduct this study (or project)??
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