Friday, February 17, 2012
Statisticians aren’t sitting cross-legged in labs, running complex algorithms on Papa John’s Super Bowl sales. A supercomputer isn’t littering the floor of a scientist’s basement, crunching cross-promotions of the FIFA World Cup. And Harry Potter has yet to cast an ROI-analysis spell.
Sports marketing is a tricky beast, predominantly because brands have no method of quantifying their return on investment, or their success rate at compelling consumers’ cravings.
In 2007, consultants Kevin Clancy and Peter Krieg published a book on how to improve marketing practices. They cited a study asking participants to recall Olympic sponsors that made a lasting impression on them.
Fifty-three percent of the sample thought of Visa, an official sponsor since 1986 that shells out millions of dollars every four years to associate itself with the world’s most promising athletes. Fifty-three percent also remembered Nike’s partnership with the games.
On the surface, this survey represents a major triumph for Visa. But Nike is not an Olympic sponsor. With its trademark swoosh plastered brazenly across athletes’ jerseys, bags, and shoes, it is easy to see why Nike may have been mistaken as a premier sponsor. Visa’s return on investment looks dreadful compared to Nike’s, which gained equal eyeball recognition without ever writing a single check to the Olympics.
“How brands can measure return on investment, that’s the million-dollar question,” says Bill Chipps, senior editor of the IEG Sponsorship Report. “It all ties back to a company’s marketing objectives.”
Return on investment trickles down to three basic ingredients: media exposure, awareness and purchase, and commitment. Among those three, awareness is often the most desirable element.
Motivations for sports marketing, meanwhile, differ based on the size of the brand, its targeted consumers, and the avenue it advertises through.
“There are a lot of organizations out there that are selling sponsorship, ranging from the Olympics to NASCAR, which are million-dollar deals, to every professonal sports team and venue, to every nonprofit festival and performing arts organization,” Chipps says. “So, obviously, there are a lot of organizations out there pitching sponsorship.”
Sports sponsorship accounts for the largest sector of the sponsorship industry, an industry that grew a healthy 3.4 percent last year to $17.1 billion. Of that amount, $11.6 billion, or 68 percent, was spent on sports. The second largest category, arts and entertainment sponsorship, barely ruffled sports’ hair, accounting for only 10 percent.
“The big properties that receive the big-time sponsorship dollars would be these marquee [sporting] events, whether they’re on a domestic or international scale,” Chipps says. “Here in the States, the Super Bowl is unique because it is such a high-profile event.”
The Super Bowl is the largest national stage for advertisers, drawing about 90 million viewers each year, or nearly a third of the American population. With so many eyes at stake, brands begin brainstorming lucrative marketing strategies months ahead of time.
Doritos, a subsidiary of PepsiCo’s Frito-Lay, fashioned itself into somewhat of a pop cultural cornerstone in the arena of Super Bowl advertising. In 2007, the sponsor launched “Crash the Super Bowl,” a contest encouraging fans to film and submit their own Doritos ads, with the top five landing on air.
“‘Crash the Super Bowl’ was based around the idea of the Doritos brand wanting to find a unique way to engage with consumers,” says Chris Kuechenmeister, director of public relations for Frito-Lay. “Doritos consumers are younger, in that 18–24 sweet spot for the brand. This idea of creating videos and content and advertising and filmmaking was an area of interest for fans. … The thought was, ‘What’s the biggest stage for them? The Super Bowl, of course.’”
Every year consumer-made ads have run during the Super Bowl, Doritos ranks within the top five of the USA Today Ad Meter, a live survey that polls viewers and presents real-time responses of their commercial rankings. In 2009, “Crash the Super Bowl” upped the stakes.
“Two years ago, we offered up $1 million for a consumer-related Doritos ad to hit No. 1 on the ad meter, and sure enough, it happened,” Kuechenmeister says. “Two guys who were unemployed at the time from a small town in Indiana who created a spot for less than $2,000, and it scored No. 1 on the ad meter.”
The primary objective of “Crash the Super Bowl” is to keep Doritos on fans’ minds while engaging their competitive flairs.
“What’s unique is, you talk about it as advertising,” Kuechenmeister says. “We look at it more as consumer engagement.”
Beginning in September when the contest is announced, fans submit entries, contestants campaign for votes, and buzz builds leading up to the game. A 30-seond ad becomes a six-month engagement.
In 2010 Pepsi Max crashed the party. As with Doritos, fans could invent ads for the brand and in turn generate mass awareness for the relaunch of the Pepsi flavor.
“I think a major benefit of that is obviously strengthening connections with our consumers, especially in this media age,” says Maria DeLorenzo, Pepsi Max communications manager. “In December, two months before the game, we’d actually had four times the number of earned media impressions than ‘Crash the Super Bowl’ had at the same time.”
While the Super Bowl is known for its adventurous advertisements, not all promotions require marketing high jinks.
Papa John’s became an NFL sponsor this season after its sponsorship of the 2010 Super Bowl set record sales.
“We did a test drive last year, as we were an official pizza sponsor of Super Bowl XLIV, and during that promotion, we had the best day ever for our company,” says Tish Muldoon, director of public relations for Papa John’s. “We sold 900,000 pizzas.”
Papa John’s marketing strategy was relatively simple: the TV spots featured “Papa” John Schnatter delivering pizzas around the community and fostering a family feel. Meanwhile, the company gained rights to the logos of the Super Bowl for retail promotions in stores, and “Sponsored in part by Papa John’s” popped out of the commentators’ mouths every few commercial breaks.
Chipps says companies align with the Super Bowl for two primary objectives: to captivate viewers with a 30-second blast of brilliance, and to plaster the marks of the Super Bowl across the brand for retail promotion.
“What’s appealing to companies about the Super Bowl is the halo effect from a positive rub-off through affiliation,” Chipps says. “Companies want to tap into that excitement and energy and have it transfer to their brands.”
Papa John’s three-year commitment with the Super Bowl proves that the brand is banking on that transfer. But in a bold move, the pizza company ditched its traditional TV advertising this year and instead built hype by promising to give away pizzas if the game went into overtime.
It helps that a natural synergy exists between watching sports and eating quick-serve food, especially when it comes to pizza. “In the pizza business, the Super Bowl is a big deal for us,” says Andrew Gamm, director of brand development at Pizza Patrón.
Sales jumped 15 percent for Pizza Patrón, a Latino-focused pizza brand with 88 locations, on the day of the 2010 Super Bowl.
Pizza Patrón advertises its pies with equal doses of traditional marketing and sports marketing. Its go-to strategy is representing the brand at community events—namely soccer, because of its target demographic.
“We look to be involved in the different markets that we’re in,” Gamm says. “That’s amateur and it’s community-based, but that’s where our primary focus takes place.”
Community involvement means selling pizzas on-site at soccer tournaments numbering 2,000–3,000 guests. To pump fans up, Pizza Patrón sets up inflatables, prize wheels, soccer kicks, and activities.
The soccer strategy allows Pizza Patrón to have a quantifiable method of measuring ROI. “We hand out coupons, and when they go back to the store and are redeemed, we count them,” Gamm says. “We know how many people were there, how many we distributed, and we can determine a measure of success the old-fashioned way.”
The rest of Pizza Patrón’s traditional advertising consists of the usual: billboards, transit, direct mail, door hangers, radio, and television. “That all works well, and it’s definitely necessary to try to increase business at the stores, but that is all very hands-off advertising,” Gamm says. “You write a check and you produce the appropriate piece for the venue. It doesn’t always work for you. On the sports side, we are much more hands-on at the events.”
For a chain with fewer than 100 locations, Pizza Patrón’s neighborhood strategy is conducive to its reach: Pizza lands directly in the hands of the target demographic, while the clientele discovers the brand’s presence, products, and promotions.
For nationwide chains with hundreds of franchisees, the game requires a slightly different offensive strategy: activation.
“It’s what we call buying a toy without batteries,” Chipps says. “Smart sponsors are not just signing the sponsorship and walking away from it, hoping they get all this return on investment. When you buy a sponsorship, you get the typical benefits—it might be tickets for hospitality, signage, that kind of thing. That’s all fine and dandy, but to really get the biggest bang for their buck, a marketer needs to allocate additional dollars to activate the sponsorship and bring it to life.”
Phillip Jones, president and CEO of the Dallas Convention & Visitors Bureau (dcvb), had the advantage of watching sponsorships activate as the city geared up to host this year’s Super Bowl. “There are several sponsors who came online in late November, early December who were waiting to see what type of exposure and visibility we received before they made a commitment,” he says.
To get the ball rolling on a sponsorship, companies need to not only activate their sponsorship, but activate it with their franchisees. Chipps says it is the sponsor’s duty to make the partnership as appealing as possible to the franchisees and engage them, whether by giving them signage or in-store collateral promoting the affiliation.
Sponsorships may be a double-edged sword, however, when franchises do not see the benefit. At Pizza Patrón, not all franchisees can directly benefit from the company’s marketing. The pizza chain has a sponsorship agreement with the American Airlines Center in Dallas, where it sells pizza and promotes the brand at Dallas Mavericks and Dallas Stars games, as well as at concerts and events that take place in the venue.
“Franchisees don’t see a direct benefit for that, especially if they live in a market outside of Dallas,” Gamm says. “‘Why are you guys investing in a sponsorship arrangement with the American Airlines Center, and how does that help me in Phoenix, in L.A., in Miami?’ And because it’s difficult to measure, you can’t give them a definitive, quantifiable response.”
But experts say building the brand is often just as important as growing the business itself.
For the Dallas Convention & Visitors Bureau, this was certainly the case. The DCVB was the first sponsor to sign on to the 2011 Super Bowl, pledging $1 million more than two years before the game.
“We were in a position to capitalize on all the immediate action and thousands of fans coming to Dallas,” Jones says. “With over $14 billion invested in new development, we thought it was a great opportunity to be on the frontlines, showcasing to the world the new Dallas.”
Chipps says the ultimate advantage of sports marketing over traditional marketing is the heart-mind connection fans have to their teams. “Sports are near and dear to many people,” he says. “They are already passionate about their favorite teams and their favorite sports activities. By sponsoring those, companies or marketers hope to tap in on a key passion point and gain a positive association by supporting this activity that people love.”
As for downsides to sports marketing, Jones could only think of one. “The only disadvantage was that it cost us $1 million,” he says.