Tuesday, November 25, 2008

Identity First, Then Branding

The obvious goal in the marketing of an athlete is to ultimately create a brand. Michael Jordan is the most obvious example and Tiger Woods is close on his heals. But despite this relatively universal objective, very few athletes actually achieve it. I think the problem is that sometimes we are overly focused on the end result and, as a result, we overlook the necessary but smaller steps that lead to eventual success. In this case, before we can get to the point of brand creation we need to discover and foster a robust identity for the athlete.

An athlete’s marketing and PR plan should look to create a universally recognizable identity that favors maximizing reach and awareness. A clear and well crafted message helps to define the athlete’s identity. His/her identity could be grounded in personality, demographics, life story/background, or the social causes the athlete stands behind.

Once the message has been established it should be disseminated through all forms of media and marketing tactics. This means partnering with sponsors, charities and businesses that go beyond the playing arena. It also entails maximizing outreach beyond the traditional media platforms. Go after TV and print media for sure, but also make sure to use the internet and blogs in an attempt to reach new audiences. Then use these opportunities to highlight the athlete’s messages and identity. Make sure to emphasize the athlete’s goals and beliefs that go past sports while still mentioning the athlete’s impact on the game in which he/she participates. The more an athlete goes beyond sports, the more likely it is that he/she will become a household name.

Thus, don’t start out and get caught up in strictly branding issues. Build up to it. A strong identity that reaches the far and wide will make the creation of a brand that much easier.

Monday, November 24, 2008

The Future of Sports Viewing Technology

I love High-Def. When I watch a game that’s not in HD I have this urge to phone a FCC specialist lawyer to right the injustice. But when I watch in HD and see the individual blades of grass on the baseball field, the area codes on the eye-black of football players or the spraying of divots on a golf course, I wonder: How can this get any better!? In 50 years, will HD look like what broadcasts of the 1950’s look like today? At what point will we reach the point of diminishing returns as it relates to sports viewing technology.

According to the industry’s scientists and engineers, we’re not there yet. The NFL is spearheading efforts to yield the next level of innovation—games in 3-D. Next week, select audiences in Los Angles, New York and Boston will be shown the matchup between the Chargers and Raiders in 3-D theaters. According to today’s WSJ, 3ality Digital LLC will shoot the game and will feed their footage to satellites. The satellite technology is being handled by Thomson SA’s Technicolor Digital Cinema and they will downlink 3ality’s footage to the three theatres. Real D 3D will carry the football across the goal-line by powering the theaters’ 3D displays.

The NFL and the three partnered companies are excited to see the improvements made to their technology over the past few years. In 2004, 3ality filmed the Super Bowl and the results of that filming has led to continued research and development—the biggest of which is the ability to perform live broadcasting.

It is important to note that this technology is a ways off in terms of making it into living rooms across the country. This is still just a “proof of concept,” said Howard Katz, the NFL’s Senior VP of broadcasting and media operations. The purpose of next week’s event “let people get excited about [the concept].” Either way, it’s still fun to peer into what the future may have in store.

Friday, November 21, 2008

Ticket Pricing Strategies

With the current economic conditions hurting everyone under the sun, sports teams are scrambling to figure out the best ways to keep butts in seats.

The New York Knicks have decided to start selling discounted tickets at COSCO. Select seats will be sold at a 40% discount. So, while you’re out picking up a 1364 oz. jar of mayonnaise and a package of 672 rolls of toilet paper you can pick just a pair of seats in the 300 level at a pretty good bargain.

Is this a good strategy? In my opinion, it’s not. Sure, the team gets exposure to potential customers in an unlikely place and the spread of the message is wide. Nevertheless, I don’t think offering a flat discount is the best way to stop the hemoraghing of fans from a team’s stadium. First of all, people will begin to interpret what was once a value product for something that is discounted. The inherent perception will be that since the cost is discounted, the product must be too. Furthermore, people may become used to the discount and will be less than pleased when the team tries to raise prices. Cutting consumer costs by 40% sounds great but an increase of the same size is less than palatable all fans. Thus, it’s a short-term strategy that in the long-run may turn sour—especially if the Knicks can’t turn around their franchise.

A better idea might be to just put a freeze on ticket prices. This is exactly what the Boston Red Sox have done and other teams across all sports, including NCAA, are following suit.

But an even better idea would be to attach “value added” item to the current price of a ticket. For instance, the Knicks could freeze ticket prices but offer certain “All You Can Eat” sections. Or create a package deal such as a “Family Knight Out” where the team sells four tickets plus drinks and hot dogs for a certain deal. Minor league baseball teams survive on these sorts of gimmicks and strategies.

The bottom line is that you don’t want to do anything that might degrade the value of your team’s product. Discounting tickets might work today, but in a few months it’ll be hard to raise prices. Teams would be better off think of ways to implement “value added” strategies that at least give the perception to fans that their getting their money’s worth in these tough economic times.

Thursday, November 20, 2008

Cause Related Marketing Works

Businesses and brands constantly search for the most effective means by which to market their products. What messaging should be employed? How can you leverage the position of an influential messenger, such as an athlete, into something even more powerful and effectual? One way is cause-related marketing—the best example of which in the sports world has to be Lance Armstrong. As a recent study carried out jointly by Cone and the Duke University Fuqua School of Business verified, cause-related marketing has the power to increase sales significantly.

The study involved 182 participants and evaluated their experiences reading a regional magazine in which they were exposed to either a generic or cause-related corporate advertisement for several focus brands. The participants were then taken to a simulated convenience store which “sold” various products, including the four focus brands. With real money in hand, the study’s authors tracked the purchasing behavior of the participants.

The results revealed:

· 74% increase in actual purchase for a shampoo brand when associated with a cause (47% of participants who saw the cause-related message chose the brand while only 27% of those who saw the generic corporate advertisement chose the brand)
· 28% increase in actual purchase for a toothpaste brand when associated with a cause (64% of participants who saw the cause message chose the target brand vs. 50% who viewed the generic corporate advertisement)

The study found, through the participants’ qualitative responses, that the type of issue, the type of non-profit backing the issue, as well as the type of product affected the decisions of the participants. Results of the study also found that 84% want to select their own cause, 83% say personal relevance is critical, 80% think the specific nonprofit associated with the campaign matters, and 77% say practical incentives for involvement, such as saving money or time, are important.

Though this study dealt with the marketing of consumer staples, there no reason why this would not apply to sports marketing. The best and most persuadable campaigns should focus on causes that are generally universally relevant, such as illnesses like cancer or issues of education. They should also have a legitimate and trustworthy non-profit backing them and should give incentives to the customer.

Wednesday, November 19, 2008

More Hurt From the Economic Environment

This from the NY Times:

“The L.P.G.A. will be down two to three tournaments next year and $4 million to $5 million in prize money. Its major concern now is sponsorship renewal and negotiating expanded television contracts for 2010. The Sports Business Daily reported this week that only 5 of the 24 events scheduled in the United States and Canada had contracts with title sponsors beyond next year.”

The PGA is a bit better off, but not by much. They did, after all, have a falling out with GM last week and the car-maker will be eliminating a sizeable chunk of their backing.

Tuesday, November 18, 2008

The NFL's Expansion Abroad

I’ve seen several reports recently hinting at the possibility of the NFL expanding to England. Wouldn’t that be something? What would they call it? Soccer?

With the recent success of the revised NFL International Series, the prospect of an expansion team playing in London is not outside the realm of possibility. Commissioner Roger Goodell was quoted as saying, “it would be a great thing for the league. If the response keeps continuing this way, that's a realistic possibility.”

And so far, the response has been great. More than 83,000 fans turned out at Wembley Stadium to watch the 37-32 victory by the New Orleans Saints over the San Diego Chargers. Furthermore, the first batch of 45,000 tickets released in May sold out in 90 minutes, and a second batch of 15,000 went off the market in 30 minutes when they were put on sale in June. Interest in American Football has increased, particularly in England, and the Guardian Newspaper has even begun to cover the NFL season regularly. Should such fan interest remain strong over the next two years—the NFL has committed to two more games at this point—then an expansion team will be even more likely.

Such a decision would necessitate scheduling changes but NFL owners have begun discussing the option of cutting the number of pre-season games from five to three. This would free up plans to expand the length of the regular season and would allow for the logistics of playing on the other side of the Atlantic.

But the larger point here is the nascent success of the NFL’s expansion. The league launched the “NFL International Series” in 2005 as a way to expand and introduce the NFL brand to new markets around the world. The International Series basically works to raise the profile of the league by showcasing competitive regular season games—in the past, the NFL hosted “friendly matches” abroad that were about as competitive as the Pro Bowl.

The first game of the International Series occurred in 2005 at the Estadio Aztecs in Mexico City and pitted the 49ers against the Cardinals. The record crowd of 103,000 signaled the potential of an expanded NFL. In 2006, the Series moved to London and will continue to host a game per year through 2010. 2008 will also witness the first regular season game played in Canada when the Bills take on the Dolphins on December 7th.

Addendum— More NFL in London would mean more access to the kind of honest commentary and writing that only the Brits can provide. This from the Guardian: “When the NFL wants to advertise its parity, it should present the Chicago Bears centre stage. On the verge of becoming a top, top team when they reached the 2007 Super Bowl, now they are distinctly average on offense, average on defense, average on special teams and, yep, average on coaching. Just how the socialist NFL likes it.” HA! I’ll take this over John Clayton any day.

Monday, November 17, 2008

British Open and BCS on ESPN?

General media consolidation hit its zenith after Congress passed the Telecommunications Act of 1996. Though a few years behind, we may be seeing the harbingers of a similar dynamic taking hold in the realm of sports media. For years, coverage of major sporting events has been covered by CBS, NBC and Fox. ESPN began challenging the major players in the sports industry by introducing 24/7 sports news. Now they’re really starting to flex their muscles.

The first rep comes following the news of Turner Sports officially withdrawing from their bid to renew its rights to golf’s British Open—one the Tour’s four major tournaments. Such a move would put an end to over 50 years of consecutive broadcasting on Turner’s ABC channel. This move all but clears the way for ESPN to come in and pick up exclusive rights to covering the tournament across the pond. ESPN has been showing early-round play for the last several years, but the new deal would see ESPN shelling out $25 million per year for the next seven years to put all four rounds on cable TV.

ESPN is launching an even more impressive bid to secure the rights to all of the BCS college football games, including the national championship game. If the move is successful, it would be the first time that an entire championship “series” was not broadcast, at least partially, on over-the-air networks. Though ESPN’s offer is significantly larger than the one Fox is currently tendering, Fox still has time to accept BCS’s rate-hike demand. BCS is requiring of Fox a 50% increase to a $125 million per year but Fox is holding at a 25% raise. Despite these facts, Sports Business Daily says it’s unlikely that Fox will budge. Thus though we may get more games in HD, there will be less viewers and less demeaning BCS talk from ESPN’s talking heads.

Friday, November 7, 2008

More Credit Crunch Induced Sponsor Pull-Outs

A while back I wrote that sponsor pullouts, induced by the financial crisis would hit the PGA Tour the hardest of all US-based sports. It makes sense considering all of the financial services firms and banks who make up substantial portion of the Tour’s funding family. However, while watching some recent Champions League matches I noticed the changes on many teams’ uniforms. It hit me that—in Europe and England in particular— the credit crunch will heavily affect sponsorship deals in soccer as well.

There is question, for instance, as to what will happen with the fate of Manchester United’s main sponsor AIG after the insurance company was nationalized in mid-September. United is in the middle of a 4 year 56.5 million pound sponsorship deal and is dependent on these funds for its operations. Although it should be said that if AIG backs out, there would certainly be a queue of sponsors willing to back –all be it at a much lower price.

But others are worse off. West Ham lost their sponsor when XL Leisure Group went bankrupt. In fact, when West Ham had a game just after XL dissolved, the team played with patches covering the company’s logo. And then there is West Bromwich Albion. The team was recently elevated to the Premiership this season but they failed to find a sponsor and played their first few games with a blank shirt.

In normal times, a jersey sponsorship is a soccer team’s largest source of revenue. But these are obviously no longer normal times. Jersey sponsorship revenue dropped to 67 million pounds from 75 million just a year ago—the first time ever that this number has fallen.

Monday, November 3, 2008

The Auspicious Redskins

We often look to the heavens or to something supernatural to prognasticate future events. Sometimes we just need to watch a football game. Tonight’s Monday Night Football matchup between the Pittsburgh Steelers and the Washington Redskins may not have fans putting their cheers behind each team for conventional reasons. Instead, fans may fall along political lines with Democrats rooting for the Steelers and Republicans supporting the Redskins. Americans will head to the polls tomorrow to elect a new president but we may have the results to the election before the booths even open. If you’re into superstition or freak coincidences then you’ll love this one.

There’s this crazy pattern in the NFL which holds that the results of the last home game played by the Washington Redskins can predict presidential election results. The pattern extends back before the Redskins were even a team! The way it works is if the Redskins win, then the incumbent party maintains control of the Executive. If the Redskins lose, then the out-of-power party takes back the White House. Let’s look at the history.

On October 30, 2000, the Redskins were defeated by the Tennessee Titans in a MNF battle. The close, back and forth game foreshadowed a close and controversial presidential campaign which ultimately saw George W. Bush regain control of the presidency for the GOP.

Back in 1996, Washington trounced the Colts at home, 31-16. This dominating performance augured the incumbent Clinton’s trouncing of the Senator of Viagra’s Bob Dole.

On the 1st of November, 1992, the Skins lost to the New York Giants, presaging Bush 41’s defeat to Bill Clinton. Washington lost a home game, and so did the Republicans.

On November 6, 1988, the Redskins narrowly defeated the New Orleans Saints by only three points. The outcome once again predicted the election of the incumbent party. This time it was Bush 41 who benefited from this crazy trend.

I could go on and on and bore you to death. Or I could just say that this trend continues back with the 1984, 1980, 1976, 1972, 1968, 1964, 1960, 1956, 1952, 1948, 1944, 1940 elections. If you look at the 1936 season, the Redskins weren’t even in Washington. Back then, the future Skins were the Boston Redskins but they too won their last home game before the election and low and behold, FDR won his second term over GOP nominee Alf Landon of Kansas. Unfortunately I must concede that this absolutely insane trend ended in 2004 when the Redskins lost but Bush 43 remained president. But still, the pattern is 17 for 18 which puts it at a 94.4% success rate. I personally don’t give this any serious weight. It can obviously be chalked up to a random correlation of factors. What are the chances though? Nevertheless, it gives election-obsessed voters just one more thing to fret about before tomorrow. Go vote!

A Lukewarm Congratulations on the World Series

So, congratulations to the Phillies on their World Series Victory. Like Crash Davis from Bull Durham, I too believe that there ought to be a constitutional amendment against the designated hitter so I was glad to see the Phillies and the National League take back the title. It was also exciting to see Brad Lidge stay perfect throughout the season and Jimmi Rollins is one of my favorite players. But enough with the good news. My prediction that this would be poorly watched Series turned out to be correct. In fact, the 2008 World Series was the lowest rated and least watched Fall Classic ever.

The five game duel between the Phillies and the Rays averaged an 8.4 rating and 13.6 million viewers. Compared to last year’s Boston/Colorado Series, this is a 21% drop in rating from 10.6 and a 22% drop in viewers from 17.1 million. This is an unfortunate trend for MLB which came about following the memorable campaign of the 2004 Boston Red Sox, whose four game sweep of the St. Louis Cardinals drew the highest ratings of the decade. Since then, ratings have dropped 47% and the last four Series were the lowest rated in history.

This downward trend can be further illuminated when the Fall Classic’s performance is compared to the other major sporting events of the year. The Phillies/Rays series (8.4) underperformed the Daytona 500 (10.2), the Bowl Championship Series (9.5), the Final Four (9.4), the NBA Finals (9.3), the Belmont Stakes (9.0), the Kentucky Derby (8.9), and the final round of the Master’s (8.6). Obviously one-day events, such as the horse races or the Daytona 500, have a greater likelihood of attracting more viewers than multi-day events, but take note of the strength of the Final Four or BCS.

To be sure, the rain delays hindered the performance of the Series. So did the fact that it was comprised of two small market teams. You can be sure that had the Dodgers and Red Sox prevailed in the LCS the ratings would have been much higher. Furthermore, the decision to broadcast games so that they could be watched at post-work hours on the West Coast despite the fact that the Series did not contain a team West of the Mississippi worked to hurt viewership in the markets that would have been more interested in the Series. This, coupled with rain delays, caused 4 out of 5 games to end past midnight. The one bright spot is that the deciding game 5 continuation of Wednesday night brought the highest rated game of the MLB season (11.9). Although MLB can probably have Barack Obama’s infomercial to thank for the lead-in.