Tuesday, January 28, 2014

Super Bowl Experiences Now as Big as the Game

The Super Bowl is the ultimate championship game in American professional sport- a single game to determine the champion of the National Football League. Television viewership and advertiser spending re pillars that support the special status to which the Super Bowl as risen in our popular culture. Another trend is emerging that is adding to the mega-event: Branded experiences during Super Bowl week. 

The presence of experiential events and spaces is perhaps magnified this year with the Super Bowl being played in the New York area. Among this year's destinations for fans and others taking in the Super Bowl atmosphere are:
  • PepCity – A free three-day event featuring concerts housed in a 10,000 foot dome in Bryant Park 
  • Bud Light Hotel – A Norweigan Cruise Line vessel docked at a Hudson River pier that will house 4,000 guests invited by Anheuser-Busch InBev
  • Super Bowl BoulevardEngineered by GMC – A 13-block interactive area on Broadway featuring games, sponsor exhibits, shopping, autograph opportunities, and a toboggan run (yes, a toboggan run). 

One might wonder if the popularity of experiential marketing around the Super Bowl is a fad that will recede after this year's game, or is it here to stay? Evidence points to the latter.

An Alternative to Traditional Ad Buys

There are two noteworthy benefits for companies to invest in hospitality and experiential events compared to traditional Super Bowl advertising. One benefit is that because the number of branded experiences are relatively few, they stand out in the minds of the people who interact with them. Brands crave engagement with their target audiences; experiences like the Bud Light Hotel and PepCity will likely gain the attention of people who interact with them. In contrast, approximately 25 different brands will be vying for the audience’s attention during the Super Bowl and with only 30 seconds to succeed. A second benefit is relates to the engagement characteristic mentioned earlier- brands can use experiential events to make deeper connections than possible in a 30-second message. Although Super Bowl commercials are more favorably received than typical TV ad messages, their impact is still short lived. Experiences have greater potential to shape brand perceptions and attitudes compared to TV advertising.

Consumers are receptive to branded experiences as long as they enhance the overall experience of sporting event consumption. When branded experiences deliver entertainment or pleasure, they add to the total bundle of benefits received from attending an event like the Super Bowl (and help justify outlay to attend). The fine line marketers must walk is to achieve impact with attendees without putting on a heavy marketing presence that would detract from their enjoyment of interacting with the brand in an experiential setting.

Branded Experiences are no Fad

Marketers are challenged more than ever to stand out in the competition for attention. Branded experiences at sporting events are somewhat exclusive compared to the number of brands that use media advertising during sporting events. Also, experiences at or near the venues of major sporting events connects with a slightly different audience than mass media advertising. In the case of the Super Bowl, many attendees are business decision makers or influencers. The benefits of more extensive interactions between them and a brand (e.g., building relationships, generating sales, strengthening brand loyalty) can create a return on investment that is felt long term.

The costs of executing elaborate brand experiences are significant. However, one way to look at the decision to commit to branded experiences is to compare cost with media advertising. A 30-second Super Bowl commercial costs around $4 million this year. Of course, that is just the air time. Brands will commit additional expenditures into seven figures on commercial production and supporting marketing. Thus, a brand could spend say $6 million or more around one 30-second message with no certainty about its impact in terms of return on investment. Branded experiences can connect with their audience in deeper, more meaningful ways than an ad buy cannot match.

Thursday, January 16, 2014

Why the Fuss over Coaches

The end of football season, college and professional, also signal the end of the line for some coaches and their staffs. Each year, teams decide that a change is in order to improve performance and perhaps to appease disgruntled fans. In the NFL alone, seven of the league's teams will have a new head coach in 2014, including one team (Cleveland) that will have a new coach for the second straight season. Coaching changes captivated college football fans, too. Long time Texas coach Mack Brown stepped down, creating a frenzy of speculation of who would succeed him. It created a mini domino effect as his replacement, Charlie Strong, departed Louisville and created a similar frenzy there. His replacement provided intrigue in that Strong's successor at Louisville was also a predecessor: Bobby Petrino. 

What Does a Coach Have to do with Marketing?
Coaches are ultimately hired and fired for their ability to lead their teams to success on the field. Let's face it- if marketing and public relations savvy was the number one requirement for job security, New England Patriots head coach Bill Belichick would have not lasted very long in the league (when The Wall Street Journal runs an article describing that you smiled only seven times all season, chances are you would not be the most energetic marketing representative for your organization). Increasingly, coaches are being looked to as a marketing asset for their organization. College coaches must have the ability to connect with recruits and their parents, donors, alumni, and fans as well as their players. Similarly, professional team coaches are incorporated in relationship building efforts with sponsors and high dollar spenders on premium seating and tickets.

Coaches as a Source of Star Power
Marketing personnel cannot control what happens on the field of play, but they have several assets at their disposal to build their brand and customer relationships: Star power. In Chapter 2 of Sports Marketing, four connection points that can attract people to a sports brand are discussed:
1.                  Star power
2.                  Family
3.                  Socialization
4.                  Community
Star power is a connection point that can be leveraged and promoted in the form of players (current or former), coaches, team owner, or facility. Players are a frequently leveraged source of star power. Star players are heroes to many fans, are admired by many other people, and at the very least are highly recognized in the community. But, coaches can wield star power, too, as success breeds admiration from fans and community involvement wins respect from fans and non-fans alike. So, when a college or pro team is considering replacing a coach, it is inevitable to include whether changing coaches would result in an upgrade in the area of the head coach's star power (present or potential).

Will Smiling become a Performance Metric?
It is probably safe to assume that wins and losses will continue to rule as the primary measuring stick of a coach's performance. While it is humorous to read about Bill Belichick smiling only seven times all season, it is unlikely that coaches will be evaluated closely on how "marketing friendly" their body language is. But, as teams make new head coach hires they must keep in mind the potential of a prospective coach to support marketing efforts. And, the marketing prowess of coaches is not limited to the current leader. Former or retired coaches are often revered for their past accomplishments and can serve a team well as a brand ambassador. 

Should the star power of a coach (or potential to develop star power) be a criterion when a team is hiring a head coach? Why or why not?

Tuesday, January 14, 2014

Predicting the Next Era of Sports Marketing

To better understand the practice of sports marketing today, it is useful to conduct a historical review of trends and events that have shaped the industry to understand how it has grown to where it is today as an industry and career field. Adapting a historical review from the book TheElusive Fan by Irving Rein, Philip Kotler, and Ben Shields, sports marketing since 1900 is discussed in terms of four distinct time periods: Monopoly Era, Television Era, Highlight Era, and Experience Era.

Monopoly Era (1900-1950)

 This time period marks the early years of the sports industry in the United States. This period was marked by a scarcity of team professional sports. Because major league team sports were in their infancy during this period, minor league and collegiate sports enjoyed a more prominent role in the markets where teams played. Boxing and horse racing enjoyed great popularity. It is during this period that the first team brands with national popularity emerged such as the New York Yankees and University of Notre Dame football. Radio and newspaper were the media for distributing sports content.

Television Era (1950-1990)

 This time period was influenced heavily by the invention of television. TV made watching sports at home possible, and TV networks saw sports programming as a source of content to attract viewers and advertisers. In the earlier years of the Television Era, programming such as the Olympic Games, Friday night boxing matches, Major League Baseball Game of the Week, and ABC Wide World of Sports expanded the reach and fan base of sports that were televised. The exposure that professional sports enjoyed via television is one reason that major professional leagues in the US successfully expanded into new markets during the 1960s, 1970s, and 1980s.

In the latter part of the Television Era, the growth of cable as a distribution format for TV programming created new growth in the sports industry. Most notably, the launch of the Entertainment and Sports Programming Network (ESPN) in 1979 and Cable News Network (CNN) in 1980 created the 24/7 news environment. Sporting events and news coverage gave sports fans more opportunities for indirect consumption of sports than ever before. Sponsorship emerged as a sports marketing practice during this period. The success of the 1984 Los Angeles Olympics is often cited as a tipping point in sponsorship practice. The LA Games bucked a trend of massive losses by turning a profit due in large part to sponsorship revenues.

Highlight Era (1990-2010)

The tremendous growth in sports consumption options continued during the Highlight Era. TV grew in the form of niche cable channels for sports (Speed, Outdoor Life Network, and Fox Sports regional networks are some examples). The advent of Internet as a mass medium in the 1990s created exponential growth in sports media, event broadcasts, and fantasy sports. The vast availability of information (sports and information in general) led to innovations that enabled consumption quickly. News tickers and rapid pace formats of sports news shows like Sportscenter and Pardon the Interruption delivered sports news in short bursts. The Internet gave businesses a new channel for creating revenue streams, too. Online stores, advertising sales, and subscriptions to premium content are three ways that sports properties benefited from fans’ unprecedented access to information, content, and shopping.

The latter part of the Highlight Era ushered in social media as another connection point sports brands had with their customers and fans. The popularity of Facebook in particular made possible reaching an audience with specific interests. More importantly, it gave people with an affinity for a league, team, or athlete a way to connect with other people who shared their affinity.    

Experience Era (2010-today)

The dawn of social media at the end of the Highlight Era did more than create communities of people with shared interests: These people now had a voice that could be heard worldwide. The ease of sharing ideas and photos on social networking websites and the ability to create in longer form content such as blogs and podcasts transformed consumers from strictly being a recipient of communications to be a co-creator along with marketers. But, the power of social media is not limited to individuals. Sports brands have sought to leverage their popularity in the offline world through building a following on social media websites.

The Experience Era has additional significance beyond online experiences. The live sporting event has evolved to become a broader entertainment experience. The game or event itself is but one component of the total product. Stadiums with interactive games and exhibits, upscale dining options, and scoreboards with the latest technology are design features that seek to create exceptional experiences for guests. And, a desire to take part in unique experiences means fans value opportunities such as locker room tours, player autograph sessions, or any other contact that puts them inside an organization that they admire, even if for only a few minutes.

The Next Era...

Look into the crystal ball- What does the next era of sports marketing look like? What will be the changes or trends that move the practice of sports marketing into a new era? A review of the timelines for the different eras of sports marketing finds a shortening of the time frame before innovation disrupts the industry and a new era dominates:
  • Monopoly Era- lasted 50 years
  • Television Era- lasted 40 years
  • Highlight Era- lasted 20 years
  • Experience Era- How long will it last before being supplanted by "the next big thing?"
The shorter time frames for eras in sports marketing suggests change occurs faster today. Marketers must be ever observant to recognize how customers and markets are changing, driving us toward the next era of sports marketing.

Friday, January 10, 2014

The Business of College Football

Let's face it- there is more to college football than wins and losses, bowl games, national championships, and prized recruits. The sport of college football has created a parallel entity: The business of college football. What was once truly a seasonal product is now essentially a year-round product, with the year breaking down like this:

  • July: Media days and preseason predictions
  • August: Fall practice begins
  • September-December: Regular season
  • December-January: Conference championship games and bowl games
  • January-February: Recruiting and national signing day
  • March-April: Spring practice
  • May-July: Upcoming season and recruiting class
For evidence of college football as booming business, look to a recent Wall Street Journal article that showed rankings of the top 50 college football programs in terms of their financial valuation. The data come from research conducted by Ryan Brewer, an assistant professor of finance at Indiana University-Purdue University Columbus. The premise of the research is to establish a financial value for college football programs that would be analogous to their worth if they could be bought and sold like professional sport franchises.

Business-Driven Growth Factor
The "national champion" of the business of college football is Texas, with its valuation coming in at a whopping $875 million. Given the success of the Longhorns football program in terms of financial value, it might come as a surprise to some that the head football coach was replaced, a move often associated with performance falling below expectations. But, that's just it- performance expectations were not being met at Texas. One reason college football has become a lucrative business is that the product has undergone substantial transformation in recent years. College football programs are more than a sport team; they have become content creators. Interesting content is the fuel that sparks and sustains attraction between customers (fans) and a brand.

If the content is unappealing or fails to satisfy, the product loses appeal with fans. In turn, diminished appeal can lead to several undesirable consequences- a drop off in booster support, licensed merchandise sales, engagement with social media, ticket purchases, TV broadcast viewing, and sponsor interest. Texas was not losing on the football field as much as it stood to lose in all of the above mentioned areas if the content was not upgraded (i.e., bring in a new coach to energize stakeholders).

"Just Win, Baby"
This quote from the late Oakland Raiders owner Al Davis has a great deal of relevance to the list of the 50 most valuable college football programs... and other programs not in the top 50. Take for instance the University of Louisville. Over the past two seasons, Louisville football had an impressive record of 23-3. So impressive that the University of Texas lured Louisville's coach, Charlie Strong, to become its next head coach. Louisville replaced Strong with Bobby Petrino, who was the coach at Louisville from 2007-2010. Despite a reputation and character that is less than stellar, Petrino was given a second opportunity to coach at Louisville because his teams win games. As Louisville moves into the Atlantic Coast Conference and strives to move up the rankings of the most valuable college football teams, leadership has deemed it necessary to make sure the on-field product (i.e., content) continues to be of high quality regardless of any negative associations with its new coach.

Your Take
Today, the head coach of a college football team is more than an Xs and Os guy. He is Chief Executive Officer and Chief Marketing Officer of a multi-million dollar business. In your view, what role does a head coach play in shaping the brand of a college football team (or any other sport)? Has the coach taken on too much power or significance, or is he a much needed "face of the brand?"

Tuesday, January 7, 2014

What Does It Mean to Have an Affinity Advantage?

Editorial Note: Beginning this week, the editorial content for Sports Biz U shifts back into classroom mode. The first post each week will relate to the study of sports marketing from topics in the Fetchko, Roy, and Clow Sports Marketing textbook. Other posts during the week will deal with current events in sports business and career issues.

 Brand loyalty is not an unusual behavior to exhibit- you probably have brands of beverages, clothing, and electronics that you like, prefer, and tend to buy that brand only when given a choice. But often brand loyalty is just a behavior, a repeated pattern of action based on past experience. What might be missing? An emotional connection to the brand. Yes, I am loyal to Crest toothpaste but I have no feelings of excitement or passion for Crest. My "loyalty" could be vulnerable if another toothpaste brand came along and persuaded me that its value is superior to Crest and was worthy of me switching brands.

Immunity from Brand Switching
In contrast to the toothpaste example given above, sports brands attract people to connect in emotion-based relationships. Sports brands enjoy an affinity advantage, which refers to the nature and intensity of the relationship many people have with their favorite sport, team, or athletes.You have probably heard stories about people planning their wedding day around their favorite team's schedule in order to not miss a game. Just last month, a groom-to-be in San Diego postponed his wedding so that he could catch the return of Kobe Bryant to the Los Angeles Lakers lineup (no word if the wedding has occurred). How many other products would you consider scheduling such a special event around to accommodate your interests?

Identifying with a team or player often occurs at a young age, and the affinity strengthens over time and can last for the rest of one's life. When a bond between a person and brand is this strong, the chance of the relationship being broken in order to switch to another brand is slight. This characteristic of sports brands makes them the envy of marketers in other categories. If only they could get customers emotionally connected like sports brands can, they dream!

Leverage the Affinity Advantage
While sports brands enjoy an affinity advantage, they may not always use it effectively to strengthen relationships and create more revenue. Do event attendees have a memorable experience that leaves them longing for more? Do sponsors receive support that helps them activate their association to achieve marketing objectives? Are there new products or experiences that could be introduced to give loyal fans additional outlets for expressing identification with the brand? Answers to these questions are ways that a sports brand's affinity advantage can be leveraged. Marketers who can come up with creative responses to these questions add value to their organizations and position themselves for career advancement.

Your Take
Can you think of a sports brand (could be a company, website, TV network, league, team, event, or athlete) that leverages the affinity advantage that sports possesses over other types of products? What does the brand do to attract customers (and even dollars) from fans who are passionate about that brand?

On the flip side, can you think of a brand that is missing out on tapping the affinity advantage of sports brands? Where is the brand falling short of realizing an affinity advantage? What could be done differently in terms of marketing to customers that would reverse the situation?