Monday, January 26, 2015

Pick 6: Brands, Stories, and Trends Shaping Sports Business #21

The NFL Pro Bowl and NHL All-Star Game have passed, and there is one more football game to go. What else is going on in sports marketing?

1. Drones the New Fly-Over Craft of Choice for Sporting Events?

The emergence of drones has drawn attention and ire for their potential to do good and harm. ESPN is experimenting with a way for drones to be used for good in its coverage of the Winter X Games. Despite height and time of day limitations, drones are carrying cameras to capture unique views of the event. Are drones the next stage in the evolution of live sporting event broadcasts, or are they a novelty that will be unable to gain widespread use?

Alexander George, How ESPN is Shooting the X Games with Drones, Popular Mechanics

2. Super Bowl Ads: A $4 Million Disappointment

Each year, advertisers line up to pay dearly for a chance at 30 seconds of exposure during the Super Bowl. High reach and the "water cooler effect" of Super Bowl ad chatter offset the high price just for air time. The payoff of Super Bowl advertising as a marketing investment is not being realized by most brands according to research from Brand Keys. The most elusive outcome? Emotional brand engagement- it is simply not happening for many advertisers. So, why does the price for Super Bowl ad inventory continue to inch upward each year when the benefit to the advertised brand is in question?

Karl Greenberg, Most Brands Aren't Getting What They Are Paying for in Super Bowl, MediaPost Marketing Daily

3. Facebook is the Super Bowl Advertising Darling

So if spending $4 million on Super Bowl commercials is not working out, it is time to ditch the practice, right? Not so fast. A solution to the challenge of engaging the audience may be Facebook. Advertisers have the ability to target Super Bowl-specific segments (team fans, parties, recipe seekers) and tailor messaging to appeal to that segment's interest in the big game. This new wrinkle in multichannel marketing illustrates the idea that spending $4 million on a TV commercial is a bad idea... unless an advertiser is prepared to support the investment with synergistic marketing that engages people before, during, and after the Super Bowl.

4. Under Armour's Growth Quest

Under Armour is overshadowed by Nike. In the U.S., Nike's 60% footwear market share trivializes Under Armour's 2.5% share. In a slow growth category, Under Armour has to rely on gains coming at the expense of its more established competitors. The company appears poised to attempt just that feat and is putting an emphasis on international markets to spark growth.

5. Help not Wanted at Sports Illustrated

It is ironic that a publication with the word "Illustrated" in its title and best known for spectacular photos of women in swimsuits would lay off its entire photography staff. But, that is exactly what Sports Illustrated did recently. Sure, we live in a world of freelance professionals that are capable of delivering great photography to SI. This move is concerning on two fronts. One, employees with a sense of brand commitment were released in favor of using hired guns. Second, are there other functions in sports media organizations (or sports industry firms in general) that could follow SI's lead, thus changing the landscape of career opportunities for young professionals?

6. NHL's Answer to Building Global Brand is not Olympics

The National Hockey League and its Players Association announced a global tournament to be held in Canada in September 2016 in advance of the NHL season. The format includes eight teams (Canada, USA, Russia, Sweden, Finland, Czech Republic, North American "Youngstars" and Team Europe). It is not the first time a global tournament featuring top professional players has been held, but it may mark the return for good of such an event. The motivation for the World Cup of Hockey is simple: Money. NHL Chief Operating Officer John Collins said "we have grown to a $4 billion business; the next question is where does the next billion come from?" The World Cup of Hockey can fulfill a portion of that quest through broadcast rights, sponsorships, and ticket sales. 

Photo of the Week

If you have ever longed to match two dream locations, a beach-front view and a 50-yard line seat, now you can do it at the University of Central Florida's Bright House Networks Stadium. The East Side Club will feature a sundeck and lounge. Sure is nice to consider the possibilities on a dreary winter day.


Monday, January 12, 2015

Pick 6: Brands, Stories, and Trends Shaping Sports Business #20

It's the new year, back-to-school edition of Pick 6- here is a sampling of what has been going on in sports business:

1. College Football Playoff: A Value at $1 Million

The inaugural College Football Playoff has met or exceeded all expectations of stimulating interest in college football over a prolonged time period. And, it is proving to be a bonanza for advertisers involved with the new format. TV ratings for the Rose Bowl and Sugar Bowl were very strong, and the same is expected for the championship game. Ad rates are much lower than for the Super Bowl and even for the NCAA Final Four. Has the College Football Championship already become a top tier sport property in its first year of existence? All signs point to "yes." Will its immediate success lead to expansion of the playoff format to eight teams, or will the concept that has been so popular this year be the preferred approach going forward?

2. Dallas Cowboys Extends Brand Outside the Lines

The Dallas Cowboys may have lost a close playoff game to the Green Bay Packers, but team executives have plenty to keep them busy even though the season is over. The Cowboys are stepping outside of sports in launching a merchant payment services business, Blue Star. It will be a partnership between the Cowboys and Bank of America Merchant Services. The venture raises the question of how sport brands, particularly high equity brands like the Dallas Cowboys, can utilize brand extensions beyond their core category to tap new revenue streams.

Dallas Cowboys Branded Payment Company? Kansas City Business Journal

3. A New Coach Does More than Energize a Team

The University of Michigan got their man, wooing former star quarterback Jim Harbaugh back home to be its head football coach. The announcement excited the fan base, but it did something else that tends to be overlooked in situations like this: It stimulated interest among corporate sponsors. No one likes to be associated with mediocrity, particularly sponsors that are shelling out big dollars to partner with a prestigious sport brand like the Michigan Wolverines. Sponsor delight about Harbaugh's return to Ann Arbor was obvious, and it served as a reminder that a coach is more than a leader on the football field. He is also a key marketing asset that sells tickets, excites boosters, and delights sponsors.

Sponsors are on Board the Harbaugh back to Michigan Train, Courtney Brunious, The Fields of Green

4. Winning the Social Media Super Bowl

The Super Bowl has been a major marketing event for many years. Advertisers introduce new campaigns, spending millions on an opportunity to connect with viewers for 30 seconds. Social media has changed how the Super Bowl marketing game is played. Some of the most memorable social media moments in its brief Super Bowl history were spontaneous, such as Oreo's tweets during the power outage at the 2013 Super Bowl. Since then, some brands have beefed up their social media teams in the hopes of having and capitalizing on an unexpected moment to repeat the magic that Oreo had two years ago. But, it is more feasible to have a strategic plan of how to integrate social media with traditional advertising before, during, and even after the big game. It is like a choice of trying to catch lightning in a bottle versus influencing conditions conducive to making lightning strike.

5. Atlanta Hawks "Swipe Right" to Hook Up with Fans

Under the category of Creative Promotions, the Atlanta Hawks held a Tinder Night promotion as part of a Wednesday night game against the Memphis Grizzlies. Dubbed "Swipe Right Night" (a reference to what Tinder users do to express interest in meeting another user who is nearby). Tinder is an app used by singles to find people they would like to meet. Beyond being a unique promotion, Swipe Right Night illustrated an excellent use of promotions: Attract an audience segment that might not necessarily be regular customers. Some Swipe Right Night attendees might not have been basketball fans or been to Hawks games, but that is the very audience a team aspires to reach. What are other ways social media can be leveraged to attract buyers who may not otherwise consider buying?

6. NHL Uses Social Media to Expand Reach, Engagement

When it comes to the major sport leagues in the United States, the National Hockey League sits in fourth place, lagging behind the NFL, MLB, and NBA in terms of TV ratings and general popularity. However, the NHL is not content to accept its standing as a solid number four. Instead, it deploys social media to reach a fan base NHL Commissioner characterizes as "the most affluent, the most tech savvy, and the most avid." The NHL has expanded its commitment to social media, developing a new app this season and doubling the size of its social media staff to strengthen fan engagement. And there is evidence that the strategy is working. The NHL set TV viewership records in the US last season, and NHL teams had more sellouts than their NBA counterparts. Is social media potentially more beneficial for "lesser" sport brands for creating growth than more established brands? What factors contribute to social media success for a sport league or team?

Video of the Week

The sports world was saddened by the passing of ESPN anchor Stuart Scott on January 4th. His distinctive style was a breath of fresh air to sports broadcasting and is credited with attracting younger viewers to the ESPN brand. Here is a personal favorite from one of the many "This is SportsCenter" commercials in which Scott appeared. Rest in peace.