Wednesday, March 11, 2015

Pick 6: Brands, Stories, and Trends Shaping Sports Business #27

Tensions are as high for marketers in the boardroom as they are for players and coaches in the locker room. Here are six current examples of the tensions sports marketers face in their quest to build winners:

1. Technology as an Opportunity, not Threat to Live Sporting Events...

It is widely assumed that technology innovations will influence more sports fans to opt for the living room sofa instead of the folding seat in Section 307. The indirect consumption experience has been enhanced with high definition TV and second and third screens that many people use while watching sporting events, enjoyed from the comfort of their home. However, technology holds promise for making the live event more satisfactory, too. Four uses of technology at sports venues- better wireless networks, venue-specific apps, cashless systems and paperless tickets, and drone deployment- have the potential to add value for fans and utilize technology in ways that makes the decision to get off the sofa worthwhile.

2. And an Opportunity for Enhancing the TV Consumption Experience

Technology is being deployed to increase TV viewers' involvement and interest in sporting events, too. Direct consumption versus indirect consumption is not always a choice for sports fans. For example, PGA Tour events our held across the country, meaning that a golf enthusiast in Montana may have no choice but to watch TV coverage of this week's Valspar Championship in Palm Harbor, Florida to get his PGA fix. 

A situation such as this one typical of many PGA fans is why the new PGA Tour iPad app is an answer for how to meet the needs of high involvement fans. The app incorporates video, real-time player tracking, and other data to satisfy the appetite of fans that may be left longing for a better experience than TV alone can offer.

3. Li-Ning Seeks to Regain Balance

Chinese sports shoe and apparel brand Li-Ning enjoyed a rapid ascent to market prominence in just a few short years following its 2003 launch. Today, the company is working to overcome a third straight year of losses. Among the reasons cited for Li-Ning's woes have to do with marketing missteps. First, the brand has failed to link expensive athlete endorsements with its brand image, making the endorsements little more than very expensive promotional campaigns. Second, Li-Ning is caught between positioning itself as a high performance athletic brand and a lifestyle brand. Company leaders must deal with these marketing issues to put Li-Ning back on the right course, but will it be enough to compete globally with Nike and Adidas?

Li Ning's Woes a Valuable Lesson in Branding, by Li Ruiqui, Beijing Today

4. Don't Tread on My Logo

Brands occasionally update logos to give their brand identity a fresh look or reflect new positioning strategies. More often than not, logo changes seem to stir protest among customers and the public. It is a stark reminder that although the asset that is a logo is owned by the brand, its meaning and significance is owned by those to whom the brand matters. 

The latest example of public angst about a new logo comes from the Albuquerque Isoptopes. The AAA minor league baseball team recently unveiled a new alternate logo (meaning the existing logo is not being replaced) only to be skewered on social media about it. Backlash to new logo introductions is not new, so it stands to reason that brands should be prepared to "sell" customers and others on the reasons why a logo is updated or like the case of the Albuquerque Isotopes, complemented with a secondary logo. 

5. MLS Ready to Become a Major American Pro Sport Property?

The 2015 Major League Soccer season is now underway. Optimism abounds about the league as it appears to be stronger than ever. New franchises in Orlando and New York have kindled fan interest in those markets. Significant additions to the league sponsor roster include Heineken, Chipotle, Etihad Airways, and Advocare. Perhaps most notable is that the rise in MLS's popularity is being traced to interest among Millennials, a significant chunk of the 18-34 year-old demographic brands crave to reach and engage. Is MLS poised to make significant strides as a sports property with national appeal, or is this hope and hype from a small but passionate base that wants MLS to grow?

6. NBA, WNBA Lean In To Promote Social Issue

We live in the era of the activist athlete as sports stars use their popularity and social media platforms to speak out on social issues of the day. Some sports fans get uncomfortable when athletes starting co-mingling games and everyday issues, but other fans are moved by their heroes showing a personal side by taking stands on issues ranging from racism to literacy. 

Another issue that is drawing support from one pro sports property is gender equality in the workplace. The NBA and WNBA have partnered with Sheryl Standberg's Lean In movement in which players from both leagues have appeared in promo videos for the campaign "Lean In Together." The stance taken by the NBA to support this cause is in stark contrast to high profile embarrassing incidents of domestic violence involving some NFL players last year. On one hand, partnering with the Lean In movement is logical for the NBA given its stake in the WNBA brand. On the other hand, the NBA stands to benefit from a social responsibility standpoint as the NBA seems prepared to integrate Lean In Together into its marketing plan over the long run. It will not be a "flavor of the month" promotional campaign only to be replaced by a new campaign.

Video of the Week

Part of the NBA-Lean In partnership and the Lean In Together is a video campaign using the hashtag #LeanInTogether. NBA and WNBA stars are featured in the campaign to raise awareness of the leagues' association with Lean In. Here is work from that campaign:

Wednesday, March 4, 2015

Pick 6: Brands, Stories, and Trends Shaping Sports Business #26

March is here- let the madness begin! College basketball takes the main stage, MLB clubs are in spring training, NASCAR is back, the NFL never went away... enough to keep sports business fans busy. Here are six stories worth another look:

1. Jordan Brand Still Soars


Michael Jordan Still Dominates the Basketball Shoe Market and Nobody Else is Even Close, by Cork Gaines, Business Insider

Michael Jordan is as dominant as ever on the basketball court even though his playing days have long since passed. Jordan branded shoes generated $2.5 billion in sales in 2013, more than four times the sales of the next four endorsers (LeBron James, Kevin Durant, Kobe Bryant, and Derrick Rose) combined. These eye-popping numbers raise two questions: 1) Why does Michael Jordan's brand still resonate with consumers? 2) It is assumed that LeBron James is the heir to Air Jordan, but do sales of his shoes compared with Jordan suggest that he does not have star power like Jordan's?

2. Time is of the Essence for Sports Fans

In a world of second and third screens vying for our attention, a premium is placed on the time devoted to any consumption experience. Sporting events are no exception. In fact, slow pace of play in golf, tennis,and baseball is cited as a reason why those sports have had challenges sustaining fan interest. As one sports marketer puts it, consumers experience the greatest value when the ball is in play. Is it imperative for sporting events to speed up pace of play and reduce the time of no action? NFL and college football games are taking longer to play but have not experienced declines in viewer interest. Is speeding up pace of play important in delivering a better fan experience, or is its effect overestimated?

Every Second Counts in Bid to Keep Sports Fans, by Christopher Clarey, The New York Times

3. Building a Commercial District around Sports

Funding of new sports venues is a sore subject. Many economists argue that public funds should not be used to build stadiums as costs far exceed any economic benefits realized. Of course, sports franchise owners wanting new stadiums tout the positive impact on employment, consumer spending, and quality of life in the community. Which side is right? A stronger case for the position of team owners is being made when they pitch the idea of mixed-use development. Rather than building a stand-alone stadium or arena, mixed-use developments incorporate retail, restaurant, and entertainment businesses that can attract customers year-round. The latest example of such a strategy is the Jacksonville Jaguars. Team owner Shad Khan has a vision for a dramatic transformation of the Shipyards area adjacent to EverBank Field. Khan's vision is refreshing because it goes beyond the hollow economic impact proclamations that are standard among owners begging for public funds to build new venues.

Jacksonville Jaguars Thinking Mixed-Use, by Mike Mahoney, The Business of Sports

4. NCAA Turner Extend Madness Alliance to YouTube

One of the most valuable TV sports properties in the United States is the NCAA basketball tournament. March Madness is reality TV at its finest- drama, unlikely heroes, and breathtaking performances. The NCAA and CBS Sports has responded to consumers' appetite for digital consumption, streaming games online and on mobile devices. Now, the NCAA and another media partner, Turner, have created a YouTube channel. While viewers will still need to be a paying TV subscriber to get full games, the YouTube channel will serve up highlights and other related content. And, sponsors are getting in on the game with branded content. This alliance has the potential to fuel fan interest in the tournament, not substitute for viewing games.

NCAA, Turner Sports Start YouTube Channel, by Saba Hamedy, Los Angeles Times

5. Formula 1 Takes Social Media at Snail's Pace

Social media and sports are a natural match. Fans flock to social networking sites to connect with their favorite leagues, teams, and athletes. Sports properties use social media for engagement and to extend fans' involvement with their brands. Well, most sports properties do that, with Formula 1 being an exception. F1's top executive, Bernie Ecclestone, dismisses social media, saying it "doesn't make any money for a start." He questions the value of social networking sites, and if he is expecting them to solely make money he is right to blow off social media. However, applying that thinking to all marketing tactics would have disastrous results on brand building. If Ecclestone and F1 is interested in building the next generation of fans, social media must occupy a place in the brand's marketing strategy. The exposure some F1 teams have garnered on YouTube and Twitter should serve as evidence that fans crave the opportunity to connect with F1 digitally.

F1 Boss Says Twitter Does Nothing for Sports as Teams Have Success Engaging Fans, by Jeff Pappone, The Globe and Mail

6. Show Me the (Sponsorship) Money

In contrast to the view of social media taken by F1, the Minnesota Wild have embraced the possibilities of social media, and they should tell Bernie Ecclestone that they did make money via social channels. The club estimates revenue gains of 15 to 20 percent from its digital assets. The goal is simple: Extend reach and engagement beyond the venue. Digital marketing inventory has been created that marketers have parlayed into significant levels of brand impressions and engagement. Properties that collaborate with sponsors on digital marketing initiatives can create new revenue streams for themselves and new sources of value for their corporate partners.

How the Minnesota Wild Are Monetizing Social Content, IEG Sponsorship Report

Photo of the Week:

Speaking of the Minnesota Wild, the club made one of the most publicized acquisitions before the NHL trade deadline on March 2nd, and an 11-year-old girl may have been an inspiration for the trade. The girl was Jordyn Leopold, daughter of Columbus Blue Jackets defenseman Jordan Leopold. A letter written by Jordyn Leopold addressed to Minnesota Wild coaches suggested the team trade for her father. Why? She said her father was very lonely without his family. Her letter suggested that the Wild was not doing well and might could use more D-men.

Although the letter was never sent to the Wild, a local radio station received a picture of her letter. It spread quickly and the Wild apparently got the message. Sports fans often forget that athletes have families and make sacrifices to play the sport they love. This story had a happy ending- what a sweet letter!