Hearts, minds & wallets
May 1, 2008
by Tim Darnell
Bernie Mullin …
Years ago, the manager of a Denver, Colo., Jiffy Lube learned, first hand, why companies such as his spend millions of sports marketing dollars. Bernie Mullin was president and GM of the Denver Grizzlies at the time, “and Jiffy Lube gave us several thousand dollars worth of advertising tags,” he says. “So they advertised on morning and afternoon drive-time radio.
Their whole message was, instead of sitting in traffic, get off the highway and head to a Jiffy Lube for a quick oil change, and you’ll get home at the same time. “We had the Jiffy Lube Grizzly Growl section, down near the glass. The radio ad said, ‘Be the first person in a Jiffy Lube; we’ll give you a hot cup of coffee while your quick change is going on; and if you give us your best ‘Grizzly growl,’ you’ll get free tickets to tonight’s game.’ “Early one morning, one guy got to his Jiffy Lube before its manager arrived,” Mullin continues. “So the manager finally gets there, and he’s unlocking the door, and the customer comes up behind him and roars at the top of his lungs and scares the living daylights out of him.”
From that single promotion, which didn’t cost Jiffy Lube any cash whatsoever, the ROI was close to $60,000 over a year’s time. “Jiffy Lube had a tally sheet at every location and tracked everyone who came to each respective store as a result of that promotion,” Mullin says. “Advertising to a highly targeted demographic is the single biggest thing that sports delivers, and in this case, Jiffy Lube was marketing to busy moms and dads who drive to work and school.”
Getting its message before a specific, highly desirable demographic is what motivates companies from Fortune 100 behemoths to entrepreneurial startups to advertise all across the professional and amateur sports spectrum. And with a Ph.D. in business and decades of experience in virtually every major American sport, Mullin has a unique insight into the corporate, sports-marketing mentality. “The single biggest thing that sports delivers is the ability to advertise to a highly targeted demographic,” says Mullin, who now runs The Aspire Group, a sports consulting business that he, along with fellow Englishman Michael Ditchfield, already have secured the National Hockey League and the Cleveland Indians as clients (from our pages: Aspiring to be the best) “Whatever the company’s targeted demographic is – be it The Home Depot, Coca-Cola, Anheuser Busch, Georgia-Pacific – that target is over-represented within the sports frame.” And within those targeted demographics is another, highly prized and sought-after group. “You’re going to get a opinion leader in that demographic,” Mullin says. “You’re going to get the innovators – the first ones to a movie, the first ones to try a product – and who are socially connected, so they spread the word of mouth. The college-educated person with above-average income, who has a larger family and spends money outside the home – that target group is over represented in the sports demographic.”
Your anti-spam filter is off
By some estimates, North American companies spend more than $10 billion annually on sports advertising – in-arena signage, morning and afternoon radio drive time, entire team sponsorships, stadium naming rights, TV, cyberspace and a whole slew of clever promotions such as the Grizzly growl. In-arena sponsorships (Turner Field, the Georgia Dome and Philips Arena, among others) are tremendously important to companies seeking to get their product in front of consumers. “This is where companies seek the hearts and minds of fans,” Mullin says. Companies think, “your hearts and minds are into the Braves, the Falcons, the Hawks and the Thrashers; you love your team, and while you’re here, relaxing, without your guard up or your anti-spam filter, you’re seeing our product for so many hours in a relaxed, positive frame of mind. “Plus, where there’s an exclusivity element included in the package, our competitor’s message isn’t there. That’s huge.”
The same goes for radio and TV advertising, but the days of those $2.6 million, 30-second Super Bowl commercials may be over. In a recent survey by the National Sports Marketing Network, which has 7,000 members representing sports marketing agencies, the sports leagues and TV networks, 41 percent of respondents said a Super Bowl commercial was not worth the investment while only 37 percent said it was. And in late March, Brandweek.com reported that budget cuts, increased activation behind new media and the lack of an Olympics-World Cup event caused companies to rethink their advertising budgets last year, and traditional sports marketing took a substantial hit.
The report said total ad spending among the 50 companies allocating the most money to advertise during network and cable sports programming dropped from $4.8 billion in 2006 to $4.4 billion in 2007, according to Nielsen Monitor-Plus. General Motors topped the 2007 list with more than $431.5 million spent to advertise during network-cable sports. But that was down $156 million from 2006, when the automaker led all companies with $587.5 million. Visa International accounted for the second-biggest decline among sports network-cable budgets, dropping from a top 10 spend of more than $135.6 million in 2006 to $45 million last year.
Among the companies increasing their network-cable sports media budgets in 2007 was Toyota, which added $20 million due to its increased NASCAR presence. Among others were DirecTV ($34 million), FedEx ($24 million), the NFL ($23 million), Schering-Plough ($14 million) and Verizon ($13 million). Also, Hyundai-Kia Automotive Group, which long has struggled to improve its brand image abroad, is reinforcing its marketing activities with more aggressive strategies such as sports marketing. As an official sponsor of the UEFA Euro 2008 football championship, the group has launched various online and offline marketing programs around the world. “We saw publicity results worth 3 trillion won four years ago when we sponsored the Euro 2004,” an automotive group spokesman recently said. “We expect our brand recognition and image to improve further through this year’s event.” Hyundai Motor and Kia Motors aim to sell up to 1.22 million cars in the European market – 620,000 for Hyundai and 600,000 for Kia – in 2010. Hyundai-Kia Group also is stepping up its marketing efforts in China ahead of the Beijing 2008 Summer Olympics and 2010 Shanghai World Expo. (From our pages – how Aflac has entered into b-t-b sports marketing.)
Have a conversation with Tiger
“There’s almost always a package element to sports marketing buys today,” Mullin says. “Today, you’re not just buying a media ad, but you’re buying hospitality and tickets; something special for your salespeople, or for people with whom you want to build a relationship, something that will truly excite these folks.”Think about how everyone does business. You’re the senior VP of Anheuser, and you want a better relationship with Kroger, for more prominent positions. It may take you a month to get just a 20-minute phone conversation with him, but to spend a weekend with him at a race or golf tournament, get to know him and his family, learn what his issues and budgets are, learn about his branding strategies…
“All of a sudden, you like this person, you like his company, you want to do business with him, so you get into, ‘Here are my issues and challenges and my budget, and can you put more emphasis on this, cut back on that, and by the way, can you push all of this back into the next fiscal year …, All of those elements now come into play because you’ve been to that event and built this kind of comfort level that allows this rapport.” Not to mention the star power that always comes with such an endeavor. “We can get you into the Pro Am where you’ll play with some of the best players in the world,” says Mullin. “Now, you’re not going to play with Tiger unless you’re Buick’s top customer and it’s the Buick Open, but you might get John Daly, and you’ll get to play the course. And you might see Tiger on the next fairway, and you might be in the reception tent and get to have a conversation with Tiger.”
The approachability of NASCAR’s drivers is a key reason why the once-Southern-backwoods pastime has arguably become America’s favorite spectator sport, particularly when you look at the sheer numbers of companies wanting to participate. NASCAR has more than 50 “official” and exclusive sponsors on its spreadsheet, everything from an insurance company (Allstate), hotel (Best Western) and convenience store (APlus) to wine (Diageo), oral care (Oral B) and battery (Alkaline). But with so many companies jockeying for prime NASCAR visibility, isn’t there a risk of sensory overkill? “But the pricing is reflective of that,” Mullin says. “If you’re going to have 10 messages and 10 messages only, you’re going to pay a really high price for that. If you’re going to have multiple messages, obviously you pay less. Home Depot is going to buy a certain race, and get advertising in the broadcast, and they’re going to have their Home Depot car, so you have the identification factor with that car and that driver and that race.”
Into the stratosphere
For years, stadium-naming rights have brought in massive amounts of revenue to sports franchises, but today, the numbers being bandied about for new arenas are stratospheric. The current top spots go to the Barclays Center, future home to the New Jersey Nets, and Citi Field, where New York Mets will play in 2009, each pulling in 20-year, $400 million contracts. Website exclusive – the nation’s major sports venues, their naming rights, and how much their contracts are worth but the naming rights to Jerry Jones’ new stadium for his Dallas Cowboys may shatter all previous records, perhaps more than $20 million a year. Costs for the ballpark already may be more than $1.1 billion. And the $1.3-billion new home for the New York Giants and Jets eventually will eclipse the Cowboys’ facility. And that’s just over on our side of the pond – www.stadiumguide.com lists 78 new soccer venues across Western Europe that either opened recently or are planned for the near future, along with a handful of others in Eastern Europe and South America.
“Companies like Philips Electronics have people at the end of the year who track how many mentions Philips has received on the radio, TV, etc., and they assign a value to that,” Mullin says. “There are independent media organizations whose job it is to determine sports marketing’s value to retailers. They can tell when a retailer or company scores in ads made specifically for the team, or using an athlete or a theme revolving around the team. And that affinity and relationship means that you reach the heart and mind of the customer.”
Lunch with Bernie
Managing Editor Michael Pallerino and I met Bernie Mullin, along with Tom Hughes, senior VP of Hope-Beckham, at one of Atlanta’s premier power lunch locations.
Chops Lobster Bar consistently ranks as one of the nation’s top 10 steakhouses. Seafood flown in daily and the USDA prime aged beef are served in the ambience of the dark wood dining room. On the lower level, the Lobster Bar features a mosiac-style dining room. 70 West Paces Ferry Road, 404.262.2675. Lunch Monday-Friday, dinner seven days a week.