I recently did an analysis of North American stadium naming rights as an adjunct to a client project. In it, I looked at 73 current stadium naming rights deals through a broad variety of research techniques and many sources. It wasn’t exhaustive and I didn’t have access to actual contracts or plans, but the landscape the information painted was crystal clear, and it wasn’t very pretty.
In this blog, many speeches, books, and the like, I have been upfront with my feelings about stadium naming rights. I’m just not a huge fan.
My lack of love for stadium naming rights isn’t about it’s lack of value as a marketing opportunity – there are huge opportunities to make returns – but because so many sponsors spend millions doing it and get virtually no real marketing value from the investments.
Yeah, yeah, yeah… I can hear you all yowling about the “massive exposure” all the way down here in Sydney. But exposure isn’t a marketing objective. Changing people’s perceptions and behaviours are marketing objectives, and being huge and loud and having a blimp take pictures of your neon name on the stadium does not change people’s perceptions or behaviours.
Based on this recent research project and 24 years experience in sponsorship, I’m confident stadium naming rights sponsors fit into four main categories:
- The clueless
- The egomaniacs
- The scared
- The saints
Clueless stadium sponsors just don’t get it. They don’t have any counterproductive agendas at play, they are not generally being disrespectful to an audience’s event experience – they simply don’t know how to get the most marketing value out of their huge investment. They buy the name, count up the media mentions and exposures, put some arbitrary media-equivalency figure on it and believe they’ve had a huge win. In real marketing terms, however, they are missing the point.
Sponsorships that are entered into primarily for generating awareness sit squarely in First Generation thinking (we’re now at Fourth, or “Last”). The view that generating tons of exposure on its own contributes to changing people’s perceptions or behaviours – our real jobs as marketers – has been repeatedly proven not to be the case in major studies starting from 1991. That said, there are plenty of sponsors out there who haven’t advanced their thinking for a decade or more and are making decisions and spending money with this outmoded objective front and centre.
The scope for turning these underperforming, marketing dinosaurs into major, measurable wins is fantastic. But they need to be prepared to let go of the old thinking and embrace the new.
While there is plenty to best practice sponsorship (for more, see “Last Generation Sponsorship”), the most basic premise is that it is win-win-win. That third “win” is about creating a series of small, meaningful wins for their target market(s). A sponsor creates those wins by:
- Adding real value to the event experience – Note, crappy giveaways and interruptive in-stadium promotions do not constitute “real value”. Think about the best and worst things about the experience, and then figure out ways to lessen the worst and amplify the best. It’s not rocket science!
- Adding real value to the brand experience – Is there anything about the stadium sponsorship that would make your customers’ interactions with you better, improve your products, improve the online experience on your site, whatever?
- Aligning with the beliefs, priorities, and self-definitions of the target markets – In the simplest possible terms, this is about using a sponsorship to say, “we understand you and we feel the same way”. This is especially powerful when the sponsor uses the sponsorship to amplify a target market’s voice.
I know that stadium naming rights is just one facet to these sponsors’ portfolios, but it is often the biggest. And I know that they may not have invested for marketing returns, but rather, to increase their market capitalisation (see below). Even if that’s the case, though, they have at their disposal a huge amount of marketing opportunity that is ripe for leverage, and most are simply not using it. And if they are that cavalier, uncreative, or out-of-date in their approach to these enormous expenditures, I dread to think what skeletons may be lurking in the rest of their portfolio.
This is an extension of not knowing what they’re doing, but has a somewhat darker side. It is clear that corporate ambition drives the decisions and that very little thought seems to be going into how this affects their target markets and real returns.
In my experience, this can go two ways:
We’re big, we’re huge, and it’s all about us – This is the sponsor that is so concerned about touting their “ownership” that their self-promotion actually intrudes on the fan experience. The tone is self-congratulatory and the volume is LOUD.
All our competitors are doing it, so we need to do it, too – This is the sponsor that gets into stadium naming rights for reflexive or defensive reasons (we don’t want a competitor to get it). Whether it is a good fit for them, relevant to key target markets, or a strong platform for leverage plays little, if any, part in the decision. The result is a very expensive white elephant and a gap in the sponsorship portfolio that could have been filled by an array of great sponsorships – if they hadn’t spent millions on the stadium.
The worst case scenario is buying naming rights to a historic stadium. When a company spends tens of millions of dollars to slap their name on a venerable and historic stadium, that’s ego talking. No good sponsor would be so self-absorbed as to think that disrespectinga place people love is a good way to get them to love your brand. There are actually some examples of companies who have bought the naming rights to great old stadiums and then returned the original names to the people of the city – in other words, they paid the fee so some other more selfish company wouldn’t put their name on a stadium people love. Those companies get it.
According to a Journal of Advertising Research study in 2002 (after the dot com bust) study of 49 stadium naming rights deals, market capitalisation for stadium naming rights sponsors rose an average of 1.65 percent on announcement of the deal. Higher and more sustained rises were attributed to hometown company sponsorship, contract length, and the winning record of the team. This outstripped the market capitalisation rises seen upon Olympic TOP Sponsorship announcements and marquee sportsperson endorsement. The research attributed the naming rights rises to the perception that such huge, long-term commitments are a sign of senior management confidence.
On the other hand, many companies have undertaken major arena and stadium sponsorships and then failed within a couple of years. Some call this the “naming rights curse”, while the more reasonable assessment would be that these naming rights sponsorships were taken up by companies that already had issues, and who were using the sponsorship with the specific aim to prop up share prices.
The dominance of financial services companies (40% of the 73 deals researched), car manufacturers (7%), and airlines (7%) taking up naming rights – particularly in the past 2-3 years – supports both of these points.
It is up for debate how many of these under- or badly-used stadium naming rights deals weren’t really marketing investments at all. But I hate wasted opportunity, and if the stadium is a half-decent brand fit, it is a crying shame not to leverage it properly.
These are the sponsors we – as consumers and sports fans – want for our stadiums. We want sponsors who understand the event experience – the good and bad. We want sponsors who have done their research, so they know what is important to the target markets. We want sponsors who understand that their role is to enhance the event experience, not interrupt it or take “ownership” of it. It’s not their experience! It’s the fans’ experience, and we want that respected!!
I wish I could point out a dozen great case studies, but I can’t. The good news is that some naming rights sponsors are on the right track.
- Citizens Bank participates in an interactive “Games of Baseball” park at the stadium and provides “Citizens Ballpark Bankers” around the stadium, providing customer service.
- TD Banknorth has worked with one of the resident teams, the Bruins, to create the TD Banknorth Kids’ Clubhouse.
- Heinz donates to the Extra Mile Education Foundation every time the Steelers score from the Red Zone at Heinz Field.
- You can get team-themed cheque accounts and credit cards at a myriad of banks who sponsor stadiums
There are any number of other leverage examples, and plenty of sponsors who participate in some way with the stadium or resident team’s community initiatives. The thing is, the longer I make this list, the more it becomes apparent that the naming rights sponsors are doing their best leverage – in fact, virtually all of their leverage - around their relationships with the resident teams, not the stadiums, and they didn’t have to enter into a 30-year, multi-million dollar stadium naming rights deals to get access to the benefits they’re actually leveraging. It’s either wasting opportunity or wasting money, and I’m not big on either.
This is so unfortunate, as there are ample opportunities to create amazing, holistic, best practice leverage programs around the stadium experience. Taking that holistic approach requires a consumer-centric approach to both negotiating the sponsorship and leveraging it. It also requires the stadium owners and/or teams to come to the party, and they are not always prepared to do that.
But just imagine the result if a sponsor decided that the name on the building was nice, but their real job was to sponsor the fans – to make their event experience better, easier, more convenient, more amazing, to make it about the fans, the kids, the communities, to share the celebrations, commiserations, and keeping the faith. Just imagine if they put their egos on hold and realised that by putting the fans first, their brand will enjoy a bigger win than if it had all the logo exposure in the world.
For all you need to know about best practice sponsorship selection, leverage, measurement, management, and more, you may want to get a copy of The Corporate Sponsorship Toolkit.