Are Stadium Naming Rights an Effective Marketing Practice?

Photo found on: Ad Pulp

After the Final Four wrapped up here in Detroit, The Detroit Free Press published an article stating that as a result of the event being held at Ford Field, Ford Motor Company had won $22.5M in free advertising from media coverage. The "Freep" noted that despite the fact there were no courtside signs present, "Ford received more than a minute of clear, focused exposure time during the two nights of coverage. Ford Field was also mentioned by the CBS announcers 23 times." (For background, when Ford purchased the naming rights to the stadium (completed in 2002), it agreed to pay $40 million over 20 years).

This article inspired me to bring up the use of stadium-naming rights as a marketing tool. It's a topic on the heat of many tongues over the past few months, primarily due to public criticism of Federal-bailout-money-funded banks continuing on with naming-right plans. Although the practice isn't anything new, over the past few years as stadiums have become larger and more luxurious, naming-rights prices have skyrocketed. For example, in July of last year Ad Age reported the naming-rights for the new Giants/Jets stadium, was estimated at $800M. And on February 4 of this year, MSNBC reported (via the AP) that “Citigroup's contract with the Mets is the biggest stadium naming rights deal ever...paying the team $400 million over 20 years...” At rates this high and the economy this low, is it even worth it?

In the MSNBC report, William Madway, marketing instructor at Villanova had said in regards to purchasing naming-rights as a marketing tool, “This is not a silly thing…this is not a corporate jet.” (Although I don't think this is a very good comparison, because an asset like a corporate jet isn’t intended for marketing purposes and in many cases the jet isn’t silly because the plane is already a sunk cost and the company is only paying for operation costs to fly (instead of paying for fluxuating, booked-at-the-last-minute, high-priced commercial airline tickets). It makes business sense because the plane flys large numbers of employees (not just executives) to highly frequented company destinations multiple times a week. But I digress.). Don Sexton, a professor of marketing at Columbia, on the other hand said "You have to have the right tone. People in these times have very sensitive ears...Perceptions rule." In other words, if people are highly critical of how you're spending taxpayer money, it probably isn't a good time to continue with a high-priced, high-exposure sponsorship. He also said, "from a branding perspective, there's no hard data to prove how effective stadium naming rights are for financial services firms."

This brings us back to the Freep article. So what if the company name was mentioned on the air? Did the name make people think of cars or football (the Detroit Lions) or college basketball? What was the actual ROI for Ford Motor Company - the car company? Did more people go out there and buy or lease new cars/trucks or get a warm fuzzy feeling when they thought of the Blue Oval? Can it be compared to $22.5M of strategized, paid-for advertising when it may not have been reaching or connecting with the appropriate target audience? What has been the actual naming-rights ROI over the past few years for Ford?

In 2005, Brand Channel posted a Brand Debate asking readers whether or not corporate sponsorship (specifically stadium naming-rights) scored with consumers. There was a range of differing opinions, from those who didn't believe it made people more inclined to purchase products/use services, to those who said it may help increase or strengthen top of mind awareness if the stadium/sport has something to do with the product and brand experience. In other words, before throwing money at naming-rights a company needs to remind themselves of their brand basics. What does your brand stand for? What do you want the customer to think or experience when they're exposed to your brand? So what if a customer knows your name...do they know what the brand is about and like what it stands for? Does tying the brand name to a stadium or sports team compliment your overall brand goal? What if the sports team is a losing one or tends to get a lot of bad PR?

In my opinion, not only is it difficult to measure the ROI to justify buying naming-rights as a marketing plan, but there are an unlimited number of ways to more effectively reach your customer for far less spend. You can do a lot of marketing for $400M and do it smartly - i.e. in ways that won't anger consumers and tarnish your brand image. But, if you do decide your brand might fit with a sports team (maybe you are a maker of athletic shoes or something), just remember to go back to the brand basics before pulling the trigger.

Iconic Brand Power Proved: Snicker's Snacklish Campaign

Over the past few weeks I've been seeing billboards and buses in the Detroit-area that seem to be all about jibberish: "Get some bling with Master P-Nut," "Pledge Sigma Nougat," "Nougetaboutit." Realizing these ads were for Snickers (based on the logo and brown background), I did a Google search and discovered Snickers' new "Snickers Speak" campaign from TBWA\Chiat\Day New York. Snickers is putting on a full-court press to encourage people to learn "Snacklish."

This isn't the first time Snickers has tried to get people to speak its "language." Similar ads were launched in 2006 using words like hungerectomy, peanutopolis, and nougatocity (Arnold Zwicky has a nice list of words and definitions from the 2006 campaign here). Back then, it got people talking, but not everyone was sold on the new words. For example, two commenters on Ad Freak said that "Hungerectomy" reminded them of rectom and hysterectomy rather than the intended meaning of removing hunger. Although it isn't certain Snacklish will actually work its way into conversations with friends (NWT reported "Executives at Mars and TBWA/Chiat/Day New York say the Snickers language will resonate with 'young adults who are texting each other...making up their own words, their own shorthand.'"), what this campaign proves to me is the power of Snickers' brand.

How many other brands would get away with only using a single word on a billboard and have people tie it back to the correct product? These ads prove Snickers is an iconic brand, a brand according to WPP that is "...instantly recognizable...with such powerful visual cues (it) has an intrinsic advantage over others, not least beacuse it ensures that marketing communication is linked to the right brand...Our analysis found that brands considered iconic enjoyed far higher top-of-mind awareness...(suggesting) that iconic brands are strongly associated with their specific categories."

So what are the take-aways from this campaign? First, these ads serve as a reminder to those of us with newer brands to be specific in our advertising and to be smart about what visual cues we link to our products. For example, if Dove were a new entry into the soap market, just showing the word "Clean" inside the outline of our logo probably won't make much sense to the consumer...yet. Second, for those of us working with the brand powerhouses, it reminds us to be sure we don't lose sight of what makes our brand an icon. Would a McDonald's commercial be the same without seeing golden arches? Would Energizer batteries be the same without the bunny?

If you want to see more Snickers' Snacklish ads, Ad Land has a several posted to their website. Or you can visit Snickers' website to learn more about the campaign.

Celebrity Endorsements: Do They Work?

Last week, USA Today published an article calling out favorite brands of the Obama family. In the write-up, Bruce Horovitz stated if the president-elect were to advertise the favorite brands of his family(Hart Schaffner Marx, J. Crew, Planters, Fran’s Chocolates, Honest Tea, Nicorette and Ford), these companies would most likely receive an increase in exposure and/or sales. One example he mentioned involved Michelle Obama. "During a Tonight Show with Jay Leno appearance, she [Michelle] wore — and talked about — a $330 outfit she had bought online. Shoppers snapped the look up. 'All the items were gone the next day,' says Jenna Lyons, creative chief at J. Crew." When reading this, I was brought back to an often discussed marketing/advertising question: Do celebrity endorsements really work? And even if they do, are paid celebrity endorsements a good business investment (i.e. is the ROI worth the (most times) extremely high premium)?

In early 2007, innovations report wrote about research conducted by the University of Bath (UK) and University of St. Gallen (Switzerland) on this exact topic. The article noted that research results questioned the effectiveness of using celebrities to sell products since it was discovered “...that many people were more convinced by an endorsement from a fictional fellow student… because many people feel a need to keep up with the Jones’s when they buy.” Furthermore they found that people “...like to make sure their product is fashionable and trendy among people who resemble them, rather than approved by celebrities...So they are more influenced by an endorsement from an ordinary person like them.” Besides this study, Brand Republic reported that some celebrities plugging products may actually turn off the consumer. In an article published in November of last year, survey results revealed “...that one in five mothers said the sight of Victoria and David Beckham plugging something in an ad would be more likely to put them off. Only 16 per cent were prepared to admit that celebrity endorsement would persuade them to buy a product.” Based on these reports, would you spend millions of dollars on a celebrity to advertise your products?

Besides the obviously monetary investment, when companies use celebrities in their ads they also take on the risk of damaging their brand/company/product image. For example:

• Overexposure: If a celebrity is representing too many products or is in too many ads, that person may lose their credibility and/or lose their "turning heads" factor. Also, we may end up tying our brand/product to something we didn't particularly want to be associated. One case of celebrity endorsement over-exposure I can think of off the top of my head is Tiger Woods. Over the past few years he has represented General Motors, Titleist, General Mills, American Express, Accenture, Nike, Tag Heuer, Gatorade and Gillette. I know Tiger is popular, but honestly, do you really listen to him in an advertisement anymore since he's in so many of them?
• Credibility: If your product is not something the celeb representing you would realistically use, then a partnership is probably not the best idea. Keeping with the Tiger Woods theme, a consumer could totally see him using Nike and Titleist products, what what exactly does he have to do with management consulting (Accenture)? Some other examples of bad celeb-product matches? Do you think Jessica Simpson would be caught dead eating greasy pizza in public or could you honestly see Fran Drescher shopping at Gap's lower-end chain? Probably not so much.
• Reputation: We try to control our brand's image, but the fact is, even when a celebrity agrees to our contract terms, we can’t really control what they say or do, and a mis-step could lead to years of damage to our brand(s). For example, many companies could not have predicted the negative publicity Michael Vick would bring upon himself. About.com reported: "Just one day after Atlanta Falcons quarterback Michael Vick pleaded not guilty to federal dogfighting charges, companies began distancing themselves from the controversy. Nike suspended its contract with him, Reebok stopped selling Vick jerseys and trading card companies Donruss and Upper Deck removed Vick's card from the rest of their 2007 card pack releases. The NFL also pulled all Vick jerseys, autographed items and other memorabilia from its NFL Shop site."
• Consistent Brand Image: When we put our products out into the market place, it's important we present a consistent image to the consumer. It brings trust and recognition to our brand. However, continually swapping celebrities is one way we can take away that consistent image. One brand I can think of who constantly changes their celebrity image is the Gap. Since the late '80's, Gap has relied on the use of celebrities in their ads with a laundry list of probably 40+ including the likes of Sarah Jessica Parker, Joss Stone, Lindsay Lohan, John Mayer, Mekhi Phifer, Claudia Schiffer, Sarah Silverman, Liv and Steven Tyler, Michael Vartan, Madonna and Brittany Murphy. In August, Marketing Daily quoted marketing consultancy Brand Keys' president Robert Passikoff as saying the Gap has a "sustained problem with brand identity that isn't solved by using stars in ads."

Over the past couple of years it appears more and more companies are realizing consumers may not buy something just because a celebrity face is linked it. Brand Republic commented: “In 2001, 17 per cent of TV ads the company was testing featured a celebrity. Last year, that fell to 8 per cent, and this year it's at 6 per cent." About.com reported on Pepsi dropping celebs from their ads stating the company “...said the celebrities were too big and the Pepsi brand didn't get the promotion out of the ad campaign that the stars were getting." On a similar note, Chrysler dumped Celine Dion after signing a 3-year, $14 million dollar deal with her. "Insiders at Chrysler say the commercials featuring Dion driving a Pacifica produced great sales...for the singer, not the car.”

Balancing Act: New Balance Says "Don't Be A Hater"

Can convincing your consumer to become more of a lover and less of a hater strengthen your brand identity?

Watching the NCAA tournament over the past month, many of you may have noticed the latest New Balance ads (by BBDO New York). One commercial starts out showing a man in bed who later is seen running in the dark. "Running kicks you out of a warm cozy bed and into a cold hard world...Every day is a question of your commitment." In another, called “You Broke up with Running,” there’s a guy sitting in a park watching people run by him. "You broke up with running last week. And now you see running everywhere. Looking really, really good." He’s envious of the runners who made the choice to run while he sits eating fast food on a park bench. Strike a chord with any of you?

New Balance, tired of being outrun and out marketed by Nike, plans to triple its ad spending in an attempt to double sales by 2012 (to reach $3B globally). Sure it’s a lofty goal, especially when you think of how Nike has been a dominant player in the athletic-shoe category and has only increased it market share over the years. So how is New Balance going to "do it" (no pun on Nike's 'Just Do It' tagline intended)? AdAge.com reported that the company has come out with a new campaign - the Love-Hate campaign - to chase casual runners and hit home with 18- to 29-year-olds (their current loyal customer base tends to be serious runners over the age of 30).

So what has the New Balance brand looked like over the years? Their website says they have “been a brand concerned with meeting the needs of the everyday athlete…a superior product will sell itself better than any superstar athlete ever could.” In 2005, The Boston Globe reported that “instead of hiring sports stars to pitch shoes, Boston's New Balance has a philosophy of ''Endorsed by no one." Instead of focusing on fashion and teenagers, as many rivals do, New Balance...emphasizes function, something his baby-boomer customers appreciate.” In 2004, Ageless Marketing by Marketeer David Wolfe argued that “New Balance’s success in projecting values that resonate across generational divides led it to having faster growth rate in market share among consumers under age 40 than either Nike or Reebok.” The blog even highlighted marketing techniques used by Nike and New Balance and claimed New Balance was attractive to the older consumer set because they had more "feminine" values. Source: Ageless Marketing, 2004

So what is it about the Love-Hate campaign that should hit home with a broad consumer base? Well, what is one of the most important things behind an effective ad campaign - finding something that taps into a key insight about the consumer. If you visit the New Balance website, the first message that pops up says “For every runner there’s a constant struggle between pain and pleasure. Between good days and bad. Between LOVE and HATE....Feel the LOVE. Feel the HATE.” I think New Balance has figured out something that hits home with both serious and casual runners.

The ads have met some criticism, however. For example, on WonderBranding: Marketing to Women, Michele Miller states “Corporate New Balance has made a conscious decision to move completely away from the older demographic and are going for, in their words, ‘young runners’…It just breaks my heart that this is the direction they are going in.” Marketeer David Wolfe responds “They have committed a classic marketing error of stupendous proportion: departing from the brand’s traditional essence. Rarely do brands succeed in making so sharp a break with their past...Not since the ill-fated “It’s not your father’s Oldsmobile” campaign have I seen such a display of ignorance of the psychodynamics of brand management. Someone needs to get to Jim and Ann Davis (NB’s majority owners) before it is too late.”

So why don’t I agree with Michele and David? I don’t see these ads as being young (i.e. only appealing to a high school/college-aged demographic). I see them pinpointing a key insight in to how people feel about running. Running is challenging. And it does make you feel guilty about having an on-off relationship with it. It’s a struggle any person who has ever run - even just once - can relate to. And it's a universal feeling - i.e. not gender or age specific. The ads attempt to make you believe that New Balance shoes will help you find a way to love running...be your support group. None of the other shoes will give you that balance between LOVE and hate.

Since I was able to find criticizm of the campaign, I decided to do some searching to see what other opinions were out there. I found a couple of runner’s forums and noted very positive comments about the campaign. On a triathalon forum, one user said “There's something about the guy sitting with a generic bag of fast-food in this one that really appealed to me. Could be that I'm that guy right now.” On RunnersWorld.com one runner said “love the ads...gave me the push I needed to get out the door on Friday night,” while another said “Totally! Great ads - bring some light to the sport of running... finally.” On SoundBite Back, Anthony Juliano (who happens to be a runner) talks about how he fell out of love with New Balance. “Part of the problem is the New Balance brand itself. It's always been kind of vanilla, lacking the intangible allure of other brands. It's not that New Balance had a bad image--it just didn't seem to stand for anything at all. And that made customers like me pretty vulnerable to good advice from people they trust…So, what's a brand to do when it runs into a relevance problem? Well, New Balance is investing in a new advertising campaign. And I have to admit, I think what they're doing is great. And smart.” Dead on.

Sure the ads could be improved by focusing more on why the New Balance shoe will help switch the balance to give you more love and less hate for running (ex/ shoe design, comfort, maybe even an online users community for you to get support/find running partners). But it’s only the beginning of the campaign, and New Balance has given themselves some great building blocks.

So marketing critics, what do the rest of you think?