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.

A Bunch of Chrismas Creep: How Starting the Season Early Doesn't Yield Intended Results

Image from http://oceanswavesbeaches.blogspot.com/

The topic of this posting has been floating around in my head since September when I saw the first Christmas trees and holiday decorations out on display at my local Home Depot store. Ah yes, early fall was my first, 2008 sighting of the infamous “Christmas Creep." According to Wikipedia, “Christmas creep is the commercial phenomenon of merchants and retailers exploiting the commercialized status of Christmas by moving up the start of the holiday shopping season. The term was first used in the mid 1980s.” Every year this exploitation seems to occur earlier and earlier in the season. We see retailers tangling Jack-O-Lanterns and monster masks with evergreens and snow globes, mingling turkeys and pilgrims with nativity scenes. Christmas in November, then October, then September, and now some reports say this year it was extended to August? What happened to Christmas in December??? I mean we all joke about Christmas in July, but the way things are going, maybe next year we'll see just that. Surfing Santas anyone?

As a consumer –and- a marketer, Christmas Creep is one of my biggest marketing pet peeves. And it appears I am not alone. Peruse message internet boards and articles about the topic and you will find massive numbers of consumers complaining about “creeping” retailers. Some threaten not to shop at the first store they see with Christmas decorations up before Halloween or Thanksgiving. One poster writes: “It’s insulting…and they need to be boycotted. It completely ruins any given holidays because the holidays no longer represent a specific time of the year. If Christmas is 24/7 365 days a year, why bother doing anything about it?”

When we think about the marketing reason behind starting the holiday season early, we understand that retailers are attempting to influence consumer buying behavior. For example, last year The New York Times quoted several retailers regarding why they had put out Christmas decorations in October. L.L. Bean's spokesperson stated: "It's safe to say there is always anxiety. [The ad] serves the marketing purpose. It gets people thinking that the holiday is coming." But does it really? Consumers aren’t stupid. They know Christmas falls at the end of December every year, no matter when the retailers put up their decorations. So, with that said, has Christmas Creep really yielded the desired results? Many of us would argue it hasn't done anything other than annoy consumers and dilute the holiday spirit.

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The National Retail Federation (NRF) conducts holiday surveys every year and defines holiday retail sales as sales in November and December. Looking at past data, today is no different than it has been over the past four years: around 40% of consumers say they’ll start their holiday shopping in October or earlier. Additionally, data collected since 2002 shows ~30% of consumers will have 10% or less of their shopping completed by the second week in December. In other words, people who tend to start early and plan their shopping will continue to do so and the Christmas Creep isn’t convincing holiday shopping procrastinators to start buying presents any earlier in the season. Finally, if we look at U.S. Census data, we see that total retail sales (excl. motor vehicle and parts dealers and food services) for November/December from 1998-2007, have consistently been in the 17% range. If you look at sales from October through December, they’ve consistently been in the 25% range and from September through December in the 33.5% range. In other words, Christmas Creep doesn't appear to be doing much to encourage consumers to spend more or buy earlier.

In March 2006, Wharton Marketing Professor Stephen Hoch wrote about Christmas Creep. "Are consumers going to revolt against it? No. Will it get people in a holiday mood? No; people will get in the holiday mood during the holidays. Does it give retailers a chance to set displays up sooner? Sure. Does it make stores more crowded? Yes. Decorations and special displays tend to make stores cluttered and hard for shoppers to move around." His article also quoted Herb Kleinberger, a partner and retail store practice leader at IBM Business Consulting Services. Klinberger stated: "Jumping the gun too soon can create an emotional pushback. In a certain sense, the consumer has to be emotionally ready to shop, and that may not happen until the weather [becomes colder]." In other words, your panic to turn your store into a Winter Wonderland in August could end up alienating shoppers.

So what should retailers be doing INSTEAD of putting up holiday decorations months before Christmas and calling early-bird sales "Holiday Sales." They should be working to identify some important consumer insights and determine what drives consumer behavior. For example, why do holiday procrastinators behave as they do? Lorraine Cohen, Life Strategist and author of the Powerfull Living blog, notes seven reasons why people procrastinate: Fear of success or failure, lack of desire, no inspiration, loss of momentum and motivation, negative self-talk and beliefs, overwhelmed by too many options, and too many distractions/loss of focus. In other words, a holiday shopping procrastinator is probably someone who can’t decide what they want to purchase, thinks there are too many choices (which causes them confusion and makes them feel overwhelmed), they don’t know where to start, and they don’t like shopping to begin with and are hence delaying the pain by shopping late. Knowing these insights, any decent marketer should be able to come up with ideas of how to appeal to this particular consumer set -and- potentially get them to both spend more money and shop earlier in the season. So with that said, I am personally challenging all you "Christmas Creepers" out there. In 2009, prove to us you know how to execute a pull rather than a push marketing strategy, show the consumer you actually understand them, and finally, quit acting like the people you want to purchase your products aren't intelligent!

To conclude, it's refreshing to see that not all retailers have jumped on the Christmas creep bandwagon. Some of you may recall Nordstrom's 2007 ad: “At Nordstrom, we won’t be decking our halls until Friday, November 23rd. Why? Well, we just like the idea of celebrating one holiday at a time. From our family to yours, Happy Thanksgiving. Nordstrom will be closed Thanksgiving Day. On Friday, our doors will open to welcome the new season.” Their company policy dictates this and I am pleased to report they followed it to a "T" again this year. "Merry Christmas" to that!

Corn Syrup's Sticky Situation: Can You Change Consumer Perception?

Have You Heard? Corn Syrup is Good for You!

Alright, so that's probably not the complete truth. We all know high-fructose corn syrup (HFCS) isn't the next "health food." But recent commercials released by the Corn Refiners Association attempt to convince consumers that corn syrup in "reasonable amounts" is completely safe. This campaign (www.sweetsurprise.com) according to CRA president (Audrae Erickson), "is designed to correct the record...not a campaign to drive consumption (of corn syrup)" (per AP article posted on MSNBC).

See the commercials:

Commercial Version 1

Commercial Version 2

Corn syrup has faced public criticism, primarily due to studies linking obesity problems to sweetened beverages. Per the Mayo Clinic, "...research has yielded conflicting results about the effects of high-fructose corn syrup. For example, various early studies showed an association between increased consumption of sweetened beverages (many of which contained high-fructose corn syrup) and obesity. But recent research — some of which is supported by the beverage industry — suggests that high-fructose corn syrup isn't intrinsically less healthy than other sweeteners, nor is it the root cause of obesity."

Recently I've written entries about how deceiving consumers can negatively impact a brand. And although I think the corn syrup campaign message is misleading and also don't think it will be completely effective in "re-educating" consumers, I don't plan to turn this into another "what you shouldn't do" entry. What I am going to talk about is how the issue driving this campaign is a realistic marketing problem. For example:

• What do you do if your product/brand has a bad reputation in the public eye – because the consumer is misinformed?
• What does it take to change consumer behavior/perceptions about your brand/product(s)?
• Will an ad campaign like this set consumers straight and be able to re-educate them/make them change their beliefs?
• Is changing perceptions possible when the message isn't consistent? (i.e. various external sources are promoting different “facts” about your product)

Changing the way consumers view a company, product, brand, etc. is one of the largest challenges a marketer will face. It is difficult to break perception since it has been developed over time from a variety of influences – psychographics, knowledge, feelings, family, culture, etc. The good (or bad) new is that perceptions are dynamic, changing as the consumer becomes more or less familiar with things. And thus, as marketers, we try different things to change the consumer's mind. Most of the time we look to the 4-P's: Product, Placement, Pricing, and Promotion. For example:

• Product: Is there a component of the product that is turning off consumers? Should we change the product all-together?
• Placement: Is there any way to re-position the product so it will appeal to a different customer or fit into a different product category?
• Pricing: Sometimes reducing the price will cause a consumer to purchase the product (although many times this may cause a temporary rather than permanent change in behavior unless competition is high and the products in the category don't have many differentiating factors other than price).
• Promotion: You can change the affect a product has on consumers through pairing the product with a desired stimulus or put out appealing advertisements. You can put out advertising or materials that make the product or its attributes a compliment the target consumer's beliefs. You can attempt to re-educate a consumer.
• A Combination of the Above: In an extreme case, some people would say the solution is to "brand, brand, brand." In other words, change multiple "P's"...update your image, release new information, redesign the product's packing, etc.

Now back to the "Sweet Surprise" campaign. The situation facing the Corn Refiners Association is unusual. The issue consumers have is with the product itself. The CRA can't add something to the product to make it more appealing - it is what it is. They also can't sponsor a study proving HFCS is completely safe because first, consumers won't listen to the results (CRA study = self-serving agenda) and second, consumers know corn syrup is not all-natural, it's chemically processed. Further, the CRA isn't able to change the consumer's ideals - you won't be successful in making processed/artificial the new ideal for food when the trend is going towards healthy, organic, natural, etc. Nor will you be able to make a consumer put "being healthy" lower on their list of priorities. Finally, corn syrup faces a non-compensatory consumer strategy. Lars Perner from the Marshall School of Business at USC quotes: “A compensatory decision involves the consumer “trading off” good and bad attributes of a product…Occasionally, a decision will involve a non-compensatory strategy. For example, a parent may reject all soft drinks that contain artificial sweeteners. Here, other good features such as taste and low calories cannot overcome this one “non-negotiable” attribute.”

Based on the television ads, the strategy the Corn Refiners Association has decided to pursue is to attempt to re-educate consumers. However, with all of the negatives mentioned above, what do you think they should do? Maybe it's time for the CRA to come up with a new product to market that actually benefits consumers (Innovation people! Give the people something they do want...consumer tastes have changed!) and give up on the stale, sweetener of yesteryear that is leaving a bad taste in consumers' mouths.

Making Mud Pies: Mudslinging's Impact on Brands and Consumers

Photo: Brand Week

It’s crunch time in the U.S. presidential race and (to no surprise) we find ourselves being exposed to a plethora of political mudslinging. Since big bucks are involved (in 2006, most of the $164M spent on political advertising went towards attacks on the competition (USA Today)), I have often wondered whether or not these ads actually achieve the intended results. Notre Dame Marketing Professor Joel E. Urbany conducted research after the 2004 election and showed political mudslinging could work - to an extent. One article quotes his research: “Negative advertising, in spite of the fact that we don’t like it...can shift opinion...14% percent of those surveyed changed their minds about their favored candidate after watching negative ads.” Additionally, John Geer a political science professor at Vanderbilt University wrote a 2006 book (In Defense of Negativity) about how attack ads actually help the democratic process and can make campaigns more focused and productive. However, in a USA Today article, Ray Seidelman, a professor at Sarah Lawrence College said: "Negative ads only work in two situations — when you are incredibly desperate or when you're incredibly close to the end.” And ND's Urbany has said he is now reconsidering his 2004 study based on the fact that this year the number of negative political ads outnumber the positive ones (he wonders if they will actually have a reverse effect).

Although typically we think of mudslinging when it comes to politics, brands have also used attack ads over the years to try to bring more business their way (or prevent people from purchasing competitors' products). Some of the culprits? Mega brands Miller vs. Anheuser-Busch, Pepsi Co. vs. Coca-Cola, Progresso vs. Campbell’s, Apple vs. Microsoft, and Arby’s vs. McDonald’s and Burger King. Some examples? How about Progresso claiming Campbell's was a child’s brand - a battle that has recently evolved into Campbell's ads attacking Progresso's ingredients (photo above). Then there are "classic" blind taste test ads between Pepsi and Coke. In 2006, many of you may recall Arby’s claiming they used 100% chicken in their sandwiches unlike McDonald’s and Burger King (who only used 70%). And what about the never-ending "I'm a Mac" vs. "I'm a PC" saga? Or who can forget the continual battle of the brewers? Even right now, when some of us may have thought the "low-carb" fad was over, there's an ad for MGD Light 64 that shows someone asking for a Michelob Ultra "64" and the server pouring out half of the bottle of beer. Yes, attack ads have become a staple in modern day advertising. But what do experts say about this practice? What is the impression you’re creating on the consumer? And are you doing your brand image - one that you've spent a lot of time building up - a disservice by resorting to negative advertising? Although there could be a legal/libel risk in bashing your competitor, could you also make your brand less appealing to consumers?

Just last month, David Dunne, a professor of Marketing and Advertising at Toronto’s Rotman School of Management wrote an article about attack ads. He states: “Attack ads work in politics because political campaigns are different from advertising soap or shampoo. Voter psychology, timing and competition make it inevitable that one or both sides will use negative ads during a campaign.” The key idea here is that in political campaigns, people are more likely to distrust politicians and thus believe bad things about them, and that compressed timing works to an advantage. “In business, advertising campaigns are designed to build brand equity over time.” The WSJ reports: "Attack ads, when they get too intense, can confuse consumers. Several years ago, an ad war between SABMiller's Miller Brewing (now MillerCoors) and Anheuser-Busch got so heated that it was hard to keep track of which ad was for which brewer..." And just today, Brand Week posted an article noting expert opinions on the increase in business-related attack ads. They reported this tactic could actually hurt the brands involved and put entire product categories at risk: "If I'm a consumer, all of a sudden, I might say, 'Canned soup might be convenient, but I know it's not as wholesome as soup I might buy at a Whole Foods or gourmet shop,'" said Paul Kurnit, a marketing professor at Pace University, New York." CEO of the Wisner Marketing Group, Jim Wisner stated: "Private labels tend to get a boost when big brands engage in a category battle."

But even with these risks, attack ads are on the rise. A couple of weeks ago the Wall Street Journal reported: "The National Advertising Division of the Council of Better Business Bureaus, which acts as the ad police, is fielding many more complaints from marketers who believe they are the victim of misleading comparison ads...September also saw complaints jump about 50 percent from last year..." They also wrote that Russ Klein (president of global marketing strategy at Burger King), said "over the next 12 months, the company's customers are going to get a "richer dose" of competitive ads than they have in the past 12." I'm not sure this is the direction companies should be taking.

We all know the big thing currently on consumers' minds is the economy. Since people are feeling down in the dumps about money, I highly doubt a bunch of negative ads are going to encourage them to up their spending. To me, most of these negative ads say "I'm a tattletale" -or- "I'm a big bully." Who ever likes someone like that? I think what consumers want to hear right now instead is "I'm a bargain" or "I'm someone you can trust." For example, a better execution of the Campbell's campaign would be to not even mention the competition. Why? Campbell's claims "consumers are reading food labels 60 percent more than they did a year ago (WSJ)." Through ads solely focusing on Campbell's and their ingredients, they should be able to convince health-conscious individuals to buy their product without leaving a muddy taste in consumers' mouths and possibly degrading their wholesome brand image.

Consumer Safety Concerns - Will this concern Nalgene?

On the Today Show on April 9th, a consumer alert was issued regarding the safety of plastic beverage containers. This isn't the first time many of us may have heard about the dangers of polycarbonates. For instance, we've been told over and over again not to microwave food in plastic for fear chemicals will leak into consumables. Even more recently, we've been told not to re-use plastic water/soda bottles since even after washing them, germs and bacteria can remain. We are also told not to purchase bottled water for environmental reasons since around 8 out of 10 plastic bottles end up in landfills. Now, it seems we also need to be concerned with chemicals from the plastic bottles leaking into our beverages and negatively impacting our health.

In The Financial Post on February 23, 2008, Hollie Shaw reports "Bottled water consumption has been on the rise, but will fears of chemical contamination spur consumers to head for the taps?...Should you guzzle your H20 from disposable or refillable plastic bottles --both have come under intense scrutiny in the past year for possible health and environmental effects-- or from trendy refillable metal canteens? And, is it better to imbibe tap water, which critics caution can contain traces of anything from hormones to nitrates?" Much of the concern with durable polycarbonate bottles is in regards to the bottle leaking harmful levels of Bisphenol A, also known as BPA, into beverages. BPA is a substance that can interfere with hormone function and mimics estrogen. Scott Belcher, professor of pharmacology and cell biophysics at the University of Cincinnati has been involved with various BPA studies. Scott and his team discovered that when the liquids in polycarbonate bottles were heated up to boiling, BPA leeching occurred 55 times faster than at room temperature (http://www.sciencefriday.com/). What sort of negative impact this may have on consumers’ health is still being studied, although most speculate this probably isn't a good thing.

Water bottle manufacturer Nalgene (

www.nalgene-outdoor.com), a Rochester, N.Y.-based company, has based its brand image on brightly colored plastic bottles and an eco-friendly reputation. In October of last year, Brand Channel, in an article entitled "Fantastic Plastic" reported: "(Nalgene) bottles have even spawned urban legends that they are unbreakable...over time, those outdoors people came to adopt Nalgene as one of the top companies for camping equipment." Although starting as a popular item with outdoorsy types, Nalgene has attracted a rather large market over the years now being found in mass quantities on college campuses and in fitness facilities. However, with all of this media hype and studies being done by scientists, will this company who has been so dependent on plastic water containers suffer a severe loss in sales due to consumers' mistrust even if they modified their bottles to be made out of another material?

A statement regarding BPA is on Nalgene's website. It reads: “As a responsible manufacturer of polycarbonate consumer products, Nalge Nunc International has monitored scientific research concerning the safety of our products including Bisphenol-A for many years. Based on the findings of the Food and Drug Administration, The Environmental Protection Agency, The American Plastics Council and other reliable sources from around the world, we continue to firmly believe in the safety of our products.” Although HDPE (high density polyethylene) bottles are still considered to be safe, I don’t know this statement buried several links back in Nalgene's website is enough. I think the company may be doing a great disservice to their brand image by not eliminating BPA-containing materials from their products. Consumers are being bombarded with all sorts of information these days and have to decide whether to believe a trusted brand or the media/scientific studies. Presently it seems they are leaning towards believing what they hear on T.V. since sales of metal bottles are exploding (ex/ Sigg (www.mysigg.com), Klean Kanteen (www.kleankanteen.com)). Wonder if Nalgene will wake up and take notice...

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04/24/08 - Follow-up: I just found the following article on The Denver Post and it looks like Nalgene is definitely doing the right thing to protect their brand. They plan to phase out production of BPA containing bottles over the next several months.

Nalgene to Phase Out Production of Consumer Bottles Containing BPA

Business Wire News Releases
Published: 04/18/08 08:30 AM EDT

In response to consumer demand, Nalgene® will phase out production of its Outdoor line of polycarbonate containers that include the chemical Bisphenol-A (BPA) over the next several months, it announced today. Nalgene’s existing product mix, including the recently launched Everyday line, already features a number of containers made from materials that do not contain BPA.

“We have always been focused on responding to the needs and concerns of our customers,” said Steven Silverman, general manager of the Nalgene business. “With 10 different product lines in several different materials, we have the largest bottle offering on the market today. By eliminating containers containing BPA from our consumer product mix, our customers can have confidence that their needs are being met.”
The company recently unveiled its Everyday line, an assortment of bottles manufactured with Eastman’s Tritan™ copolyester. The line includes favorites such as the OTG (“On the Go”), the iconic 32-ounce Wide Mouth and the Grip-N-Gulp sippy cup. Tritan is impact resistant, withstands a wide range of temperatures and does not contain BPA. The new Everyday products are already available in stores and will be available through

www.nalgene-outdoor.com next month.

To help consumers easily determine the bottle and material that is right for them, Nalgene also recently launched Nalgene Choice™, an online information resource at www.nalgenechoice.com. Nalgene Choice provides consumers with information to help them understand the features and benefits of Nalgene’s wide assortment of products and materials. The result – individuals can choose the product that is right for them.
“Today, everyone from hikers and outdoor enthusiasts to commuters and kids on the go are using Nalgene products to reduce the use of disposable bottles and containers,” said Silverman. “Based on all available scientific evidence, we continue to believe that Nalgene products containing BPA are safe for their intended use. However, our customers indicated they preferred BPA-free alternatives and we acted in response to those concerns.”

A Natural High? Red Bull Cola...

So...have you heard the news? Red Bull plans to enter the cola market and take on the likes of cola power brands Pepsi and Coke. Using the tag line "Strong and Natural" the beverage will be all natural (100%) using actual coca leaf and kola nut. (Does that make it more of a "Coca Kola" than Coke itself?) The product's US launch is slated for June and it will command premium prices.

Looking at this product introduction from a marketing/branding perspective, I'm not sure if branding the drink as Red Bull is the best idea. Why? First of all, when you think of Red Bull the energy drink, natural doesn't seem to be a prime connection (for example, a major ingredient in it, taurine, is synthetic). Also, being branded Red Bull, most people will expect the drink to be a super-powered, energy cola. Since the cola isn't out there yet, I'm not sure how much of an emphasis will be placed on the trademark "giving you wings" factor. Having a large focus on natural makes me think Red Bull should have branded this under it's Carpe Diem brand (the name of its botanic water). I guess time will tell whether or not this was the right branding strategy -or- right tag line for this new cola.