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Home arrow Tuesdays with Tukaiz arrow Sports Marketing Poised for Growth in 2011
Sports Marketing Poised for Growth in 2011
Tuesday, May 10 2011

When you turn on the TV to watch professional sports, what do you see? When you watch baseball, you likely see rotating ads behind home plate each time the pitcher winds up and releases. When you watch football, you see sponsors embedded on the gridiron and constantly flashing across the screen. When you watch auto racing, you’re essentially watching moving advertisements speeding around a track at over one hundred miles per hour. Professional sports (and increasingly, college sports) are intrinsically tied to marketing and advertising, and it’s no surprise why—the age of 24/7 cable coverage of dozens of different sports genres (along with significant live attendance at games) provides a captive audience of fans for brands to reach.

Sports marketing can be leveraged in numerous ways, and we’ve covered several of these applications here on Tuesdays with Tukaiz, including the 2010 World Cup in South Africa, the 2010 Winter Olympics in Vancouver, and the mother of all sports marketing events known as the Super Bowl. Brands pour money into sponsoring stadiums and other sports complexes. In this day and age, it is notable that the new Cowboys Stadium in Dallas, Texas hasn’t sold its naming rights yet… it’s waiting for the right sponsor that’s willing to pay the reported $400 million-plus it will cost to obtain sponsorship status. Sports leagues and teams sell sponsorships to be the “official product” of that team or league. For instance, if you’re the official beer of a league or team, your brew gets prime placement for sale at the stadium. While sports teams do their own marketing, sports stars are tapped for high-value endorsement deals for major brands’ products, further extending the image and reach of the star, team, and sport.

In the United States alone, sports marketing is a big business. Sports marketing spending in the U.S. is well into the double-digit billions of dollars. Sports Business Journal is one of the premier trade publications for the business side of college & professional sports in the United States, and closely tracks the ad spending trends of major brands and industries tied to sports marketing. It recently released an in-depth article on how sports ad spending rebounded in 2010, and is expected to have an even greater impact going into 2011. Some of the key findings include:

  • In 2010, the top 50 companies spent a total of $6.6 billion on sports marketing and advertising, marking a 27% increase in spending by those same advertisers during 2009.
  • AT&T Mobility ousted Anheuser-Busch/InBev as the number one spender on sports marketing in 2010, shelling out an estimated $366 million. Sports marketing accounted for 32.4% of AT&T Mobility’s total ad budget of $1.12 billion and saw an increase of over 100% in sports marketing spending versus 2009.
  • After a number of consecutive rocky years, the automobile industry bounced back in sports ad spending in 2010. The auto industry comprises the largest overall percentage of spending on sports advertising and marketing. The Ford Motor Company led spending in this category in 2010 with $305 million (Number 4 on the list). European automakers also made inroads in U.S. sports marketing spend in 2010.
  • Bank of America had the largest spending increase for sports advertising and marketing, increasing spend by almost 192%. It’s no surprise that Nike, a brand synonymous with professional sports, spent over 90% of its total advertising budget on sports in 2010.

It’s clear that brands will pay quite a chunk of change to get into the sports marketing game, resulting in something of a sensory overload when watching sports on TV or even in-person. While major corporations have bought naming rights and other types of sponsorships for stadiums and leagues, the teams themselves have been immune to total corporate takeover. For instance, we haven’t seen advertising encroach on players’ uniforms, although that could occur in the not-so-distant future.

In the United States, professional auto racing (NASCAR in particular) has a long history of leveraging brand sponsorships and partnerships to support the sport. Cars, drivers, and crew members are tricked out with uniforms that have dozens upon dozens of sponsor logos. When a winning driver exits his or her car, the first thing he/she does is thank the sponsors. Racing fans buy millions of dollars of merchandise per year with sponsors’ logos prominently featured on hats, t-shirts, cups, and much more… this is a sponsor’s dream! Professional golf advertises in a more subtle way, with players wearing caps and shirts featuring sponsors’ logos. Looking outside the United States, soccer (“football” to everyone else) takes no objection to players wearing uniforms branded with logos of major sponsors like Adidas, Puma, and AIG.

In time, we might just see a Bank of America logo on a Red Sox jersey, or a Doritos logo on the shoulder-pads of every Philadelphia Eagles uniform. How would fans react? While there would likely be some initial resistance, it wouldn’t be at all surprising if this strategy stood the test of time. Professional sports and advertising need each other, and sports fans have proven that they have a high tolerance for marketing and advertising, so long as they get to watch their favorite player, driver, or team play. With the rebound in sports marketing and advertising, keep an eye out for new forms of commercialization that attempt to engage with fans and ultimately boost revenues for teams, leagues, and brands alike.

 

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