Transcription
All right, my friends. Here we go with sports sponsorships. We're going to have an expanded view on sponsorships. Obviously, we've already talked about them um a a couple of different times um, but we're going to expand upon them today, and we're also going to consider uh the activation part of it and um experiential marketing that goes hand in hand. I will remind you, so for those who are thinking like, oh, I've already taken experiential marketing, just as a reminder, this class is is uh can be taken by minors from a couple of different majors. And so I have to pretty much uh start from scratch uh with with marketing, with experiential marketing, with all of that. And so, just a reminder there. Um, obviously with this being an upper-level course, I try to go a little bit faster. Um, so those of you who haven't had marketing or experiential marketing, this is kind of a crash course. Um, for those of you who have, it's uh reminders. Reminders are helpful. Um, but we'll hopefully get into more uh to be able to to expand your view on things.
So, we're going to start. I I want to show you some numbers. Um, we're, you know, the the numbers are um are mind-boggling um uh from a sport sponsorship standpoint. It is a very, very uh popular and growing um trend to sponsor sports. And we can see from these numbers um when you look from 2007 um all the way to 2018 um nearly doubled in a little uh over in a little over 10 years um from 37.9 billion globally spent to 65.8 globally. That's just in 2000, just in um that 10-year period. Then if we look at just from the North American standpoint in in um billions of dollars, we went from 2006 um about a little more than 9 billion all the way to 2023 and upwards of 20 billion. That's just in North America. Okay.
And then we continue to look at it and look at the projections. Um, so this is some of the latest data um that projections um 360 um research has uh has uh determined worldwide in 2022 we were up. So if we go back, right? And um well, we don't have to go back, but but um, you know, I can remember off the top of my head, remember in 2018 we were talking 68 billion um and then in 2022 estimated at 97 billion worldwide. Um, and that is is estimated to grow by 2030 to $189 billion in sport sponsorship spending.
Um, we're going to we're going to look at this a little bit deeper. Let's go a little bit um a little bit deeper into North American sports. Um, if you look at the latest data that's been released in 2024 um revenue in billions of dollars based on the sport leagues um, these are this is team sponsorship revenue of major sports leagues in North America in 2024. You can see that um NFL uh leads the heap. Um, right. So um NFL um is has the most followed by Major League Baseball. Obviously with Major League Baseball um some of you may say, "Well, NBA is more popular than than Major League Baseball right now." Well, um yes. Um, but um you're also talking with Major League Baseball, you're talking 162 games. So you get more bang for your buck with sports sponsorship um along those lines. Um, so you know that that's where you might see some differences. And then if we go into the um NFL league and team sponsorship revenue worldwide from 2010 to 2024, this is in millions of US dollars. So you can convert it obviously um to uh billions. You can see the increase there for NFL. Obviously, it's a huge amount of money that ultimately I want you to recognize that it's a huge amount of money. Okay.
And then we get to intercollegiate athletics. Something that we cover in this course as well, right? And um FBS autonomy schools. So, just so you know what we're talking about there, those uh that's the P uh several years back and and those of you who took my um intro to sport management class, you will have learned this, okay? Um several years back, the NCAA granted autonomy to the Power Five schools. It used to be that if you were a division three school, you got just uh your vote. So NCAA is a member-driven institution. So it used to be that if you were a D3 school, you had just as much voting power as Alabama, okay, as the University uh of uh as UCLA, as USC, right? Um as Cal Poly, Cal Poly had just as much as as Alabama. Okay. Well, several years back, um the NCAA because the big schools revolted and got got ticked off about this and they uh formed what's called um uh they they gave them what's called autonomy. So they gave them more voting power. So FBS autonomy schools are Power Five conferences plus Notre Dame. Okay. Um, so here's where the money comes from. Those FBS autonomy schools. And if you look at it, you can see what did we just talk about globally with sports that sports sponsorship revenue is a huge huge piece of the pie. All right, we look at uh we look at NCAA athletics. What's missing? So we have to assume right that other revenue, the 5% there is sponsorship. Um, and so um yeah, so you can see why people think there is an enormous growth potential in NCAA athletics. When I was in New York City, uh, at the Nike, um, New York City headquarters meeting, um, the I talked with a gentleman from here in California who represents a private equity firm who is partnering with um NCAA brands in trying to maximize their revenue. Every NCAA athletics department is now in this modern age looking at seeing how they can maximize their revenue. So you ask yourself, how can these organizations afford to pay um salaries for college athletes? They can afford it. One, because they're already making an enormous amount, but two, the growth potential is huge because of sport sponsorship.
Okay, now let's review. Sport sponsorship in its essence, it's based on a mutual exchange between a sport entity and a company. Right? Heckin said, "We want to be associated with the World Cup of Rugby. We believe that this will help to maximize um exposure to our brand and will help our brand." Okay, that's a mutual exchange between a sport entity and a company. That mutual exchange most often includes a binding contract that establishes the details. We've already gone over this. We've already talked about this, but there there's a butt. All right, there is a butt. When we look at the the statistics, only about 19% of sponsorship professionals say they can actually measure return on investment related to sports sponsorships. All right, that has been a huge um not necessarily uh detriment, hasn't been necessarily a detriment, but it's been a huge issue. Okay. Uh, because it is incredibly difficult to figure out whether or not people watching um PSG fly Emirates more, right? Whether when they are faced with a decision whether to um book on um on one airline over another, whether they decide to do so because of a sponsorship that is incredibly incredibly difficult. There are some who believe that AI may hold the key to unlocking that value. We right now in our experience innovation lab, we're working on a sport marketing project where we're trying to tap into AI and trying to figure out a way to help. Um, but you know, it's incredibly difficult. And it's incredibly difficult because ultimately sponsorships are most effective when they enhance the experience, either the participant's experience, right? In the case of the New York Marathon here, right? Or the fan's experience in the case of those along the sides who are cheering on the marathon runners, right? And so it is um it is something that we are going to explore explore that um you you you have to understand what you're doing. You have to recognize that just putting up an advertisement, just putting a sponsorship does not always work, is not always effective.
And so, let's look at some of the elements along those lines. So, this is a little a case study um about Adidas's sponsorship of the New Zealand All Blacks. And um I I I bring this up because I think it's um uh provides an interesting quote from Motion Leech and Brody and they noted that in sponsorship, both the sponsor and the sponsored activity become involved in a symbiotic relationship with a transference of inherent values from the activity to the sponsor. And so, you know, we look at it and we think about Adidas and they went all in with this sponsorship with the all New Zealand All Blacks and um you know, obviously Adidas thinks that it benefited them and so um that's that's ultimately with these sponsorship deals, that's the decision that they have to make. Okay.
So another element of it and and those of you who have taken my um community relations class, you know about this aspect. Strategic philanthropy is another element related to sports sponsorship and so I think it's most often uh it helps us to think about more from the grassroots perspective, right? Um so uh obviously if we're having a local golf tournament that benefits something that people believe in like the First Tee, right? These businesses in that local Harrisburg, Pennsylvania area said, "Yeah, you know what? We absolutely want to be associated with this. These are going to be people from the community. We want to show that we're doing good through our dollars." Right? So strategic philanthropy is defined as a company's long-term investment in an appropriate cause that does measurable good in society while enhancing the company's reputation with key audiences. Right? Sports sponsorship is ultimately similar. Right? If I'm sponsoring, so Harrisonburg, Pennsylvania, if I'm sponsoring the Pirates, um, it's because I believe that getting eyeballs on my brand will help my brand in being associated with the Pirates. Just as these businesses said, "Yeah, absolutely. We want to do good in the community and get our name out in the community um to do good but also to enhance our reputation." All right. So, there's some some um there there's some similarities there, of course.
But we get into the issue of saturation when it comes to sports sponsorship. And so, this is a picture from Citi Field. And you go to almost any Major League Baseball stadium. Um, there's some similarities. Some are not as overt as this one. Um, you know, Citi Field, um located right there in um in New York City in the heart of uh the financial capital of our country, right? Look at all those. I mean, Xerox, Geico, G, uh, Citi, City Bank, obviously, Toyota, Goya, Fox News, Cholula, Budweiser, Hertz, Galaxy, uh, what's that? Uh, I can't tell what that is. That's an official hot a hot spot right there. Um, I'm not going to keep going. I mean, obviously, you can see all the different brands. Um, but uh, you know, some have wondered whether or not that that saturation um diminishes the effect of sports sponsorship. Those of you who did your modern critique on the Olympics. Um, it it's really that's a really fascinating case study because in back in 1984 when we had the last uh Los Angeles Olympics um spons sports sponsorships uh were taking off around that time. And there was a famous video that was created that back when I was in school um I saw uh that that basically spoofed what it would be like um the the next time uh that Los Angeles hosted the games and they they projected that that might be in 2030 or something like that. I can't remember the exact year that they projected it. Obviously, we know that it's 2028 now, but um they projected that every athlete would be sponsored, that every lane would be sponsored, that every And you know what? It's gone the exact opposite. The Olympics, do the Olympics offer sports sponsorships? Yes, 100%. And and they're very adept at it. But those who did the modern critique um of uh the I believe it was the Rio games um and Brazil and Germany. Um, those who did that critique, they realized whoa, the Olympics really, really limit sport sponsorship during the actual game. Um, and so there were only really three sports sponsorships that they could um ascertain from watching that game. One was Omega, that was the official timekeeper, and so that was associated with the clock and the time. Um, and then the other two were simply the jersey sponsorships of the two teams, Brazil and Germany. And so one, I believe one was Nike and one was Adidas. And so, uh, those were the only two that you could see something as big of a global stage as the Olympics, right, compared to this, like Mets game, um, just a, uh, you know, just a regular season Mets game and and being able to see all of those sports sponsorships. So um uh obviously the Olympics take saturation very, very seriously and in doing so they can up the amount of money that they get from SP from from um from sponsors.
Now I want to transition and make sure that you understand the experiential marketing and the brand activation aspect. So, these are some pictures taken from the NFL draft. Um, back when it was in Chicago, um, the year that it was in Chicago, it represented, um, a pretty major transition for the NFL into ultimately making the NFL draft an experience. And so now in in subsequent years, it has become an enormous, enormous thing where um hundreds of thousands of people descend on um on the the place where the NFL draft is being headquartered and they do so because of all of these experiences, right? And so Chicago marked um ultimately really marked the start of this, right? And so you can see here through the NFL draft experience, people were able to go through um this is a picture um of Visa uh using VR to get you into the huddle, right? To be able to and so using football, using sports, using this in-person experience as a way to enhance their brand, right? So, you're looking at football, you're thinking about football, but Visa is the one that is getting you in on it. And so, they get you to try their products and to get a voucher, right? You see there over on the side, show your PNC Visa card and get an extra $5 voucher, right? So, they're bringing their brand to life through this live experience of the NFL draft. Obviously, the NFL draft's not the only ones that are doing it. And the the one of the reasons why sport is so powerful is because sport is buoyed by the live event. So, we have this example here on the screen of game day and Home Depot has for a number of years um uh sponsored college game day, right? Where the ESPN College Game Day staff goes from um city to city depending on they they choose a city every year that will host the live game day experience, which is like a I mean I think it's like what is it like a four-hour experience leading up to kickoff, right? And so building excitement for the day, it has been a huge, huge boost to college football. And so I give you this example here on the screen because Home Depot is sponsoring it. And then in addition to the commentary and the talking by the talking heads like Pat McAfee and and um uh the the the uh coach Coach Corso, I believe he's going to have his very last one coming up or he may have already had his last one. I'm not sure about that. But Herb Street and all of the all the gang, right, that are Fowler and um and Desmond Howard all as a part of this game day experience, they do other activations. And so one of the activations that they do is this field goal kick because Pat McAfee was a field was a he was a punter. He was a kicker. Actually, I think he was just a punter. He wasn't really even a kicker. Um, although I think punters can probably kick pretty well too. But anyway, so what they do is they get a local student from where whoever's hosting it and they get them to try to kick a field goal for money. I'm watching this morning that that this is happening. They bring out this kid Henry Silver and I'm like, man, that kid kind of looks familiar. But I'm thinking to myself, I'm looking at him. And I'm like, "This kid is cool and calm. He's going to make this field goal." Um, and lo and behold, he did. And I'm like celebrating. I'm watching it in the morning, right? And I look down and my phone starts to blow up. Uh, one of my college roommates, uh, was Jeff Silver, uh, from upstate New York. Um, so at University of North Carolina at Chapel Hill, Jeff was one of my good friends and one of my college roommates. This is his son, Henry Silver, who was uh a Georgia student who kicked a field goal for $800,000. I mean, right down the middle. As pure a kick as you will ever see. So pretty uh pretty amazing. But that's how brands, it's all about bringing brands to life. That's the activation part through the live sports experience and that's the experiential marketing part. Okay.
And then finally, we end with the 10 essentials. It's not just the live event, right? There are lots of things that go into it, right? And so you may think to yourself, well, yeah, Greenwood, well, what about like digital marketing? Isn't digital marketing huge? Yeah, absolutely. There are digital components around all of these aspects. College Game Day has they they have event ambassadors on on uh on the scene. They have content engagement. They're getting people, they want people to have a digital way of connecting as well in addition to the live experience, right? And so all of these elements are the essentials to sponsorship activation. So I want to make sure that you recognize that these are key elements to building your pitch, your final pitch that includes experiential marketing obviously because sport marketing is experiential marketing. All right, hope you enjoyed this lecture. See you.