Does The Super Bowl Create Super Sponsorship Spending?

            Many people watch the Super Bowl for two reasons – to see the on-field drama and to laugh at the television commercials. In fact, the media coverage around Super Bowl commercials seems to receive nearly as much attention as the game itself. For example, there are thousands of newspaper, magazine, blog, and television stories evaluating which company had the best commercial. In addition, companies’ entire annual marketing campaigns can be geared around a single Super Bowl Commercial. This includes creating additional activation elements around commercials, such as Facebook pages, microsites, coupons, and promotions.

            As an increasing amount of attention is focused on Super Bowl television commercials, an increasing amount of scrutiny has been placed on their return on investment (ROI). More specifically, does it make sense for any company to spend $4 million on a 30-second commercial – the going rate for an ad during this year’s game? On the surface, this type of investment does make sense. The Super Bowl’s domestic viewing audience has grown by 26 percent over the past 10 years, with audience levels expected to exceed 110 million viewers. In addition, Super Bowl commercials have become “event viewing,” with a significant portion of the audience paying full attention to the content of advertisers’ messages. Having this large and engaged audience is a rarity for any other type of television content.   

            For many companies that can afford this type of marketing expense, however, the Super Bowl may not deliver a tangible ROI for the significant cost. As noted, commercials are often judged on likability. Nielsen completed a study both on the “Best Liked” and “Most Remembered” Super Bowl Commercials. While there was overlap between the two categories, many times the “Best Liked” were not the “Most Remembered,” and vice a versa. One of the most interesting findings is that four different car companies had four of the top ten “Best Liked” commercials. Yet none of them were rated in the top ten “Most Remembered.” If a commercial is well-liked, but is not remembered, then does it make an impact? Also, some commercials are not well-liked but are still the “Most Remembered.” $4 million seems like a hefty price tag for a company to negatively impact its brand.

            Still another problem with Super Bowl commercials is their supposed appeal for advertisers – the gargantuan size of the audience. A company’s engaging a large audience does not always correlate with engaging its target demographics. One of the car companies with one of the “Best Liked” and “Most Remembered” commercials, Audi provides a good example of this issue. . For Audi, targeting sports fans makes sense because sports fans make more money and have higher levels of education than the average population. Yet the Super Bowl is much more likely to attract non-sports fans than the average sporting event, resulting in Audi squandering a significant amount of advertising money not reaching its targeted demographic.

            Still companies looking to increase brand awareness among customers will likely benefit most from producing a Super Bowl spot. The most famous example is Apple’s ‘1984’-inspired commercial for the Super Bowl in the same year. Apple generated significant increases in brand awareness and perception during a time when it was trying to reach a large audience and differentiate itself from IBM. A more recent example of a company using the Super Bowl to increase its brand awareness is GoDaddy.com. The company spent $2.4 million – its entire marketing budget – on a single commercial during the first quarter of Super Bowl XXXIX. GoDaddy’s primary product is selling domain names (Block Six Analytics purchased the www.blocksixanalytics.com from GoDaddy). The Super Bowl advertisement allowed GoDaddy to introduce and differentiate itself to a large number of customers in a commoditized space, as many companies at the time sold domain names. GoDaddy’s CEO has often credited this Super Bowl ad as one of the main catalyst’s for the company’s success.

            Both Apple and GoDaddy showed that companies that need to increase brand awareness can receive a significant ROI from their Super Bowl spend. Yet these are not the types of companies that generally purchase commercials. In fact, many well-known companies use Super Bowl commercials to increase brand awareness when they seemingly do not need to (i.e. Doritos and Pepsi) or wind up targeting customers not in their target demographic (i.e. Audi). 

            Block Six Analytics Corporate Asset Valuation Model does allow companies to evaluate their sponsorship spend for all sporting events, including the Super Bowl. The primary goal of our model is to show how sports organizations can drive new revenue and achieve corporate partnership goals. We evaluate three different categories: initiative, demographics, and channels. With regards to Super Bowl commercials,     most activation occurs in one channel – television. Companies can use the Corporate Asset Valuation Model to see if they are receiving value by increasing brand awareness and/or reaching their target demographics viewing the commercials.  

Doctor, Doctor Give Me The News

            From the perspective of Washington Redskins fans, coaches, and players, today marked the end of the most difficult stretch of an otherwise largely positive 2012-13 season. This year’s team winning its first NFC East Division Title since the 1999-00 season has been marred by the torn lateral cruciate ligament (LCL) and anterior cruciate ligament (ACL) suffered by Robert Griffin III in last Sunday’s playoff game versus the Seattle Seahawks. The team’s star quarterback had strained his LCL after a devastating hit during a game against the Baltimore Ravens in early December. After missing a game against the Cleveland Browns, Griffin started and helped the team win its final two regular season contests. Yet, it was clear Griffin’s knee prevented him from dynamic, athletic playmaker that made him a candidate for both the NFL’s Most Valuable Player (MVP) and Rookie of the Year awards.

            Only three days after collapsing on the ground at Fedex Field, Griffin had surgery to repair his LCL and ACL. Yet, the blame game for who was at fault for the injury started much more quickly. Many media members and fans criticized coach Mike Shanahan for keeping Griffin in the playoff game and not playing backup quarterback Kirk Cousins, who led the Redskins to a convincing victory against the Browns in his only career start. Some wonder why Griffin either did not revealing the extent of his injuries to the coaching staff or failing to remove himself from the game when knew he was injured.

              And others blame Dr. James Andrews. Arguably the most famous and revered sports orthopedic surgeon in the world, Andrews has been standing on the team’s sideline as the team’s medical consultant during for regular season games since before Griffin first injured his knee. Recent reports have surfaced, however, that Andrews had not orally communicated with Shanahan about Griffin’s knee injury during the Ravens game (instead giving him a “Hi” wave to indicate Griffin was OK). The day before the Seahawks game, Andrews was quoted as saying he had been a “nervous wreck” watching Griffin play since he first injured his knee. Many have wondered why Andrews had not been more forceful in recommending that Griffin not play if he thought there was a good chance the quarterback could re-injure his knee.

            From a Block Six Analytics perspective, determining whom to blame for Griffin’s injury is not the goal of the post. Instead, we hope that Griffin’s injury does not also lead to a potentially bigger loss in player development and on-the field performance management. The Redskins actually did take an innovative step in hiring Dr. Andrews as a medical consultant. Despite paying athletes millions of dollars to compete for their team, many sports organizations do not invest nearly as much in having best medical personnel to take care of its players. For the same amount of money as the average salary professional athlete makes in the NFL, NBA, MLB, or NHL, sports organizations could hire the top medical specialist in virtually any field. Having players return to the field more quickly by having the best medical care possible would seem to provide a distinct competitive advantage as compared to compensating an average player.

            This logic does not simply apply to the medical space. As B6A has discussed before, on and off the field analytics has become one of the hottest topics in the sports industry. Yet, it is still uncommon for sports organizations to hire leading economists, data miners, or statisticians to evaluate performance data. Again, sports organizations can hire these professionals at a fraction of the cost of signing a star or average player. As Bill James, the statistician largely credited with coming up with the performance metrics highlighted in Moneyball, stated, “You can get 100 guys like me for what you were paying Manny Ramirez.”  

            Even taking the best approach, however, does not guarantee the best outcome. As Nate Silver recently stated in a Reddit Ask Me Anything Forum, “If you watch a poker hand, and a guy gets all-in before the flop with aces against kings (an 80/20 bet), our animal instinct is very much to tag him as a LOSER if a king comes up on the flop, even though he probably played his hand perfectly.” The Redskins actually did employ Dr. Andrews (using Silvers parlance, the team played pocket aces correctly) and Griffin still suffered a major knee injury. It is critical to not let what happened with the Griffin to negate the fact that the Redskins made the right strategic decision to hire Dr. Andrews. Sports organizations that employ similar logic will have the best opportunity to win their next bet. 

Block Six Analytics Engages Mike Chan As A Sales Consultant

Block Six Analytics (B6A) is pleased to announce that it has entered into an agreement with Mike Chan to become a Sales Consultant. Chan will help B6A generate new sales leads and target new customers based on his experience working as Senior Director of Strategic Marketing for the Washington Capitals / Monumental Sports and Entertainment.

            “We are thrilled to have Mike on board,” B6A President Adam Grossman said. “His experience using innovative digital media strategies and technologies to enhance revenue generation and increase customer engagement will help B6A continue its growth in the sports industry.”

            Chan is an independent consultant who assists startups and small businesses with marketing, strategy, business development, and technology. He is also an Adjunct Professor at Georgetown University, where he teaches a course on digital media. Chan hired Grossman as a Marketing Intern during his time at the Washington Capitals (how the tables have turned!). Mike has a B.S. in Materials Science and Engineering from Lehigh University, an M.S. in Industrial Engineering from Georgia Institute of Technology, and an M.B.A. from NYU’s Stern School of Business.

Company Description: Block Six Analytics has created a suite of proprietary web-based products that allows sports organizations to address critical strategic challenges. Our Partnership Scoreboard™ application uses a proprietary valuation model and technology platform to demonstrate how targeted impressions help corporate partners generate new revenue and meet sponsorship goals. In addition, B6A helps sports organizations enhance their CRM, billing, and media spend processes via a series of applications that can be integrated through a single dashboard. B6A has already worked with numerous sports and entertainment organizations including SMG @ Soldier Field, the Washington Capitals, and the University of Hartford. The company has also been featured in BusinessWeek for the innovative work that we have done in the corporate partnership space.

For more information about B6A contact info@blocksixanalytics.com.

Does Pay For Performance Make Sense For Corporate Partnerships?

            The Arsenal Football Club and The Emirates Group recently made news when the Dubai based airline announced there had incorporated performance-based clauses in its sponsorship agreement with the English Premiere League team. Emirates and Arsenal have a five-year contract that pays Arsenal £30 million ($48.6 million) in annual fees for partnership inventory including a jersey sponsorship. While Arsenal has qualified for the Champions League every season for the past eight years, it has not won a major title during this span (FA Premiere League, FA Cup, and UEFA Champions League). If the team fails to qualify for the Champions League or does not perform well in the Premiere League then, "There are certain clauses, from 2015, that we pay them a percentage less if they don't perform," Emirates SVP Boutros Boutros said. "It's fair to us and fair to them."

            On the surface, it does seem fair. Sports organizations should absolutely be held accountable for their performance with regards sponsorship agreements. The question is what the definition of performance. More importantly, does competitive performance always translate to a successful sponsorship?

The answer is both yes and no. A team should be evaluated on both the quantity and quality of the impressions it delivers to corporate partners through inventory items like jersey sponsorships.

Quantity of impressions is relatively easy to define. It is generally considered to be the number people who view, consume, or experience an inventory item. For a corporate partnership agreement, a team should estimate the total number of impressions for each inventory during the course of the year. It should be rewarded for exceeding this number and penalized for missing these estimates.

Quality of impressions, however, is more difficult to define. At Block Six Analytics, we define the quality of impressions by a sports organization’s ability to help its partners to increase revenue and meet sponsorship goals.  By increasing revenue, B6A recognizes that different types of impressions can generate differing amount of revenues. For example, arena / stadium signage likely does not have the same impact on new customer acquisition or customer attention as having a partner’s core customers attend a game in a luxury suite. It is not that the stadium / arena signage in not a valuable piece of partnerships inventory. It is that that the luxury suite is more valuable to the partner because it targets specific customers and creates in an environment that is more likely to generate revenue.

Not all partnerships, however, are about generating revenue. Therefore, it is critical to define what the sponsorship goals are for each partner. Enhancing brand perception through sponsoring a community’s professional, collegiate, or high school team has a higher priority for many partners than increasing revenue. Sports organizations can be evaluated for its ability to maximize this type of impressions as well.

The Emirates deal, and the fairness component of this deal, appears to focus more on the quantity of impressions. Most of the Champions League value comes from the media rights deals for tournament games. If Arsenal does not qualify for the Champions League then the team will not be able to broadcast its jersey sponsorship to the hundreds of millions of fans who watch the tournament each year. This will decrease the overall number of impressions. However, it is not clear how much it will decrease quality of impressions. Most of the impressions from a jersey sponsorship go towards increasing brand awareness to viewers watching television broadcasts. While these are valuable, these impressions may not be as valuable those that go directly to increasing customer acquisition and customer retention. After all, how many airline purchases are individual purchases making in a given year?  

This goes to the heart of return on investment (ROI) calculations when it comes to sponsorship. Winning generally does help increase awareness and interest in a team or individual. This translates into increases in gameday attendance, television ratings, and unique visitors the organization’s websites. While this is good for the sports organization, corporate partners need to ensure that these new impressions actually generate profitable revenue growth or help meet sponsorship goals for their organizations. Simply generating a massive number of impressions can no longer be the standard used to evaluate partnership value. Books like Sasha Issenberg’s The Victory Lab: The Secret Science of Winning Campaigns shows how successful political campaigns use microtargeting to focus on the most valuable voters – people who can be persuaded vote for a specific candidate but only after being contacted by a campaign with a specific message.

This same logic should be applied to corporate partnerships. For example, Arsenal could provide Emirates with introduction to team fans or other sponsors that make enterprise purchasing decisions about corporate travel. This type of introduction could occur whether the team is losing or winning on the field. More importantly, this is the type of microtargeted impression that is much more likely to deliver increases revenue to the Emirates than if the team qualifies for the Champions League.     

While usually aligned, winning in competition can mean something entirely different than winning with the corporate partnerships. It is definitely a good idea to hold sports organizations accountable for sponsorship spend. Partners need to ensure that they are holding sports organizations accountable in the right way.  

Voicing Concerns Should Not Be A Concern For Those In Sports

Today’s shooting in Newtown, CT has caused unspeakable heartbreak for too many families at Sandy Hook Elementary School. Yet, the tragedy has already seemed to find a voice on numerous social media outlets. More specifically, people are talking about the unbelievable loss of life in the context of a larger debate about gun violence. The debate has centered on whether there should be a debate at all. Can a tragedy as terrible as this one be used to examine second amendment rights and gun control laws? 

For many sports fans, this unfortunately sounds eerily similar to the conversation that happened after Jovan Belcher’s death two weeks ago. The former Kansas City Chiefs linebacker shot and killed his girlfriend before driving to team’s stadium and shooting himself in front of Chiefs General Manager Scott Pioli and Head Coach Romeo Crennel. Many players, fans, and media members sought to express their opinions about this tragedy and spark a larger conversation about gun violence and professional athletes. NBC broadcaster Bob Costas used the halftime of a Sunday night NFL game to question whether the deaths of Belcher and his girlfriend would have occurred if he not owned guns.

This blog post is not to debate the merits of second amendment rights. It is a complicated issue in which both gun control advocates and critics have valid arguments. However, there seems to no debate that those in sports, whether players, coaches, or media members, should not be talking about issues outside of sports. Many people may not have agreed with Bob Costas sentiments about the Belcher tragedy. Yet, the larger controversy has come from his saying anything about killings at all. Because he was “simply” a sports broadcaster, Costas should not have use a football game to present his gun control views or provide his take on what happened with Belcher.

This sentiment is not just shared by people outside of the sports industry. Minnesota Vikings punter Chris Kluwe has been outspoken voice on numerous issues. Kluwe wrote an open letter to Maryland state delegate Emmett C. Burns criticizing his efforts to have Baltimore Ravens owner Steve Bisciotti fine Ravens linebacker Brendon Ayanbadejo for supporting the state’s gay marriage bill. Recently, Kluwe’s special teams coach stated that he was tired of Kluwe’s taking stances on controversial issues. “To me, it’s getting old,” Mike Priefer said. “He’s got to focus on punting and holding.”

When it comes to sports players, coaches, and media members talking about issues outside of sports there should really be no debate. To say that Kluwe cannot punt or holder as well as he possible could because he voices his opinions makes little sense. To criticize Costas for just talking about gun violence within the context Belcher’s death and claiming he is not doing is job as a sportscaster is upsetting.   

We understand that players, coaches, and media members have a large platform from which to share their opinions simply by being associated with professional or major collegiate sports. And yes, athletes, coaches, and media members can and will say things that are offensive to most people. Pittsburgh Steelers running back Rahshard Mendenhall’s comments about September 11^th or Ozzie Guillen’s comments about Fidel Castro are a particularly egregious example of people using their fame from sports to loudly and widely broadcast some asinine thoughts.

However, those in sports do have a unique opportunity with which to bring a spotlight to issues. It is their right to talk about issues that are important to them. There really should be no debate that those in sports have a right to start a debate.