Citi paid something like $300 million for the naming rights of the new Mets stadium, now known as Citi Field. You will find similar deals in every city. But are they worth it? There has been lots of debate. The debate usually comes down to a fundamental debate in marketing. Is brand advertising and spending worth it? Here we are again at the ROI question.
How do you measure the return to your business of naming the Mets stadium for example? You can come up with some metrics such as new accounts, customer loyalty etc in the market, but it is usually and indirect metric, that is, you can't directly attribute the new account to the stadium name but it can be seen as helping.
As budgets get tighter, many companies are looking at their budgets and asking, is brand advertising worth it? After all, it is much easier to measure return on investment (ROI) on a direct mail piece. You know your cost. You know your response. You know your resulting sales.
How can a sponsorship of the Washington Capitals or Seattle Mariners makes sense for a business?
I think it can makes sense, but only if there are several conditions in place:
1) You must be targeting a regional audience. By definition, sports franchises are local enterprises. Yes, there are some that are national or global, but this is the exception and not the rule. And, it will be very difficult to measure any kind of tangible impact for a local sponsorship on a national or global scale. Know your audience and make your decision with the assumption that your impact will be local.
2) You must go for some kind of endorsement or key sponsorship. Advertising during Steelers games can be an effective way to reach a specific demographic, if that is your goal. But if you are seeking to benefit from that demographic's emotional connection to the team, then straight advertising misses a key opportunity.
3) The team or franchise you are sponsoring must have a strong and irrational fan base. Think about it. The Tampa Bay Devil Rays made it to the World Series, but never filled the stadium during the year. The Nationals have a new stadium and lots of attention, but the fans are just learning to love them irrationally. The Nats are not the Redskins. Those fans are truly nuts in love. That is the kind of franchise you would want to be associated with....assuming their fans are the demo you are trying to reach.
4) You must make your brand part of the team's brand family. Red Sox fans know that they are part of something more than following a sports team. They call themselves Red Sox Nation. For many, the Red Sox are part of their own personal brands/identities. With effective sponsorship and advertising deals, you can make your product part of the "family." The key is meaningful placement and enagement as well key endorsement by the organization. Another Red Sox example. Citizens Bank is a corporate sponsor. They have signage. They advertise during broadcasts, but perhaps the most effective part of their plan is when Jerry Remy, the color man for the Sox TV broadcasts, reads promo scripts and often goes off script to say what a great bank they are. You can't pay enough for that kind of promotion. But it comes from being a trusted part of the family. And it is a cycle that perpetuates itself.
5) Develop relevant content -- ideally playing off the fans and their emotional connection directly. Avis does this brilliantly in a recent ad developed for the New York market.
I don't know if the $300 million was worth it. But I can tell you, if it is a flat footed advertising deal that doesn't seek to make Citi part of the Mets organization and its fans identities, it will have been a waste of money.
Here are a few other sources of info:
http://www.nytimes.com/2000/10/29/us/denver-journal-what-s-in-a-stadium-name-tradition-or-money.html
http://www.performanceresearch.com/naming-rights.htm
http://www.ameinfo.com/61816.html
http://www.sportslinkscentral.com/sports_business/sponsorship_research.htm
Tuesday, April 28, 2009
Thursday, April 23, 2009
Facebook Pages Become the Newest Ad Platform
Facebook Pages Become the Newest Ad Platform -- Mashable
US Weekly, that highly popular, never admitted to, magazine of high culture, has sold a sponsorship of its Facebook page to State Farm Insurance.
Hey State Farm, I reach a highly desirable demographic. Want to sponsor me?
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US Weekly, that highly popular, never admitted to, magazine of high culture, has sold a sponsorship of its Facebook page to State Farm Insurance.
Hey State Farm, I reach a highly desirable demographic. Want to sponsor me?
Posted using ShareThis
Wednesday, April 22, 2009
Microsoft Plans Retail Stores-- For Real?
Anything you can do, I can do better? Hey, Microsoft be careful. Remember the Zune.
Microsoft announced that it will open Microsoft branded retail stores. This raises interesting strategic questions.
First, the business environment:
The OEM market is huge for Microsoft.
Microsoft has 88% market share of operating systems in the U.S. Most people get their Microsoft operating system when they buy their new computer. The manufacturers decide which version of the operating system to install and ship. And as PCs dominate, MS OS obviously dominates. But it doesn't always go the way Microsoft wants. It is interesting to note that there has been a bunch of noise in theblogosphere about manufacturers shipping new machines with the "downgraded" XP operating system but counting them as Vista machines.
(Random thought for another post: It is interesting that Intel chips have a bigger impact on consumer choice than the operating system that is installed on the machine.)
Computer sales are slowing like everything else.
PC sales 6% worldwide in 2008 according to Gartner. But the all the gains were racked up in the first three quarters. In the Q4 08, sales dropped more than 10% compared to Q4 07. That means fewer versions of the Microsoft operating systems. So perhaps people will hold off buying new computers. Consumer direct sales of operating systems (upgrades) could grow as people try to make their computers last longer. Prices of computers continue to fall. Will the cost of the operating systems?
Microsoft doesn't have direct interactions with consumers.
MS software products are sold through manufacturers. Their software is sold through retailers over which MS has little control. With an increasing number of consumer direct products like Zune and Xbox, Microsoft may be looking for more control over the sales experience and the presentation of its brands.
Microsoft's Solution = Retail stores
Retails stores could be seen as a form of brand marketing rather than a distribution play.
Apple's highly successful stores were primarily about distribution. And as a strategy, it worked. For Microsoft, retail stores as a distribution strategy makes less sense.
In a ComputerWorld article by Preston Gralla, he writes: "Seattle Times blogger Benjamin Romano has more details. He interviewed Microsoft President of Entertainment and Devices Robbie Bach, who compared Apple's stores to what Microsoft's will be:
This has to be about Window 7.
Microsoft is releasing it Window 7 soon and needs that product to be far more successful than the Vistas launch. They can't risk a repeat with Window 7. So by definition the launch must be different. Microsoft was reportedly a bit puzzled about why Vistas wasn't better accepted by consumers. In focus group environments consumers really like Vistas, but in the real world, adoption was more difficult. Microsoft seemed to blame this on "unfair" media coverage. But perhaps it was a bit more complicated than that. Vistas is/was expensive. It is a memory hog. Windows XP, which was pre-installed on most everyones' machine, was running fine. So why pay several hundred dollars to upgrade to a new operating system with a few cool new features?
Will retail stores help or hurt the brand?
I don't have much of a desire to have more "experience" with Microsoft products. Dealing with the headaches they create at work seems enough. What kind of brand experience will they create? Apple is hip and cool, very mod. How do you reflect the Microsoft brand? Perhaps a key feature could be the Simulated Software Crash. It could be fun. Every 45 minutes they could turn the lights off, force customers to put down merchandise, clear the store of customers and force everyone out outside and then reopen. When they reopen the sales people could forget all the conversations they were just having.
Some think Microsoft retails make sense, like Joe Wilcox at Apple Watch, but he also raises the issue of what the stores will be like.
It seems to me that the challenge is getting people into the stores.
Why would I go to a Microsoft store if it isn't to repair my PC? What exclusive products will they have? What can I find there that I can't find at Best Buy for less cost?
What lessons can Microsoft take from Sony and Gateway Country Stores?
Didn't Sony start retail stores for brand reasons? I don't think you could call the Sony stores a retailing success, but perhaps that wasn't the point. It is about the brand lifestyle no doubt as they call the stores Sony Style Stores. And Gateway wanted to create a direct channel to deliver their unique brand to consumer face to face. The NYTs wasn't convinced it is working.
This will be interesting. I can't help but think of Discovery Stores that sought to build brand and experience while selling some products. Retail stores as a brand strategy is an expensive proposition. But if you are Microsoft, and you have the money, perhaps you view the retail loses as an investment in the brand. Eventually, somewhere, Microsoft will need to see a sales increase. Stay tuned.
First, the business environment:
The OEM market is huge for Microsoft.
Microsoft has 88% market share of operating systems in the U.S. Most people get their Microsoft operating system when they buy their new computer. The manufacturers decide which version of the operating system to install and ship. And as PCs dominate, MS OS obviously dominates. But it doesn't always go the way Microsoft wants. It is interesting to note that there has been a bunch of noise in theblogosphere about manufacturers shipping new machines with the "downgraded" XP operating system but counting them as Vista machines.
(Random thought for another post: It is interesting that Intel chips have a bigger impact on consumer choice than the operating system that is installed on the machine.)
Computer sales are slowing like everything else.
PC sales 6% worldwide in 2008 according to Gartner. But the all the gains were racked up in the first three quarters. In the Q4 08, sales dropped more than 10% compared to Q4 07. That means fewer versions of the Microsoft operating systems. So perhaps people will hold off buying new computers. Consumer direct sales of operating systems (upgrades) could grow as people try to make their computers last longer. Prices of computers continue to fall. Will the cost of the operating systems?
Microsoft doesn't have direct interactions with consumers.
MS software products are sold through manufacturers. Their software is sold through retailers over which MS has little control. With an increasing number of consumer direct products like Zune and Xbox, Microsoft may be looking for more control over the sales experience and the presentation of its brands.
Microsoft's Solution = Retail stores
Retails stores could be seen as a form of brand marketing rather than a distribution play.
Apple's highly successful stores were primarily about distribution. And as a strategy, it worked. For Microsoft, retail stores as a distribution strategy makes less sense.
In a ComputerWorld article by Preston Gralla, he writes: "Seattle Times blogger Benjamin Romano has more details. He interviewed Microsoft President of Entertainment and Devices Robbie Bach, who compared Apple's stores to what Microsoft's will be:
'Apple's approach was about distribution. People forget that when they entered their stores [in 2001], this was quite a while ago, they didn't have distribution for Macintoshes, so they created their own distribution.
'We have plenty of distribution. These stores for us are about building our connection to customers, about building our brand presence and about reaching out and understanding what works and what improves the selling experience.
'So Apple you would think of as a volume distribution play. You should think of ours as much more of a brand and customer relationship investment more than anything else.' "
This has to be about Window 7.
Microsoft is releasing it Window 7 soon and needs that product to be far more successful than the Vistas launch. They can't risk a repeat with Window 7. So by definition the launch must be different. Microsoft was reportedly a bit puzzled about why Vistas wasn't better accepted by consumers. In focus group environments consumers really like Vistas, but in the real world, adoption was more difficult. Microsoft seemed to blame this on "unfair" media coverage. But perhaps it was a bit more complicated than that. Vistas is/was expensive. It is a memory hog. Windows XP, which was pre-installed on most everyones' machine, was running fine. So why pay several hundred dollars to upgrade to a new operating system with a few cool new features?
Will retail stores help or hurt the brand?
I don't have much of a desire to have more "experience" with Microsoft products. Dealing with the headaches they create at work seems enough. What kind of brand experience will they create? Apple is hip and cool, very mod. How do you reflect the Microsoft brand? Perhaps a key feature could be the Simulated Software Crash. It could be fun. Every 45 minutes they could turn the lights off, force customers to put down merchandise, clear the store of customers and force everyone out outside and then reopen. When they reopen the sales people could forget all the conversations they were just having.
Some think Microsoft retails make sense, like Joe Wilcox at Apple Watch, but he also raises the issue of what the stores will be like.
It seems to me that the challenge is getting people into the stores.
Why would I go to a Microsoft store if it isn't to repair my PC? What exclusive products will they have? What can I find there that I can't find at Best Buy for less cost?
What lessons can Microsoft take from Sony and Gateway Country Stores?
Didn't Sony start retail stores for brand reasons? I don't think you could call the Sony stores a retailing success, but perhaps that wasn't the point. It is about the brand lifestyle no doubt as they call the stores Sony Style Stores. And Gateway wanted to create a direct channel to deliver their unique brand to consumer face to face. The NYTs wasn't convinced it is working.
This will be interesting. I can't help but think of Discovery Stores that sought to build brand and experience while selling some products. Retail stores as a brand strategy is an expensive proposition. But if you are Microsoft, and you have the money, perhaps you view the retail loses as an investment in the brand. Eventually, somewhere, Microsoft will need to see a sales increase. Stay tuned.
President Signs National-Service Bill and Issues Call to Volunteer - Philanthropy.com
How will your company or organization take advantage of the opportunity thsi new national service bill offers?
Why do I say opportunity? Because most people, not all, but most, want to have meaning in their lives. They want to be good citizens, good family members, good neighbors. They want to give back. Many don't feel they have time or don't have a personal connection to a group that needs their help.
So why not enable your employees, members, constituents to be the good people they want to be?
And if they see you as helping them to become fuller people, so much the better. You will develop deeper, stronger, better relationships with you people. Go do it. Create a service initiative. Highlight and reward service. Find a tie in to your business. This is not hard. And it is smart business.
So why not enable your employees, members, constituents to be the good people they want to be?
And if they see you as helping them to become fuller people, so much the better. You will develop deeper, stronger, better relationships with you people. Go do it. Create a service initiative. Highlight and reward service. Find a tie in to your business. This is not hard. And it is smart business.
My Wish List of IPhone Apps for Marketing Chiefs - Advertising Age - Jonathan Salem Baskin
Check out Jonathan Salem Baskin's article in this week's Ad Age. Clever. He's right. When will iPhone apps become truly useful business applications?
My Wish List of IPhone Apps for Marketing Chiefs - Advertising Age - Jonathan Salem Baskin
My Wish List of IPhone Apps for Marketing Chiefs - Advertising Age - Jonathan Salem Baskin
Wednesday, April 1, 2009
Where's My Bailout?
The "Bailout" poses a problem for the Obama administration. Its a huge number, but who has felt it personally?
This is where the administration needs to be reminding people that things like low mortgage rates and extended unemployment benefits are a direct result of the federal action.
I think some people are expecting a federal agent to show up and hand them some cash. But don't assume people know how they are being helped.
Graffitti in New York outside the Holland Tunnel proves the point.
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This is where the administration needs to be reminding people that things like low mortgage rates and extended unemployment benefits are a direct result of the federal action.
I think some people are expecting a federal agent to show up and hand them some cash. But don't assume people know how they are being helped.
Graffitti in New York outside the Holland Tunnel proves the point.
Posted using ShareThis
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