Sports Marketing and the Recession

Friend of ShysterBall Pete Toms has an article up over at the Biz of Baseball about sports marketing in the wake of Depression v2.0. It’s a comprehensive cataloging of thr furor over banks using TARP dollars — or not using TARP dollars if you deny the fungibility of money — for sports sponsorships. Read to the end, however, for the most interesting passage:

In the midst of this public and political turmoil, Nielsen Media Research has released some figures that show banking companies have decreased spending by 10 percent over the last year, but have increased the amount that they are spending on sports advertisement by 36 percent in 2008, showing that these businesses see sports as great return on investment.

According to Nielsen, “Banks spent $122 million – or 18.7% of all its TV ad dollars – on sports event programming in 2008. In 2007, the banking industry spent $90 million on sports broadcasts, or 12.5% of the industry’s total TV ad expenditures.”

Is it possible that, despite my dubiousness, banks and other advertisers have some good evidence that, rather than mere vanity projects, sports marketing provides a good return on investment? Is it possible that sports are less recession prone than other sectors? Is any of this going to convince a bank executive to buy the naming rights to ShysterBall for, say, $100K a year over the next 25 years?

So many questions . . .

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  1. Arva said...

    One reason that sports might be a nice advertising venue is its immunity to Tivo.  People Tivo thier shows, stream the rest online, etc, etc, in increasing numbers.  However, if your names on the stadium, or you’ve sponsored the program, and that sports are best watched in real time, well, you begin to see the picture.  Is it effective?  That I don’t know.  But if getting your name out there is the heart of advertising, then this seems to be a good way to do it.

  2. Jeff said...

    Well I work in marketing/promotions, and most of the latest research shows that word of mouth is much more effective than television/radio.  If your friends try a product or brand, or have a positive experience with a product/brand, and they tell you about this experience, you are then much more likely to try said product/brand.  I’m not sure how this plays out for banks, which don’t have the same goods as a lot of other brands.  It may be that just hearing the brand in association with something people like (their favorite team) builds a similar positive bond (I haven’t seen any research on this, but it doesn’t mean it’s not out there).

  3. Pete Toms said...

    Craig, thanks.

    Craig, I have to own up.  The Nielsen figures are from Maury, he added them to the piece.  I was initially surprised by the figures but after some thought, less so.  And this takes me to Arva’s point.  Advertisers see more and more value in TV sports because as Arva notes it is less likely to be DVRed and more likely to be viewed live and still commands a mass audience in this era of audience fragmentation, internet and video games.  And this is where the rubber hits the road.  The marketing execs think these naming rights are good investments but they won’t make the investment because they fear a political and media backlash.  BofA was quoted as saying they backed out of the Yankees deal even though they thought it was a good investment…

    @ Monahan, I linked to that article a few times in the post and it is where I ripped off the title.  Always good stuff @ SBJ.

    One more confession, some of the links I copped from Shysterball but I might have sent them to Craig in the first place anyway….

    In a nutshell, if the Corporate America decides that it is no longer good to be associated with pro sports we will see revenues and salaries come down big time (and I’m not arguing that that would be bad)

  4. Craig Calcaterra said...

    Pete—given how many tips you’ve sent me over the past year or two, you could rip off links from now until the end of time and we’d still probably not be even.

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