IEG Sponsorship Report
June 28, 2010
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Strategy
AB InBev Reviewing Entire Sponsorship Portfolio
Brewer will make “tough decisions” on dropping properties,
giving up exclusivity, inventory.
At the time of the merger that created brewing giant
Anheuser-Busch InBev SA/NV, the conventional wisdom was
that executives from InBev—known for keeping a close eye
on spending—would soon curb A-B’s equally well-recognized
appetite for gobbling up sponsorships.
But upon the signing of a blockbuster NFL deal this May, it
appeared that predictions of cost cutting and belt tightening
had been wrong.
Well, maybe not.
In a presentation at last Thursday’s ANA/IEG Sponsorship &
Event Marketing Day presented by Univision at Carnegie Hall in New York City, AB InBev revealed that it is midway through a
global audit of about 300 of its major corporate sponsorships.
When that assessment is completed—which should be by the end of the year—decisions will have been made about the future
of each of those relationships, said Mike McGough, the company’s global procurement manager, media and sponsorship.
“Budgets are not increasing; there will be some tough decisions,” McGough told the audience. “In some cases, we will decide
not to renew, in others we may choose to give up exclusivity and share the category if necessary.”
Part of the impetus for the audit is that as a “new company,” AB InBev needs to “harmonize what we are doing now that we
have brought a number of brewers under one roof,” McGough said.
The process includes gathering all key data relevant to each sponsored property in a central database; instituting a “buy
what you need and use what you buy” philosophy worldwide; and aligning sponsorships with the company’s three global
brands—Budweiser, Beck’s and Stella Artois—and key focus brands in each country.
“Matching up brand and sponsorship strategies sounds obvious, but it is not done currently in many markets,” McGough said.
The audit also is an expansion of a process begun in the U.S. by Anheuser-Busch prior to the ’08 merger with Leuven,
Belgium-based InBev.
“We started this about three or four years ago as the sponsorship landscape had become more complex,” McGough said,
© 2010 IEG, LLC. All rights reserved.
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outlining three major challenges that the company—and other sponsors—continue to face: rising costs of rights fees, clutter,
and measurement of return on investment.
To meet those challenges, the brewer had to evolve its sponsorship platform, said McGough, an 18-year A-B veteran who
began with the company as senior manager of local sports and stadium signage. Specifically, AB InBev is shifting its approach
to sponsorship in the following ways.
From: Non-activated properties
To: Activated properties
From: Horizontal ownership
To: Vertical ownership
“Horizontal” refers to deals such as the company’s partnership with the MLB St. Louis Cardinals, where it has stadium
naming rights, signage, broadcast ad packages, etc. This type of sponsorship is becoming “the exception not the rule,” at AB
InBev, McGough said, replaced by vertical deals that concentrate on only the inventory and benefits that are most effective.
“We don’t need to have everything,” he noted.
From: Long-term commitment
To: Shorter-term agreements
Although the company’s goal is still to have longstanding relationships, they will be conducted through shorter-term contracts.
“The days of five-year or more agreements are over,” McGough said, noting that although brand managers prefer one-year
terms for maximum flexibility, it is more likely the company will be able to negotiate two- and three-year commitments.
From: Sum of local = global
To: Global reach, local relevance
“We have had too many local deals,” McGough said. “It’s more efficient and effective to have global platforms that can be
leveraged in locally relevant ways.”
From: Multi-brand properties
To: Single (focus) brand properties
The brewer “has been guilty of wedging too many brands” into some sponsorships, McGough pointed out. “We don’t need to
have five brands in one deal. Among other reasons, if you have a single brand you require less inventory.”
AB InBev has already shifted sponsorships of the four major U.S. sports leagues according to this philosophy—including plans
for its NFL partnership, which begins in ’11. Budweiser is now aligned with MLB and the NBA, while Bud Light has the NHL
and NFL.
From: Logo, hospitality, presence
To: Branded engagement
From: Borrow property equity
To: Create property equity
From: Be everywhere, anytime
To: Make choices
© 2010 IEG, LLC. All rights reserved.
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IEG Sponsorship Report
From: Exclusivity
To: Shared
Where Things Stand
AB InBev began the audit last October with an online questionnaire sent to designated staff involved in focus brand
sponsorships in top markets to collect information on deals that met minimum thresholds.
“In some markets it was sponsorships of at least $50,000,” McGough said. “In other markets the threshold was higher.”
The questionnaire focused on key financials for each property, such as annual spend on rights fees and activation, media
commitment and contract length. It also asked sponsorship managers to rate each property on a 10-point renewal scale, with
10 indicating that a deal “must be renewed” in the manager’s opinion.
AB InBev has created a proprietary audit tool to assess the deals and determine whether they should be retained, divested or
considered for divestiture pending further analysis. Many in the third group are properties where activation is low but which
managers indicated should be renewed.
The company is “right in the middle” of its audit process, said McGough, who moved into his current position last September,
relocating from St. Louis to AB InBev’s new “functional management office” in Manhattan.
With collection and analysis of sponsorship data occurring between October ’09 and March ’10, the company has entered
phase two of the process, in which it will create its global sponsorship strategy during the second and third quarters of this
year.
Phase three—implementation and alignment with key markets and focus brands—is scheduled to begin rolling out during the
third quarter and continue through the fourth quarter with phase four—ongoing evaluation and measurement—beginning in
’11.
While the audit process takes into account approximately 300 property relationships controlled by the company, McGough
estimated that twice that number of deals are done on behalf of AB InBev brands by distributors throughout the world.
Although distributor deals are not included in the audit, the company intends for local managers to share the new
sponsorship strategy with distributors, he said.
Sponsorship Evaluation
McGough said AB InBev’s measurement plans are a “work in progress,” noting that the company does not have a “set
formula” for evaluating return.
“We are in the process of developing a consistent set of metrics that can be used to measure the success of our sponsorship
investments,” he said, adding that those metrics would include: increases in sales, increases in market share, media value,
digital activation, and tailored surveys of hospitality guests.
Source
Anheuser-Busch InBev SA/NV, New York, Tel: 212/573-8800
© 2010 IEG, LLC. All rights reserved.
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IEG Sponsorship Report
800/834-4850 | www.IEGSR.com
June 28, 2010
One-on-one
Discover Signs Six Flags Deal; Wants More Opportunities To
Reward Customers
Family-focused properties that can offer purchase discounts
and other perks appeal to credit card company.
We told you so.
Discover Financial Services has expanded its sponsorship
portfolio, signing a first-time multimillion-dollar deal with Six
Flags Entertainment Corp.
As IEG SR reported in March (“Discover’s New Sponsorship A
Precursor Of Deals To Come,” 3/1/10), the company indicated
at least one larger deal was to come after it signed as the
preferred card of Illinois Swimming.
Discover remains open to additional opportunities that provide
value-added benefits to customers and incent card usage.
The company will activate its exclusive status as official credit
card of all Six Flags parks in the U.S. by providing an array
of perks to card holders, including an across-the-board five
percent discount on in-park and online Six Flags purchases,
discount ticket and meal packages, expedited entrance to
parks through Discover-branded gates, and the opportunity to
stay in the park after regular business hours on select days.
“We will continue to look for opportunities that provide
concrete benefits to our stakeholders,” said Larisa Drake, vice
president of brand communications. “The ability to do that at
the point of purchase is very intriguing, and we will definitely
be looking for future opportunities.”
Credit Card Company Sponsorships by Number of Deals
Associations 2%
Government/Tourism 3%
Festivals 7%
Entertainment 9%
Sports 51%
Causes 13%
Arts 14%
© 2010, IEG, LLC. Source: IEG Research
The Six Flags deal includes in-park media, digital signage,
billboards, point-of-sale and other visibility at 11 parks, as well
as promotion on SixFlags.com.
IEG SR spoke with Drake about Discover’s re-entry into sponsorship and the Six Flags partnership in particular. Below are
edited excerpts from the conversation.
© 2010 IEG, LLC. All rights reserved.
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IEG Sponsorship Report
IEG SR: After a few years of little to no activity, sponsorship
is playing a larger role in Discover’s marketing mix. What’s
behind the new push?
Drake: From a marketing standpoint, we made a change last
year to focus on card members and, as a pioneer in offering
rewards, we started looking across all of our communications
efforts—across the entire marketing mix—to see how we could
provide them more added-value, exclusive benefits.
Six Flags gives us the ability to offer benefits to consumers
who use their cards. Our card members are more likely than
the average consumer to visit a theme park.
IEG SR: What other interests do Discover customers have
besides visiting theme parks?
Drake: Family oriented is the best way to describe our
customers. In addition to theme parks, they enjoy going out
for dinner, community theater and sporting events.
SIDEBAR
Six Flags Signs More Blue-chip Partners
Despite having just emerged from Chapter 11 bankruptcy—a
process that saw the company change its name from Six
Flags, Inc.—Six Flags Entertainment Corp. has brought on
three new corporate partners this year in addition to Discover
Financial Services: Kellogg Co., Sony Pictures Entertainment
Inc. and Wal-Mart Stores, Inc.
The theme park operator also recently renewed and
expanded its partnership with Post Foods, LLC.
David McKillips, Six Flags’ senior vice president of corporate
alliances, attributes the new deals in part to the company’s
investment in on-site media assets over the last three years.
That includes this year’s rollout of Menu Board TV on digital
menu boards at in-park restaurants and the expansion
of the Six Flags Television Network and debut of the Six
Flags Jumbotron Network, which combine to offer sponsors
and advertisers hundreds of screens throughout Six Flags
venues.
IEG SR: What was appealing about Six Flags versus other
theme park properties?
“Our investment in the Six Flags TV network and other digital
assets helped us solidify our place in the media world,”
McKillips said.
Drake: Six Flags is the largest regional theme park company
in the U.S., and millions of people go to their parks each year.
Below, the major components to the Kellogg, Post, Sony
Pictures and Wal-Mart deals:
I have been particularly impressed how Six Flags promotes
our special offers. If you buy anything in the parks, you can’t
help notice them. That includes signage at the point of sale,
exposure on buttons worn by employees, and mention on
receipts.
It’s a nice surround-around marketing platform with a call to
action and a longer-term brand message.
IEG SR: In addition to rewarding current customers, does
sponsorship play a role in acquiring new card members?
Drake: Our strategy is to focus on value that we bring to card
members, with the intention that prospects are listening in.
You can’t help notice all the great benefits card members
receive. People will want those benefits, and the partnership
will motivate them to get a card.
IEG SR: How have economic conditions impacted Discover’s
sponsorship activity?
Drake: The economic environment impacted our business
overall as well as our customers. More than ever, we are
© 2010 IEG, LLC. All rights reserved.
Kellogg. Six Flags’ most recent partner aligned with the
theme park chain to promote its Pop-Tarts brand.
Building on Pop-Tarts’ long-running tie to the American Idol
Live! Tour, the brand will sponsor a new Six Flags concert
series, around which it will run a Pop-Tarts Fame, Fortune
and Flags promotion, which asks up-and-coming musicians
to submit a music video for a chance to perform at Six Flags
parks, with the grand prize winner having a song and video
produced by partner Jive Records.
The promotion combines professional judging and online fan
voting to select winners in each of nine Six Flags markets. As
the rounds of judging progress, three acts in each market will
be chosen to open a Six Flags concert featuring Jive artists
Hot Celle Rae and JLS in August.
Post Foods. The cereal maker is leveraging its Six Flags
partnership with an on-package promotion offering a free
children’s ticket with purchase of an adult ticket.
Post is touting the offer on 12 million boxes of Alpha-Bits,
Cocoa Pebbles, Fruity Pebbles, Honey Combs and Waffle
Crisp cereals. Post is supporting the promotion via in-store
merchandising and a national FSI drop.
In addition, Post also gains presenting status of the Risen-Scream event at Six Flags parks. The July 13 promotion
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IEG Sponsorship Report
focusing on reassuring existing customers that they made
the right choice for a credit card and giving non-customers a
reason to apply for our card.
Our partnership with Six Flags gives us an opportunity
to make our brand more relevant and bring it to life in a
concrete way.
Source
Discover Financial Services, Tel: 224/405-0900
offers admission one hour before the normal park opening
time for consumers who register online.
Post tested a promotion with Six Flags last year for the
Honey Combs brand, McKillips said.
Sony Pictures. Sony used its Six Flags partnership to
generate buzz around the June 11 release of The Karate Kid.
Sony activated the partnership by hosting one-day Karate
Kid Challenges at ten parks. Sony posted videos of the ten
sensei-protégé teams that were judged to have the best
skills on a dedicated Web site. Online voting determined the
top three teams, with each receiving a trip to the movie’s
premiere in Los Angeles and a meet-and-greet with the film’s
stars. The top vote-getting team also won a private screening
of the movie for friends and family.
The Karate Kid also gained exposure through Six Flags’ outof-home media network as well as a wrapped roller coaster at
Six Flags Magic Mountain near Los Angeles, McKillips said.
Sony also is using its year-long partnership to promote the
movies Grown Ups and Salt, he said.
Wal-Mart. The retailer signed a three-month deal centered
around Wal-Mart Family Days, a promotion offering a $99
admission package that includes four tickets and discounts
on food and attractions.
Throughout June, consumers shopping at Wal-Mart on
Wednesdays and Thursdays can use a promotion code
on their receipt to register to receive the discount offer at
SixFlags.com/Walmart.
The retailer will further leverage the tie with a Wal-Mart Rise
& Ride promotion that offers Family Days ticket holders
chances to visit a park for one hour prior to opening.
Wal-Mart also gains exposure in Six Flags’ out-of-home
network through August, McKillips said.
Source
Six Flags Entertainment Corp., Tel: 212/652-9403
© 2010 IEG, LLC. All rights reserved.
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IEG Sponsorship Report
June 28, 2010
800/834-4850 | www.IEGSR.com
Opinion
Why Do Properties’ Cause Overlays Leave Sponsors On The
Sidelines?
Editorial Director Jim Andrews’ latest observations, insights
and advice.
A trend I have noticed lately involves rightsholders—primarily
sports and entertainment properties—conducting causerelated promotions that bring attention to their events and
organizations while benefiting a charitable group. Many of
these have taken the form of online auctions for a propertyrelated VIP experience, with the proceeds donated to charity.
Such programs deliver wins to the property, cause and
consumers, but what about the property’s sponsors? Wouldn’t
the rightsholders be better served by offering this platform as
an “ownable” proprietary program that is part of an addedvalue sponsorship package? The property would 1) still reap
the positive publicity from the cause tie, 2) receive additional
marketing support for the program from the sponsor, and 3) add a valuable benefit that could be the difference in attracting
or retaining sponsors.
My Legal/Ambush Question Answered
I tracked down the world’s foremost expert on sponsorship law—attorney Mary Hutchings Reed, who is of counsel to the
Chicago-based firm Winston & Strawn and author of The IEG Legal Guide to Sponsorship—to get her opinion of the GU Energy
Labs announcement I wrote about recently (“A New Twist On Ambush Marketing And Other Interesting Events,” 6/1/10).
The two questions I put to Mary were: Was GU within its rights to issue a press release noting that the Brazilian national
soccer team had purchased its product? And are there steps a property can take to restrict a vendor from announcing that
the rightsholder has become a customer?
The answer to the first question: GU’s announcement does not violate any Team Brazil commercial rights. Specifically, Reed
said:
“It’s basic trademark law that one is free to use another’s trademark in a truthful manner, for the limited purpose of making
a truth statement about that product or your own. You can, for instance, say you service Volkswagens, even if you aren’t an
‘authorized’ dealer. But you can’t use their logo and you can’t suggest an endorsement, sponsorship or affiliation if none
exists.”
She further pointed out that while a company such as GU is within its rights to publicize and advertise the names of teams,
© 2010 IEG, LLC. All rights reserved.
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IEG Sponsorship Report
companies, etc. who are customers, they need to be careful in their language. “Can you say, ‘here are the companies who
trust us?’ since you don’t know why they bought your product? You might not even know that they ‘use’ your product; perhaps
it is just back-up, so you’ll always have to pay close attention to the actual facts.”
As to whether properties can limit such disclosures by companies whose products they buy, Reed added:
“If a team is buying direct from the manufacturer, then the team should be able to write a confidentiality clause or a PR
clause that says the company won’t disclose the purchase without the team’s consent. (And, on the third side of this, if you
are an official supplier or official sponsor, you ought to write a clause that says the team won’t buy from competitors or other
specified vendors, to forestall just this sort of thing.) “But if a team buys from a third-party vendor, and it’s true that the team has bought a product, then the law in the U.S. does
seem to allow some latitude for the use of the team’s word trademark to truthfully advertise that. (Note, however, that the law
does not grant the same latitude to a company when a celebrity buys or uses its product; the commercial use of a person’s
name/right of publicity almost always must be licensed, and almost any use by a commercial entity is a commercial use.)”
© 2010 IEG, LLC. All rights reserved.
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IEG Sponsorship Report
June 28, 2010
800/834-4850 | www.IEGSR.com
Packaging
New Strategy Helps Illinois Park District Overcome Sales
Challenges
Properties won’t succeed selling benefits prospects don’t
need; tailoring packages leads to new, bigger deals.
Since launching a new sponsorship sales strategy late last
year that replaced pre-set packages with tailored offers,
Illinois’ Rockford Park District has posted a 20 percent
increase in revenue.
The district oversees parks, golf courses and other
recreational areas and programs in the city of Rockford
and other communities in a multi-county area northwest of
Chicago.
The new strategy has resulted in the district exceeding its
cash revenue goal for ’10 six months early, which is even more
noteworthy given its location in one of the most economically
besieged areas of Illinois.
“We have one of the highest unemployment rates in the state, and it’s been a very difficult time in our community,” said
Denise Delanty, the district’s marketing and communications manager. “Needless to say, we are excited about our increase in
revenue.”
New partners include area locations of restaurant chain Buffalo Wild Wings and Edward Jones Investments, as well as the
Greater Rockford Veterinary Medical Assn., Rasmussen College and Bryden Motors, an auto dealership in nearby Beloit, Wis.
Rockford Park District launched its new strategy to better meet the needs of marketers amid economic challenges, Delanty
said.
“In a difficult economy, companies aren’t going to take a sponsorship just because it’s a feel-good opportunity. They want
tangible results.”
The district now focuses on identifying each prospect’s marketing needs and creating custom solutions based around those
needs, rather than trying to sell packages full of signage and other standard benefits.
“When presenting cookie-cutter packages, many times prospects would say, ‘This is great, but half of the benefits don’t
pertain to me.’ In this economy, we have to show them how a sponsorship will benefit them, not try to sell something they
don’t want,” Delanty said.
© 2010 IEG, LLC. All rights reserved.
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IEG Sponsorship Report
The district sits down with each prospect for a needs analysis.
“In the first meeting, I’m no longer trying to sell them something; it’s all about getting to know their marketing goals and their
target demographic,” said Tonya Vernon, the district’s corporate partnership manager. “We then put together a package that
revolves around the things they talked about.”
The new approach has helped the district sell larger packages, Delanty said. For example, Edward Jones purchased multiple
assets spanning concerts, a wine tasting event and a golf outing.
“When you do a needs analysis you find out if a company is interested in a number of facilities and events instead of just
one.”
The district kicked off the new partnership program by reassigning Vernon from the Rockford Park District Foundation to its
marketing department. One of her first charges: identifying existing assets and uncovering new ones.
As a result of that initiative, the district has developed new sponsorship inventory, including ID for the Greater Rockford
Veterinary Medical Assn. on bags used at its dog parks, and first-time signage on the Splash Blaster attraction at the Magic
Waters water park facing a major highway. The signage was purchased by Chicago Rockford Int’l Airport.
Source
Rockford Park District, Tel: 815/987-8800
© 2010 IEG, LLC. All rights reserved.
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