Sponsorships Remain A Constant Amid

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Sponsorships Remain A Constant Amid
IEG Sponsorship Report
800/834-4850 | www.IEGSR.com
November 15, 2010
Who Does What
Sponsorships Remain A Constant Amid Changes To
Credit Card Business
Payment systems and issuers rely on sponsorship for
positioning, promotional platforms and experiential benefits.
Tighter credit and increased government scrutiny have not
slowed down sponsorship activity on behalf of credit card
issuers and payment systems.
Indeed, those that issue credit cards and/or own payment
systems brands have signed a number of new deals over the
past year with global sports properties, local festivals and just
about everything in between.
Perhaps most notably, Discover Financial Services, Inc.
(“Discover Signs Six Flags Deal; Wants More Opportunities To
Reward Customers.” 6/28/10) has launched a seven-figure
sponsorship campaign on behalf of its eponymous card that
includes title of the Orange Bowl and cosponsorship of the
NHL in the U.S.
U.S. Credit Card Brand Sponsorships By Number of Deals
Other 5%
Festivals 7%
In addition, Visa Inc. this year signed new deals with four
NFL teams and renewed its NFL partnership through 2014.
It also renewed its worldwide TOP sponsorship with the IOC
through 2020.
Although the primary reason credit card issuers and
processors use sponsorship has changed little over the past
two decades—to acquire customers and incent transactions—
economic conditions and other market factors have influenced
how they approach and use the medium.
Entertainment 9%
Sports 52%
Causes 13%
Arts 14%
© 2010, IEG, LLC. Source: IEG Research
“With new government regulations, economic uncertainty and
evolving business models, things have changed a great deal
in the category,” said John Brody, principal, global sales and
business development with Wasserman Media Group, who previously worked with MasterCard Inc. and credit card issuers
during his 12-year stint with Major League Baseball.
One development that has made an impact on how MasterCard and Visa use sponsorship is their transition from associationbased organizations into publicly traded companies. Visa went public in 2008 and MasterCard in 2006.
© 2010 IEG, LLC. All rights reserved.
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IEG Sponsorship Report
Although both companies have long prided themselves on their in-depth approach to sponsorship measurement, the
transition into shareholder-owned entities has made the need for sustainable ROI greater than ever.
“Becoming a publicly traded company only increased our focus on the quantitative side of ROI,” said Michael Lynch, Visa’s
head of global sponsorship management.
“If a sponsorship is not generating a positive return, we are no longer doing it,” he said, noting the company dropped the IRC
Rugby World Cup based on lackluster ROI.
Visa’s changed corporate status also has impacted how the company activates ties. For the first time in its history, the
company this year activated its two key international properties—the Olympics and FIFA World Cup—with global ad campaigns.
The global platform followed the consolidation of Visa’s six worldwide regional offices into a centralized marketing structure,
Lynch said, noting that Visa previously funded regional sponsorships and other brand market activity out of those offices.
The two campaigns were each tailored to local markets, he added. “Since we have gone public, we have tried to consolidate
our sponsorship efforts and use laser focus on properties where we can generate the most positive return.”
Another trending issue for credit card marketers: the growing use of sponsorship to access perks that can be shared with
cardholders and used to enhance positioning.
“High-end experiential opportunities and the aspiration of using specific credit card products have become more important,”
said Tom Shepard, principal of Shepard Consulting and a former Visa sponsorship executive. “That may include getting a
table at a certain restaurant or winning a trip to the Super Bowl.”
The Ins And Outs Of The Credit Card Category
The category is largely comprised of two sectors: payment systems (MasterCard, Visa) and credit card issuers (American
Express, Discover, financial institutions, etc.)
While every company in the category uses sponsorship to gain acceptance and spur usage, their approach varies based on
which sector they are in.
Below, IEG SR breaks down the sponsorship objectives, activation strategies and trends among payment systems and credit
card issuers.
Payment systems. MasterCard and Visa largely use sponsorship to reach three audiences: financial institutions that issue
their cards, merchants that accept them and consumers who use them.
For example, Visa this year is activating its 15-year-old NFL partnership with an integrated marketing campaign to engage all
three distinct audiences.
That effort centers on the Super Bowl Trip for Life sweepstakes, around which Visa cardholders are automatically entered into
the promotion each time they use a Visa-branded product.
Visa is activating the campaign with more than 600 financial institutions, each of which is helping market the promotion. The
institutions also have the chance to take part in tailored promotional opportunities such as the chance to participate in the
official Super Bowl coin toss.
The campaign is further supported by four national merchants: Chevron Corp., Doubletree Corp., Southwest Airlines Co. and
United Airlines.
One growing trend: broader exclusivity. While Visa and MasterCard have historically looked for exclusivity in the payment
systems category, they are increasingly adding the financial services category to the mix. For example, Visa purchased
© 2010 IEG, LLC. All rights reserved.
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IEG Sponsorship Report
exclusivity in the payment systems and financial services categories for its FIFA global partnership.
“The financial services category gives us a little more flexibility when activating our partnerships,” Lynch said. “A debit product
is connected to a checking account, and checking accounts have historically been in the retail bank category. This gives more
value to financial institutions and more flexibility to market our investment.”
Credit card issuers. While Visa and MasterCard use sponsorship to engage multiple audiences, Amex, Discover and financial
institution issuers typically focus on one target: cardholders.
Those companies typically use sponsorship to gain a point of differentiation by accessing special perks they can pass through
to consumers.
For example, Discover is using its new NHL partnership to gain a number of experiential opportunities to pass along. They
include the chance to mingle with players at the NHL Awards in Las Vegas, gain discounts on Shop.NHL.com and the
opportunity to purchase autographed merchandise.
Those efforts follow in the footsteps of American Express, which has long used sponsorship to access special viewing areas,
exclusive content and other privileges it can share with its cardmembers.
In addition to existing products, issuers are increasingly using sponsorship to promote new products. For example, AmEx this
year signed new deals with the Austin City Limits Music Festival, Voodoo Music Festival and several other music festivals to
promote its new Zync credit card (“American Express Taps Music Sponsorships For New Card,” 7/16/10), a product aimed at
consumers in their 20s and 30s.
On the bank issuer front, JPMorgan Chase & Co. is using sponsorship as a key component in the relaunch of its Chase
Freedom (“New Sponsorships Coming From Chase Freedom Card,” 8/27/10) charge card. The bank this year sponsored
several music festivals on behalf of the card—including the Bonnaroo Music & Arts Festival in Tennessee and Outside Lands
in San Francisco—and plans to sign additional deals.
Both companies are using sponsorship to offer cardholder perks. For example, AmEx leveraged the music festivals to offer
Zync cardholders access to tickets before the general public, while JPMorgan Chase activated Outside Lands by hosting
private concerts for customers.
Sponsorship Activity By The Four Largest U.S. Credit Card Brands
American Express Co.
200 Vesey St.
New York, NY 10285
Contact: Jessica Igoe, vice president of global sponsorship and event marketing
212/640-2000
Sponsorship/Activation Strategy: AmEx (“No Credit Crunch For American Express Sponsorships,” 1/26/09) sponsors
music, sports and entertainment properties to strengthen brand loyalty by offering cardholders special access to unique and
memorable experiences. For example, the company has leveraged Mercedes-Benz Fashion Week in New York City by hosting
customers in a skybox overlooking the runway, while activation around the Tribeca Film Festival has included cardmember
discussion panels featuring thought leaders from the independent film community. “Ultimately it’s about understanding the
areas that our cardmembers are passionate about, and enhancing the customer experience,” said Sarah Meron, director of
corporate affairs & communications. Amex in 2010 expanded its presence in the music, fashion and film spaces, including
a partnership with YouTube and Vevo, around which it streams live concerts; a tie with Vogue and the magazine’s Fashion’s
Night Out event, and becoming a founding partner of Tribeca Film, a distributor of independent movies.
© 2010 IEG, LLC. All rights reserved.
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Current Deals: Presenting: River to River Festival, New York City. Cosponsor: Academy Awards; Apollo Theater, New York City;
Aspen Skiing Co.; Atlanta Tennis Championships ATP World Tour stop; Best Buy Theater, New York City; Celebrate Brooklyn!
Performing Arts Festival; Conan O’Brien comedy tour; Farmers Classic presented by Mercedes-Benz ATP Tour stop, Los
Angeles; Food & Wine Magazine Classic at Aspen; Jackson Hole Mountain Resort; Lincoln Center for the Performing Arts, New
York City; Mercedes-Benz Fashion Week; MLS Real Salt Lake; NBA Washington Wizards; NHL New Jersey Devils and New York
Rangers; New Jersey Performing Arts Center; Tribeca Film Festival; Vail Resorts; U.S. Golf Assn.; USTA US Open.
Additional Comments: This year rolled out NextContenders.com around 17-year-old sponsorship of the USTA U.S. Open; the
site features athlete interviews and other behind-the-scenes content. Activated Fashion’s Night Out by offering cardmembers
exclusive ticket access and retail incentives for apparel purchases. Signed new ties this year with the Austin City Limits
Music Festival and other music festivals on behalf of its new Zync (“American Express Taps Music Sponsorships For New
Card,” 7/16/10) credit card. Additional sponsorship contacts: Rich Lehrfeld and Courtney Kelso, both vice president, global
sponsorship marketing. 2009 sponsorship budget: $25 to $30 million.*
Discover Financial Services, Inc.
2500 Lake Cook Rd.
Riverwoods, IL 60015
Contact: Jennifer Murillo, director of advertising
224/405-0900
Sponsorship/Activation Strategy: Discover has significantly expanded its sponsorship portfolio as a platform to connect
with consumers around their passion points, reward cardholders with unique experiences and incent card usage. New ties
include title of the 2011-2014 Orange Bowl games and the 2013 BCS National Championship game and cosponsorship of
the NHL in the U.S., and Six Flags Theme Parks. Discover is activating the NHL by offering card members special perks such
as access to the 2011 All-Star Game—an event it will present—and the opportunity to spend a day with the Stanley Cup.
Activates Six Flags by offering a five percent discount on in-park and online purchases, discount ticket and meal packages
and other cardholder perks. Typically looks for exclusivity in the credit card category.
Current Deals: Title: Orange Bowl; 2013 BCS National Championship Game. Cosponsor: Children’s Miracle Network; NHL
(U.S.); Make-A-Wish Foundation; Ravinia Festival, Highland Park, Ill.; Six Flags Theme Parks.
Additional Comments: Discover will further activate the NHL deal by allowing card members to redeem their Cashback
Bonus rewards for discounts on Shop.NHL.com, in the NHL Powered by Reebok store in New York City, for GameCenter Live
subscriptions and other merchandise. The tie designates Discover as the official card of the NHL, NHL All-Star Weekend, NHL
Winter Classic, NHL Awards and the NHL Entry Draft. 2009 sponsorship budget: $1 to $5 million.
MasterCard Inc.
2000 Purchase St.
Purchase, NY 10577
Contact: Emily West, vice president, U.S. sponsorships
914/249-2000
Sponsorship/Activation Strategy: MasterCard uses its long-running partnerships with MLB and the PGA Tour to build visibility,
increase credit and debit card distribution, and promote its PayPass contactless payment system and other products. The
company also uses the ties to incent card usage, such as offering ticket and merchandise discounts to the PGA Tour FedEx Cup
Playoff events. Activated the 2009 and 2010 MLB All-Star Games with Hit it Here promotion, around which the company would
donate up to $2 million to Stand Up To Cancer if one of its two signs was hit by a batter during the game or the State Farm Home
Run Derby. Frequently purchases exclusivity in the payment services and financial services categories. Case in point: GRAMMY
Awards sponsorship affords status as the event’s official financial services and payment sponsor.
© 2010 IEG, LLC. All rights reserved.
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IEG Sponsorship Report
Current Deals: Presenting: Arnold Palmer Invitational PGA Tour stop, Orlando, Fla.; Central Park Summerstage, New York City.
Cosponsor: AIDS Walk New York presented by Duane Reade; CONCACAF; Copa America soccer tournament; GRAMMY Awards;
Jazz at Lincoln Center, New York City; MLB; MLB Atlanta Braves, Boston Red Sox, Chicago Cubs, Chicago White Sox, Los Angeles
Angels of Anaheim, Los Angeles Dodgers, New York Yankees and Philadelphia Phillies; NFL Arizona Cardinals, Chicago Bears,
Detroit Lions, Green Bay Packers, Houston Texans and Philadelphia Eagles; NHL Chicago Blackhawks, Detroit Red Wings,
Montreal Canadiens, Toronto Maple Leafs; PGA Tour; PGA Tour stops: Allianz Championship presented by Administaff, Boca
Raton, Fla.; Deutsche Bank Championship, Norton, Mass.; HP Byron Nelson Championship, Irving, Texas; Liberty Mutual Legends
of Golf, Savannah, Ga.; Principal Charity Classic, West Des Moines, Iowa; 3M Championship presented by Post-It Products,
Blaine, Minn.; Pennsylvania State University athletics; IRC Rugby World Cup 2011; UEFA Champions League.
Additional Comments: MasterCard last week renewed its partnership with Copa America for the 2011 Argentina event;
the company will activate the partnership with the Copa America Trophy Tour across Latin America. NFL quarterback Peyton
Manning serves as a MasterCard spokesman. Additional sponsorship contact: Michael Robichaud, vice president, global
sponsorships. 2009 sponsorship budget: $25 to $30 million.
Visa Inc.
900 Metro Center Blvd.
Foster City, CA 94404
Contact: Michael Lynch, head of global sponsorship management
650/432-3200
Sponsorship/Activation Strategy: Visa uses sponsorship to accomplish four key objectives: build brand equity and loyalty;
showcase the value of its products; engage financial institutions and merchants; and generate return on investment. Takes
a ‘less is more” approach by aligning with a handful of well-respected global and domestic properties. Visa has placed
more focus on international properties that can be activated in local markets after transitioning from a membership-based
organization to a publicly traded company in 2008. Expanded NFL portfolio this year with new ties to four teams: Jaguars,
Colts, Vikings and Titans; the company is activating its NFL involvement with the Super Bowl Trip for Life sweepstakes that
dangles a trip to the game for life when consumers use a Visa card.
Current Deals: AIDS Walk San Francisco; Dover Int’l Speedway, Del.; Essence Music Festival presented by Coca-Cola; FIFA;
International Paralympic Committee; IOC TOP worldwide Olympic program; Kentucky Derby presented by Yum! Brands; London
Organizing Committee for the Olympic Games; Mexican National Soccer Team 2010 U.S. tour; MLB San Francisco Giants; MLS;
NASCAR; National Breast Cancer Foundation; NFL; NFL Atlanta Falcons, Baltimore Ravens, Buffalo Bills, Carolina Panthers,
Cleveland Browns, Denver Broncos, Jacksonville Jaguars, Indianapolis Colts, Minnesota Vikings, New England Patriots, New Orleans
Saints, San Francisco 49ers and Tennessee Titans; Pebble Beach Resort; Southwest.com Chinese New Year Festival & Parade, San
Francisco; USOC; U.S. Ski & Snowboard Assn.; U.S. Soccer; USA Fencing; USA Gymnastics; USA Swimming; USA Track & Field.
Additional Comments: USOC tie affords status as exclusive payment card and official payment network. NFL team deals
afford preferred card status for ticket, merchandise and concession purchases. The company is in its second year titling the
San Francisco 49ers practice jersey. Uses its long-running partnership with the MLB Giants to test new payment systems.
This year extended its partnership with the International Paralympic Committee through 2012. Uses Essence Music Festival
partnership to promote Visa prepaid debit card. 2009 sponsorship spend: $30 to $35 million.
*IEG SR estimates
Sources
Visa Inc., Tel: 650/432-3200
Shepard Consulting, Tel: 415/306-4254
Wasserman Media Group, Tel: 212/704-0488
© 2010 IEG, LLC. All rights reserved.
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IEG Sponsorship Report
November 15, 2010
800/834-4850 | www.IEGSR.com
In Depth
A-B Lawsuit Illustrates Value Of Pro Sports Sponsorships;
Sector Grows 7.8 Percent
Financial services category rebound helps lead overall
comeback.
News of the lawsuit filed by Anheuser-Busch Inc. against
MLB over renewal of the brewer’s league sponsorship is one
indicator of the importance corporate marketers place on
partnerships with pro sports properties, especially those at
the highest echelons.
Thus it should not be a surprise that the four major U.S. pro
sports leagues and their teams are projected to post a 7.8
percent increase in sponsorship revenue in 2010 to $2.28
billion from $2.12 billion, according to an IEG SR analysis.
The rise in spending marks a significant rebound from 2009,
when those same entities saw a drop of 3.9 percent in total
sponsorship revenue in the face of a struggling economy.
When IEG SR releases its full review of the year in sponsorship at the end of December, the higher than expected growth
in pro sports will almost certainly drive actual spending for the entire sports category much higher than the 2.8 percent
increase projected at the beginning of the year, even if the fortunes of amateur sports, auto racing and other pro sports such
as golf and tennis lag behind.
The rebound largely is attributable to three factors: Pent-up demand after two years of corporate belt tightening; the
availability of previously unmarketed inventory; and a resurgence in spending by the financial services category.
Case in point: The NHL last week announced a new U.S. partnership with Discover Financial Services (“Discover Signs Six
Flags Deal; Wants More Opportunities To Reward Customers,” 6/28/10).
In basketball, the NBA in September signed Spanish bank BBVA as its official bank (“Who’s The Official Bank of the NBA?
BBVA, That’s Who,” 9/20/10), a tie that represents the league’s first partner in the category in recent history. The deal
follows new ties with Bacardi U.S.A., Inc. (“Why Bacardi Has Mixed Up A Batch Of New Sponsorships,” 5/27/10) and State
Farm Insurance Cos.
On the football front, the NFL this summer replaced Bank of America Corp. (“Checking In On The Changes At Bank of
America,” 10/4/10) with Barclaycard US, with the latter becoming the league’s official issuer of co-branded credit cards.
© 2010 IEG, LLC. All rights reserved.
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IEG Sponsorship Report
Other new ties include Papa John’s
Int’l, Inc. and—in a deal that does not
begin until 2011—Anheuser-Busch as
official beer, replacing Molson Coors
Brewing Co.
MLB’s new partnerships for 2010
included The Scotts Co. (“Scotts
Sees Fertile Ground In Baseball
Partnerships,” 01/21/10) and
Bridgestone Americas, Inc., which is
using the tie to promote its Firestone
tire brand.
Spending at the team level also has
increased this year, driven in part by
renewed spending in the automobile
category, as well as from financial
services.
© 2010 IEG, LLC. All rights reserved.
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IEG Sponsorship Report
© 2010 IEG, LLC. All rights reserved.
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IEG Sponsorship Report
© 2010 IEG, LLC. All rights reserved.
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IEG Sponsorship Report
November 15, 2010
800/834-4850 | www.IEGSR.com
One-on-one
Nationwide Moves To The Local Side: New Deals Reflect
Shift In Strategy
Company’s move serves as a reminder to properties to stay
on top of prospective sponsors’ changes in approach.
Having focused on national golf and motorsports platforms
over the past several years, Nationwide Financial Services,
Inc. is adding a localized sponsorship approach into its mix.
The insurer, which has titled the NASCAR Nationwide Series
for three years and the PGA Tour’s Nationwide Tour for eight,
has recently signed first-time ties to five properties with
regional footprints.
The new deals are: presenting status of Dublin, Ohio’s The
Memorial Tournament PGA Tour stop and cosponsorship of the
NBA San Antonio Spurs, University of North Carolina athletics,
and the NFL Cincinnati Bengals and Pittsburgh Steelers.
The Nationwide Tour sponsorship will be a casualty of the company’s shift: Nationwide has announced it will not renew the
title deal after its ten-year contract expires at the end of the 2012 season.
IEG SR spoke with John Aman, the insurer’s associate vice president, strategic sponsorships and events, about the new
strategy, activation in the insurance category (“Property/Casualty Insuers’ Policy: Continue Sponsoring,” 2/1/10), results
from its NASCAR involvement, and other topics. Below are edited excerpts from the conversation.
IEG SR: Nationwide has been focused for quite a while on its title of NASCAR’s and the PGA Tour’s developmental series.
What’s behind the new push?
Aman: We chose our national sponsorships in a deliberate fashion, and we have been successful with them.
For this year’s marketing campaign we decided to focus on 14 key markets. We evaluated those markets and came up with
five that have properties with avid followers and a passionate fan base.
For example, the Pittsburgh Steelers. People are very passionate about the Steelers. Their games have sold out for years, and
if people in Pittsburgh are not at the game, they are watching it on TV.
We have applied our national sponsorship model to these local properties. We want to see if we can have the same kind of
impact at the local level as we have had nationally with our national sponsorships.
© 2010 IEG, LLC. All rights reserved.
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IEG Sponsorship Report
Apart from Pittsburgh, we are focusing
on Columbus, Ohio; San Antonio;
and Charlotte and Raleigh, N.C. We
didn’t have to allocate additional
sponsorship dollars in Columbus
because of our partnership with
Ohio State University athletics, or in
Charlotte, where we already have a
large presence through our NASCAR
involvement.
IEG SR: You are adding a PGA Tour stop and will be departing from the Nationwide Tour in two years. What’s the rationale
behind that switch?
Aman: The Memorial Tournament is located in our home town of Columbus. It was founded and is hosted by Jack Nicklaus,
the world’s greatest golfer, and it seemed like the right time to present the event.
Over the long term, we did not think both properties were in our interest from an investment standpoint. We did not think it
was in the best interest of each property, either.
The Nationwide Tour helped us develop our capabilities, which helps set the stage to make The Memorial an even more
effective marketing platform. The Memorial moves us to up to the PGA Tour and network TV, and it lets us stay with many of
the golfers that we spent the last eight years getting to know on the Nationwide Tour.
IEG SR: How are you activating the new ties?
Aman: It’s similar to what we do in NASCAR. We are activating them through multiple channels including TV, which includes
assets in our contracts as well as additional media buys. We have exposure in pre- and post-game shows, radio networks,
online media, and so forth.
We also try to engage fans before they head to the game and while they are in their seats. We do that through text-to-win
programs and other types of brand messaging.
IEG SR: Do you use sponsorship to acquire leads?
Aman: Yes, we try to collect information and sell ourselves as an insurance opportunity through a conversation with fans.
We are doing that by hosting the World’s Greatest Super Fan in the World sweepstakes with each property. The promotion
supports our new World’s Greatest Spokesperson ad campaign.
We tailor the promotion to each property. For example, we are running the World’s Greatest Bengals Growl around our
sponsorship of the Bengals. We use the promotions to collect data both in person and online.
We have run a similar promotion around our NASCAR partnership over the past several years.
IEG SR: Speaking of which, Nationwide has been involved in NASCAR for three years. Can you share any success stories from
your NASCAR involvement, and are you applying any lessons learned from that partnership to your new sponsorships?
Aman: We have seen a great deal of success from our NASCAR sponsorship. We pay attention to shifts in unaided awareness
across all of our marketing activities. We increased unaided awareness among NASCAR fans by 50 percent in the first two
years of the partnership. That significantly outpaced what we have done from a general market standpoint.
© 2010 IEG, LLC. All rights reserved.
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IEG Sponsorship Report
We also have seen positive ROI from our NASCAR partnership. We are in positive territory in terms of both premiums earned
and profitability.
We know NASCAR fans are more likely than the general market to buy a policy from us. It’s not just auto insurance—they are
more likely to ensure their house, motorcycle, boat and take personal umbrella policies than the general market. That makes
the NASCAR fan a higher long-term value customer.
Source
Nationwide Financial Services, Inc., Tel: 614/249-7111
© 2010 IEG, LLC. All rights reserved.
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IEG Sponsorship Report
November 15, 2010
800/834-4850 | www.IEGSR.com
Emerging Category
Hot Sauce Brands Spice Up Music, Sports And Events
Players in category seek traditional packaged goods
benefits, including sampling and sales-related promo
platforms.
Although sponsorship on behalf of hot sauce brands has been
fairly quiet since McIlhenny Co.’s ill-fated NASCAR involvement
a dozen years ago—a team sponsorship that ended up in a
lawsuit and became known in racing circles as the “Tabasco
Fiasco”—a handful of competitors are making moves outside of
endemic properties such as food festivals and chili cook-offs.
In fact, category activity runs the gamut, with deals across
music, action sports, festivals, auto racing and pro sports
properties.
Recent sponsorships include TW Garner Food Co.’s Texas Pete
brand coming on board as a first-time sponsor of the X Games, while Jose Cuervo S.A. de C.V.’s Cholula hot sauce inked a
new partnership with Live Nation Entertainment.
In addition to being the music promoter’s official hot sauce, Cholula—the category’s fourth-largest brand, according to
SymphonyIRI Group sales data—sponsors a smattering of other properties, including the IZOD IndyCar Series Toyota Grand
Prix of Long Beach, Seattle’s Seafair and Wrightwood, Calif.’s Mountain High ski resort, around which it titles the Cholula
Triple Air snowboarding competition.
The industry’s other active sponsor is Baumer Foods, Inc.’s Crystal Hot Sauce, which sponsors the NBA New Orleans Hornets
and NFL New Orleans Saints. The brand serves as the presenting sponsor of the Honeybees, the dance squad of the Hornets.
Both Cholula and Crystal posted double-digit year-over-year sales during the 52 weeks ending Oct. 3, 2010, according to
SymphonyIRI.
The pair were the fastest growing hot sauce brands after Reckitt Benckiser Inc.’s Frank’s Red Hot, which posted a 20.1
percent rise. The overall category grew by 7.6 percent.
Below, IEG SR highlights the sponsorship hot buttons for hot sauce marketers and tips on selling the category.
Sampling opportunities. Nearly every hot sauce brand involved in sponsorship uses the medium to sample.
For example, Cholula’s new Live Nation tie affords sampling in 43 amphitheaters and House of Blues clubs, said Maureen
Ford, Live Nation’s president of venue sales.
© 2010 IEG, LLC. All rights reserved.
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IEG Sponsorship Report
In addition to sampling through concession stands, Cholula receives branding on table tents and menu integration at House
of Blues clubs, Ford said. That includes exposure in the club’s Foundation Room and during the venues’ popular gospel
brunches.
Similarly, Texas Pete sampled product at this summer’s X Games in Los Angeles. Like Cholula, it also hosts a mobile
marketing/sampling tour to college football games, the Texas Pete Tailgate Tour.
Promotional platforms. Similar to other packaged goods products, hot sauce brands frequently use sponsorships to conduct
promotions that build their marketing databases and incent purchase.
For example, Crystal Hot Sauce is leveraging its partnership with the Saints through a Black & Gold Sweepstakes that dangles
a replica jersey, game tickets, pre-game field passes, lunch and tour of the Saints training facility and a Crystal gift package.
Consumers who enter the promo can opt-in to receive e-mail newsletters and other information from the company.
Cholula is leveraging its Live Nation partnership with a Turn Up the Flavor sweeps (http://cholulasweeps.com) that dangles
two prizes: An instant win $10 rebate off the price of a ticket or merchandise, and four tickets and a meet-and-greet with the
performers of the winner’s choice.
To enter the instant win portion, consumers must supply barcode numbers from a bottle of Cholula. Vern Hunt, president of
Santa Ana, Calif.-based marketing agency Synergy, Inc., spearheads sponsorships on behalf of the Cholula brand.
Hot sauce brands also can use promotional platforms to gain incremental shelf space from their retail partners.
Buzz generation through viral marketing. While the category may not be thought of as tech-savvy, hot sauce marketers are
increasingly turning to social media platforms.
Texas Pete last month joined the TwitChange celebrity tweet auction benefiting AHomeInHaiti.org, a nonprofit that provides
education and housing for Haitian disabled children. The brand will make a matching donation up to $10,000 for the highest
bid for a Twitter exchange with Eva Longoria Parker, Tony Hawk or the Hornets’ Chris Paul.
“TW Garner is very active on Twitter with our Texas Pete brand, so when we first heard about the TwitChange charity auction
we immediately knew it would be a good fit with our charitable activities,” said Glenn Garner, director of marketing, in a
statement.
Sources
TW Garner Food Co., Tel: 336/661-1550
Live Nation Entertainment, Tel: 310/867-7000
© 2010 IEG, LLC. All rights reserved.
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