The Dallas Cowboys, the Los Angeles Lakers, and the New York Yankees - what do these three have in common?
Yes, they are all professional sports teams. Yes, they have all won championships within their chosen sport. Yes, they are each legendary among sports enthusiasts and draw fierce fan loyalty. But what else?
All three lead their respective leagues in sports merchandise sales.
In 2007, spectator merchandise spending in the United States was in excess of $9.5 billion, according to an October 2008 article in USA Today.
Noted in the Licensing Business Databook, nearly one quarter of the United States and Canada's licensed merchandise retail sales - totaling 68.7 billion dollars - was based on corporate trademarks and brands in 2007. An additional 20 percent of monies spent were on sports merchandise.
Baseball and its professional governing body, Major League Baseball, generate the most annual revenue from merchandise sales. However, the NFL's Dallas Cowboys benefit from their loyal fans in dollars and cents more than any other professional sports team, according wikianswers.com.
Reap the Benefits
Logo recognition and sports taglines have been around as long as the game itself, but capitalizing on those brands can take your team or event to the next level.
The branding of sports merchandise is not isolated to the United States. The appeal is global. Logos and brands translate internationally. Anyone from the United States traveling to Europe wearing a Yankees hat or shirt is sure to be recognized as a fan. The Nike swoosh, which was created as a simple sketch has transcended into a recognized worldwide symbol of sports apparel.
"It's the opportunity to get a product into the consumer's hand in some cases," said Tyson Webber, vice president with GMR Marketing. "It's also an opportunity to drive desired behavior, whether it's retail or a website driven."
GMR Marketing is an award winning event marketing agency with offices throughout the United States, Canada and Europe. They represent a wide array of clients that include McDonald's, Lowe's Home Improvement, New Balance and ESPN. GMR was recently honored by Sports Business Journal as the 2009 Sports Event Marketing Firm of the Year.
Coca-Cola has been a pioneer in the sports marketing and branding industry. The company was the first official sponsor of the Olympic Games in 1928. They are not only the most recognized brand in the world but also a leading corporate partner to several professional and collegiate sports entities including NASCAR and the NCAA.
So what benefits a corporate giant like Coca-Cola to partner with teams on co-branded merchandise?
"From a bottler's perspective," said Tony Philo, manager of Corporate Marketing with Coca-Cola Bottling Consolidated, "It's important for us to not only connect with consumers but also the retailers so that we can activate with a specific partner to engage their consumers at their passion points, which drives profitable growth for both Coca-Cola and the retail partner."
Webber agrees, "It's another connection to the property and more importantly, to the consumer. It's another chance for signage, branding and media."
ROI - Return on Investment
Branded giveaways and merchandise can create additional revenue for your organization through co-sponsorships and on-site sales. If you have a corporate partner on board for your event, a co-branded giveaway will not only result in additional monies but also provide an added benefit for your partner, which in turn can secure future joint ventures. Understanding the monetary goals of each organization, as well as the partnership are key elements.
So what's the best way to measure a return on investment for both parties?
"It depends on the dynamics of the event and the objectives," explains Greg Economou. "I would say going into an event that those objectives should be planned and how they are going to be measured. In some cases it might be database driven and in others it could be financial."
Economou founded and was managing director and CEO of BRANDTHINK, a consulting firm specializing in sports marketing and management strategy development. Economou helped develop brand positioning, consumer segmentation programs and corporate partnerships for the Houston Rockets, Pittsburgh Pirates, Atlanta Thrashers and Dale Earnhardt Inc. to name a few. Economou was also responsible for the re-branding of the Charlotte Bobcats during his tenure with the team as executive vice president and chief marketing officer through 2008.
"In most cases there are multiple ways to analyze (the ROI)," continued Economou. "If it's an annual event, the database might be more effective."
Jeff Collins with Matchup Promotions, a sports marketing firm in Orlando, Florida concurs. "It depends on the sponsor," he said. "Some companies try to generate leads (from giveaways) which in turn result into an excellent return on investment."
"Some companies will give away a premium item in order to get the (sales) leads from an on-site kiosk," Collins continued. "Rather than a general audience, the sponsor is able to define their market or audience in one area."
So it's imperative to clarify what the ultimate goal is with any event merchandising endeavor.
"It (the merchandise) becomes a statement of the brand itself," said Economou. "That needs to be taken into consideration when the product is being developed. Those things should go hand in hand."
The Importance of Branding
Branding your event is two-fold. The additional revenue can help offset the costs of running your event, and it can also create partnership goodwill.
"It gives you a chance to extend the brand with walking billboards," said Economou. "You have more places to be seen by more people. From a brand prospective standpoint, it can behoove any sponsor or event planner spending that much. In any endeavor, small or large, the number one thing you want is for the merchandise to represent the essence of your brand."
Branded merchandise also creates the sense of being a part of the event. It adds a feeling of loyalty which results in a positive experience, and ultimately increases attendance for future events.
"From an activation standpoint," explained Philo, "with the properties that we choose, like NASCAR and the Coca-Cola 600 for example, we are trying to connect with those consumers at their passion points. We are working with those properties to engage the consumers to associate those special moments with a particular event." Philo continued, "The consumer will reflect on the event and associate that they enjoyed a Coca-Cola with those special moments."
Traditional event merchandise items include commemorative cups, hats, lanyards and t-shirts, but with today's cutting edge technology getting your message to the general public is no longer sticking with the safe bet.
Following their winning 2008 Cinderella season, the Tampa Bay Rays gave championship replica rings to 37,000 spectators. According to a recent St. Petersburg Times article, the rings were such a success among fans that they hit E-bay within 24 hours following the game.
Not only did the giveaway produce online frenzy, but also created positive memories for those in attendance. According to a source close to the team, additional rings were ordered and available for purchase. Many of the proceeds benefited the Rays charitable organization - generating team revenue and helping the community as well.
Keeping up with the fast paced technology industry can be mind numbing, but you can utilize that technology and turn it into a great takeaway for your event. A branded USB memory stick for the computer allows spectators to transfer their photos from the event and store it on the memory stick. Each time they look at those photos, your event image will be on the forefront. A mouse pad with a team logo is an excellent way to deliver your message on a daily basis to the average computer user.
"There are some great technologies right now," explains Webber. "RFID (Radio Frequency Identification) is a technology embedded into a product allowing you to track the consumer and what they are doing with product. There are implements that you can put into place whether it's couponing, sampling or driving consumers to a website and measuring (ROI) from that giveaway."
With the greening of America, utilizing environmentally friendly merchandise not only delivers your message but also cuts down on our carbon footprint. Recycled, organic, biodegradable and energy friendly items are quickly making a positive impact in the merchandise world.
You can customize anything to meet your event objectives. Depending on your budget, the sky is the limit. But according to Philo, the old standby still holds true, "The t-shirt is the most simple thing," he said. "Everyone loves a t-shirt branded with that specific event."
IMG can help extend your brand and increase revenue through licensing.