IEG SPONSORSHIP REPORT THE LATEST ON SPORTS, ARTS, CAUSE AND ENTERTAINMENT MARKETING
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1 IEG SPONSORSHIP REPORT THE LATEST ON, ARTS, CAUSE AND MARKETING NOVEMBER 16, CATEGORY UPDATE RETAILERS GO SHOPPING FOR NEW SPONSORSHIPS Retailers increase use of sponsorship to drive store traffic, engage employees and demonstrate community involvement. Home improvement chains, discount stores and other types of retailers are filling up their shopping carts with new sponsorships. The category s eight biggest players spent an estimated $245 million on sponsorship in 2014, up from roughly $220 million in the previous year, according to IEG research. Four companies increased their sponsorship spend from 2013 to 2014: Lowe s Cos., Bass Pro Shops, Macy s, Inc. and The Kroger Co. Home Depot, Aaron s and Menards kept spending flat, while Target Corp. decreased its sponsorship outlay by an estimated $5 million. Retailers are doubling down on sponsorship to accomplish three primary objectives: Gain platforms for retail promotions. Retailers often use sponsorship to generate excitement around new and existing stores. Lowe s, for example, hosts show car appearances for Jimmie Johnson s No. 48 NASCAR Sprint Cup Series team, while Bass Pro Shops hosts meet-and-greets with Tony Stewart and other NASCAR drivers to generate excitement around new store openings. Deepen strategic relationships with vendors. Retailers often turn to vendors to help activate sponsorship and/or offset rights fees. Target is leveraging its partnership with Chip Ganassi Racing in support of an in-store merchandising initiative that includes hundreds of products in plaid packaging including Kyle Larson s No. 42 Target Chevrolet SS NASCAR Sprint Cup Series car. Strengthen community ties through employee volunteerism. With hundreds of stores and thousands of employees, retailers frequently use sponsorship to support local communities through employee volunteer initiatives. Case in point: Lowe s employees (Lowe s Heroes) donate time and talent to help repair and refurbish Boys & Girl Club renovation projects across the country. Lowe s employees also repair community centers through the company s presenting sponsorship of the NCAA Legacy Restorations program IEG, LLC. ALL RIGHTS RESERVED. 1
2 CHART: WHERE RETAILERS SPEND MONEY 72% 20% $615M TOTAL U.S. SPONSORSHIP SPEND IN 2014 CAUSE 3% 3% OTHER 2% 2015 IEG, LLC. ALL RIGHTS RESERVED. 2
3 IEG SPONSORSHIP REPORT THE LATEST ON, ARTS, CAUSE AND MARKETING NOVEMBER 16, SIDEBAR PORTFOLIO OVERVIEW: THE SIX BIGGEST SPENDERS IN THE RETAIL CATEGORY With an estimated $55 million to $60 million sponsorship budget, Lowe s Cos. is the biggest spender in the retail category. Below, sponsorship spending, portfolio overviews and activation strategies for the six biggest spenders in the category. LOWE S COS. Estimated 2014 U.S. Sponsorship Spend: $55M-$60M 2013 Spend: $50M-$55M Top Deals By Spend Hendrick Motorsports NASCAR team 77 Colleges NCAA The country s second-largest home improvement retailer focuses on two national sponsorship platforms: the NCAA and Jimmie Johnson and the No. 48 Hendrick Motorsports NASCAR Sprint Cup Series team. Lowe s activates sponsorship to promote vendor products. The company in 2015 teamed with Jimmie Johnson and Mission a manufacturer of instant cooling towels on a public awareness campaign designed to promote the importance of heat safety. The campaign included a mobile tour, national TV ads, in-store promotions, digital and social media and job site visits. Lowe s, which has sponsored Johnson and Hendrick Motorsports since 2001, this year extended both partnerships through the 2017 season. Lowe s also leverages the NCAA with retail partners. The company in 2014 passed through promotional rights to Scotts Miracle-Gro, which ran a March Madness promotion that dangled a trip to the NCAA Final Four. Scotts used the campaign to drive seed sales during the spring planting season. Lowe s dropped its partnership with IMG College in IEG, LLC. ALL RIGHTS RESERVED. 3
4 LOWE S PORTFOLIO BREAKDOWN BY SPEND / ACTIVITY 91% CAUSE 8% 1% 26% 39% ARTS 4% 9% CAUSES 22% TARGET CORP. Estimated 2014 U.S. Sponsorship Spend: $50M-$55M 2013 Spend: $55M-$60M Top Deals By Spend Earnhardt Ganassi Racing with Felix Sabates Target Field Major League Baseball Target Center Target has adjusted its sponsorship strategy over the past year to support key product segments and engage its evolving customer base, with focus on urban millennials. One key component of the new strategy: promote products in the style, wellness, children s and baby categories. On the style front, the retailer is leveraging its partnership with Chip Ganassi Racing to promote an in-store merchandising campaign that includes apparel, grocery items, consumer packaged goods and other products with plaid packaging. The retailer is promoting the initiative via a plaid paint scheme on Kyle Larson s No. 42 Target Chevrolet SS NASCAR Sprint Cup Series car. Target in 2015 dropped its sponsorship of a CGR entry in the Verizon IndyCar Series in an effort to increase engagement with NASCAR fans. The retailer invested the money in a marketing campaign that included broadcast TV, digital and social media. The retailer this year also launched Together We Win, a marketing initiative designed to educate NASCAR fans about the role vendors play in sponsorship. Target is the only company among the six biggest spenders in the retail category that reduced its sponsorship budget from 2013 to The company cut its sponsorship spend by estimated $5 million to $10 million after dropping a number of regional deals. TARGET PORTFOLIO BREAKDOWN BY SPEND / ACTIVITY 72% CAUSE 10% ARTS 8% 8% 2% ARTS 47% CAUSES 6% 21% 7% OTHER 3% 16% 2015 IEG, LLC. ALL RIGHTS RESERVED. 4
5 THE HOME DEPOT INC. Estimated 2014 U.S. Sponsorship Spend: $30M-$35M 2013 Spend: $30M-$35M Top Deals By Spend Joe Gibbs Racing NASCAR team Habit for Humanity Major League Soccer After dropping its long-running partnership with Joe Gibbs Racing at the conclusion of the 2014 NASCAR season, the country s largest home improvement retailer now focuses on two national platforms: Major League Soccer and College GameDay Built By The Home Depot. Home Depot uses its seven-year-old partnership with Major League Soccer to engage Hispanic and millennial consumers. The retailer leverages the tie to drive engagement through soccer-centric conversations, strengthen preference and loyalty by inspiring consumers to tackle home improvement projects, and maximize ROI by using MLS assets to drive online and in-store traffic. The retailer activates MLS with game day hospitality, vendor-driven consumer engagement programs, in-store player appearances and gift card giveaways. Home Depot sponsors a handful of properties located near its Atlanta headquarters including the MLB Atlanta Braves, NFL Atlanta Falcons, Chick-fil-A Peach Bowl, Peachtree Road Race and the Georgia Aquarium. HOME DEPOT PORTFOLIO BREAKDOWN BY SPEND / ACTIVITY 76% 3% CAUSE 21% 43% CAUSE 17% 17% ARTS 17% 2015 IEG, LLC. ALL RIGHTS RESERVED. 5
6 BASS PRO Estimated 2014 U.S. Sponsorship Spend: $25M-$30M 2013 Spend: $20M-$25M Top Deals By Spend Chip Ganassi Racing Stewart-Haas Racing Richard Childress Racing Bass Pro Shops, which operates roughly 85 stores in the U.S. and Canada, uses sponsorship primarily as a platform to drive store traffic. The company leverages its five-year-old partnership with Professional Bull Riders with in-arena and in-store activation in PBR Built Ford Tough Series markets. Retail activation includes meet-and-greet autograph and photograph sessions with PBR riders and bullfighters, fishing demonstrations hosted by PBR announcer Clint Adkins, mechanical bull rides and live bull displays. Bass Pro Shops hosts an annual PBR day at more than 50 Bass Pro Shops locations throughout the U.S. and Canada. The two-day event includes bucking bull and rider appearances, cowboy and cowgirl costume contests for children and Bass Pro Shops PBR-themed sweepstakes. In-arena PBR activation includes Bass Pro Shops branding on arena video boards and a video that features PBR Ring of Honor bull rider Luke Snyder shopping at a Bass Pro Shops store. Select fans that guess the price of the combined items in Snyder s cart (within a certain price range) win the items. The retailer activates NASCAR with in-store appearances by Tony Stewart and other drivers. The company will expand its NASCAR program in 2016 with title of the Bass Pro Shops NRA Night Race at Bristol Motor Speedway. Bass Pro Shops also uses NASCAR to promote Tracker boats, a brand owned by the retailer. BASS PRO SHOPS PORTFOLIO BREAKDOWN BY SPEND / ACTIVITY 99% 83% 1% 17% 2015 IEG, LLC. ALL RIGHTS RESERVED. 6
7 AARON S Estimated 2014 U.S. Sponsorship Spend: $20M-$25M 2013 Spend: $20M-$25M Top Deals By Spend Michael Waltrip Racing 30 NCAA Colleges International Speedway Corp. The rent-to-own retailer will cut back its NASCAR program when Michael Waltrip Racing closes its doors at end of the 2015 season. The company reportedly plans to maintain a presence in the sport through media and track activation. Aaron s uses sponsorship to cultivate leads via consumer sweepstakes. The company activates the MLS Chicago Fire with the Create Your Own Stadium sweeps that dangles a home stadium (a 55-inch high-definition TV, recliner, coffee table, etc.) in exchange for contact info and an opt-in for promotional offers. The retailer is activating the NFL Atlanta Falcons with a sweepstakes dangling tickets to the team s Jan. 3, 2016 home game against the New Orleans Saints. The promo includes pre-game sideline passes, a tunnel experience and Falcons apparel. Aaron s in 2015 inked a one-year sponsorship of Virginia Motor Speedway and the Aaron s King of the Commonwealth Pro (Crate) Late Model division race. The sponsorship affords designation as the official sales and lease ownership partner of VMS. The retailer also sponsors the NBA Atlanta Hawks, MLB Atlanta Braves, MLB Houston Dynamo and New York City FC. AARON S PORTFOLIO BREAKDOWN BY A SPEND / ACTIVITY 98% 90% 5% 5% 2% 2015 IEG, LLC. ALL RIGHTS RESERVED. 7
8 MENARD, INC. Estimated 2014 U.S. Sponsorship Spend: $15M-$20M 2013 Spend: $15M-$20M Top Deals By Spend Richard Childress Racing NASCAR team Auto Racing Club of America presented by Menards Menards 200 ARCA race, Toledo Menards focuses sponsorship activity on the No. 27 Richard Childress Racing NASCAR Sprint Cup Series team driven by Paul Menard, the son of Mendards founder John Menard. The home improvement chain leverages RCR with vendors. Pittsburgh Paints cosponsors the No. 27 car, while Kimberly-Clark Professional this year activated the Scott 150 ARCA Racing Series race at Chicagoland Speedway with Menards, the series presenting sponsor. The two companies ran an in-store promotion that offered a rebate with the purchase of a 200-count Scott Rags In-a-Box. Menards this year expanded its motorsports portfolio with naming rights to the weekly Manufacturers Chevy Series telecast on Velocity TV. The retailer leverages the sponsorship with vendors: True Science pet food presents the show s Minties Top Dog Award. MENARDS PORTFOLIO BREAKDOWN BY SPEND / ACTIVITY 99% 80% 20% 1% 2015 IEG, LLC. ALL RIGHTS RESERVED. 8
9 IEG SPONSORSHIP REPORT THE LATEST ON, ARTS, CAUSE AND MARKETING NOVEMBER 16, PRO YEAR-END REVIEW: SPONSORSHIP SPENDING ON THE FOUR MAJOR U.S. PRO LEAGUES With seven new league sponsors, MLB posts the largest increase in year-over-year spending. Although the National Football League continues to dominate the U.S. sports landscape in terms of total sponsorship revenue, Major League Baseball gains bragging rights for the largest spending increase among the four major pro sports leagues in the most recent season. Sponsorship spending on MLB and its 30 teams totaled $778 million in the 2015 season, a 12 percent increase over the previous year, according to IEG research. The spending increase was driven in part by seven new league sponsors including Esurance, DraftKings and Falken Tire. The NHL posted the second-largest increase (9.2 percent) with the NBA in a close third (8.9 percent). Spending on the NFL totaled $1.15 billion in 2014, a 7.8 percent increase over the previous season. NATIONAL FOOTBALL LEAGUE 2014 Spending: $1.15B 2013 Spending: $1.07B Year-over-year increase: 7.8% New League Sponsors (2014 Season) 2015 IEG, LLC. ALL RIGHTS RESERVED. 9
10 MAJOR LEAGUE BASEBALL 2015 Spending: $778M 2014 Spending: $695M Year-over-year increase: 12% New League Sponsors (2015 Season) NATIONAL BASKETBALL ASSOCIATION Spending: $739M Spending: $679M Year-over-year increase: 8.9% New League Sponsors ( Season) NATIONAL HOCKEY LEAGUE Spending: $447M Spending: $409M Year-over-year increase: 9.2% New League Sponsors ( Season) 2015 IEG, LLC. ALL RIGHTS RESERVED. 10
11 IEG SPONSORSHIP REPORT THE LATEST ON, ARTS, CAUSE AND MARKETING NOVEMBER 16, BEST PRACTICE ESSENCE SHARES THE LOVE AT SPONSOR AWARDS Music fest uses sponsor awards to reward activation, strengthen relationships and showcase new programming. There was plenty of love shared at last month s Essence Festival sponsor awards. In a practice that other properties would be wise to replicate, Essence Magazine hosted sponsors, prospects and other stakeholders at the Essence Festival Sponsor Awards and 2016 Preview at Mist Harlem in New York City. The goal of the event: recognize (and encourage) sponsor activation; highlight new programming for the 2016 festival; and strengthen relationships with sponsors, prospects and representatives from the City of New Orleans, the festival s host city. The two-hour awards show featured presentations by Essence Magazine editors, each of whom shared a sneak peek at new programming (empowerment, beauty/style, money/finance, faith/spirituality, food, etc.) and other new developments (expanded beauty expo, etc.) at the 2016 festival. Michelle Ebanks, Essence Communications president, kicked off the event with a welcome to attendees; Dana Blair, host of Essence Live, served as MC. The event also featured performances by Essence Festival artists. Essence divided the awards into six categories: Fan Favorite, Best Use of Media and Technology; Best 360-degree Engagement; Rookie of the Year; Most Effective Multi-Category Execution; and Sponsor of the Year. Winners were selected by an outside panel of industry experts. The winners of the 2015 Essence Sponsor Awards: My Black is Beautiful (Fan Favorite) Samsung (Best Use of Media and Technology) Coca-Cola (Best 360-degree Engagement) Samsung (Rookie of the Year) State Farm (Most Effective Multi-Category Execution) Verizon (Sponsor of the Year) Essence will follow up the event with a sponsor activation summit in February IEG, LLC. ALL RIGHTS RESERVED. 11
12 ABOUT IEG AND ESP PROPERTIES IEG has shaped and defined sponsorship over three decades. It is the globally recognized source for industry insights, trends, training and events via sponsorship.com, its annual conference, online publications, trend reports, surveys and webinars. IEG is part of ESP Properties, a WPP company. As a commercial and creative advisor for rightsholders, ESP Properties helps organizations unlock greater value from their audiences and brand partnerships. Our consulting team assesses and advises how to grow the value of rightsholders commercial programs. We do this through a full range of services across data, digital and content development to better understand audiences and create more relevant ways to engage with them. This provides brand partners with new ways to connect with communities of fans and followers, growing the potential value of commercial partnerships. Our sales team provides partnership strategy and sales representation to the world s most active sponsors, within and beyond the WPP network of brand clients. Through WPP we have extensive contacts and deep insights into what it takes to create successful partnerships. INSIGHTS EVALUATION GUIDANCE IEG LEADS THE WAY IN SPONSORSHIP ANALYSIS, INSIGHT, VALUATION & MEASUREMENT WWW. SPONSORSHIP.COM For more information about IEG and the sponsorshp industry, please visit or call IEG, LLC. ALL RIGHTS RESERVED. 12
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