IEG SPONSORSHIP REPORT THE LATEST ON SPORTS, ARTS, CAUSE AND ENTERTAINMENT MARKETING
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1 IEG SPONSORSHIP REPORT THE LATEST ON SPORTS, ARTS, CAUSE AND ENTERTAINMENT MARKETING MARCH 21, CATEGORY UPDATE SPONSORSHIP PRIMER: PAINT COMPANIES SEAL NEW DEALS Industry consolidation is expected to drive interest in national and international properties as companies look for global scale. Paint companies are putting a new sheen across the sports and entertainment landscape. Looking to engage customers and mine business from rightsholders, paint companies are expanding their sponsorship portfolios like never before. B2B and B2C companies over the past two years have signed a number of deals with properties ranging from professional soccer teams to PGA Tour events and motorsports leagues and teams. Recent deals include The Sherwin-Williams Co. and MLS Orlando City SC and Valspar Corp. and the Valspar Championship PGA Tour event, a partnership the company recently extended through The ties follow a flurry of activity in 2015 including Axalta Power Coating Systems USA, Inc. and the NFL Philadelphia Eagles; Rust-Oleum Corp. and the NBA Cleveland Cavaliers; and Sherwin-Williams and the Verizon IndyCar Series. SPONSORSHIP HOT BUTTONS IN THE PAINT CATEGORY Access hospitality for customers and prospects Gain business from sponsored properties Access IP for in-store promotions Access content for social media promotions Showcase product attributes The sponsorships come amid a backdrop of competitive pricing, increased competition and industry consolidation. Fueled by an 8.3 percent reduction in the cost of raw materials (namely oil), global paint sales rose 3.5 percent in 2015 to $128.2 billion, according to the World Paint & Coatings Industry Assn. The trade group categorizes the paint industry into three primary segments: architectural, industrial and special purpose coatings. Sales of architectural coatings accounted for 49 percent of total sales in 2015, according to the WPCIA. Sherwin-Williams proposed $11.3 billion merger with Valspar is expected to drive even more activity as the newlyformed company expands its global finishing business in Asia-Pacific, Europe, Africa and the Middle East. The merger will create the second-largest paint company in the world behind Amsterdam-based Akzo Nobel based on 2015 sales, per the WPCIA. The deal is expected to be completed by 2Q IEG, LLC. ALL RIGHTS RESERVED. 1
2 Sherwin-Williams is the most active sponsor in the paint category while Valspar is the fourth most active sponsor, according to IEG research. Fifty-four percent of North American properties with a sponsor in the category report a sponsorship with Sherwin-Williams while 10 percent report a partnership with Valspar. Sponsorship Activity In The Paint Category Sports receive the lion s share of sponsorship spending in the paint category followed by associations and causes, according to IEG research. Sports account for 47 percent of spending, associations 32 percent, causes 10 percent and arts/entertainment 8 percent. Local, regional and national apartment associations account for the majority of spending in the association sector. Sherwin-Williams, for instance, has partnerships with the National Association of Residential Property Managers, the Florida Apartment Association and a slew of other associations. WHERE PAINT COMPANIES SPEND MONEY (GLOBALLY) With a portfolio that spans pro sports, motorsports and a healthy dose of associations, Sherwin-Williams is by far the most active sponsor in the paint category. THE MOST ACTIVE PAINT COMPANIES (BY NUMBER OF DEALS) Fifty-four percent of properties with a sponsor in the paint category report a partnership with Sherwin-Williams IEG, LLC. ALL RIGHTS RESERVED. 2
3 IEG SPONSORSHIP REPORT THE LATEST ON SPORTS, ARTS, CAUSE AND ENTERTAINMENT MARKETING MARCH 21, SIDEBAR VALSPAR SEES SUCCESS WITH VALSPAR CHAMPIONSHIP Valspar is finding success with the PGA Tour Valspar Championship. The paint company this month extended its original fouryear contract with the Palm Harbor, Fla. tournament with a new partnership that runs through While Valspar uses the sponsorship to accomplish multiple objectives (client hospitality, support premium brand positioning, etc.), it has seen success in one primary area: building visibility in front of consumers. The company credits the sponsorship with generating a roughly 10 point increase in awareness. The company has aided awareness of more than 90 percent, up from roughly 80 percent prior to the sponsorship. While the Valspar brand is more than 200 years old, the company has made products for the consumer market for less than ten years. Our brand awareness is higher than it has ever been. It has increased immensely (as a result of the sponsorship), said Aaron Erter, Valspar senior vice president, paints. The sponsorship provides national reach via tournament broadcast coverage on the Golf Channel and NBC, he added. Valspar activates the partnership with internal sales promotions and consumer sweepstakes at Ace Hardware, Lowe s and other national retailers. On-site activation includes brand ambassadors and coupon distribution. The partnership includes status as the official paint supplier of the PGA Tour, a benefit Valspar plans to leverage on product packaging. Honestly, we haven t used that as much as we should. We plan to do more of that going forward. Valspar also sells paint to TPC golf courses, a benefit that helps balance out its awareness-building goals with corporate number crunchers. We have to have the right return for shareholders. Awareness is a key component, but the pure economics of being able to sell paint can be significant. Uses Chicago Fire To Reach Contractors and DIYers Valspar in late 2015 announced a multiyear jersey sponsorship with the MLS Chicago Fire IEG, LLC. ALL RIGHTS RESERVED. 3
4 Valspar whose paint business is headquartered in Chicago was drawn to the sponsorship for two primary reasons: a 10-month-long activation platform that includes the key spring-through-summer painting season; and the ability to reach multiple customer segments including families, contractors and professional painters, many of whom are Hispanic and Polish. The Chicago Fire replaces a partnership with the MLB Chicago Cubs. Source The Valspar Corp., Tel: 612/ IEG, LLC. ALL RIGHTS RESERVED. 4
5 IEG SPONSORSHIP REPORT THE LATEST ON SPORTS, ARTS, CAUSE AND ENTERTAINMENT MARKETING MARCH 21, SIDEBAR SPONSOR PROFILE: AXALTA COATING SYSTEMS As a business-to-business company that serves the auto industry, motorsports play a key role in Axalta s marketing strategy. The company uses its 24-year-old partnership with Hendrick Motorsports and other motorsports properties to entertain decision-makers with regional and national auto body shops and collision repair centers. Axalta which changed its name in 2013 from DuPont Performance Coatings after being acquired by the Carlyle Group treats customers and prospects to garage tours, driver meet-and-greets and other behind-the-scenes activities on race weekends. The hospitality program has evolved into a more targeted platform in the wake of the corporate buyout, said William Sturgill, Axalta s director of North American motorsports. While Dupont previously hosted upwards of several hundred people at each NASCAR race, Axalta focuses on a more targeted group of roughly 20 to 50 people. The rising costs of entertaining hundreds of people makes the economics difficult on getting a return on investment. Axalta also uses on-car assets as a relationship builder. The company earlier this month gave D Angelo s exposure on the back of the No. 88 car at the Good Sam 500 NASCAR Sprint Cup Series race at Phoenix International Raceway to help celebrate the distributor s 60th anniversary. It was a great way to give our customer some branding exposure and integrate them into our racing relationships. Axalta also uses the sponsorship to build relations with Hendrick Automotive Group, a corporate client. The company operates hundreds of dealerships and collusion repair centers around the country. The business relationship is not predicted on the sponsorship, notes Sturgill. We ve had a great relationship with Hendrick and have been able to keep their business. It s not because we have a team sponsorship, it s because we have a great product and great customer service. We produce for those guys. Axalta in 2016 kicked off a new partnership with Dale Earnhardt Jr. to replace its decades-old partnership with Jeff Gordon, who retired at the end of the 2015 season. Axalta will serve as the primary sponsor of the No. 88 car for 13 races in the 2016 NASCAR Sprint Cup Series IEG, LLC. ALL RIGHTS RESERVED. 5
6 Axalta has further expanded the relationship via sponsorship of JR Motorsports Web site, weekly videos, podcasts and other digital platforms. We want to be a good partner, and it helps build out our social media, said Sturgill. Axalta s NASCAR program isn t limited to Hendrick and JR Motorsports. The company also sponsors Kyle Busch Motorsports and Stewart-Haas Racing as well as teams in the Verizon IndyCar Series (Ed Carpenter Racing), the NHRA (Mike Skillman Motorsports) and the AMSOIL Championship Snocross, powered by Ram (Polaris Racing & Judnick Motorsports). The sponsorships help appeal to the varied tastes of customers and prospects, said Sturgill. Leverages Philadelphia Eagles To Promote STEM Education Axalta in 2015 partnered with the hometown NFL Philadelphia Eagles to support its CSR mission that focuses on STEM education, sustainability and corporate citizenship. The Eagles approached Axalta about a teacher recognition program modeled after Hometown Heroes, a program that honors military veterans. The sponsorship affords presenting status of All-Pro Teachers, a program that recognizes outstanding teachers in the Tri-state area. Axalta honors the winning teacher with a donation to their school, a pep rally, a vacation with his/her spouse and recognition at an Eagles home game. Most people don t think about paint companies as technology companies. We want students to study STEM education because they re our future employees, said Joe McDougall, Axalta global senior vice president and chief human resources officer. Source Axalta Coating Systems, LLC, Tel: 855/ IEG, LLC. ALL RIGHTS RESERVED. 6
7 IEG SPONSORSHIP REPORT THE LATEST ON SPORTS, ARTS, CAUSE AND ENTERTAINMENT MARKETING MARCH 21, STRATEGY HOW BAI IS USING SPONSORSHIP TO ENGAGE CONSCIOUS AUTHENTICS Beverage company ramps up sponsorship to engage socially-conscious consumers. Bai Brands is ramping up marketing to drive sales of its better-for-you beverages, with sponsorship playing a central role. Fresh off its first Super Bowl ad, the company has signed new partnerships with the Tribeca Film Festival, the New York City premier of Batman v Superman: Dawn of Justice and the first-ever Panoroma music festival. The six-year-old company markets water and teas including Bai (enhanced water), Bai Bubbles (sparkling enhanced water) and Antiwater (pure water infused with antioxidants and electrolytes). The company launched Bai Superteas a line of truly brewed teas this past weekend at the Batman v Superman premier in New York City. Bai markets the products with the None Of This Makes Sense tagline to play up the fact that healthy drinks typically do not taste good. The definition of health has evolved over the last 10 years. It used to be about taking the bad stuff out of beverages. Now it s about keeping the good stuff in, said Michael Simon, Bai Brands CMO, who joined the company in 2014 after holding the same title at Panera Bread Co. Bai is using the marketing push to engage Conscious Authentics, an audience segment comprised of health conscious consumers in their early 30s who look to do business with transparent, authentic and socially responsible companies. Bai identified the customer segment last year as part of a quantitative segmentation survey. While the segmentation study identified Bai s core customer base and what is meaningful to them, it also revealed that less than 7 percent of the U.S. population has heard of the company and its products. While awareness of Bai may be low, consumers who sample the drinks convert to repeat purchasers at a rate significantly higher than competing products, said Simon. It reinforces the fact that the product tastes great IEG, LLC. ALL RIGHTS RESERVED. 7
8 Our objectives in 2016 are driving awareness, consideration and trail through advertising, earned media and partnerships. The company is using sponsorship to generate trial, access content and promote the brand s authentic, youthful personality, said Simon. Many people only know us by what they see on the shelf. We want to be culturally relevant by aligning with events that help define the brand and let people see what our personality is. The Tribeca Film Festival affords exclusivity in the water and flavored water categories, sponsorship of two red carpet premiers and pouring rights at more than 70 events including Spring Studios, the festival s primary hub. Bai is still developing activation plans for the July Panorama music festival. Panorama is not Bai s first involvement in music. The company in 2015 sponsored the Zac Brown Band s North American tour. Bai activated the sponsorship with a social media contest that offered fans the opportunity to create a Bai-based cocktail ( mocktail ) inspired by a song from the band s new album. The winner received a VIP experience that included a band meet-and greet. Bai activated the sponsorship at retail by offering a free song download from the artist s new album with the purchase of three products. And additional deals with music and other events may be in the works. We ll continue to be aggressive in this space. Our customer is very much a part of these culturally relevant events. We re built on the notion of a full flavored life, and that includes art, music, entertainment, fashion and social responsibility. Bai is distributed nationally by Dr Pepper Snapple Group, which purchased an equity stake in the company in Source Bai Brands, Tel: 855/ IEG, LLC. ALL RIGHTS RESERVED. 8
9 IEG SPONSORSHIP REPORT THE LATEST ON SPORTS, ARTS, CAUSE AND ENTERTAINMENT MARKETING MARCH 21, SPONSOR PROFILE HOW ALLEGIANT AIR IS USING NASCAR TO SUPPORT VACATION BUSINESS Airline leverages motorsports series to access cosponsor inventory. Consumers play just one part of Allegiant Air s new NASCAR partnership. The low-fare carrier will use the new three-year sponsorship to access travel package inventory from NASCAR cosponsors. The airline sells package vacations including trips to Daytona, Fla. and other NASCAR markets. Allegiant plans to access the inventory through the NASCAR Fuel for Business Council, ( The Growing Popularity of B2B Networking Councils 2/01/16) a series of quarterly meetings designed to facilitate businessbuilding opportunities among NASCAR sponsors. We re primarily an airline, but we also sell hotel rooms, car rentals, show tickets, and later this year, a cobranded credit card. There is value in reaching out to other businesses to explore how we can both provide more value to our customers, said Jessica Wheeler, Allegiant director of marketing communications. Commissions on auto rentals, hotels and other sales reportedly represent up to one-third of the airline s revenue. NASCAR and Allegiant announced the sponsorship earlier this month at Fuel for Business Council meetings in Las Vegas, the location of the airline s corporate headquarters. The NASCAR sponsorship is not Allegiant s first foray into motorsports. The airline over the past several years has sponsored Spencer Gallagher in the NASCAR Camping World Truck Series and ARCA Racing Series presented by Menards. Gallagher is the son of Maurice Gallagher, Jr., Allegiant Air CEO. We have long known there is an overlap of NASCAR fans and potential Allegiant Air customers. They are very loyal to the sport and supporters of the sport. The association with a sport where crashes are common is not an issue, said Wheeler. Quite simply, both NASCAR and Allegiant have one goal in mind every day: safety. Safety is our number one priority every single day. The sponsorship affords presenting status of NASCAR Go West, a marketing platform that will run in conjunction with the motorsports series annual West Coast swing. Allegiant will gain visibility via content on drivers off-track activities on NASCAR.com and messaging with the #NASCARGoesWest hashtag IEG, LLC. ALL RIGHTS RESERVED. 9
10 Allegiant will not provide travel to NASCAR as part of the sponsorship, said Wheeler. The NASCAR sponsorship builds on a portfolio of local and regional properties ranging from music and food festivals to pro sports teams. Ties include the NFL Cincinnati Bengals, Jacksonville Jaguars and Indianapolis Colts. We look for opportunities to connect with communities we re in, have face to face connections and make consumers aware of our product. Source Allegiant Travel Co., Tel: 702/ IEG, LLC. ALL RIGHTS RESERVED. 10
11 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. 11
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