Anheuser-Busch, Browns Unlock A Winning Sponsorship Opportunity   BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      The only thing arguably better than beer is free beer. That is exactly what Anheuser-Busch (AB) and the Cleveland Browns have  announced  with their most recent sponsorship activation. Starting yesterday, Anheuser-Busch is “placing eight-foot ‘Victory’ fridges filled with Bud Light bottles into 10 Cleveland-area bars that purchased them. When the clock strikes zero on the Browns' first win the electromagnet that keeps the fridges locked will be turned off through a WiFi connection, opening all of them for fans to enjoy free of charge.”  Anheuser-Busch likely understands that many of its customers are NFL fans. It is one reason that Bud Light is currently the official sponsor of 28 out of 32 NFL teams and of the NFL itself. In addition, B6A has highlighted in previous  posts  that being an exclusive sponsor of sports rights holders can increase revenue particularly for large events such as the Super Bowl.  However, category exclusivity should not be the only way that companies generate value through these partnerships. What brands are looking for is to find unique ways to activate sponsorships that drive customer engagement and increase brand perception. More traditional activations may have more difficulty in driving interest to core customers in the ways they are looking to consume content.     That is exactly what this activation between AB and the Browns (who are a B6A Client) accomplished with the Victory fridges. The only team that would have the opportunity to have this type of partnership is unfortunately the Browns (because the team did not win a game last season and only won one the season before). Therefore, there is real interest about when the Victory fridges will actually open. The only beer company that could take advantage of this situation is AB because the company is the official sponsor of the team.  B6A is already seeing the results of this activation through Twitter results from our  Social Sentiment Analysis Platform (SAP)  since Tuesday. A sample is provided below with B6A’s value calculations factor in both sentiment and engagement on a per post basis into the final results. This includes:   Earned media - Darren Rovell has multiple tweets that have generated $18,672.34 of value with 1,540,927 impressions.  Owned and Operated  Bud Light – Multiple tweets that have generated $1,235.77 of value with 101,982 impressions.   Browns – One tweet that has generated $4,601.47 of value with 379,734 impressions.     Even with the initial positive results, this was not an easy decision for either side of this partnership. AB has very publicly stated that the  company  wants to incentivize its partners based on their on-field, on-court, on-ice, etc. performance given that winning leads to higher sales and consumer engagement. Even though it expects to perform much better this year than in the previous two years, the Browns do not want to emphasize how they struggled in the past. The Victory fridges seem to do the exact opposite of what both AB and Browns would want to highlight.  Yet, this decision is the right one for both sides of this partnership. AB shows that it will work with the team to determine new ways to activate that help the company achieve its goals even when the team’s on-field performance is struggling. The Browns show how the team can leverage losing to create new activations while also taking advantage of winning when the team does perform better. Bringing beer to fans enables both the team and its partner to celebrate victory even before the Browns win a game.   

BY ADAM GROSSMAN

Anheuser-Busch, Browns Unlock A Winning Sponsorship Opportunity

The only thing arguably better than beer is free beer. That is exactly what Anheuser-Busch (AB) and the Cleveland Browns have announced with their most recent sponsorship activation. AB and the Browns found a unique ways to activate a sponsorship that drives customer engagement and increases brand perception.

       Sponsorship Is Key To Esports Industry’s Growth   BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      Esports industry revenues are expected to  grow  from $655 million in 2017 to $905.6 million in 2018 with 40% of those dollars coming from sponsorship. Despite this success, potential esports sponsors still have several questions particularly from companies that are non-endemic to the space. As Seven Leagues senior consultant Charlie Beall  states , “You can sponsor players, who are often young and commercially naïve; a team, whose managers who are equally young and commercially naïve; or a competition, which have few trustworthy and established players.”  Some of these concerns articulated by Beall are rapidly diminishing as seen most recently by the success of Activision Blizzard’s Overwatch League (OWL). After  selling  12 franchises to industry leaders including New England Patriots owner Robert Kraft, New York Mets COO Jeff Wilpon, and Los Angeles Rams owners Stan and Josh Kroenke for $20 million and selling out the Barclay’s Center for the OWL finals, Activision Blizzard franchises are now being sold for $30-60 million. OWL also recently announced a new  broadcast rights  deal with ESPN to complement its $90 million, two-year deal with Twitch.  While esports continues to mature in its development, the OWL does highlight a challenge to its future growth. Much of the revenue articulated in the OWL example is accrued by Activation Blizzard as the game publisher of Overwatch. Game publishers  receive  the bulk (if not all) of the franchise, streaming, and broadcast fees for esports leagues rather than having that revenue shared among the teams as is the case with most other professional sports leagues.  For esports franchises and athletes to be successful, they must be able to sell sponsorship to both endemic (i.e., those with natural ties to esports) and non-endemic sponsors. The main question for non-endemic sponsors is why are esports valuable to my specific business. As managing director of M&C Saatchi Sport & Entertainment Jodie Fullagar  states , “Not all brand sponsorship decisions are solely based on reach, but to get bigger budgets, esports will need to understand the value beyond eyeballs.”  Block Six Analytics (B6A) currently works with multiple esports teams to specifically answer this question. We use the technology and analytics in our  Partnership Scoreboard  platform to show non-endemic partners why working with an esports team would or would not be a good fit for their brand.  This starts with employing our Corporate Asset Valuation (CAV) model to map out each partner’s brand and revenue goals on to a specific esports activation. We then look to see how esports activations can help a company generate new revenue and / or better engage with target demographics. The goal here is to clearly demonstrate how a specific company generates specific value from a specific opportunity.  By mapping out a company’s goals and specifically demonstrating how an esports activation helps partners achieve these goals, the CAV helps franchises, players, and their partners see how value is created in esports activations. This enables rights holders to demonstrate to a non-endemic partner how a company will benefit from a relationship while non-endemic sponsors can clearly evaluate if this opportunity makes sense for their business.  Reach is still an important component of an esports sponsorship. It is better to reach a larger number of a company’s key demographic when possible. B6A’s integration with Twitch’s public API determines audience size on a minute-by-minute basis. We then use our  Media Analysis Platform  (MAP) to determine the value resulting from brand logo exposure in streaming video on the platform within 72 hours after a game, event, or series.  Logo exposure is only one potential activation for esports franchises and players. Social media conversation, social branded integration in image and video, earned media conversation, in venue, experiential marketing, and corporate hospitality activations can best be monetized by franchises and players if partners understand their value to their specific businesses.   If this seems like a similar approach to that which B6A uses for other professional rights holders that is because it is a similar approach. The core question of why a company wants to work with any rights holders are the same in esports as they are with any rights holders. Each company wants to know how each sponsorship helps it meet its revenue and brand goals. For the esports industry to continue its growth, franchises and players will need to be able answer that question.

BY ADAM GROSSMAN

Sponsorship Is Key To Esports Industry’s Growth

While esports continues to mature in its development, the OWL does highlight a challenge to its future growth. Much of the revenue articulated in the OWL example is accrued by Activation Blizzard as the game publisher of Overwatch. Game publishers receive the bulk (if not all) of the franchise, streaming, and broadcast fees for esports leagues rather than having that revenue shared among the teams as is the case with most other professional sports leagues.

       NBA Makes A Good Bet On Gambling Sponsorship   BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      One of the biggest challenges in the era of big data is monetization. How do you monetize information at a time when so much data is being created? One answer to that question is to find an immediate use case where the information an organization generates addresses a critical business challenge.  That is exactly what the NBA has done in its new deal making MGM Resorts its official gambling partner. This new relationship is generating significant attention because it is the first of its kind in a major professional sports league. Yet, that is really not the most significant component of this deal. It is that the NBA could be providing a blueprint for how leagues can monetize their official data across multiple partnerships.  In a previous  post , I stated that the U.S. Supreme Court’s decision to strike down the Professional and Amateur Sports Protection Act of 1992 (PASPA), effectively making gambling on sporting events legal in the U.S., would benefit sports organizations because it would open new sponsorship opportunities. The NBA’s partnership with MGM is a good example of this new dynamic.  MGM  now has the ability “to use official NBA data and team logos across its domestic resorts and mobile sports-betting apps.” Gambling is reliant on having the most accurate data. Both sides of a betting transaction need to ensure payouts are based on the correct outcome of any event.  It is difficult to argue that the most accurate NBA data could be anything but the “official NBA data” provided by the league. As the NBA’s exclusive gambling partner, MGM Resorts can now position itself to current and potential customers as having the best data both in its casinos and mobile apps.  That provides a distinct competitive advantage and should help MGM Resorts generate incremental growth because of its first-to-market relationship with the NBA. Because legal sports gambling is novel in the U.S., there is a reasonable concern that sports fans would not be sure where to go for gambling to ensure that they are not “cheated” in transactions. Being the first company that has official data enables MGM to alleviate these concerns for NBA bets and maximize the probability of capturing a significant share of the early gambling market.   This is not the only reason that being first-to-market is a key distinction in this new deal. As  The New York Times   explains , “While MGM will be the league’s exclusive gambling partner for marketing purposes, most of the rest of the agreement is not exclusive…The N.B.A. is eager to have every company offering sports betting use official league data and work with league officials to prevent manipulation.” In fact, the NBA already had already signed a six-year data distribution deal with Sportradar and Second Spectrum in 2016 worth a  reported  $250 million over the life of the agreement. Sportradar is arguably best known outside of the U.S. for providing data for and monitoring gambling activity abroad.  Yet, the NBA was also able to sign MGM Resorts to a three-year deal worth a  reported  minimum of $25 million. Why would MGM agree to this deal given the NBA’s previous relationship with Sportradar. Both MGM and Sportradar can credibly say they have official NBA data. However, MGM can only use the data in  its  “domestic resorts and mobile sports-betting apps” while Sportradar can  provide  “data and audio-visual game feeds to gaming operators outside of the United States.”  These two agreements demonstrate how the NBA can monetize the same data in multiple relationships. This is exceedingly rare in the sports industry where exclusive deals mean that only one company can benefit from their relationship with their rights holders. While both MGM and Sportradar derive clear benefits from their relationships with the league, the NBA is arguably the biggest winner. It is a blueprint that other leagues are likely to follow to maximize revenue from gambling partnerships.

BY ADAM GROSSMAN

NBA Makes A Good Bet On Gambling Sponsorship

One of the biggest challenges in the era of big data is monetization. How do you monetize information at a time when so much data is being created? One answer to that question is to find an immediate use case where the information an organization generates addresses a critical business challenge. That is exactly what the NBA has done in its new deal making MGM Resorts its official gambling partner. This new relationship is generating significant attention because it is the first of its kind in a major professional sports league. Yet, that is really not the most significant component of this deal.

       Blockchain’s Potential Impact On Sports Media And Sponsorship   BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      Even though we have Block in our name, Block Six Analytics is not a blockchain company. However, we do see blockchain technology impacting our business in ways that are likely to surprise many in the sports industry. More specifically, blockchain could alter sports media and sponsorship in counterintuitive ways.  To start, we will give a brief summary of what blockchain is as there several books, documentaries, and articles that can provide a fuller description. Let’s look at the area where blockchain first became famous – currency. For money to change hands, a buyer needs to submit a form of payment (i.e. cash, check, or digital payment) and the seller needs to receive the payment. A clearing house needs to ensure that a transaction only occurs once (i.e., a person does not use the same check for two different transactions) and that both parties can be involved in a transaction. Banks, credit card companies, and digital payments providers (e.g., PayPal) provide this service for a fee as private companies.  Blockchain technology, typically via cryptocurrency, changes this type of transaction. The way that cryptocurrency works is based on everyone in a network having a public and private cryptographic key. The public key serves like the routing and account number on a check. It lets everyone involved in the transaction know that a specific person that is making the transaction and is derived mathematically from a public key. The private key is like your signature on a check. Rather than writing a person’s name, the private key an extremely long series of numbers and letter that only that person knows and is  difficult to determine  by another person or computer. When a transaction occurs, high powered computers are  mining  the network for a new “block” (i.e. receipt of that transaction) by decrypting a “hash” (a complex series of letters and numbers). To incentivize mining in the network, the first computer in the network to successful mine a transaction receives a new portion of currency. Transactions all are recorded in a “public ledger” with unique blocks of transactions that include people’s public keys that can be seen by everyone in the network.      What does any of this have to do with sports? Cryptocurrency enables everyone in a network to trace every transaction by looking at the blocks in public ledgers. In sports, one of the most difficult things to track right now are tickets. When a team sells a ticket, it is a challenge to determine if a person used the ticket, sold the ticket on the secondary market (i.e., StubHub or SeatGeek), gave it to a friend, or did not use it at all. Advances in digital ticketing and Major League Baseball’s new relationship with  Clear  make this significantly easier. In particular, scanning tickets on a phone or letting fans “enter stadiums using fingerprints, and eventually, just their face, instead of tickets” makes it much easier for teams to track whom and when someone is using a ticket.  However, this still requires fans to opt-in to a team’s specific ticketing platform or to participate with a vendor like in Clear. If that does not occur, then a team will still have difficulty tracking a transaction, particularly if it occurs outside of its network. Blockchain for tickets will eliminate these issues because all transactions would be public and decentralized. Every team (and potentially their sponsors) could see every part of the transaction through the public ledger and track each part of the ticket’s journey through a block. This would potentially eliminate counterfeit tickets and payment processing because each ticket would be tracked no matter where it is sold. There are several  companies  currently exploring how to apply blockchain technology to tickets but are still in early stages.  Yet, ticketing may not be the most interesting application of blockchain technology in sports. In his recent book     Life After Google: The Fall of Big Data and the Rise of the Blockchain Economy  , George Gilder argues that Google has helped to lead to the creation of the “aggregation and advertising” model as the primary way to monetize content. The reason is that there is so much content it is difficult to know who is consuming it or when it is being consumed at any time. In addition, people are not charged by the amount of content they consume. Therefore, content has ads in the form of banners, pop-ups, pre-roll, mid-roll, etc. that interrupt the experience or audiences have to go through an inefficient process to pay for content.  Sports is extremely susceptible to this problem particularly when comes to watching games. Historically, much of sports content has been free. The traditional way to consume a game is to have it “interrupted” by ad breaks or the “Playing Through” concept seen in NBC’S broadcast of the British Open where ads are run next to a live broadcast. In addition, customers of cable or satellite companies are not happy with the increase in their bills to pay for sports they may or may not be watching. As more content moves to digital and / or over the top (OTT) channels, consumers have to go through paywalls where people typically have to fill in their credit or banking information, pay a flat fee, and wait for the transaction to process.  Blockchain technology would eliminate most if not all of these issues with sports media in a way described in more detail in Gilder’s book. He states that Blockchain technology would enable the currency to become the “messenger” of content. More specifically, content would essentially contain an embedded code then, when accessed, would automatically charge the consumer. The transaction would be recorded in a public ledger in block format automatically and be tracked in a similar form to the way currency is tracked as described above.  Knowing and generating revenue for the content that people actually consume could be a boon to the sports industry. Sports content is still in high demand as demonstrated by how many of the  top-watched programs  every year are sporting events. Rights holders can not only charge people every time they consume content but also track exactly where the content is seen. This would make it extremely efficient to remove any illegal broadcasts or streams of content because teams, leagues, etc. would know exactly where that activity is occurring by examining the public ledger. In addition, audiences would have an easier time accessing content they want while watching shorter games because there would be less need for ad breaks. This likely would increase the number of people watching sporting events and increase revenue for rights holders and / or broadcasters as games become more popular over time.    Counterintuitively, this likely makes traditional sponsorship more valuable. Sponsors still want to reach large audiences that are engaged in content. If commercials are limited or eliminated completely then companies will need to activate within the content itself. Sports is already in position to do this via stadium signage and jersey logo activations. More specifically, sports audiences are already accustomed to seeing company signage and logo activation when watching games. It is not clear if that would be the case with other entertainment content as product or logo placements have received  mixed reviews . Therefore, “traditional” sponsorship can potentially be the most “lucrative” asset in a blockchain content world.  Blockchain is still in its very early stages, both inside and outside of the sports industry. We are still a long way from blockchain impacting ticketing sales let alone media and sponsorship. However, blockchain does provide the opportunity for sports organizations to develop novel solutions to many of the industry’s most pressing challenges.

BY ADAM GROSSMAN

Blockchain’s Potential Impact On Sports Media And Sponsorship

Even though we have Block in our name, Block Six Analytics is not a blockchain company. However, we do see blockchain technology impacting our business in ways that are likely to surprise many in the sports industry. More specifically, blockchain could alter sports media and sponsorship in counterintuitive ways.

       What Is Managed Should Be Measured In Sponsorship   BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      Famed management consultant and professor Peter Drucker is arguably most well-known for the  axiom , “What gets measured gets managed.” That is one reason why the results of a recent study of sports partnerships by the Association of National Advertisers (ANA) are so surprising. The ANA found that  only  “37% of respondents reported having a standardized process for measuring their return on sponsorship.”  These results are the complete opposite of what Drucker would advise for the way that sponsorships are being managed. Sponsorship sales have increased 22% in 2018 since a 2013 ANA study. The billions of dollars being spent on sponsorships requires that buyers and sellers have people whom manage each phase of the process including (but not limited to) sales, account management, and activation. So why are so few sponsorships being measured?  One answer is that most current metrics do not answer a basic question: Why is a specific sponsorship valuable to a specific company? In standard financial asset valuation, there are typically three approaches used to determine how much something is worth. They are:   Comparable Valuation – What are other companies paying for the same asset?  Relative Valuation – What is a common ratio that can be applied to the same type of asset?  Inherent Valuation – What is the asset supposed to produce?   The problem is that most current metrics used in the sports industry commonly have been dependent on the first two approaches. In particular, relative valuation is used as the backbone of many analyses. Common relative valuation metrics are:   Cost per thousand impressions (CPM)  Cost per engagement (CPE)  Cost per click (CPC)  Cost per acquisition (CPA)   The challenge with these relative valuation metrics is that they are reliant on volume. The more impressions, engagements, etc. an asset produces then the more value that is generated for a partner. The problem with this idea is that having a higher volume does not always equal more value.  The most common example we use to explain this at Block Six Analytics (B6A) is the difference between a business-to-consumer (B2C) company vs. a business-to-business (B2B) company. B2C companies typically do want to reach larger audiences because their revenue is usually dependent on a large number of individuals making small purchasing decisions. B2B companies have the opposite challenge in that they have a small number of customers making large purchasing decision. For B2B companies, targeting the relatively few buyers making these enterprise-wide decisions is significantly more important than reaching a large audience.  This situation shows why different companies would receive different value from the  same sponsorship asset . Yet, a relative (or a comparable) valuation approach would not capture this difference. The question becomes: why measure sponsorship if we cannot determine how valuable an asset is for each company.  An inherent valuation approach can answer this question. More specifically, a sponsorship asset should produce two things:   Return on Investment (ROI) – does the asset maximize the probability of a company increasing its top-line revenue.  Return on Objectives (ROO) - does the asset maximize the probability of a company increasing its brand engagement, sentiment, and / or awareness.   One natural question is: what does maximize the probability mean? The answer is: does the asset reaching the right people with the right message in the right channel. Right then is defined by: are these people likely to increase a company’s ROO and ROI. Each company will have different “right” people based on the products, services, goods, etc. it is trying to sell. That is why different assets can and should have different values to do different companies.  ROO is also an important element in this type of analysis. For customers to make a purchasing decision, they often have to know and have a positive relationship with a brand. Companies have the flexibility to determine how much to weigh ROI and ROO by using a more inherent valuation based approach.  One of the other common challenges to standardizing valuation is that most relative metrics are created from a media or digital perspective. How does a quantity-based approach apply to something like corporate hospitality or events that typically have much smaller audiences and are becoming a bigger component of sponsorship spend?  An inherent based valuation approach also answers this question. Because it is focused on ROI and ROO, an inherent valuation can more effective determine how much these types of assets are worth. More specifically, an asset should be more valuable if the customers that generate the most revenue are spending more time with the sponsorship partner in a unique environment that generates positive brand associations.  An inherent valuation can be more difficult to complete and can require  expertise  in financial analysis. In particular, both buyers and sellers (and agencies that work with both) have to pursue a deeper dive into a company’s data and information to learn what drives ROI and ROO. Yet, despite the difficulties, this is the approach that most likely will provide the answer to the question of how much a sponsorship asset is worth to a specific company. Knowing the answer to that question ensures that sponsorships are both effectively managed and measured.  

BY ADAM GROSSMAN

What Is Managed Should Be Measured In Sponsorship

Famed management consultant and professor Peter Drucker is arguably most well-known for the axiom, “What gets measured gets managed.” That is one reason why the results of a recent study of sports partnerships by the Association of National Advertisers (ANA) are so surprising. The ANA found that only “37% of respondents reported having a standardized process for measuring their return on sponsorship.” So why are so few sponsorships being measured?

       Why Criminally Engaging Content Is Good For Sports   BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      Marketers, teams, leagues, events, and athletes often state that a sports partnership delivers engaging content that resonates with companies’ core audiences in unique ways. A recent post in  The   New Yorker , however, may contain some of the most compelling and surprising evidence yet to prove this point.   The post highlights recent research conducted by social-science researchers at the University of California at Davis that discovered “decreased crime rates with major televised sports events.” In a study focused on Chicago sporting events, the authors found that:   On Monday nights when the Bears were playing, crime in Chicago was down thirteen per cent—property crimes by three per cent, violent crimes by eleven per cent, and drug crimes by nearly thirty per cent—compared to the same Monday-night time slot when the Bears were off. Crime was consistently lower, though to a smaller degree, during N.B.A. finals games, Bulls playoff games, and Cubs and White Sox playoff games, regardless of whether the games were played at home or away. The Super Bowl had the biggest impact. During the three-plus hours of the game, crime fell by an average of twenty-five per cent—property and violent crimes by roughly fifteen per cent and drug crimes by more than sixty per cent—which amounts to about sixty fewer crimes.   The other crucial finding from the research is that there were not offsetting crime increases when games were not being played. With the exception of the Super Bowl, crime patterns were “cancelled” by sporting events. More specifically, crime rates did not change around sporting events meaning that criminals were not just time shifting to before or after games to commit crimes.   The authors of the post recommend that this evidence shows that more sporting events should be played in the summer when “rates are highest” to help combat crime. There is a more practical application of this research to the sports industry. As we have mentioned in previous posts, B6A has found the companies are no longer looking for the content that reaches the largest audience. Instead, many sports sponsors are specifically looking for highly engaging content that commands an audience’s attention. It is difficult to think of a clearer piece of evidence (sports is so compelling that it stops crime) that would resonate with sports sponsors.    There are clearly some limitations to this study. The authors only focused on the city of Chicago and the event with the largest impact, the Super Bowl, did not see crime “cancelled.” From a partnership / sponsorship perspective, virtually every company is not looking to target criminals, so a decrease in crime does not necessarily mean an increase in the ability to reach a targeted demographic.   This story, however, does create a compelling narrative for sports rights holders to communicate why sports represents uniquely engaging content. Combining a compelling narrative (sports is so engaging that it even stops crime) with quantitative evidence (reduced crime rates during sporting events) should create a clear way to communicate to companies why sports provides a unique way to engage their customers. 

BY ADAM GROSSMAN

Why Criminally Engaging Content Is Good For Sports

Marketers, teams, leagues, events, and athletes often state that a sports partnership delivers engaging content that resonates with companies’ core audiences in unique ways. A recent post in The New Yorker, however, may contain some of the most compelling and surprising evidence yet to prove this point. 

      Giving The Companies What They Want For Sponsorship Valuation  BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      Multiple people sent B6A a copy of AdAge’s most recent post  titled  “MARKETERS DEMAND MORE (AND MORE) FOR SPORTS SPONSORSHIPS.” This article focuses on Anheuser-Busch InBev's (AB InBev’s) new approach to sponsorship  where  “leagues and other so-called rights holders get paid more if they reach certain goals, like making the playoffs.”  The reason that AB InBev is implementing this strategy reflects a fundamental shift in how partners approach the space. In particular, partners want to know the answer to this question: Why is a specific sponsorship good for my specific company? For  AB InBev , “Fans of winning teams buy more tickets—and ultimately more beer.” With its relationship with the Minnesota Timberwolves, the team will be paid more if market share in Minneapolis and St. Paul jumps over the next 12 months.  Having sponsorship tied to the specific revenue and marketing goals of each partner is at the  heart of B6A’s approach to sponsorship valuation . Our technology and analytics are specifically designed to answer the questions that companies like AB InBev are asking. It is why so many people sent us this post.  However, there are some key differences in our approach versus AB InBev’s when it comes to valuation. Having sponsorship tied to on-field, on-court, on-ice, etc. performance goals is a strategy that may or may not work well for partners as we have discussed  here . In this specific case, AB InBev has the right approach because winning does appear to drive sales for their products (at least inside the Target Center, where the Timberwolves play).  Yet, relying on sales outcomes is not always the best approach when looking at sponsorship ROI, even when examining it from a revenue perspective. In the AB InBev example, the company appears to be looking at the results (or dependent variable) rather than looking at the process (or independent variable) that could be causing the results.   More specifically, how does AB InBev know if increases in market share in the Twin Cities has to do with the Timberwolves? If the share goes up but there is no direct attribution to the team then does it still get rewarded?  What if the Timberwolves do everything right but sales do not increase because of external factors? For example, what if there is an unusually cold winter in Minneapolis (which would be saying something) and people buy less beer because they are less likely to go to the store. This has nothing to do with whether the Timberwolves activated the sponsorship directly but the team could still be penalized for not increasing sales.   B6A’s approach focuses on maximizing the probability of success from both a revenue and brand perspective. Each company has different business goals, customer types, and brand metrics that are important to them. Is the rights holder putting a company in the best position to target the right people at the right time with the right message to increase customer acquisition, customer retention, brand perception, brand awareness, and / or brand sentiment?  In addition, is the company receiving a lift on these core metrics by partnering with a rights holder above and beyond what it could receive on its own or potentially through other opportunities?  It is certainly possible that AB InBev could have put something similar to this approach in place and it was not reported in the AdAge post. The larger point is that AB InBev is asking the right question that is becoming the industry standard – How does this partnership specifically benefit my company? Rights holders and agencies need to be able to answer this question and B6A can help with the solution.

BY ADAM GROSSMAN

Giving The Companies What They Want For Sponsorship Valuation

Multiple people sent B6A a copy of AdAge’s most recent post titled “MARKETERS DEMAND MORE (AND MORE) FOR SPORTS SPONSORSHIPS.” This article focuses on Anheuser-Busch InBev's (AB InBev’s) new approach to sponsorship where “leagues and other so-called rights holders get paid more if they reach certain goals, like making the playoffs.” The reason that AB InBev is implementing this strategy reflects a fundamental shift in how partners approach the space. In particular, partners want to know the answer to this question: Why is a specific sponsorship good for my specific company?

      Why A Run On Beer In Russia is Good for Budweiser  BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      It is never a good thing to run out of beer. To run out of beer during the world’s largest sporting event seems to be a particularly big “problem.” However, that appears to be exactly what is happening in Russia during the 2018 World Cup. As  Reuters  recently reported, “Beer-guzzling fans risk drinking parts of Moscow dry, with some bars and restaurants in the Russian capital saying they are running low and having to wait longer than usual for fresh supplies.”  This increase in beer consumption during the World Cup appears to be a surprise. Beer sales had declined in Russia for the  past decade  and none of the major beer companies expected a significant reversal of this trend.  So why is supply not keeping up with the demand and why is this potentially good news for the World Cup’s official sponsor Anheuser-Busch InBev? One answer could come from research from the journal  Marketing  Science that we featured in past blog post about the  effectiveness of Super Bowl  television ads. The authors completed a multi-year study focused on Budweiser (and Pepsi) and found that there was an increase in sales before and during the Super Bowl in part because customers associated consuming the products of these companies with sporting events. It was also critical that Budweiser and Pepsi were the only official partners in their category during the Super Bowl to see those increases in sales.  The same thing seems to be happening in Russia. Potential increases in beer sales means that there is a good possibility that there is disproportionate increase in Budweiser sales during the World Cup because it is the only official  FIFA partner  for beer. While  Anheuser-Busch  “did not immediately respond to requests for comment” about beer sales, Heineken stated, “sales were so far going well and it did not yet see any challenges supplying its beer.”  Another benefit for Budweiser is that these sales increases could continue around sporting events after The World Cup. The  Marketing Science  authors saw spikes in sales for Budweiser (and Pepsi) throughout the year but really only around sporting events that occurred after the Super Bowl. Budweiser may be in a similar position to see these spikes for other sports after the World Cup.  To be clear, the evidence here does not mean that Budweiser will automatically see a positive ROI for its FIFA partnership. However, the early evidence suggests that could be the case even though the World Cup is being played in a country not known for its beer sales and that had actually seen beer sales decline in recent years.

BY ADAM GROSSMAN

Why A Run On Beer In Russia is Good for Budweiser

It is never a good thing to run out of beer. To run out of beer during the world’s largest sporting event seems to be a particularly big “problem.” However, that appears to be exactly what is happening in Russia during the 2018 World Cup. So why is supply not keeping up with the demand and why is this potentially good news for the World Cup’s official sponsor Anheuser-Busch InBev?

       Block Six Analytics’ Media Analysis Platform Outperforms Google and Amazon Computer Vision Products   BY JOSHUA L. HERZBERG AND ALEXANDER CORDOVER  Block Six Analytics’ (B6A) Media Analysis Platform ( MAP ) analyzes sports video broadcasts to compute how long in-stadium signage appears on screen. However, other computer vision products like Amazon’s   Rekognition   and Google’s   Cloud Vision   can also perform this task. Both offer  text localization (finding text in a video frame) and optical character recognition (reading the text)  services akin to what MAP offers. But which product is most accurate?  To evaluate and compare the products, we conducted experiments on one 3.5-hour game video. This amounts to analyzing 50,350 frames We tested each algorithm’s capability to identify how often Delta Airlines and Verizon Communications signage appeared on screen. The images contained static and visual signage for both companies. The Delta signage appeared on screen for 9 minutes 22 seconds while Verizon signage appeared for 14 minutes and 18 seconds.  To evaluate the products’ algorithms, we compare the predicted results to the actual presence of signage in the image.  When an algorithm analyzes a frame from a video, we compare the predicted result to the ground truth result. If the algorithm correctly finds signage, a  True Positive  has occurred. When the algorithm correctly finds no signage, a  True Negative  has occurred. On the other hand, when the algorithm incorrectly finds signage where none exists, a  False Positive  has occurred. When the algorithm incorrectly finds no signage but signage exists, a  False Negative  has occurred.  Each algorithm processed every frame in the 3.5-hour broadcast.      
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     DELTA  
     True Positive Frames: (Percent of Correct Time) 
     False Negatives (Minutes: Seconds) 
     False Positives (Minutes: Seconds) 
     F1 Score 1  
   
   
     B6A MAP 
     1675 (74.5) 
     574 (2:24) 
     0 (:00) 
     .854 
   
   
     Google Cloud Vision 
     951 (42.3) 
     1298 (5:25) 
     9 (:02) 
     .593 
   
   
     Amazon Rekognition 
     597 (26.5) 
     1652 (6:53) 
     7 (:02) 
     .419  
   
      
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     VERIZON  
     True Positive Frames: (Percent of Correct Time) 
     False Negatives (Minutes: Seconds) 
     False Positives (Minutes: Seconds) 
     F1 Score 1  
   
   
     B6A MAP 
     3063 (89.2) 
     370 (1:33) 
     0 (:00) 
     .943 
   
   
     Google Cloud Vision 
     1132 (33.0) 
     2301 (9:36) 
     10 (:03) 
     .495 
   
   
     Amazon Rekognition 
     1798 (52.4) 
     1635 (6:49) 
     0 (:00)  
     .687 
   
       1  F1 Score combines False Positives and False Negatives into a single number.       False Positives and False Negatives are both important to teams, brands, and agencies, but MAP distinguishes itself by minimizing False Negatives. In both tests, MAP misses less than one fourth of the time that Cloud Vision and Rekognition miss. Users of Google’s or Amazon’s tools must manually review each frame of video to adjust for the gap in accuracy. This squanders entirely the efficiency of computational analysis and incurs additional financial costs. For example, to adjust for the gap in Google’s Delta results, a human must watch the entire game to find the missing 6:53 of screen time.  If clients want more accurate analysis, they must choose algorithms with fewer False Negatives. MAP’s neural networks and value calculations were built and trained specifically to analyze sports broadcasts. MAP provides more accurate results than these leading providers, while also avoiding extraneous manual review.

BY JOSHUA L. HERZBERG AND ALEXANDER CORDOVER

Block Six Analytics’ Media Analysis Platform Outperforms Google and Amazon Computer Vision Products

Block Six Analytics’ Media Analysis Platform, MAP analyzes sports video broadcasts to compute how long in-stadium signage appears on screen. However, other computer vision products like Amazon’s Rekognition and Google’s Cloud Vision can also perform this task. Both offer text localization (finding text in a video frame) and optical character recognition (reading the text) services akin to what MAP offers. But which product is most accurate?

       Branded Content Pays Off For The Players’ Tribune   BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      AdAge recently  featured  The Players’ Tribune because “its success is due in large part to a forward-thinking business model focused on high-quality branded content.” In the same post, however, AdAge appears to contradict its own narrative. As the post states, “According to ComScore, The Players' Tribune site gets 3.4 million unique views a month, a respectable number but nowhere near the clicks of an entrenched institution like ESPN, which recently attracted 75 million visitors in that same amount of time.”  How could The Players’ Tribune be achieving “success” when its competitors are generating significantly higher levels of traffic? Quantity is definitely an important metric when looking at how content resonates with an audience, however, it should not be considered the only metric. As we have documented in several  previous posts , Block Six Analytics (B6A) looks at  quantity, quality, and engagement  when it comes to determining content’s value.  The Players’ Tribune  is  “a website devoted to allowing athletes to tell their own stories on whatever topics they wanted”. It currently focuses on branded content as its primary revenue source. According to Ad Age,  Branded content  is “an advertising platform… [involving] companies underwriting stories as a means of marketing. [It] has been around since the 1940s, back when businesses like Texaco and Lucky Strike cigarettes sponsored TV and radio programs.”   The primary goal of branded content is that advertisements seamlessly integrate with the media platform to increase audience engagement. Branded content on The Players’ Tribune has incorporated companies including P&G and Samsung in athletes’ stories that are the core feature of the site.  Saying that branded content increases engagement is one thing. Using a tangible metric to define increased engagement is another. The Players’ Tribune states that its pieces  receive  average engagement time of seven minutes and 45 seconds. As a point of comparison, Facebook, Twitter, and Instagram  counted  watching a video for three seconds as a video view in 2017. This is a clear demonstration of the degree of engagement that The Players’ Tribune is delivering to advertisers with its branded content.  Companies have taken notice of this type of success with branded content. Organizations ranging from Bleacher Report to The New York Times have already successfully utilized branded content as a way to deliver value to their advertising partners. The reason is that branded content consistently delivers higher levels of performance on metrics important to companies. As senior VP with sports consulting business GMR Marketing Todd Fischer  states , "It's quality over quantity, and I think that's appealing to brands.”  The Players’ Tribune has also achieved success for another important reason – it features athletes. B6A has consistently seen that athletes have the highest levels of sentiment, engagement, and value in their social media posts by using our  Social Sentiment Analysis Platform . Leveraging athletes for branded content campaigns maximizes the probability that The Players’ Tribune can provide engaging content for its advertisers.  Content rights holders should take notice of branded content’s impact and how both companies and agencies are viewing its success. Branded content is certainly not the only way to deliver higher levels of engagement. However, quality and engagement is an increasingly important factor when buyers are making purchasing decisions about advertising and sponsorship. 

BY ADAM GROSSMAN

Branded Content Pays Off For The Players’ Tribune

Content rights holders should take notice of branded content’s impact and how both companies and agencies are viewing its success. Branded content is certainly not the only way to deliver higher levels of engagement. However, quality and engagement is an increasingly important factor when buyers are making purchasing decisions about advertising and sponsorship. 

       Visit Rwanda Via Arsenal   BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      One of the more surprising sponsorship agreements to come to fruition recently is a  deal  that will feature “Visit Rwanda” on the sleeve of Arsenal’s jersey while also making “Visit Rwanda” the official tourism partner of this English Premier League team. Why would the Rwanda Development Board want to be the sponsor of a team hundreds of miles away from the country?  This is an example of where jersey sleeve sponsorships can really add significant ROI for a partner. Rwanda has a considerable brand perception and awareness issue given the devastating recent history of civil war and ethnic cleansing that occurred in the 1990s. For many people, this is really the only thing they know about the country.  Yet, Rwanda is one of the best examples of the economic development that is happening throughout the African continent. As Rwanda Development Board Chief Executive Officer, Clare Akamanzi,  said , “Visit Rwanda and discover why we are the second fastest growing economy in Africa.  Investors [should]…prepare to enjoy the opportunities accrued from the free trade agreements that we’ve signed with over 50 countries.”  Activating with Arsenal helps put “Visit Rwanda” in a position to achieve its goal of changing people’s narrative about the country by targeting a high number of the right people in a positive environment. According to Arsenal Chief Commercial Officer, Vinai Venkatesham, the team’s jersey  is seen  “35 million times a day globally and we are one of the most viewed teams around the world.”  Not only is reaching a large audience on a daily basis important, but also “Visit Rwanda” is targeting reaching a global audience as well. In addition, “Visit Rwanda” realizes that Arsenal should have a better perception to its target demographic than the country itself does right now. Associating the “Visit Rwanda” brand in an environment its audiences typically enjoy (i.e. an Arsenal game) increases the probability of seeing a perception lift.  That is exactly what “Visit Rwanda” needs to do bring foreign tourism and businesses to the country. More specifically, global tourists and companies need to know that “Visit Rwanda” is an option for them. The country also needs to change the perception of these people and organizations to encourage and promote foreign investment. A deal with Arsenal is a good start and should provide a tangible ROI for the country.  Arsenal is also being rewarded for the concept of doing well by doing good. The team is generating revenue while helping a country continue to recover from a terrible national trauma. However, this is not just a “charitable” relationship for Arsenal. The team is helping “Visit Rwanda” achieve a tangible economic goal critical to its continued development as a nation.  Both “Visit Rwanda” and Arsenal benefit from this relationship. Sports teams and partners that consider a global company / organization base can find relationships that provide tangible benefits to both buyers and sellers of sports sponsorship.

BY ADAM GROSSMAN

Visit Rwanda Via Arsenal

One of the more surprising sponsorship agreements to come to fruition recently is a deal that will feature “Visit Rwanda” on the sleeve of Arsenal’s jersey while also making “Visit Rwanda” the official tourism partner of this English Premier League team. Why would the Rwanda Development Board want to be the sponsor of a team hundreds of miles away from the country?

       Betting on New Revenue   BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      The U.S. Supreme Court decision that the Professional and Amateur Sports Protection Act of 1992 (PASPA) is unconstitutional will have a dramatic impact on the sports industry. The ruling enables each state to enact its own sports gambling regulations unless (or until) Congress decides to make its own nationwide laws (which is the  preference  of most sports leagues).  The most direct way that sports organizations seemingly would benefit from gambling is through what NBA Commissioner Adam Silver proposes as an “ integrity fee .” Sports leagues would essentially receive a 1% fee on  each bet to  “monitor games and ensure they are contested honestly.” Sports leagues also want to make sure that bettors use the same statistics for evaluating games as well. The NBA’s agreement with  Sportradar  was completed in part to address this issue.  It is estimated that legalized gambling will be a  $300 billion per year  business so sports leagues could earn $3 billion per year in new revenue just from the fee. It is unclear if sports leagues will be able to charge this high of an integrity fee when casinos typically only make a profit of  3.5%-5% per sports bet . However, sports leagues will still likely see a very substantial windfall as legalized sports gambling becomes more prevalent.  The new revenue is not just from taking fees on the bets themselves. In fact, some of the big winners of the PAPSA decision are sponsorship rights holders. Even before the PAPSA decision, gambling was a large driver of interest in sports teams, leagues, events, and athletes. With more people now having the ability to have “skin in the game,” sports organizations should see even more people attending, watching, listening to, and reading about sports. of  Bettors are also a desirable demographic for many corporate partners. According to the  Fantasy Trade Sports Association , the average age of this demographic is 32 years-old while the average income is over $75 thousand per year. Having a larger, more engaged audience of desirable demographics consume sports content is exactly the opportunity that many companies are looking for from partnerships. More specifically, it maximizes the probability of success for companies to use sponsorship to achieve their revenue and brand goals. Therefore, repealing PAPSA should help both buyers and sellers of sports sponsorships generate more money.  In addition, gambling companies themselves have traditionally been large sponsors of sports teams. In the United Kingdom (UK) alone there is an estimated  $100+ million dollars  spent by gambling companies on sponsorship. In the United States, daily fantasy companies such as DraftKings and FanDuel already spend millions of dollars on sports sponsorship.  The reason that gambling companies want partnerships with sports organizations is fit. We can use in-game betting as an example. In Europe, fans can currently bet on almost anything that happens during a game such as how many goals will be scored in the second half of a soccer match. Having a brand’s logo or call-to-action in front of a customer right as he / she is making a purchasing decision is exactly the type of opportunity that maximizes the ROI of a partnership investment.  There is a significant difference, however, in the current dynamic between the US and European markets. Because legalized gambling will be starting in several states in a very short amount of time, many customers in the U.S. do not have as much familiarity with gambling companies as Europeans fans already have. Therefore, increasing brand awareness and enhancing brand perception is critical. More specifically, sports fans want to know where they can gamble and how they can gamble safely.  Sports organizations have a long history with helping companies achieve their brand awareness and brand perception goals. Using in-venue signage, traditional media, social media, and mobile channels in particular will ensure that the gambling companies’ customers receive the right message at the right time in ways that facilitate having the best experience. This combination can maximize the probability of success for gambling companies in attracting new customers.  The Supreme Court’s decision to strike down PAPSA should greatly benefit the sports industry. However, it is not solely because sports organizations can take a percentage of bets. Buyers and sellers of corporate partnerships should also benefit greatly by having a large, engaged audience consuming sports content in ways that help companies achieve their revenue and brand goals.

BY ADAM GROSSMAN

Betting on New Revenue

The U.S. Supreme Court decision that the Professional and Amateur Sports Protection Act of 1992 (PASPA) is unconstitutional will have a dramatic impact on the sports industry. The new revenue is not just from taking fees on the bets themselves. In fact, some of the big winners of the PAPSA decision are sponsorship rights holders.

      Rating NBC’s New TV Measurement Valuation Approach  BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      NBCUniversal recently announced it was making a fundamental change to how it is measuring the success of its television programming with its advertising partners. According to   The Wall Street Journal  , “In an effort to convince advertisers that TV can demonstrate the same kind of return-on-investment (ROI) as digital media, the company is working…to show brands business outcomes that result from their ads.”  NBCUniversal should be applauded for shifting its focus from looking solely at the quantity of impressions to now also factoring in the quality of impressions. The most common way to judge the success of television advertising has been by the number of people that watch a program or network. From an advertising perspective, the larger the audience the more exposure a brand would receive.  While reaching a large audience can be important, it should not be the only success metric used to judge advertising effectiveness. For example, CDW is a company that focuses on selling technology products and solutions to enterprise clients. Therefore, its focus is on reaching a relatively small number of people whose job is to make large technology purchasing decisions. Its advertising is usually more valuable when it is focused on reaching a narrow target demographic rather than reaching the largest possible audience.  Another reason that television ratings have been used is that they represent an easily defined success metric. A typical arrangement between television networks and advertisers is to determine a guaranteed number of people that will see an advertisement during a program. If that program fails to deliver that number of viewers then the network will provide a “make good” by providing advertising time on another program.  Shifting to measuring “business outcomes” changes the nature of this conversation. How do television networks and advertisers define what business outcomes should be? In addition, different companies have different business models so it would appear that creating success metrics would be difficult. As  The Wall Street Journal Article   states  ,  “Tying TV viewing to business outcomes provides advertisers with greater validation that their ads worked, but the measurement process is complicated.”   The Block Six Analytics (B6A)  Corporate Asset Valuation (CAV) Model  makes a complicated process simpler by creating clear definitions of what constitutes a quality impression. We define success based on how a company makes money and on its brand goals. We measure these goals by looking at three considerations:   What is a company trying to accomplish?  Whom is a company trying to target?  What is the most effective way to reach the target demographics?   This approach standardizes how value is defined while also creating specific models for specific opportunities for specific companies. It also enables television networks to look at both monetary and non-monetary goals. More specifically, revenue and brand goals are not always in complete alignment. For example, automobile companies often partner with sports organization to reach 18-34 year-old demographics, yet, the average age of a  new car buyer  is 51.7 years old. If car companies’ goals are to maximize immediate annual revenue then targeting younger demographics would not drive a high ROI (pun not intended).  However, car companies are focused on building brand awareness and enhancing brand perception for younger demographics now because it is believed that doing so will influence purchasing decisions in the future. B6A’s CAV model takes these types of considerations into account when determining the overall value that is being delivered in multiple different advertising channels, including television.  NBCUniversal is another example of how content providers are changing their approach to advertising valuation. By understanding its customers’ businesses and developing success metrics based on achieving companies’ brand and revenue goals, NBC is putting itself in a better position to communicate value and generate incremental revenue growth.

BY ADAM GROSSMAN

Rating NBC’s New TV Measurement Valuation Approach

NBCUniversal is a good example of how content providers are changing their approach to advertising valuation. By understanding its customers’ businesses and developing success metrics based on achieving companies’ brand and revenue goals, NBC is putting itself in a better position to communicate value and generate incremental revenue growth.

      Fanatics Finds A Successful New Relationship With Aston Villa  BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      Aston Villa recently announced that it signed “ a kit manufacturing deal ” with Fanatics. What seems like a standard merchandise / apparel deal on the surface, however, “ may be at the forefront of a revolution ” in sponsorship and licensing in sports. This is not just because the Fanatics logo will not be on the jersey of the English soccer club team.  To see what this is all about, let’s start with Fanatics’ business model. Unlike many of its competitors, Fanatics is a vertically integrated company that designs, produces, sells, and markets its products. Fanatics’ business model does force the company to incur more of the costs but it also allows the company to keep more of the profits that come from apparel and merchandise deals.  By contrast, Nike and Adidas typically only design and market their soccer kits (uniforms). They rely on outside manufacturers to physically produce the clothes and on retailers such as Dick’s Sporting Goods to sell their products. In a typical deal, a company such as Nike or Adidas will pay the manufacturer to produce the shirt and then sell that shirt to a retailer such as Dick’s who then sells the product to the customer. Because these companies are reliant on their partners to make and sell their products, Nike and Adidas usually need longer times for their products to come to market.  Nike / Adidas then pays a licensing fee to the team or rights holder based on the amount for which it sells the shirt to a retailer. By definition, it has to sell to a retailer at a lower price than the retailer sells to a customer (or else the retailer cannot make any money). Because their profit margins are typically lower on each unit sold, Nike and Adidas are now more focused on finding apparel sponsorships that allow them to sell in higher volumes. That is one reason why these companies have signed bigger deals with a smaller number of teams  particularly when it comes to soccer .   Fanatics does not have this “problem.” Fanatics can make a higher profit on each unit and therefore can sell a lower number of items. It also can move quickly because it owns the entire supply and value chain including primarily selling directly to its customers through digital or mobile channels. Therefore, it can much more quickly take advantage of periods when Aston Villa performs well and / or if the team gets promoted back into the Premiere League. By mitigating many of the risks that come with apparel / merchandise deals, Fanatics has found a clever way to enter the British market.  In addition,  Fanatics  “has paid for exclusive licensing rights for all Aston Villa merchandise for several years. It will then sell on separate rights deals for different bits of that merchandise: kit, baseball caps, homewares, and so on.” This is also different from standard “kit” deals because it is Fanatics (the licensee) rather than Aston Villa (the licensor) that is now in control of apparel and merchandising deals.  This is also another indication that both the seller (Aston Villa) and buyer (Fanatics) have examined how a partnership enables both parties to maximize revenue generation. Aston Villa can see that companies like Nike and Adidas have relatively low demand for an apparel / merchandise partnership. It needed to help create a compelling argument that would attract a partner given the unit economics of kit deals. Partnership with a company like Fanatics and being open to a larger licensing deal now puts Aston Villa in a better position to maximize value from its kits.  Fanatics realized that it had an opportunity to expand the inventory that was available in a deal while realizing that it had better unit economics than companies like Nike or Adidas for these types of deals. Therefore, Fanatics can now experiment with a new approach to kit deals and determine if this is a viable option to pursue with other teams. The ability for both the seller and buyer to benefit in novel and tangible ways should be the goal of these partnerships.   

BY ADAM GROSSMAN

Fanatics Finds A Successful New Relationship With Aston Villa

Aston Villa recently announced that it signed “a kit manufacturing deal” with Fanatics. What seems like a standard merchandise / apparel deal on the surface, however, “may be at the forefront of a revolution” in sponsorship and licensing in sports. This is not just because the Fanatics logo will not be on the jersey of the English soccer club team.

       Fortnite Helps Demonstrate The Value Of Potential Esports Partnerships   BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      Earlier this week, Ashland University announced it would be  providing scholarships  to Fortnite players as a way to attract new talent to its esports team. Some questions that many people in the sports industry may have include:   What is Fortnite?  Why would Ashland University offer scholarships for people to play Fortnite?    The Guardian’s Keith Stuart  described Epic Games’ Fortnite as:   In short, it’s a mass online brawl where 100 players leap out of a plane on to a small island and then fight each other until only one is left. Hidden around the island are weapons and items, including crossbows, rifles and grenade launchers, and players must arm themselves while exploring the landscape and buildings. It’s also possible to collect resources that allow you to build structures where you can hide or defend yourself. As the match progresses, the playable area of land is continually reduced, so participants are forced closer and closer together. The last survivor is the winner.   Why would a university offer a scholarship based on this description of the game? We can actually use the Block Six Analytics (B6A)  Corporate Asset Valuation Model  to answer this question. When applying B6A’s analytics to valuing sponsorship, we define success based on two main criteria:   Return on investment – how does a company make money from a partnership  Return on objectives – how are a company’s brand and marketing goals addressed from a partnership   Evaluating the impact of an esports team on revenue should not begin or end with direct revenue. As we have discussed in our post on UMBC’s success in the  Men’s NCAA Basketball Tournament , colleges primarily make money through tuition. From a purely economic perspective, schools either want to have a higher number of students attend or charge a higher price for annual tuition. The more students that apply to the program, the more likely that the school will have both a higher number of students attend and the ability to charge higher tuition given the greater demand.  Ashland University faces strategic challenges in this context. In Ohio alone (where Ashland is located), the school competes with several public and private colleges and universities including The Ohio State University, The University of Cincinnati, Dayton University, and Xavier University. That does not even factor in the out-of-state options for students. How does Ashland put itself in the competitive set for students applying to colleges in this context?  Increasing brand awareness with the target demographic is the key strategic goal of having an esports team. More specifically, students have to know that Ashland could be a compelling option for their college education. That is where offering Fortnite as a scholarship comes into play. The earned media from the announcement alone from publishers including TechCrunch, Business Insider, Forbes, and Variety provides increases in brand awareness that Ashland would be unlikely to achieve otherwise.  Ashland’s Fortnite scholarship is not just increasing brand awareness in a vacuum. Ashland is specifically able to reach its target high school demographic of students that are considering applying to college. Relatively few people will actually make the schools esports team, but as esports head coach Josh Buchanan  said , “Fortnite appeals to both the core and casual gaming audience.”  The core and casual gaming audience has significant overlap with Ashland’s target demographic. The key here is Ashland using Fortnite to show why it is different from other universities and that it will have innovative activities that specifically appeal to its target demographic. Now many students have a compelling reason to apply and chose Ashland over some of its competitors.     Ashland’s Fortnite scholarship also demonstrates an approach to solving one of the biggest strategic challenges with esports. In particular, esports leagues, teams, and athletes (i.e. rights holders) want to attract non-endemic sponsors as corporate partners. Yet, companies not familiar with or who do not see a clear connection to esports have a difficult time making the investment.  Esports rights holders can use Ashland as an example of why companies should become partners. In particular, rights holders can show non-endemic sponsors how partnering with a team or league helps these companies generate more revenue or more effectively reach their brand objectives in novel ways that create competitive differentiation.   Each company generates revenue in different ways and has different brand goals. Understanding what those are and placing a potential partnership in this context provides esports rights holders with the best path to secure new sponsors.       
BY ADAM GROSSMAN

Fortnite Helps Demonstrate The Value Of Potential Esports Partnerships

Esports rights holders can use Ashland University as an example of why companies should become esports partners. In particular, rights holders can show non-endemic sponsors how partnering with a team or league helps these companies generate more revenue or more effectively reach their brand objectives in novel ways that create competitive differentiation. 

       PGA Takes Approach That Is Not Par For The Course   BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      Earlier this week, the PGA Tour announced that it was changing its slogan from “These Guys Are Good” to “Live Under Par.” Changing one of the most prominent features of the PGA Tour brand after 20 years would be news on its own. What is potentially more interesting, however, is the thought process behind the change. According to  AdWeek ’s Robert Klara:   The most noticeable feature of the new campaign, developed with a creative assist from L.A.-based branding and marketing shop Troika, will be to augment the usual content that focuses solely on the technical aspects of play with content that includes softer and more personal elements such as the experiences of the fans who attend tournaments and the lives of the golfers when they’re not playing golf.   The “These Guys Are Good” slogan solely focuses on the players’ abilities and the PGA Tour had focused much of its brand strategy around this concept. The PGA Tour’s new insight is that winning, on-course performance, and “technical” skill is not the sole, or for a larger portion of fans, the primary driver in people’s interest in golfers. In fact, the data showed that the fans were identifying with the players as stars in addition to being successful athletes. As Klara  states , a “demographic the PGA Tour dubs ‘Sports Socialites’—and make up nearly a  quarter of golf’s viewers —are looking for far more social and interactive content (emphasis added).”  This is not the first time this year that the PGA Tour recognized that it needs to not be focused solely on athlete’s performance. Many have noted that ratings have increased  significantly  since Tiger Woods’ most recent return to playing in PGA Tour events. The PGA Tour recognized that it needed Woods to compete in order for the organization to maximize audience size and the revenue generated from media rights agreements.  In   The Sports Strategist: Developing Leaders for a High-Performance Industry  , my co-authors and I highlighted a strategy that the PGA Tour put in place specifically to address this issue. In 2011, the PGA Tour was able to secure a 33% increase in its media rights deal even though Woods was at the time in what my co-authors and I described as at his “competitive nadir,” having not consistently performed well since the 2009 season. How did the PGA Tour accomplish this? From  The Sports Strategist:    The PGA Tour’s critical insight was to ensure that its broadcast partners could sell their advertising inventory regardless of ratings fluctuations. The PGA Tour proactively gained commitments from sponsors to buy approximately 75% of the advertisements during tournament broadcasts. As, the chairman of CBS Sports, said about a new agreement, “It’s a close to a guarantee as you’re going to see in big-time sports  today .”    The PGA Tour’s new slogan, “Living Under Par,” is consistent with this type of strategic thinking. On course performance will always be a component of a player’s star power. The slogan’s “under par” component is a direct reference to the fact that golfers’ want to score as far under par as possible.  Changing the slogan shows the PGA Tour’s understanding that it needs to the look at the holistic value that players create. For example, golfers such as Jordan Spieth, Rickie Fowler, Justin Thomas, and Bubba Watson are top-ranked players but are also top athletes in trying to interact with fans particularly through social media. However, golfers such as Grayson Murray and Max Homa have struggled on the course but have succeeded by showcasing their personalities in  social media channels.  The PGA Tour recognized that it has an opportunity to take advantage of their golfers’ strengths off the course.  B6A’s products also take this holistic approach to asset valuation with our  Revenue Above Replacement (RAR)  model being a good example. To determine an athlete’s value to a team, league, or organization, we examine a player’s on-field, off-field, and personal performance. While on-field is an important component, it is not the only component of a player’s value. As the PGA Tour demonstrates, fans, media, and sponsors want to engage with athletes both on and off the course. This a consistent feature of virtually all athletes in all sports.  The PGA Tour has created an economic model where it can be successful even when its star golfers are not performing on the course while also taking advantage of these golfers' successes when they do happen. Its new slogan now more accurately reflects this strategic approach and enables the organization to better position its brand and monetize its success both on and off the course.   
BY ADAM GROSSMAN

PGA Takes Approach That Is Not Par For The Course

Earlier this week, the PGA Tour announced that it was changing its slogan from “These Guys Are Good” to “Live Under Par.” Changing one of the most prominent features of the PGA Tour brand after 20 years would be news on its own. What is potentially more interesting, however, is the thought process behind the change.

      Does Pay For Performance Make Sense For Sponsorship?  BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
       Yesterday, Anheuser-Busch announced a decision to    utilize    "a new sponsorship model that promises to shake up the industry. It is built on incentives for performance on the field, pitch or court, as well as off of it". In 2012, B6A explored a similar approach The Emirates Group employed with the Arsenal as part of a larger deal including a jersey sponsorship. That blog post is included below.    The Arsenal Football Club and The Emirates Group recently made news when the Dubai based airline  announced  there had incorporated performance-based clauses in its sponsorship agreement with the English Premiere League team. Emirates and Arsenal have a five-year contract that pays Arsenal £30 million ($48.6 million) in annual fees for partnership inventory including a jersey sponsorship. While Arsenal has qualified for the Champions League every season for the past eight years, it has not won a major title during this span (FA Premiere League, FA Cup, and UEFA Champions League). If the team fails to qualify for the Champions League or does not perform well in the Premiere League then, "There are certain clauses, from 2015, that we pay them a percentage less if they don't perform," Emirates SVP Boutros Boutros  said . "It's fair to us and fair to them."  On the surface, it does seem fair. Sports organizations should absolutely be held accountable for their performance with regards sponsorship agreements. The question is what the definition of performance. More importantly, does competitive performance always translate to a successful sponsorship?  The answer is both yes and no. A team should be evaluated on both the quantity and quality of the impressions it delivers to corporate partners through inventory items like jersey sponsorships.  Quantity of impressions is relatively easy to define. It is generally considered to be the number people who view, consume, or experience an inventory item. For a corporate partnership agreement, a team should estimate the total number of impressions for each inventory during the course of the year. It should be rewarded for exceeding this number and penalized for missing these estimates.  Quality of impressions, however, is more difficult to define. At Block Six Analytics, we define the quality of impressions by a sports organization’s ability to help its partners to increase revenue and meet sponsorship goals.  By increasing revenue, B6A recognizes that different types of impressions can generate differing amount of revenues. For example, arena / stadium signage likely does not have the same impact on new customer acquisition or customer attention as having a partner’s core customers attend a game in a luxury suite. It is not that the stadium / arena signage in not a valuable piece of partnerships inventory. It is that that the luxury suite is more valuable to the partner because it targets specific customers and creates in an environment that is more likely to generate revenue.  Not all partnerships, however, are about generating revenue. Therefore, it is critical to define what the sponsorship goals are for each partner. Enhancing brand perception through sponsoring a community’s professional, collegiate, or high school team has a higher priority for many partners than increasing revenue. Sports organizations can be evaluated for its ability to maximize this type of impressions as well.  The Emirates deal, and the fairness component of this deal, appears to focus more on the quantity of impressions. Most of the Champions League value comes from the media rights deals for tournament games. If Arsenal does not qualify for the Champions League then the team will not be able to broadcast its jersey sponsorship to the hundreds of millions of fans who watch the tournament each year. This will decrease the overall number of impressions. However, it is not clear how much it will decrease quality of impressions. Most of the impressions from a jersey sponsorship go towards increasing brand awareness to viewers watching television broadcasts. While these are valuable, these impressions may not be as valuable those that go directly to increasing customer acquisition and customer retention.  This goes to the heart of return on investment (ROI) calculations when it comes to sponsorship. Winning generally does help increase awareness and interest in a team or individual. This translates into increases in gameday attendance, television ratings, and unique visitors the organization’s websites. While this is good for the sports organization, corporate partners need to ensure that these new impressions actually generate profitable revenue growth or help meet sponsorship goals for their organizations. Simply generating a massive number of impressions can no longer be the standard used to evaluate partnership value. Books like Sasha Issenberg’s  The Victory Lab: The Secret Science of Winning Campaigns  shows how successful political campaigns use microtargeting to focus on the most valuable voters – people who can be persuaded vote for a specific candidate but only after being contacted by a campaign with a specific message.  This same logic should be applied to corporate partnerships. For example, Arsenal could provide Emirates with introduction to team fans or other sponsors that make enterprise purchasing decisions about corporate travel. This type of introduction could occur whether the team is losing or winning on the field. More importantly, this is the type of microtargeted impression that is much more likely to deliver increases revenue to the Emirates than if the team qualifies for the Champions League.       While usually aligned, winning in competition can mean something entirely different than winning with the corporate partnerships. It is definitely a good idea to hold sports organizations accountable for sponsorship spend. Partners need to ensure that they are holding sports organizations accountable in the right way.    
BY ADAM GROSSMAN

Does Pay For Performance Make Sense For Sponsorship?

Yesterday, Anheuser-Busch announced a decision to utilize "a new sponsorship model that promises to shake up the industry. It is built on incentives for performance on the field, pitch or court, as well as off of it". In 2012, B6A explored a similar approach The Emirates Group employed with the Arsenal as part of a larger deal including a jersey sponsorship. That blog post is included here. 

      UMBC Positioned to Take Advantage of March Madness Success  BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      The biggest star of the 2018 NCAA Division I Men's Basketball Tournament so far is Zach Seidel. The University of Maryland Baltimore County (UMBC) director of multimedia communications for the athletic department is the man behind the Twitter account that has done everything from trolling CBS /  The Athletic reporter Seth Davis  and ESPN to espousing the virtues of UMBC to people who had not heard of the university prior to the school becoming the first 16 seed to upset a 1 seed in the history of the NCAA Tournament. Seidel’s ability to create a unique voice through real-time comedic Tweets generated interview requests from national media outlets – including The Athletic and ESPN.  Seidel, however, is “only” a star on the UMBC team. UMBC as an institution is the biggest winner of the NCAA Tournament so far, even more for what it has done off the court than on the court. More specifically, UMBC had positioned itself to take advantage of success if / when an upset in the NCAA Tournament happened.  The first step in understanding why this is so is understanding the full potential value of college athletics. For many schools, college athletics is a marketing asset that functions like a brand influencer. In particular, the reason that Seidel became a star is that conversations around varsity athletics can generate significant attention for schools in ways that professors, academic programs, or new research does not. That is why so many analyses of the value of UMBC’s upset are focused on the “ media value ” the school generated for the win.   Media value, however, is not likely UMBC’s ultimate goal. The school is attempting to use athletics in similar ways that corporate partners should be using sponsorship assets – to achieve discrete business goals. UMBC’s “business” is focused on recruiting as many bright students as possible to apply to the school for admission. For virtually every college or university, tuition is by far the biggest revenue driver for the school. Investments in athletics should have an impact in both the number of applicants that apply and the annual tuition a school can charge because it is more attractive.  Making investments in basketball, as UMBC has done, or in football can have a tangible impact on a school’s admissions. In particular, a school that has an upset does see a significant increase in admissions. According to a recent analysis of Department of Education Data from  Bloomberg :  Schools that beat performance expectations during March Madness receive a bump not only in public awareness, but also in the number of applications they receive. For example, as Bloomberg points out, after then-15th-seeded Florida Gulf Coast’s wild run through Georgetown and San Diego State to advance to the Sweet Sixteen of the 2013 tournament, applications to the Fort Myers, Florida, campus spiked 27.5 percent. A similar trend was observed at Lehigh University after it bounced perennial tournament contender and then-second-seeded Duke from the first round of the 2012 tournament. And it’s not just one shocking upset that results in more applications: If a team makes it further into March than expected—such as Wichita State’s surprising Final Four berth in 2013—it can also experience increased interest. Wichita State, for its part, received almost 30 percent more applications following its success on the court in 2013, Bloomberg reports.  This is not just the case in basketball. In his study of the “Flutie Effect”, Harvard Business School professor  Doug J. Chung  found  that :   When a school goes from being mediocre to being great on the football field, applications increase by 18.7%.  To attain similar effects, a school has to either decrease its tuition by 3.8% or increase the quality of its education by recruiting higher-quality faculty who are paid 5% more in the academic labor market.  Schools become more selective with athletic success. For a mid-level school, in terms of average SAT scores, the admissions rate improves by 5.1% with high-level athletic success.  Surprisingly, students with high SAT scores are also significantly affected by athletic success.   UMBC appears to have applied these types of lessons to its commitments to athletics. As Seidel humorously stated in a  Tweet , ” BTW guys, we have a brand new $85 million Event Center we opened up last month that still doesn't have a corporate sponsor name.... (sic) .”  UMBC is in a better position now to obtain a sponsor after its historic upset. However, the decision to make this type of investment into an Event Center shows the importance the school placed on sports and events long before its upset occurred. It also positions the school for longer-term success in admissions by making this type of investment in athletics.  UMBC should also take this point-of-view when looking for corporate partners for its new venue. Rather than just examining the media value of its basketball team, the school should look at the core business of potential corporate partners. For example, Seidel’s efforts increased the school’s Twitter followers from 5,500 to 109,000 followers over the course of the Retrievers run through the NCAA Tournament. The University of Maryland has 149,000 followers. If partners are only looking at audience size then the Terps are still a significantly better spend than the Retrievers.  UMBC should focus on why the quality of its audience can help potential corporate partners achieve their revenue and marketing goals. For example, UMBC can now make a compelling argument to Adidas about why the apparel brand should be the naming rights partner for the Event Center. Seidel’s social media activity has helped to define a UMBC brand in-line with  Adidas ’ “three clear strategic choices that we want to focus on: Speed, Cities and Open Source.” In addition, Under Armour (one of Adidas’ biggest competitors) has made significant investments in the University of Maryland’s athletic department. Adidas’ sponsorship of the UMBC Event Center would enable the company to directly compete with Under Armour in the county and state where Under Armour is headquartered.  Schools do not need to make $85 million investments to achieve success. In   The Sports Strategist: Developing Leaders for a High-Performance Industry  , my co-authors and I highlight the University of Chicago. The Maroons was an original member of the Big Ten athletic conference and home of the first Heisman Trophy winner. However, the school decided to end college athletics in 1939 so that it could make sure its students and the institution could focus on academics.  The decision contributed significantly to the school earning the reputation of the  place  “where fun goes to die.” While the school re-instituted its  college football program  in 1969, it only more recently made the team a priority to show that the college experience was more than solely the academic experience. The school saw a rise in applications after making a more public face of the out-of-class offerings Chicago provides its students.  UMBC was the winner of the opening weekend of the NCAA Tournament. However, the school’s investments in athletics should pay long-term dividends in helping the school take advantage of this success.   
BY ADAM GROSSMAN

UMBC Positioned to Take Advantage of March Madness Success

The biggest star of the 2018 NCAA Division I Men's Basketball Tournament so far is Zach Seidel. Seidel, however, is not the “only” a star on the UMBC team. UMBC as an institution is the biggest winner of the NCAA Tournament so far, even more for what it has done off the court than on the court.