Cause Marketing’s Impact On The Sports Industry
BY ADAM GROSSMAN
One the most common reasons that companies want to partner with sports properties is to leverage their brand equity with leagues, teams, athletes, and events. As more companies pursue cause marketing, however, sports properties now will have to examine these partnerships with these companies in new ways.
The most recent example is Gillette’s “Short Film” posted on YouTube as part of the company’s Super Bowl “the best a man can be” campaign. Derived from the company’s famous tagline “the best a man can get” and as a response to the #MeToo movement, Gillette’s goal is focused on “promoting positive, attainable, inclusive and healthy versions of what it means to be a man.” The film includes tangible examples of what this means and how men can change past stereotypical behavior to something more “positive.”
When evaluating the impact of sports sponsorship, Block Six Analytics’ (B6A’s) Corporate Asset Valuation examines the return on investment (ROI) and return on objective (ROO) of a partnership. Gillette appears to be focused on both with this campaign. Even though it has been the dominant player in the razor market for decades, Gillette is now facing increasing competition (Harry’s and Dollar Shave Club are examples of relatively new, well-funded competitors) with a core product that customers can find difficult to differentiate.
Brand sentiment and engagement are important for competing in this type of environment. Increasingly companies have turned to cause marketing to help differentiate themselves from their competition while also increasing revenue and profits. Cause marketing has traditionally been defined as companies identifying charitable organizations, donating money and / or product to these charities, and then marketing that the company had made these efforts.
Recent research has shown the impact of “doing well by doing good” for companies. A study published in 2017 examined yogurt company Yoplait’s partnership with the Susan G. Komen foundation. The authors found that not only did Yoplait increase its profitability but also that Dannon (its biggest competitor) saw profitability decrease during the same time period.
Ironically companies in the past did not necessarily want to directly invest in the “cause” of cause marketing. More specifically, companies want to avoid becoming associated with controversial causes because taking any point-of-view on an issue could potentially alienate customers and depress revenues.
This has started to change with sports playing a central role. Both Nike’s endorsement deal with Colin Kaepernick and Dick’s Sporting Goods’ decision to remove assault rifles from stores after the shooting at Marjory Stoneman Douglas High School in Parkland were clear examples of companies openly and substantively supporting controversial “causes.” Nike has seen an estimated 31% increase in online sales since the beginning of the deal. Dick’s saw its stock increase 21% in the immediate time period after making the decision so that the financial impact “wasn’t nearly as severe as feared.”
Both Nike and Dick’s operate in a similar competitive consumer products environment as Gillette where brand perception plays an important role in customer purchasing behavior. Not only are women an increasingly a large portion of the shaving market but also women have traditionally been significant purchasers of men’s razors as part of their families’ larger household spend. These factors are key reasons why Gillette has targeted women for years even if the company’s tagline has been “the best a man can get.”
Gillette’s Super Bowl film creates an interesting challenge for sports organizations. Gillette is a well-known sports sponsor, most famously for its Gillette Stadium naming rights partnership with the New England Patriots. The connection between the film’s timing and the Patriots has been discussed throughout social media channels. Yet, the Patriots have little (if any) control over Gillette’s choices for its marketing campaigns while still having to understand its impact. For example, Gillette’s film has generated over 11 million views and almost 400 thousand more down votes than up votes even though it has only been on YouTube for three days at the time of this post being published.
Cause marketing campaigns will not always have this type of response. In fact, this should also be a positive development for sports organizations. Companies increasingly want to invest in causes that their customers are passionate to increase engagement and differentiate themselves from the competition. As we have shown in previous posts, many companies’ customers are passionate about sports. This enables sports properties to be likely recipients of new cause marketing dollars.
The overall takeaway, however, is companies are likely increasingly going to put more resources into cause marketing because it has a tangible ROI and ROO impact. While corporate partners will always want to have a strong partnership with sports properties, companies will likely continue to put leagues, teams, and athletes at the center of conversations around controversial issues.
This requires properties to take a proactive approach in monitoring the conversation around their partners because they will be directly impacted. B6A’s Social Sentiment Analysis Platform (SAP) is designed to evaluate conversation in social media in both owned and earned accounts. In particular, SAP uses natural language processing (NLP) to “read” posts to determine positive or negative lifts while also examining the value of overall post engagement. By being proactive, sports properties will be best prepared to deal with the different impacts of cause marketing campaigns.