Why The PGA Tour Created New On-Site Partnership Activations During COVID

BY ADAM GROSSMAN

The PGA Tour recently announced that there will be no fans or pro-ams allowed for the remaining portion of the season’s events. Yet, the PGA also stated that it will “restart its honorary observers program” while also launching new “hosted experiences” with “sponsor guests.” The honorary observers program will restart at this week’s WGC-FedEx St. Jude Invitational while the hosted experiences will begin at the Wyndham Championship on August 13th.

Why would the PGA want to increase the number of people at its events particularly in light of what has happened this week with COVID-19 in sports? As the PGA Tour states, “It is necessary to provide new or reimagined ways to deliver value to our title sponsors and host organizations. We have concluded we can successfully host a small number of sponsor guests on-site in a safe manner that will provide critical value to our key partners.”

Hosting guest “on-site in a safe manner” is the PGA’s stated highest priority and Commissioner Jay Monahan has commented on his organization’s success in more recent events. These events can only be successful if executed safely. Both hosted experiences and honorary observers participants will go through on-site screening for COVID-19

We will, however, focus on the “[providing] critical value to our key partners” in the context of this post. Hosted experiences enable up to 50 guest per day to “be allowed on-site only on competition days and will not be allowed to walk the golf course.” The honorary observers program allows for “16 two-person groups each competition day walking outside the ropes.”

In a past post, we highlighted the importance of on-site experiences in the context of American Express and the PGA. In the multiyear title sponsorship deal that changes the name of the PGA Tour event most recently called The Desert Classic to The American Express announced in 2019, the company focused on experiences as the primary value driver.

More specifically, Chairman and CEO of American Express Stephen Squeri called the new partnership a “perfect match” because “golf consistently ranks as one of the top passions of our Card Members, and the TOUR provides some of the most exciting experiences at some of the best venues the game offers. We’re looking forward to making The American Express a ‘must-see’ event for fans and Card Members alike.”

American Express appears to be building on an experience-driven strategy that has been honed from its successful U.S. Open Tennis Championships partnership. More specifically, companies typically want to reach targeted customers and demographics that can or will drive revenue most effectively rather than only being able to reach a large audience.

American Express has potentially discovered that its best customers really value tennis and golf events. These customers are worth more to a company than its average customers or the average person. Providing access to the experiences that align with the “top passions” of these card members, such as through professional golf and tennis events, creates product and brand differentiation in a market with large competitors.

Customers also value experiences because they usually feature engaging and interesting content. B6A’s proprietary research has shown that reaching people in ways that increase brand engagement, sentiment, and awareness have a statistically significant correlation with increases in revenue. This is another important and quantifiable way that companies can attract and retain their best customers.

That does not mean that other sports organizations need to have on-site experiences or that every partner will benefit from hosted experiences. In particular, we showed how branded tarps on seats at NFL stadiums should drive value for partners looking to maximize brand awareness with a large audience. The PGA is also focused on new signage to help partners looking to accomplish the same goal.

American Express, however, shares the goal of increasing engagement with targeted audiences that can drive specific business outcomes for companies with many other PGA Tour title sponsors. At a time when few fans can attend sporting events (particularly in the United States), the PGA Tour’s ability to safely create hosted experiences should be a significant value driver for many of its largest partners.