2000: Golf emerges as brand elixir
Wednesday, November 30, 2011
Kevin Ilges, director of sponsorships and events at Shell Oil Co., likes to work efficiently. Which explains why, when it comes to marketing, his sport of choice is golf.
By helping the Texas company sponsor a local PGA Tour stop, for instance, Ilges did much more than get it named the Shell Houston Open.
The April event splashed the Shell brand before a national TV audience, which increased 14 percent from the year before. It gave Shell’s top brass an opportunity to woo key clients. And the event, run by the Houston Golf Association, helped funnel $4.4 million into local charitable causes.
In short, Shell increased its media exposure, secured new business and spiffed its image as a caring corporate citizen – all in four days.
“You can leverage golf in so many ways,” Ilges says.
The versatility of golf sponsorship and its ability to produce quantifiable benefits – plus the game’s surging popularity and rock-solid demographics – make for a powerful combination that has made golf one of the fastest-growing categories in sports sponsorships.
In the past five years, corporate dollars spent on golf have increased 42 percent from $555 million to $788 million, making it the second-largest category behind motor sports, which netted $1.35 billion.
Corporations wouldn’t spend such a sum unless there were significant returns on investments. Though it often is difficult to link new revenues directly to sponsorship, marketing experts and corporate executives say golf affects consumer preference and awareness positively. That’s significant because in golf such consumers are often decision-makers who can deliver new business to sponsors.
Indeed, Ernst & Young credits all of its marketing efforts, including golf sponsorships, for increasing by 73 percent its brand recognition among America’s corporate elite, according to a survey of 500 chief executive officers and chief financial officers. Such recognition, in part, has helped Ernst & Young win 21 of its past 25 “major engagements” – accounts with Fortune 100 companies such as Compaq, Verizon and Swiss bank UBS.
“For you to be in the consideration set, you have to be top-of-mind,” says Jim Speros, national director of external communications for Ernst & Young, which reported revenue growth of 14 percent to $9.2 billion this year. The firm hosts hospitality tents during the Ryder Cup and Masters. It also has endorsement deals with Kirk Triplett, Loren Roberts and Donna Andrews.
While golf may not be the best sports sponsorship vehicle in all cases, it possesses inherent advantages that other sports typically do not offer.
Unlike some sports that have short seasons, golf is played all year, allowing it to support a sponsor’s objectives without interruption. In many cases, golf’s use of a world stage also is appealing to sponsors because that helps them pursue their international goals.
And few sports, if any, can provide hospitality venues as majestic as golf courses. Says Sean Brenner, managing editor of Chicago-based IEG Sponsorship Report: “Given the audience that it attracts and its settings, there is clearly an aura associated with golf that other sports do not have.”
Not to be underestimated is the fervor with which golfers play their game – however skillfully or woefully. And that passion often lasts a lifetime, making golf a “cradle-to-grave” sport that companies love, says Karen Durkin, the LPGA’s vice president of marketing.
“By associating their brand to such a sport, it gives (sponsors) the opportunity to introduce their products to consumers and win them for the rest of their lives,” Durkin says.
The reasons why companies use golf sponsorships are almost too many to list. But some are obvious: gaining media exposure and entertaining clients. Others are more subtle: impressing target audiences, from job candidates to Wall Street analysts.
Century 21’s Fine Homes & Estates division decided to partner with the LPGA for several reasons. Century 21 executives thought its division, which sells upscale properties with an average price of $500,000, was a good fit for golf’s affluent audience. And they believed sponsorship offered a better avenue to connect with such consumers than conventional advertising, which can be exorbitantly expensive and diluted by clutter.
As the “official luxury real estate organization of the LPGA,” Century 21 ran a sweepstakes promotion that featured a grand prize trip to the Solheim Cup. The entry form included a series of questions crafted specifically to identify whether a participant was a “hot” prospect to buy a home. Century 21 received approximately 30,000 entries.
“Based on our past experience 10 percent will turn into prospective leads, and if every single one of them bought a home, that would translate into $45 million of incremental revenue across our system (of brokers),” says Steve Savino, Century 21’s executive vice president of global marketing. “Of course, we’re not going to get all of them, but even if we convert just 1 percent, that’s $450,000.”
These leads will be tracked closely to measure benefits and justify sponsorship expense. Century 21 declined to disclose its costs, but a recent decision to exercise the optional year of its three-year LPGA deal indicates the company is getting its money’s worth.
To achieve favorable returns, companies are increasingly leveraging their sponsorships, Durkin says.
Multi Grain Cheerios, another LPGA partner, plans to make an emotional connection with consumers early next year by featuring players Lori Kane, Christie Kerr and Janice Moodie on its cereal boxes. The three players also participated in a birdie contest – with Cheerios donating $250 to the American Heart Association for every birdie the trio made during the second half of 2000.
This year, Cheerios ran a promotion in which box tops could be redeemed for a sleeve of Pinnacle golf balls. The effort increased trial and sales and also served as an example of another sponsorship benefit: business-to-business opportunities with other sponsors. When Cheerios officials needed golf balls for its redemption campaign, the LPGA put them in touch with Acushnet Co., the maker of Pinnacle balls and another LPGA sponsor. The result: Acushnet sold thousands of sleeves of balls to Cheerios.
The most common use of sponsorships, arguably, is for recruiting and servicing clients.
Atlanta-based Georgia-Pacific Corp., a major manufacturer and distributor of paper and building products, entertains clients via its sponsorship of the Super Seniors – a yearlong competition held within Senior PGA Tour events for players 60 and over. The company host clients at pro-ams held at 18 tournament sites across the country.
“The people who watch senior golf and the people who know Gay Brewer or Gene Littler are mature businessmen, and that’s our audience,” said Steve Jackson, Georgia-Pacific’s vice president of corporate services. “The (Senior PGA Tour) players tell war stories and help our customers with their game. . . . They’re great ambassadors for our company.”
With consumers increasingly saying they see little difference between products or services in any particular category, marketing experts say, creating such emotional ties are priceless.
“At the end of the day a brand is a relationship,” says Speros of Ernst & Young. “How you use your communications tools to build that relationship with clients determines who the winners and losers are.”