Editor's Note: This article originally appeared in the April 1993 issue of Athletic Business with the headline "What's in it for Me?"
What's in it for me? That’s what corporate sponsors are asking, and that’s the question sports organizations have to answer if they want those companies’ financial support. A survey of NCAA sponsors might help provide some insights.
With most corporate involvement in sports marketing now geared toward return-on-investment—not “warm and fuzzies”—one of the keys to attracting corporate sponsors has become understanding the business goals of a sponsor. Although a great deal has been written the last few years about the increased need for and benefits of corporate sponsorship in intercollegiate athletics, little research has been available that discusses companies’ attitudes toward intercollegiate sponsorship.
A 1992 survey of corporations involved in the NCAA sponsorship program attempted to identify the reasons for their involvement in the program, what they perceived as the benefits of being a corporate sponsor and whether they were satisfied with the results of their involvement. Representatives of the 12 official NCAA corporate sponsors were interviewed, along with the director of corporate sponsor relations for Host Communications, the administrator of the NCAA program. The survey consisted of a single interview with a representative of the corporate sponsor.
Corporate sponsors and the individuals interviewed at each company were as follows:
- American Airlines, manager of worldwide sales promotions
- Coca Cola USA, project manager/prestige accounts
- Gatorade, senior manager of sports marketing
- Gillette, assistant manager of communications
- Hyatt Hotels, vice president of sales and marketing
- Kodak, manager of U.S. sports programs
- National Car Rental, staff vice president of marketing
- Oldsmobile, executive assistant to sales and marketing mgr.
- Pizza Hut, manager of print advertising
- Rawlings Sporting Goods, marketing manager for inflatable division
- Sara Lee, marketing supervisor
- U.S. Sprint, group manager.
Primary reasons for sponsorship: The companies cited affiliation with sports (67 percent), access to intercollegiate athletics (50 percent), media exposure (58 percent), ticket access to NCAA championship events (42 percent) and product/service exclusivity (42 percent) as their primary reasons for involvement with the NCAA sponsorship program.
Sponsors who cited access to championship event tickets as a reason for participating said they used the tickets for employee incentives, prizes for retail promotions and VIP entertainment.
One of the primary factors lending value and prestige to NCAA sponsorships is the limitation placed on the number of sponsorships and the assurance of corporate product or service exclusivity. Sponsors who cited exclusivity as a reason for participation as an ANCC corporate sponsor emphasized that being able to prevent their competitors from being a corporate sponsor was very important. For example, as long as Coca-Cola is an NCAA corporate sponsor, Pepsi-Cola is excluded from having any involvement as an NCAA sponsor.
Supplementary reasons: The companies also cited the following reasons for participation in the NCAA program:
- Desire to increase consumer base (Sara Lee, Gillette, Hyatt, Coca Cola, Rawlings, American Airlines, Oldsmobile)
- Ability to develop tie-in programs (Oldsmobile, Pizza Hut, Kodak, Gillette)
- Enhances image (Sara Lee, U.S. Sprint, National)
- Coincides with peak advertising campaign (Gillette, Pizza Hut)
- CEO on NCAA board (Sprint)
- More economical than licensee agreement (Rawlings)
- Sports market exclusivity (Gatorade)
Benefits: NCAA corporate sponsors often cited perceived benefits unique to each corporation, but there were many common benefits as well:
- Cooperation with other corporate sponsors (Sprint, American Airlines, Hyatt, Gatorade, Gillette, Kodak, Oldsmobile, Pizza Hut, Rawlings)
- Ability to reach a broad base of people (Gillette, Hyatt, Kodak, National, Pizza Hut, Sara Lee, Sprint)
- Increased revenue or market share (American Airlines, Gillette, Kodak, National, Rawlings)
- Enhancement of other marketing efforts (Kodak, Oldsmobile, Rawlings, Sara Lee, Sprint)
- Community involvement (Gatorade)
- Ads in NCAA News (National).
Clearly, the cross-promotional activities and co-op relationships with other sponsors have been very successful benefits. The Pizza Hut-Rawlings mini-basketball project during the 1991 NCAA men’s Final Four championship demonstrated this strategy. In addition, Gillette sponsored a promotion in which contestants could win a new Oldsmobile or a trip on American Airlines. This strategy has been effectively incorporated by other sport sponsors in the recent past and serves to show how innovation and cooperation can enhance a company’s involvement in sport sponsorship.
However, some sponsors are not in a position to cooperate with other sponsors on promotions because of parent company conflicts. For example, Pizza Hut is a division of PepsiCo, Coca-Cola’s top competitor, so neither sponsor is going to reveal a great deal of information about marketing strategy or plan extensive co-op activities.
In the area of community involvement, Gatorade specifically mentioned that its participation in the NCAA Y.E.S. (Youth Education Through Sports) Clinics has been a positive aspect of their corporate sponsorship. The director of corporate sponsor relations for Host Communications also indicated that sponsors have said their involvement in the Y.E.S. Clinics has provided excellent public relations.
Gaining a perceived advantage with athletic departments was especially important to the service-oriented corporate sponsors—American Airlines, National Car Rental and Hyatt Hotels. Their participation in the corporate sponsorship program was driven by the rationale that the NCAA, fans, coaches, athletes, administrators and alumni need the services these sponsors offer for every championship event, as well as for year-round competition. According to the Host Communications representative, solicitation of certain sponsors is also driven by similar needs identified by the NCAA.
Lack of signage opportunities: Ten of the 12 sponsors indicated their satisfaction with the program. Those were American Airlines, Coca Cola, Gillette, Hyatt, Kodak, National, Oldsmobile, Pizza Hut, Rawlings and Sara Lee. Only Gatorade and U.S. Sprint said they were dissatisfied.
However, two of the sponsors who indicated that they were satisfied with their involvement in the NCAA corporate sponsorship program also said they were frustrated with the restrictions placed upon the sponsorship by the NCAA. Both of these sponsors, as well as the two who indicated that they were not satisfied, specifically mentioned signage restrictions at NCAA championships as their primary frustration.
A 1989 study on the impact of stadium advertising found that stadium signage was an effective way for corporate sponsors to improve visibility and name recognition while also having a positive impact on sales. According to Host Communications, the basic sponsorship package totaled $750,000 for three years. Sponsors felt that for that amount of money, there ought to be flexibility on the part of the NCAA regarding signage at championship events.
Target markets: While there is some overlap of target markets, there is a great deal of variety in the population sponsors are focusing their marketing efforts on through their corporate sponsorship. Ten of the 12 sponsors cited a specific demographic group as an important factor in their sponsorship decisions:
- American Airlines—35- to 50-year old sports enthusiasts and business travelers
- Coca Cola—College students
- Gatorade—18- to 34-year old males
- Gillette—18- to 49-year old males
- Hyatt and Rawlings—Coaches and administrators
- National Car Rental—30- to 53-year old males
- Oldsmobile—Upscale college graduates
- Pizza Hut—18- to 34-year old males
- Sara Lee—Women
The diverse base of the NCAA market also supports the goal of several sponsors to reach a broad-based market through the national scope of the NCAA program and the quantity of championships sponsored by the NCAA.
Corporate sponsorship of intercollegiate athletics has been shown to be an effective practice through which athletic programs can raise much-needed financial support and corporations can receive significant marketing benefits. The sponsorship arrangement can successfully accomplish objectives for all parties involved. This research strongly suggests that intercollegiate athletic programs and corporate sponsors can work in harmony to produce benefits that correspond to the marketing and financial needs of both entities.
There is considerable discussion about future trends in corporate sponsorship. The ingenuity of sport marketers and corporate sponsors will play a significant role in determining whether or not the NCAA corporate sponsorship program remains viable. Universities and the NCAA, together with intercollegiate athletic administrators, must take a leadership role in the evolution of the intercollegiate athletic-corporate sponsorship milieu.
David K. Stotlar is the director of the School of Kinesiology and Physical Education at the University of Northern Colorado. James C. Kadlecek is the activities director at Greely (Colo.) Central High School. This article originally appeared in the April 1993 issue of Athletic Business with the headline "What's in it for Me?"