Industry insider: sport marketing forecast.

Kadlecek, Jim

The following industry leaders consider five areas of sport marketing and tell Sport Marketing Quarterly what they expect in 2010. The interviews were conducted by Jim Kadlecek, associate professor and chair of the Department of Human Performance and Sport Business at Mount Union College and Vice President for Industry Relations of the Sport Marketing Association.

John Brody, Senior Vice President of Corporate Sales & Marketing, Major League Baseball

Vic Gregovits, Senior Vice President of Sales & Marketing, Cleveland Indians

Nancy Hill, President & CEO, American Association of Advertising Agencies

Mike McGee, Managing Director, ANNIKA Brand of Businesses

Patrick J. McGee, Jr., President, ProVentures Sports & Entertainment Marketing

Scott O'Neil, President, Madison Square Garden Sports

Kurt Schwartzkopf, Chief Marketing Officer, Denver Nuggets & Colorado Avalanche

Ticket Sales

O'Neil: Big and unique events with marquis properties will continue to sell for bigger dollars and increase their slice of the pie in 2010.

Schwartzkopf: Big-ticket items such as club seats, suites and some season seats continue to be a tough product for teams in the lower to mid rankings around all leagues--major and minor alike. The emotional spend is as great as the financial spend; however, economy is king, and sometimes even the most passionate fans just can't afford to be a season ticket holder any longer until they are back to a strong financial position at home. This makes the promotional campaigns, group campaigns, and mini plans a critical product to fill the arena. But everyone knows, without a solid foundation of season seats, even the most dynamic and intense sales teams struggle to sell out games.

Hill: This year will be a huge boost in ticket sales, mostly due to the World Cup in South Africa and the Winter Olympics in Vancouver. Large events that happen every couple of years are always a big draw for spectators, even those that can't afford to go to sporting events regularly.

Gregovits: I believe we will continue to see ticket offers with the emphasis on value continue to move; we saw this in 2009. Anything value oriented moved the needle, and I also believe we will continue to see that fans are still looking for value-added offers.

McGee: I think ticket sales will be interesting in 2010. Teams have had to be creative to try and fill the seats the last couple of years. I think you will see more teams and tournaments trying to "over deliver" to provide the best possible experience to their fans.

Brody: Last year unequivocally was a time of great economic challenge for all people around the country and around the world. We were very fortunate as a sports property, not because of luck or because of predictions, but because of preparation and commitment to the fan, that we enjoyed the 5th best attendance mark in our history of over 139 years. That is people kind of voting with their feet by saying in good times and bad, baseball is an important component in my life. We are very fortunate because of what we have in a product. And why we were and will be able to continue to have fans go to our ballpark, it is about affordability, it is about access, and it is about understanding what the fan wants. In our clubs we are very quick to see the economic challenges facing the country and react with great opportunity for fans to come in and spend time. I think you will see more sports and entertainment properties generally adopting the moniker that we have, that we really need to be affordable family fun. So I think you'll see more of that, more creative approaches to how people and how properties attract their fan base, and it all starts when you have to have a quality product, you have to be relevant to the fan base, and you have to be worth the investment, because people only have a certain amount of money to spend on entertainment, and only a certain amount of time to dedicate to it.

Technology

O'Neil: 3D HD will slowly enter the market and over time change the sports television viewing experience in a more dramatic way than the HD revolution did. Regional sports networks will prove to be the engine to drive market acceptance and adoption.

Hill: As cliche as it sounds, social media is the future. Sports fans have an emotional connection to their teams and how successful they are. Fans want to feel as close as possible to the action; why not create an online community for them? A great example is MyColts.net, a fan site for Indianapolis Colts fans. The site allows fans to connect with each other and talk about their favorite team. It also lets fans from across the country, who may not have access to television broadcasts of the games, connect to the team. Social media platforms offer a whole new level of connectivity, creating stronger ties to the brand, and in this case, the team. Even though the ROI is not as clear as tickets sold, it is important to cultivate these connections.

McGee, Jr.: The inclusion of all forms of social media into all facets of sports; we already saw this to some degree on the athlete side with Tiger Woods' communication during his crisis. However it is very interesting to see how teams are integrating a medium they can't always control. This past season the Washington Redskins installed four 60-inch LCD screens to broadcast all Redskins tweets to fans while they watch the game on the Audi sponsored club level. This will be expanded on to enhance the live event experience for the fan and integrate the relationship with sponsors.

Gregovits: This continues to be a thriving part of our business. Whether it is loaded value onto our tickets, which we were doing for all season ticket holders this year, or paperless tickets, by using technology to create dynamic ticket pricing, we are trying to maximize technology including e-brochures, e-cards, as well as in-game texting, etc.

McGee: Social media has really become not only popular, but a necessary way to promote products and services. People want real-time feedback and videos. We use Annika's website, blog, Twitter, and Facebook to simultaneously distribute all information, press releases, articles, etc. We still have a lot to learn, but this will definitely be part of our strategy moving forward.

Schwartzkopf: Teams continue to spend more and do more in this space and are seeing positive ROI's the more they invest. Team sites will continue to get better and deeper with content and functionality. Facebook and Twitter accounts keep growing and growing, while teams find new ways to use technology to sell seats.

Brody: I think technology will continue to find incredibly innovative ways to deliver content, and sports content is something that people crave. It's about how access and technology is bringing sports and content generally to more people, and I think that will only continue to evolve and find new ways to integrate technology into customers' consumption of media and content.

Sponsorship

Brody: An over-arching comment about our predictions for the future is people continue to spend, and the spending will escalate in sports sponsorship because it is good business, it is driven by return on investment. As the world continues to open its doors globally, and there continue to be more and more choices, we think more and more people will choose sports; baseball most notably. It is important to know what we can offer the brands, make sure we understand their objectives, and then what they will do to support the partnership. Partners are the conduits to the fans; we look for the brands to help take messages about baseball and their brand to the consumers. That's why these are true marketing partnerships, not sponsorships. We're asking them to help market our sport and their brand together. I think as you look to the future, you will see more brands and sport properties following that philosophy because it has proven to be successful in tough times, as well as less challenging times. Partnerships need to be based on sound research and market understanding, not just how to figure out a deal, and I think you'll see much more of that with the top-tier brands as you look to the future, not just 2010, but in the years to come.

O'Neil: Brands will do fewer deals for more dollars with properties that demonstrate an ability to move the partners' business. Therefore, the flight to quality that played out in 2009 will continue, as iconic properties will take more market share.

McGee, Jr.: The market place is going to continue to be oversaturated as every event makes its way to some sort of broadcast outlet. While potential exposure might increase, the actual numbers will continue to fall, and just being on television is not going to be enough. The savvy sponsors are going to demand a way to control the message more and to integrate with the event and players more than ever. This integration will lead to sponsors creating events within sponsorship deals that they control and run in partnership with teams, and leagues, or by themselves.

Hill: I think that sponsorship will see a whole new level in the coming year. Consumers are conditioned to see grand sponsorships of stadiums, uniforms, and anything else you can think of. They see right through it. Sponsorships need to get smarter in order to create the type of consumer reaction that results in brand loyalty. Sponsorships in the future will have to tap into emotions that sports fans feel. Whether that emotion is heartbreak, victory, or humor, it allows the fan to connect their emotions about the game to the product.

McGee: Teams, companies, and events all use social media to provide added value to sponsorships. Websites have really been utilized the past five years and I think that will increase through Facebook, Twitter, etc. Individual sponsorships may be slightly smaller in terms of dollar amounts the next couple years due to the economy.

Schwartzkopf: Sponsors are getting more creative with their media integration/activation, and teams are adapting and accommodating while taking their products to new levels and exposure, which makes for great partnerships. Yes, the dollars are tougher to get, but with great activation typically comes happy and long-term partners.

Gregovits: Corporate partners will continue to look at short-term agreements with the focus on driving traffic to their locations, more relevant to activation. Social media, which I think all of us are starting to learn about, will be the next big topic. Sampling continues to be big, but engaging interaction with our fans will be more important than ever before.

Customer/Client/Sponsor Retention

Gregovits: The retention is coming from corporate partners requesting the interaction of our fan base. There is more focus on different elements as opposed to your standard sponsorship, such as creativity and incorporating social media, and the Internet. Corporate partners are asking for those items as opposed to association and event marketing.

Schwartzkopf: People have to do business with people/products that they like and trust, and this doesn't change because there is a recession. However, it's more important than ever to keep the communication lines open with customers, and let them know they are important to your success, that you hear and seek their opinions and feedback, and react accordingly. In a tougher economy, teams must show their fans that they are willing to change with the times and adapt their business when the need is there. Whether that means going from a 6-month payment plan to a 10-month payment plan, giving the most loyal customers more/better benefits, or becoming more flexible in your terms on a suite contract. Either way, everyone is less likely to dig in their heels when the belts are tightening for everyone.

O'Neil: More emphasis and attention will be placed by the most successful properties on leveraging partnerships to drive quantifiable business results for the partner, and real brand leverage and activation on behalf of the property.

McGee, Jr.: In order to retain as well as generate new sponsors, the leagues and teams are going to have to continue to reinvent themselves. Before Larry Bird and Magic Johnson came along, the NBA All-Star game was a non-event; now it is a three-day bonanza for the league. The same is becoming true with what the NHL has done with The Winter Classic--the creation of a major event that is a must see happening. I think you will start to see the creation and expansion of these special in-season events in both team sports, as well as individual sports.

McGee: Now more than ever, companies need to deliver on their brand promise. This means to consistently deliver on both the functional (the products and services they provide) and emotional (how they make their customers, sponsors, etc. feel) benefits to develop the trust of their clients, customers, and sponsors. It's not enough to have a good team or event; that is a given. You have to make people feel good and be consistent, or you'll just be another commodity.

Brody: Properties must have a good plan going in, do the proper research, provide value and execute properly, provide the best customer service, have an interesting product, and give attention to the driveway to driveway experience. Preparation and attention to detail is the key to success and retaining customers.

Next Big Thing

Gregovits: I think sports teams are going to be much more analytical and targeted. They have to make smarter decisions, so analytics departments on the business side will continue to grow doing more sophisticated analysis of our fan base, their buying patterns, etc. I'm a huge proponent of value-based pricing, similar to the concert business; valuing each game as reflected by the fans so pricing is much more in line with secondary pricing. In technology we will continue to make it easier and more fan friendly from all assets of ticketing, as well as the ballpark experience.

McGee, Jr.: What is great about the next big thing is that usually when major shifts occur, a certain climate must exist that the status quo is not enough. The recession and the competition that it has created for fans and sponsorship/advertising dollars is what will bring about the next big thing. The table is set.

Hill: Within the coming year, I think social media will become a larger part of the sports marketing mix. First, by creating a Facebook and Twitter presence, and eventually, expanding to actual networks where fans can network for larger and more popular teams. In addition, I think you will see more and more testing of e-tickets--downloadable to your mobile device. Think boarding passes at airports with scanners now able to read the bar code on your iphone. This is being tested now and will be in full force at the World Cup.

Brody: I'm confident you will hear much more about 360 degree marketing programs in the years ahead like the deal we just announced with Scott's. It has a national overlay, local extensions, community component, significant media commitments, and national and local licensing. There's a commitment on so many different levels that I think that is not a deal that was able to be executed 10 years ago, because the levels of integration and sophistication may not have been there before. As people get deeper into how they are going to take their brands to market, more deals like this will come to fruition.

O'Neil: 3D HD, for the reasons I already gave.

McGee: I look for something along the lines of Twitter, but voice-activated. Ten-second comments that people can listen to rather than read. Just like video has replaced photos on the web.

Schwartzkopf: Pertaining to our business, I think we will start seeing more teams take full control of their ticketing platforms; working harder than ever on the secondary market issues, while embracing digital ticketing as the wave of the future.