Sports Marketing - Objective Investment or Fantasy Fulfilled?

I'm a sports nut. I love to watch and I love to play, so I'm one of those people who gets exposed quite often to how companies use sports to market themselves. When I ran Coca-Cola's U.S. marketing, we were deeply engaged in sports marketing of all sorts - from The Olympics to NASCAR to the NFL/NBA/NHL to MLB to World Cup Soccer. So I know something about this.

If you market sports equipment or sports related clothing, it would be awfully dumb if you didn't associate your brand with your sport. Nike markets using sports. Under Armor uses sports. So does Gatorade. Duh.

It's more interesting to look at the companies that aren't directly related to sports and consider why they are using sports to market themselves and is this smart business. In some cases, it is. In other cases, you've got a CEO who loves a sport (say golf or tennis or NASCAR for instance) and who makes more of a personal decision to invest marketing money in a sport they happen to love. It's certainly a nice executive perk to be treated like a big shot at some major sports event while entertaining company or customer VIPs. But is it really justifiable from a marketing ROI standpoint?

It is rare to find a non-sports company investing in sports marketing if the top executives aren't big fans. I'll bet if you took a survey of all the companies that buy naming rights to major sporting events, 95% of them have top executives who are gigantic fans of that sport. They can use their company's money to buy an association that allows them to fulfill a dream.

The biggest sports investments of all are the deals to acquire the naming rights to a new stadium. These are $100 million deals and more, depending on the stadium. Is this EVER a smart investment? I think not. Remember Enron Field? Enron spent a fortune on that deal. Was that the best place for them to invest that money? Of course not. But those jail bird top Enron executives sure got their egos stroked whenever they went to games.

When times were rosy, companies could get away with doing these deals. Today, it looks ridiculous to invest money this way. Jerry Jones wants HUGE money for the naming rights to the new Cowboys Stadium. In this economy, it isn't going to happen. Jerry is going to bide his time. The new stadium will simply be Cowboys Stadium...for now. Visions of a stupendous naming rights deal are still dancing in Jerry's head. He's just waiting for the economy to turn around. Some company with a CEO who's a lifetime Dallas Cowboys fan will eventually get suckered into a deal.

Associating your brand or company with a sport makes sense when the demographics are right and when the imagery of the sport is reinforcing of the imagery you want associated with your brand/company. But the approach to analyzing these deals should be no different from analyzing what TV shows to advertise on. You'd never advertise on a TV show just because you were fan of a certain actor or actress. In the same way, companies need to objectively analyze any association with any sport to make sure that it is a financially sound way to build your brand equity and create sales.