Posted by David Polakoff on March 2, 2009
The Windmills of My Immediate Mind
Media Business Strategies – David Polakoff
After Citibank hit the skids, and before it made the US Congress’ radar screen, I had long questioned the rationale for Citibank’s commitment to its $400 million (20 years) naming rights deal for the new stadium for the New York Mets. I actually thought the stadium should be called TARP field – for the double entendre of the stadium’s infield tarpaulin; and the US government’s Troubled Asset Relief Program. When I attended the 2008 Austin City Limits Music Festival, in September, my friends and I nicknamed the stage sponsored by WaMu (Washington Mutual Bank) as the “FDIC” stage. I continue to refer to the theatre at Madison Square Garden as the “FDIC Theatre” (though in my heart, it is still the Felt Forum [its original, 1968 name]).
Even before the financial meltdown of 2008, I had queried my professional media industry colleagues, especially those in marketing, sports, and sponsorship, of the cost/benefit of stadium and arena naming rights; no one has provided a definitive answer; mostly it’s a “it can’t really be quantified” response. I submit that money spent on billboards and purchasing hospitality tents/suites at marquis and regular events have greater company (and shareholder) cost/benefit than the same money spent on naming rights. If marketers are seeking the younger demographic anyway, we all know that millennials are not brand loyal; further support for going for effective advertising vs. exorbitant brand spending.
I don’t feel “proud” or any more brand loyal when a product/service I utilize has stadium/arena naming rights. Similarly, I have no impetus to sample a product or switch brands when I see a new (to me) brand/product/service leasing named rights. I do feel good when a stadium/arena honors a hero (e.g., Veteran’s Stadium; RFK Stadium; Joe Louis Arena). I feel good about my association with a brand, product, or service company that underwrites a community service project or the performing arts. When I read about an event (sports; concert; etc.) or hear about it on radio/television, the mention of the branded stadium (“Good afternoon, ladies and gentlemen, and welcome to Petco Park where the San Diego Padres take on the…”) goes in one ear and out the other; it has no bearing on any impetus to shop at Petco.
I often discuss with my clients the return on investment (ROI) and cost of acquisition (C of A) of sales and marketing campaigns. It is ironic that the crunching of these numbers often puts the kabash on campaigns with an even lower overall cost than naming rights, whose ROI and C of A, as per my expert colleagues, can’t be sufficiently calculated. Some compare the value of purchased commercial time with the equivalent value of sighted or heard instances of the branded time from naming rights (i.e., comparing the value of time the sportscaster mentions “Petco Field” with what a commercial for that air-time would have cost). The key question is not the comparative dollar value but the comparative effectiveness. A well produced advertisement does not compare with the equivalent priced value of seeing/hearing a brand name.
Sure, the named rights money helps finance stadiums and player salaries, which in effect reduces (my otherwise exorbitant) ticket prices, but I can’t help but feel a bit schadenfreude with named rights scenarios gone wrong: Enron Field, Citi Field, Adelphia Coliseum, PSINet Stadium, CMGI Field, etc. Then again, this is coming to you from the entwined thoughts of a sports traditionalist and media consultant, who loves creative thinking, as long as the “numbers” rationalize it. Fortunately in the naming rights gone wild situations, there appears to be no apparent harm to the hosted team and the city – let’s hope so for New York’s and the Mets’ sake.