Baseball is a game of numbers, and here’s what the numbers show: Major League Baseball is on pace to set a single-season attendance record for the fifth consecutive year, with the total expected to exceed 80 million. The All-Star Game on July 15 (seen on Fox) delivered an average TV audience of 14.5 million viewers, the most for the midseason event in six years and a jump of 16% over 2007, per Nielsen Media Research, New York. The State Farm Home Run Derby on July 14 (on ESPN) had a 6.4 rating and was seen by more than 9 million viewers, the highest rated cable show of the year. And MLB partners are supporting the game with marketing and activation, including current baseball-themed campaigns from Pepsi Cola’s Aquafina and Gatorade, State Farm, DHL, Bank of America and Sharp’s Aquos.

Still, the state of the economy raises numerous issues. Are fans spending fewer dollars on sports? How much influence does sports marketing have on the buying habits of consumers? Will marketers reevaluate their ROI on sports investments? Are sports and sports marketing recession-proof? To seek answers to these and other questions, Brandweek, in conjunction with MLB, convened a panel of experts whose companies all are marketing partners with the league.

The roundtable meeting, which took place on Aug. 4 in the offices of MLB, New York, included:
• John Brody, svp-corporate sales and marketing, MLB Properties, New York;
• Mark Gibson, assistant vp-advertising, State Farm, Bloomington, Ill.;
• Charles Greenstein, vp-global sponsorship marketing baseball, Bank of America, Boston;
• Neil Mulcahy, evp-sales, Fox Sports, New York;
• Ralph Santana, vp-sports, media and interactive marketing, Pepsi Cola North America, Purchase, N.Y.



Brandweek: Given the magnitude of the 2008 All-Star Game in New York and the massive build-up and anticipation, did marketing efforts reach or exceed expectations?

John Brody: The people [at this roundtable] were among those who worked so hard to put together what we thought was an historic and memorable event around the city of New York and on the airwaves. Without the help of our partners both on the broadcast side and on the marketing side we would not have been able to create an event as unique as we did. Now it’s about looking forward and seeing how we can take the momentum of [what happened in] New York and the momentum of baseball and build on it.
 
Ralph Santana: The challenge we had was that New York is a really difficult market to break through. But the menu of items that MLB put together for their partners to participate in gave us options on how we could craft our activation. Couple that with the ability to link some of that with Fox as the broadcast partner, it really put together an activation footprint that was not only on-site in the market but made it feel like it was a bigger presence due to the media integration. It over-delivered for us in the sense that this is a hard market to break through and our activation met that challenge.

Mark Gibson: I would agree that it met expectations for us and exceeded them in some cases. We saw New York as a huge challenge but also a huge opportunity to be able to break through in the most media-congested marketplace that there is. Looking at the entire platform, we were very pleased with the exposure we received and elements of All-Star week that we were able to execute around, as well as the great partnerships that were fostered among [the various marketers].

Charles Greenstein: The Fox and MLB partnership was essential to the success we had during All-Star week. As we try to drive greater levels of awareness of our brand and product, and create that favorability [among businesses and consumers], and ultimately drive our business growth, the All-Star Game in New York was a tremendous platform for us. We activated on several fronts: We had a product program in market, we partnered around the Bon Jovi concert in Central Park with branding and with Fox in terms of an integrated channel mix. And we [had TV spots] during the game. So it was a tremendous success on several fronts, including what we look at in terms of community and associate impact.

Neil Mulcahy: It certainly is a rarity when you can have a group of great marketers and partners create such a cohesive plan and move forward with it to such levels of activation and success. It probably was one of the most impressive things Fox Sports has been through in terms of activation and the way it was organized. So my hat is off to MLB and all the marketers because it came off looking great.

Santana: One of the ways we measure success is not only the eyeballs—the numbers speak for themselves in terms of how good that was—but the level of engagement you get with consumers and with retail trade in any given market. Some of the options that were put on the table were assets that were engaging from a consumer perspective but also valuable to the retail trade. There was so much that local retailers could either participate in directly or have their shoppers participate in. It gave us this great tool belt, if you will, to spread a lot of items around the local trade; there were lots of ways we could plug our retailers in. That, to us, was a breakthrough, for us to have all those tools to build long-term relationships.



BW: What does this say about how loyal fans and consumers are to baseball and its marketing partners?

Brody: The way we look at loyalty is not just across our sponsors but across our fan base. We judge loyalty based on consumer habits . . . [According to our studies] more than 60% of the people in this country consider themselves fans of Major League Baseball, so they have an allegiance to our brand. That’s an enormous reservoir of consumers to the likes of Pepsi, State Farm and Bank of America to tap into. And we let the partners do what they do, and they are the best partners in the world.

Santana: The proof for me is in the numbers. When we work with MLB and leverage their trademarks in programs and packages, we see a difference in terms of our [sales] numbers. To me, that shows a passion of whether fans are loyal to a particular sport. There is a sense of passion at the national level, but we also have the local footprint that really goes deep from a consumer perspective, where we tie into local MLB teams, it drives a sense of loyalty and makes a difference in terms of numbers for our business.

Mulcahy: People talking about baseball and getting excited about baseball is great for the sport. All-Star Game ratings were the highest they’ve been in years and our Game of the Week ratings are up. Our barometer is that we are pacing at least 20% [in ad sales] ahead of where we are in the playoffs compared to last year. Live sporting events continue to be the [best] vehicle for advertisers to reach their consumers and get their message out. All you see is growth across all of our sports . . . It’s not just guaranteed ratings, but guaranteed big ratings.

Greenstein: We look at sports in general as a universal platform. We are the official bank of MLB, Nascar, NFL, plus the relationships we have with local teams. We see it as connecting with our consumers on an emotional level. Baseball in particular attracts very loyal fans. Baseball is part of the fabric of this country. We’ve done a lot of research and we feel that avid fans and actively engaged fans have a much higher propensity to purchase sponsors’ products by about two and a half times more than [nonsponsor] products. So for us it’s critical to be associated with Major League Baseball on the national level and to be ingrained with the local clubs, where you can become more actively engaged.



BW: Given the array of sports events this summer, including the All-Star Game, the Olympics, the U.S. Tennis Open and NFL training camps, how do you keep your message fresh so consumers retain it?

Santana:  We look at that on two levels. First, what’s the creative challenge? How can we engage consumers with our concepts and execution? Second, you need to have some discipline around not spreading yourself too thin when you are engaged in many sports. With Major League Baseball, I want to make sure that we are doing vertically integrated programs at a league level, a team level, tying in with our broadcast partners, really leveraging the jewel events as they pop up on the calendar. Going back to the All-Star Game, nothing can be more challenging than trying to stand out in New York City. So if you can make it happen here, you can pretty much make it happen in any other city. The model is to start with great creative content and then build it vertically.

Gibson: I always refer to the three “Rs”: You have to be relevant in the environment you’re in, which is a combination of the creation and the activation so people can feel and then understand why you’re doing what it is you’re doing. It has to resonate with consumers so that you’re not just giving them a message that falls flat or so they are not experiencing your brand that is not consistent with the core values of the product or services you’re selling. And you have to show folks respect, because consumers are very smart and savvy. They give you permission to market to them, and in doing so you have to make sure you are reaching them in a respectful tone in a way that is consistent with your brand and where their mindset is . . . One measure of success is that if you’ve ever pulled out of anything and people [didn’t notice], it tells you a little bit about what you were doing or how you were activating. If you can drive excitement before an event as we did with the Home Run Derby and then have it turn out as successful as it did, you’re in the right type of [platform].

Brody: We are steadfast in our position that to align with Major League Baseball you have to be an all-in activated partner. We have partners who will not just jump in on an All-Star Game if it’s in the right city or a post-season match-up if it’s the right team. They are partners who will support the game 365 days a year. And when you do that, you break through.



BW: How has the impact of sports and sports marketing on consumers been affected by the economy, and vice versa?
 
Santana: Sports is a comfort zone for consumers and fans during hard times. It’s one of the last things they try to cut back on. Even if you can’t go to a game you certainly can watch a game. The efficacy of our marketing hasn’t changed. We try to focus our dollars for the greatest impact, but sports are not one of those extraneous properties that we would pull back from. In fact, in this type of environment, this is the type of property to which we gravitate.

Mulcahy: If you look at live sporting events and the properties we have, we have shown growth in every one of our sports. If you have the right product with passion points behind it, the money will come. Even in this tough time, we are seeing [marketers] who use the product continue to spend, and maybe there is even an uptick, because the ratings are there. The beauty of live sports and the flagship events we have is that [consumers] know where they will be and can plan around them.

Gibson: The 30-second ad is still a powerful tool, but you always want stronger and more creative ways to extend the efficiency of your overall media buy and connect with consumers. In this media-cluttered environment and the highly competitive industry that I’m in, partners like Fox and MLB help me break through. So I’m going to stay with and build on those alliances. More brands are seeing the value of the sports marketing environment because it is TiVo-proof and it is reality TV manifested in the area of competition. Sports will continue to have lots of opportunities for marketers to reach consumers.



BW: How are marketers working to engage and attract consumers via the Internet, wireless and other forms of communication?

Santana: Technology has enabled us to make the digital world the place where we can take advantage of consumer engagement and interactivity. With MLB we have the “Clutch Performer of the Month,” where fans can co online and watch video highlights, vote for their favorite players and also enter a sweepstakes for tickets to the 2009 All-Star Game in St. Louis. We are increasingly doing more in the digital space.  But that has a different sort of objective than our mainline broadcasting. It’s a place where we get much more interactivity and a higher level of engagement with consumers.

Gibson: One of the cornerstones of the deal we did with baseball was the MLB.com piece of the agreement. When you talk about loyalty and fans and the passion that people have for their baseball teams, one of the beauties of the game for us in the relationship we have with MLB and 25 of the teams is our ability to connect with them on a regular and daily basis . . . All of the different things that go with being a baseball fan touch people on a daily basis, and more than just once a day. So they are online a couple of times a day checking box scores, checking their fantasy teams, watching highlights from the local news or a national sports program, was Manny Ramirez going to be traded? (Editor’s note: The Boston Red Sox traded him to the Los Angeles Dodgers.) The online space is huge because people crave that information. The inherent nature of the game and the length of the season lends itself to a high degree of loyalty with all of these multiple touch points for consumers that make it really attractive to a sponsor like State Farm.

Greenstein: Bank of America uses a wide array of channels so that we can message our brand and our positioning. Digital has a tremendous number of touch points for us, and it is much easier to track. The evolution of the media mix is having the greatest impact, whether it’s driving traffic to our locations or to our Web site. We do a lot of testing on tradition and alternative channels and we alter our mix accordingly. The number of digital touch points that people have [is growing] be it at work, at home, PDAs, mobile phones. It’s top of mind for us as we look at ways to reach consumers.

Santana: They play different roles. A good example is the All-Star Game, where we utilized so many assets. For example, we had a “watch and win” promotion where consumers had to register online and the messaging came through Fox. The beauty is that when you get those elements working together, which is sometimes difficult. Each medium has a different strength and a different ability to deliver on your activation. The power comes when you get it all right and get it all vertically integrated. But it starts with compelling content, which MLB delivers. Then you have to get the right support and programming behind it.

Mulcahy: We are reaching a mass audience, so when we get together with our partners we try to create something special. As in the case with Pepsi, [we reached] a large group of people and then drove them to their Web site. And it works unbelievably well with baseball because we are in step with both sides: baseball and the clients. We do tons of [programs] with these guys in all our other sports and there is a trust level of delivery. Our job is to reach the largest audience we can. The way television is watched regarding sports is that it’s not TiVoed. It’s a live audience. A compassionate audience. People who tune in to watch sporting events live. So we want to create ideas and events for our marketing partners that drive consumers to point of sale, Web sites or wherever they do their business.

Brody: What’s tremendous about the evolution of media is we are better able to deliver solutions. So whatever [partners] bring to us we work together with all forms of media to find a solution to reach customers.



BW: What is the biggest change you’ve seen in sports marketing and what changes do you see coming?

Gibson: It’s getting more crowded and there are more entry points. Everybody is being charged with finding the most effective ways to spend their dollars, so understanding the overall efficacy of the sports sponsorship and marketing buy and trying to figure out your return on objective, not necessarily ROI, but what are you trying to achieve with your sports marketing and sponsorships. The stakes are higher for everyone who wants to align with sports.

Greenstein: We’re seeing the cost of entry to some of these sports platforms is increasingly becoming more expensive, and that has a direct impact on your ability to activate. The activation funds are becoming more difficult to find. And that becomes a more difficult issue especially when you start to define the ROI and the ROO. We’re also seeing the rapid adoption of new marketing channels and talking to the customer in the right channel and when they want to be talked to. That’s something we need to be in front of, even more so than the consumers so that we are top-of-mind with avid fans and those fans who are actively engaged with their leagues and their teams.

Santana: We clearly are in an inflationary environment for sports, so that makes some things more difficult. It’s getting increasingly crowded at the partner level and from a media perspective because there is such value to be where the eyeballs are. We are seeing retailers who want to engage with partners and sponsors increasingly wanting to get their own tentacles in the sports marketing space to create their own deals to create value for them. And the exploding media options and the way you can package your message has really changed the face of the game.

Brody: Television is the mass-reach venue and will always [be] the protagonist. But there are many more ways you can push content through to consumers and give them access to your activations. All the assets that baseball as the content provider offers gives to the marketer, the advertiser and the partner the opportunity to interact with consumers. That’s what we’ve seen evolve over time. The media mix has changed, and it has changed for the better because marketers can interact with consumers and fans in more ways.



BW:The Bon Jovi concert presented by Bank of America and the State Farm Home Run Derby certainly raised the bar as far as activation and consumer buzz. What was the reaction and how are you using those efforts to build long-term relationships?

Greenstein: The way we looked at underwriting that concert provided us with a breakout opportunity we were looking for. In an expensive and very crowded media market, we were looking to gravitate toward and get our hands around something that can tie your brand with and carry your message to consumers and associates. This concert was a unique opportunity to do that. It was a great play for us in the market, a great brand opportunity and a great platform for us to create unique client hospitality access and associate engagement point. So you can only imagine the number of clients and associates who, when this announcement came out, were just charged and thrilled that we were doing this. They wanted to know how to get tickets, but, more important, wanted to know how they could support what we were trying to do. The whole alignment, the fact that it was Bon Jovi, a marquee band, it heightened our presence in the market. In New York you saw the various media we used as a lever to get the word out about our affiliation with Major League Baseball and Bon Jovi. We looked at this as one of the key measures of success for us not only as a brand but also from a community and associate perspective in terms of activation. It was a momentum builder.

Gibson: The State Farm Home Run Derby has fast become one of the largest sponsorship opportunities in our portfolio. We started activation plans for [the 2008 Home Run Derby] right after we left San Francisco [site of the 2007 Home Run Derby and All-Star Game], going into it knowing that New York is such a media-saturated marketplace. We wanted to have a big impact. Our goal was very much to paint the town as State Farm red as we possibly could in and around the Home Run Derby and our other activations. We feel very good about the results. When you look at numbers it delivered on ESPN, it was the highest-rated cable program of the year. It holds a unique opportunity . . . as far as reaching people and talking to consumers, both our current customers and potential customers. Beyond the numbers, it is the ability of a brand to have a dominant and high profile position in a prominent place of passion. It provided a crescendo to the All-Star Game. So we not only took the them to the streets of New York with banners on street poles, but to the unique advertising opportunities of New York: the busses, taxi cabs, FanFest at Javits Center and a mini Yankee Stadium in Times Square, where [Hall of Famers] Cal Ripken Jr. and Goose Gossage were signing autographs and giving clinics. And with MLB we donated $250,000 to the Boys & Girls Clubs of America as a result of the number of gold balls that were hit for home runs during the Home Run Derby. So we had great success in tying our activation locally in New York and nationally.



BW:State Farm has a current TV spot with Dodgers' manager Joe Torre and Pepsi's Aquafina has a spot starring Chicago Cubs' manager Lou Piniella, both of whom are unique personalities. How has that helped get your respective messages to consumers?

Santana: It always starts with a creative idea. Clearly you want people who are recognizable and who have distinct personalities to which consumers may attribute specifically to them. Lou is certainly someone that people know and want to watch.

Gibson: One of the important times for us is when a consumer moves. Our message is that we have 17,000 agents nationwide, so there is somebody close by who can help you with your journey. So when we were thinking about [a baseball spot], we wanted someone who was high profile who just moved to a different location. Joe Torre fit that bill when he moved from the East Coast [where he had been manager of the New York Yankees] to the West Coast. Joe is a likeable, relatable type of guy and that commercial [which shows him morphing from a gruffer New York-type guy to someone now basking in the lifestyle of Los Angeles] has been a great success.

Santana: [Laughs] I'd love to see a commercial where Joe is introducing Manny [Ramirez] to the Los Angeles lifestyle and a State Farm agent.