Advertising experience or experience advertising?

Conventional wisdom holds that traditional media’s grip on consumers continues to slip as they increasingly turn to the internet and their peers for entertainment and purchasing recommendations. In fact, any planner worth his or her salt can reel off a stream of statistics pointing to advertising’s demise — or lack of effectiveness, at least: Prime-time continues to erode as all the major networks saw significant declines for last year’s season; 77% of U.S. consumers trust businesses less than they did a year ago; consumers trust their peers’ opinions online more than any other source and a whopping 83% of Mad Men’s supposedly ad-friendly time-shifted audience fast forwards through commercials according to Tivo. The list goes on and on.

But perhaps it’s not that advertising is failing but that brand experiences (both on and offline) are really what are capturing the imagination of today’s consumer.

For example, 65% of U.S. consumers report a digital experience changing their perception about a brand (either positively or negatively) and 97% of that group report that the same experience ultimately influenced whether or not they went on to purchase a product from that brand. In a nutshell, experience matters. A lot.

Of course, brands that were “born digital” intuitively know this. Google and Amazon are pioneering experiential brands. That’s why Amazon continues to pour money into improving its customer service rather than run traditional advertising or marketing campaigns. As Amazon CEO Jeff Bezos has said, “We are not great advertisers. So we start with customers, figure out what they want, and figure out how to get it to them.” Zappos built its brand the same way, as has Facebook.

But what about more traditionally-minded marketers who weren’t born digital? Can they succeed in an experience-driven world? The answer is “yes” and here are some of the best:

Red Bull: Red Bull basically pioneered the experiential category. Not only did the brand rise to prominence by sponsoring alternative athletes and lifestyles, it went further by creating its own events, like Red Bull’s Flugtag and even its own sports like Red Bull’s Crashed Ice, which takes over old Quebec with a mix of hockey and motorcross. Even the brand’s website has morphed into a blog, much like today’s most popular publishers.

Camper: Most think of Camper as purely a comfortable yet stylish shoe brand. But the Spanish company is much more and pursues a brand ethos that’s both traditional, cultural and fashion forward simultaneously. Proof: Casa Camper, stylish (but laid back) hotels in Barcelona and Berlin that embodies the brand’s essence. Ditto for Camper Together which taps up and coming artists to create one-of-a-kind boutiques.

Guinness: Guinness may be old but it’s acting like a much, much younger marketer. The company has embraced experiential branding both literally and figuratively with its “It’s Alive Inside” positioning. For its anniversary, Guinness offered up Remarkable Experiences, including a trip into space. It also released a pub-finder iPhone application with a social media twist. More impressively, the brand created the Guinness Storehouse, a seven-story building that functions as both museum and pub, that has now become one of Ireland’s top tourist attractions. And, more recently, Guinness even wired up its rugby team with RFID tags (including balls and players) to capture a whole range of statistics about how fast, powerfully and effectively the game is played.

UNIQLO: Few companies have so used digital like Uniqlo to both build a brand and breakthrough to new consumers — and on a truly global scale. The Japanese retailer surprises and delights consumers at every turn, whether through innovative iPhone applications, calendars, e-commerce, stylebooks and microsites. Uniqlo’s experiential efforts not only express the brand, but reach new consumers who may live thousands of miles away from the nearest retail location.

Virgin America: Virgin America has gone further than most, ensuring that the experience is the marketing — and advertising in many cases. The brand targeted tech-savvy consumers early on with its Red system entertainment console and in-flight WiFi. It showed off its dramatic interiors in promotions with Diggnation and YouTube celebrities; became an early adopter of Twitter for customer service; and reinforced its brand values through its simple booking engine on VirginAmerica.com. And now, for the holidays, Virgin America is partnering with Google to offer free WiFi for travelers.

Nike: Nike, of course, has been moving in this experiential direction for a few years. ‘We’re not in the business of keeping the media companies alive,” Nike’s Trevor Edwards told the New York Times in 2007. ”We’re in the business of connecting with consumers.” And so they have. The company continually earns kudos for consumer experience breakthroughs like Nike+, its online running community; the Human Race, a global running event; and more recently the Livestrong Chalkbot which enabled users to submit a text message that would be painted (digitally) on the route of the Tour de France.

Experiences, it would seem, are the new advertising. Experiences reach and engage customers in new and more meaningful ways, they promote “trial” over simply messaging and — quite frankly — experiences are much more suited to our digital era when everything is just a click away. Our challenge now, as marketers, is to make sure that our products and brands can actually live up to the experiences that we advertise. Garrick Schmitt asks “Is advertising dying?”  It’s certainly fashionable to say so and it has a direct impact on how marketers apply the ‘experience’ to sports, sponsorship and entertainment properties.

The fans don’t follow F1… they follow the Brands and Atheletes

Formula One television audiences in Spain and Italy fell drastically this year, reflecting disappointing performances by Spanish driver Fernando Alonso and Italian car manufacturer Ferrari, which suffered its worst season in 16 years.

According to the latest sports viewing survey from TV Sports Markets and Eurodata TV Worldwide, the big falls in Spain and Italy were partly counterbalanced by a significant lift in UK audiences. Viewership in the other two top European markets, France and Germany, remained broadly stable.

Audiences in Spain dropped 29 per cent on 2008, with Alonso’s worst-ever season coinciding with coverage shifting from what was the country’s leading commercial broadcaster, Telecinco, to smaller rival La Sexta. La Sexta’s live coverage averaged just under three million viewers per race and drew an audience share of 31 per cent.

Audiences for Italian public-service broadcaster Rai fell 21 per cent against 2008, when Ferrari won the championship, averaging 5.6 million viewers per race. Further analysis shows, perhaps surprisingly, that almost 40 per cent of the audience was female. Just under 50 per cent of the audience was aged over 55.

In the UK, Jenson Button’s championship season provided a perfect start for public-service broadcaster the BBC, which took over the rights at the start of this year after commercial rival ITV opted to concentrate its limited resources on Champions League football. Audiences were 16 per cent on ITV’s audiences last year and the highest since the BBC last had the rights in 1996.

In France, audiences for commercial broadcaster TF1 rose less than one per cent to 3.1 million. Some 33 per cent of the audience were women, slightly lower than the gender split for Champions League football, where women accounted for 35 per cent of TF1’s average audience last season. Forty-nine per cent of the Formula One audience in France is over 50 years of age, the same proportion for the Champions League. In Germany, RTL averaged 5.2 million viewers per race, with the penultimate race of the season in Brazil attracting the season-high of 7.2 million viewers and a 28-per-cent audience share.

Sources: TV Sports Markets, Eurodata TV Worldwide, Mediametrie – BARB – AGF/GfK Fernsehforschung – AUDITEL – TNS Audiencia de Medios – ALL RIGHTS RESERVED

Toyota finally quits F1

Toyota has confirmed that it is pulling out of Formula 1 - The world’s largest car manufacturer will concentrate on its core business. The team failed to win any of the 139 races it entered after making its F1 debut in 2002 but was fifth in the 2009 constructors’ championship… this despite having one of the biggest budgets in the premier class. Toyota’s withdrawal leaves the sport with no Japanese team after Honda left F1 at the start of the 2009 season. They become the third manufacturer to quit the sport in the last 11 months after BMW announced it was leaving in July. Honda were of course replaced by BrawnGP, who went on to win this year’s drivers’ championship with Jenson Button and the constructors’ championship… again congratulations to all the team in Brackley, UK – an amazing ‘fairy tale’ happy ending.

Maybe this is ‘back to the future’ for F1 – more independent teams and less ‘manufacturers’ – with Lotus (where Trulli may be headed??), Manor, USGP and Campos racing to make the 2010 grid… who will be next to join the fray? Maybe F1 is beginning a new era.

MotoGP Champ Valentino Rossi gears up for motocross

Valentino Rossi will put his leg over a Motocross bike in a little less than two weeks time. The nine time World Road Racing Champion will line up alongside many of his MotoGP friends to raise money for sick kids.

Rossi is organising the event to raise money for a children’s hospital which treats leukemia sufferers in the Italian city of Pésaro. On Sunday 15th November Rossi will be one of the riders taking part in a special motocross event to give a financial boost to the hospital, with Andrea Dovizioso, Loris Capirossi, Marco Simoncelli, Mattia Pasini and former 500cc World Champion Kevin Schwantz also all booked in to attend.

The organisers are hoping for a big turn-out from fans to support the event, which will take place in Cavallara, a 40km drive from Pésaro.

2009 Dirt Bike Show at Stoneleigh Park

If you’re into motocross then there’s only one place to be, that’s the 10th anniversary Dirt Bike Show at Stoneleigh Park from November 5-8th

Korea and Canada on FIA’s F1 2010 calendar

Formula One racing’s governing body, the FIA, has released the calendar for the 2010 world championship. The addition of the Korean Grand Prix, and a return to Canada (subject to race contract), will make for a 19-round season – two more than in 2009. The Bahrain Grand Prix will kick off proceedings on March 14, followed by the Australian race two weeks later. The Malaysian and Chinese races will take place in April, with the Sepang event getting underway an hour earlier than this year, with a revised start time of 1600 hours local time.

In May, the championship heads to Europe for rounds in Spain, Monaco and Turkey, before the teams make their way to Canada for the first time since 2008, subject to the completion of contractual negotiations with Formula One Management. If these are not completed, then the Turkish Grand Prix will be moved to June 6.

Following the completion of the European season, the teams will fly out to Asia in late September for back-to-back races in Singapore and Japan, followed by the inaugural Korean Grand Prix. Abu Dhabi will be the penultimate round, with the championship finale returning to its familiar home of Brazil in mid November.

2010 FIA Formula One World Championship calendar
14 March – Bahrain
28 March – Australia
4 April – Malaysia
18 April – China
9 May – Spain
23 May – Monaco
30 May – Turkey
13 June – Canada*
27 June – Europe (Valencia)
11 July – Great Britain
25 July – Germany
1 August – Hungary
29 August – Belgium
12 September – Italy
26 September – Singapore
3 October – Japan
17 October – Korea
31 October – Abu Dhabi
14 November – Brazil

*Subject to the completion of contract negotiations with Formula One Management. If these are not completed then the Turkish Grand Prix will be moved to 6 June.

Note: The race in Australia will start at 1700 local time, in Malaysia at 1600 local time, in Singapore at 2000 local time, and in Abu Dhabi at 1700 local time.

www.formulaone.com

F1 – what goes around comes around!

Team Lotus will be back in Formula One next season – and the Norfolk man draughted in is Mike Gascoyne, ex Toyota, Jordan and Tyrrell designer. Malaysian entrepreneur and new team principal Tony Fernandes is involved in the project – something which brought with it backing from the Malaysian government and a consortium of investors from the country.”It is different from what Lotus was, obviously, as the company is now owned by Proton and this is very much a Malaysian backed initiative. But that backing is exciting and great for Formula One, and to tie that in with the heritage of Lotus has a very nice synergy.” said Gascoyne.

Lotus F1 will initially be set up in the RTN centre at Hingham, a 50,000 square foot facility most recently used by Bentley for its Le Mans programme. Works will eventually move to Lotus’ new operations base at Malaysia’s Sepang circuit. Sponsorship announcements are anticipated and driver line-up is due to be revealed next month.

Lotus F1, based in Norfolk joins Manor Motorsport, based in Buckinghamshire, as two of the four new teams in Formula One in 2010 boosting the motorsport industry in the UK. The other teams are from the USA, Team US F1, and Campos from Spain – more good news is the return of Cosworth as an engine supplier. BMW Sauber also has a new owner having been sold to Swiss-based Qadbak Investments.

It seems the auto manufacturers are pulling out gradually as teams – leaving more independant teams to fill the F1 grid… isn’t this how it used to be?? What goes around comes around!

Motorsport sponsorship declines in 09… tell us something we didn’t know!

One For The Record Books: Motorsports Sponsorship To Decline In ‘09… but its how the spend is spent that will make all the difference. Sponsorship is entering a new age… just because the fans have octane in their veins doesn’t necessarily mean it’s relevant any longer.

North American-based companies will spend an estimated $3.3 billion to sponsor motorsports teams, tracks and sanctioning bodies this year, a nearly six percent decline from the $3.5 billion spent in ‘08, according to the IEG Sponsorship Report.

The projected decline is a first since IEG SR began tracking motorsports spending in 1985. As automakers and other sponsors look for ways to reduce spending, the big-ticket prices associated with major racing sponsorships have become harder to justify, and many companies have backed away from previous levels of commitment.

The projected spending amount reflects both reductions in spending and elimination of programs from previous sponsors such as Domino’s Pizza, Kodak and others, but also some new sponsor dollars that have served to prevent the decline from being even more severe.

Looking at some of the positive activity: Search engine Ask.com this year will launch a multi-faceted NASCAR program that includes a tie to the sanctioning body and title of a Hall of Fame Racing Sprint Cup Series entry driven by Bobby Labonte. In addition, Mars North America signed a multiyear extension with NASCAR spanning four categories: chocolate, chocolate bar, cheese-filled snack and pet food.
www.sponsorship.com

Sponsorship Spending To Rise 2.2 Percent in 2009

Sponsorship spending by North American companies is expected to grow 2.2 percent in ‘09 to $16.97 billion, according to IEG Sponsorship Report, the world’s leading authority on sponsorship.Chicago (Advertiser Talk) 26-Aug-2009 – Sponsorship spending by North American companies is expected to grow 2.2 percent in ‘09 to $16.97 billion, according to IEG Sponsorship Report, the world’s leading authority on sponsorship.

The forecast is the smallest annual growth rate in the forecast’s 24-year history. Spending in ‘08 was up 11.4 percent over ‘07, just shy of IEG SR’s projection a year ago of 12.6 percent growth.

The sports sector is expected to be the biggest victim of the recession given sponsors’ willingness to bail out of big-ticket sports deals. IEG SR expects corporate spending on sports properties to total $11.6 billion, up 1.8 percent from ‘08.

“The economy has forced many companies to keep a tighter hold on their purse springs, and big-ticket pro sports properties will take the biggest hit,” said William Chipps, IEG Sponsorship Report’s senior editor.

Projected dollar amounts for non-sports categories are entertainment tours and attractions: $1.66 billion, up 1.9 percent from $1.63 billion in ‘08; causes, $1.57 billion, up 3.1 percent from $1.52 billion; arts: $848 million, up 2.5 percent from $827 million; festivals, fairs and annual events: $786 million, up 4.4 percent from $753 million; and associations and membership organizations: $503 million, up 4.4 percent from $482 million.

As a result, sports’ share of overall North American sponsorship spending will dip a percentage point to 68 percent, while festivals, fairs and annual events increases its share from four to five percent.

While corporate spending is expected to slow considerably in the year ahead, sponsorship is expected to once again outpace traditional media buys. North American media spending is expected to decrease 3.2 percent in ‘09, according to the worldwide media and marketing forecast produced by GroupM, the global media investment management operation of WPP Group plc.

International Outlook Rosier, But Slowdown Will Occur Just as the economic crisis has taken its major toll in the U.S. with a ripple effect elsewhere in the world, the impact of the downturn on sponsorship will be felt around the globe but not yet to the same degree as on the home front.

The absence of the Beijing Olympic Games and the unprecedented spending surrounding that event also will contribute to slower growth in ‘09, although the Asia Pacific region will remain the fastest growing.

Overall, including North American spending, ‘09 global sponsorship expenditures should reach $44.8 billion, a 3.9 percent increase over the $43.1 billion spent in ‘08, a number slightly below IEG SR’s projection of $43.5 billion.

Subtracting U.S. and Canadian activity, spending by the rest of the world is expected to reach $27.8 billion, up 4.9 percent from $26.5 billion in ‘08.

Europe will remain the region whose companies spend the most on sponsorship after North America. IEG SR expects European firms to spend $12.2 billion in ‘09, up 4.3 percent from $11.7 billion in ‘08. Asia Pacific companies should increase spending 7.4 percent from $9.5 billion to $10.2 billion.

Companies based in Central and South America should see 2.9 percent growth from $3.4 billion to $3.5 billion, while companies from all other regions are expected to grow expenditures 2.6 percent from $1.9 billion to $1.94 billion.

www.sponsorship.com

How Sports Brands Create Brand Fanatics

A key reason sports brands are so successful is the relationship they have with each of their consumers, or fans. Being a sports fan-and loving a team brand-transcends a person’s job, family or social status. “Fans experience pleasure and satisfaction with successful teams,” writes Baylor University marketing professor Kirk L. Wakefield in his book, Team Sports Marketing, “but, they also experience feelings of delight or excitement that deeply resonates within the identity of the individual fan, such that the effects are likely to be long-term. … Sports teams develop a faithful fanatical following primarily due to high levels of identification…”

It is this identification that professional and amateur leagues in general, and teams in particular, play on (or prey upon). Wakefield points out that a dedicated sports fan has “an enduring involvement with the sport and situational involvement with the event.” A fanatical soccer fan, for example, will have “an ongoing interest or concern with the sport on a day-to-day basis.” That same fan, if dedicated to a particular team, will also watch or attend games, check scores online, follow the team’s star players and buy team merchandise. This is the kind of brand involvement some product brands can only dream about.
Identifying with a particular team brand is a strong fan motivator. “Highly identified fans are likely to Bask In Reflected Glory [BIRG] by doing such things as wearing team-identifying apparel after a team win, describing team wins in terms of what ‘we’ did, and, in general, seeking to enhance their public image by connecting with positive aspects of the team,” Wakefield writes. “The result of BIRGing is enhancing self-esteem in the highly identified fan.” According to Wakefield, the more identified a fan becomes, the higher the level of his or her team involvement.

Incredibly, Wakefield writes, “identification with a sports team seems to shield against the potential consequences of death…evidence suggests that one’s identification and involvement with a sports team in some ways makes the highly identified fan feel immortal.” Now that’s the ultimate in brand loyalty.

There is a hierarchy of sports brand fanaticism. Some fans of a particular sport might identify with a league or association, such as the International Soccer League, the NBA (National Basketball Association) or NASCAR (National Association for Stock Car Auto Racing). Others might identify with different sports under the same umbrella brand, such as the Olympics or the NCAA (National Collegiate Athletic Association). Or fans might be intent on supporting a single team brand, often because of school or hometown affiliation. And then there are the multisport fanatics, supporting several sports, leagues or teams at once. Typically, each of these leagues or teams positions itself as a distinct brand with its own logo, merchandise and marketing program.

This presents a big branding challenge: There are so many sports brands in existence that sports fans in general may be spread thin. In their book, The Elusive Fan, authors Irving Rein, Philip Kotler and Ben Shields say competition among sports brands for market share is increasingly intense because of fragmentation. They believe there are six distinct sports sectors vying for fans’ attention: older sports (such as European soccer and Major League Baseball), reemerging older sports (such as cricket, rugby and golf), school sports (high schools, youth development teams and the like), new sports (extreme sports and paintball, for example), declining older sports (such as boxing and horse racing) and sporting goods (including team merchandise and sports equipment).

That means each sports team needs a multifaceted branding strategy to keep fans loyal. Traditionally, teams hitch their stars to star athletes. But now these brands, say Rein, Kotler and Shields, “must also broaden their star power mix to include facilities, food, teams, places, events, and individuals, such as owners, who have not been a part of the storyline. Star power needs to be redefined to connect with more fans, maximize all the attributes that a sports product has to offer, and ensure a constant flow of sports branding material to convert into star status.”

The authors point to Manchester United as an example of a team that “has been transformed into a highly profitable company and an identifiable global brand.” Manchester United became a megabrand due to developing the best talent, careful attention to managing and growing the business, and an aggressive distribution strategy. Today its arsenal includes branded restaurants, stores, a cable television network, a stadium, the use of new media and unorthodox ways to expand into new markets, such as a marketing partnership with the New York Yankees.

Sports leagues and teams continue to attract and retain sports fans, as well as commercial sponsors, but for the first time in a long time, the sports world is feeling a money pinch. In fact, a recent study indicates that over half of companies surveyed “plan to cut 2009 sponsorship spending, including sponsorship in the sports world, while almost as many are seeking to get out of current deals…” (”Over half of firms to cut sponsorship spend – study,” Reuters, March 10, 2009).

That may be why sports brands are beginning to look for new and novel ways to generate revenue from their fans. For example, the storied New York Yankees, MLB’s most valuable team, just opened a new Yankee Stadium this season. Soon afterward, the Yankees organization announced it would market its own grass: Yankees Sod. “It may cost a few thousand dollars to cover a large backyard, but the sod comes with a certificate of authenticity from Major League Baseball, complete with the counterfeit-proof hologram, declaring it to be the official grass of the New York Yankees” (”Yankees Grass Is Now a Brand,” The New York Times, March 22, 2009).

Barry Silverstein is a freelance writer/marketing consultant and co-author of the McGraw-Hill book, The Breakaway Brand.

www.brandchannel.com