6 Brands That Love Sports As Much As You Do
Soroush is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
It’s an election year, which means most market followers are closely watching the campaign trail, hoping to make out hints about the future of the economy. Of course, the presidential election is not the only quadrennial occurrence. The Olympic games are less than a month away, and sports fans are already beginning to take note through the airing of the trial competitions. Many sponsors have already begun their Olympic-oriented campaigns, and some levels of support, such as the giant Ralph Lauren (NYSE: RL) Polo logo on every American’s shirt, are hard to miss – here’s a shot of those hilarious duds.
While the Olympics may be the most obvious example in the rise of sports marketing, it is merely one aspect of a trend that has been steadily gaining precedence since the 1980s. As fewer Americans are willing to deal with the vexations of commercial interruptions that come with live TV, deciding instead to watch sporting events online or with the fast forwarding luxury of a Digital Video Recorder, it is becoming increasingly important for marketers to develop campaigns beyond the traditional ad. Companies are now aggressively searching for sports-related places to stamp their logos. At this point, most corporations have at least put their foot in the door, although there are some leaders who stand well above the rest.
Few products are more associated with sports than beer, and, more specifically, few brewers are more associated with sports than Anheuser-Busch InBev (NYSE: BUD). Anyone who has ever watched a game is sure to have seen a Budweiser ad (especially notable during the Super Bowl), but Anheuser-Busch’s marketing strategy actually goes far beyond Dalmatians and Clydesdales. Its products are the official beers of several sports leagues, including the NFL, NBA, MLS, MLL, and MLB, and it also maintains separate sponsorships with the majority of teams in each of those leagues. This gives it a monopoly on quenching sports-flavored throats, a privilege best represented by where the Cardinals play—Busch Stadium. To learn more about how to capitalize on this trend, check this article out. Now, calling Budweiser synonymous with professional sports is nowhere near a stretch, as its competitors, such as MillerCoors, find themselves almost entirely relegated to college sports. Anheuser-Busch spends two-thirds of its marketing budget on sports marketing, recognizing that its key demographic rests among the sports fans of the world. Of course, the correlation between sports watching and beer drinking had to have originated somewhere.
Not every sports fan craves a brew; such is the marketing strategy of Coca-Cola (NYSE: KO), the largest athletic advertiser in the non-alcoholic category. Coke practically invented the sports marketing technique with its 1928 sponsorship of the Amsterdam Olympics. This set the precedent for Olympic sponsorship, allowing others to follow suit and eventually leading to the TOP (The Olympic Partner) program that marks the preeminent twelve sponsors of the game. Coke has maintained this partnership for almost a century now, a move that really paid off in 1996, when Coca-Cola launched a massive campaign in its home city of Atlanta. It also has sponsorships with the NCAA, NBA, and NASCAR, in addition to a plethora of individual NBA, NFL, and MLB teams. Owning Vitaminwater and Minute Maid also helps, since they have separate deals with several leagues and teams.
In a similar manner, AT&T (NYSE: T) has consistently expanded its sports marketing arm, quickly rising to the top of the list. It promulgates its name through San Antonio’s AT&T Center, San Francisco’s AT&T Park, and Texas Tech’s Jones AT&T Stadium. It has naming rights to the annual Cotton Bowl, in addition to the annual Texas Longhorns-Oklahoma Sooners football game, which is now known as the AT&T Red River Rivalry. It also lends its appellation to several golf championships and American sporting teams. While its number of “Big Four” teams pales in comparison to Anheuser-Busch and Coca-Cola, it supports baseball, basketball, football, and hockey teams. While primary competitor Verizon spends more on sports advertising in general, leading all companies with $345.4 million in sports broadcasts in 2011, AT&T optimizes its sports budget in ways visible in earned media as well.
The big three industries of sports marketing are beverages (mostly beer), cellular providers, and automobiles. General Motors (NYSE: GM) leads this latter category, although Ford, Chrysler, and Nissan all put up admirable shows. GM primarily benefits from the fact that Chevrolet, Cadillac, Buick, and GMC trucks all have their own sports marketing budgets, meaning they each can sponsor MLB, NFL, NHL, MLS, NBA, and NASCAR teams. Many corporations utilize international markets to spread their image, and General Motors is no exception, sponsoring football associations such as CONCACAF and teams like Manchester United.
Now, the automotive industry’s dominance in sports marketing is not reliant on vehicle producers themselves, as insurance companies also contribute largely to the mix. GEICO is the most prominent of this crowd, and few sports fans would be unable to identify the famous gecko or cavemen. In fact, both GEICO mascots have made a name for themselves beyond TV ads, venturing to appear at sports games. GEICO is a subsidiary of Berkshire Hathaway (NYSE: BRK-B), whose Russell Athletic brand made news last month for earning naming and merchandising rights for a bowl game beginning this winter. Russell Athletic used to prevail as the commanding presence among NFL gear providers in the 1990s. Now, it mainly sponsors college sports teams, although it remains the official outfitter of the Little League World Series, as well as several individual major league baseball superstars.
Ardent investors would be wise to track the status of these companies’ sales, both during and after the Olympics this summer. Due to the fact that stock prices undoubtedly respond bullishly to booming revenues, there may be more connections between sports and investing than one might originally think. To track how the markets are viewing these stocks, visit WealthLift’s Sentiment Index today.
This article is written by John Kocsis and edited by Jake Mann. They don't own shares in any of the companies mentioned above. The Motley Fool owns shares of Berkshire Hathaway and The Coca-Cola Company. Motley Fool newsletter services recommend Berkshire Hathaway, General Motors Company, and The Coca-Cola Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.
