The NFL is a money-making machine that has turned the game of professional football into a billion dollar business. The powers that be realized long ago there was money to be made in areas outside of the games themselves. They saw the revenue potential of TV advertising and marketing programs based around multiple product categories. The Super Bowl became TV’s most lucrative advertising event and now there’s a long line of companies fighting for a chance to get their products on the NFL money train. The key to all of this were clever advertising and marketing campaigns that appealed to the masses. The NFL’s success is the envy of other professional sports. But it’s not just pro sports paying attention.
College athletic programs began to take notice during the early 90’s. Big programs were used to signing shoe/apparel contracts to outfit their teams. At some point they realized that these companies were making money by using the players in these programs as walking billboards. Their conclusion? There was money to be made in college sports beyond the typical revenue streams of ticket sales and game day concessions. College Presidents and Athletic Directors everywhere decided to dive right into this world of brand creation, advertising campaigns and marketing promotions.
Fast forward to today.
Ben Sturner, Founder and CEO of Leverage Agency, a prominent sports marketing firm in New York City, thinks a major shift is happening in college sports. “College sports’ marketing is exploding and in the last 5-10 years has become increasingly sophisticated. What they have discovered is that this is real business now and the return on investment comes back in from a diverse range of revenue streams. The big schools are leading the way here. The smaller schools only have a few folks in their department entering into this arena, whereas the bigger schools have brought in professional sports marketing firms to handle their campaigns.”
As mentioned above, the NFL has mastered the branding game. But in college sports, they are still discovering new branding opportunities and testing the boundaries of their reach. Compared to their pro counterparts, college programs are still in their teenage years in terms of developing lucrative branding campaigns. Sturner continued, “It’s all about the brand they are creating and reaching the college fan. In the past it was all about ticket sales generating revenue. Now, it’s a multi-faceted approach with sponsorship deals, media licensing and merchandising.” Some programs have been wildly successful, while others have stumbled along the way. Let’s take a look at what’s working and what’s not.
First, let’s look at the goals of a school’s marketing and branding campaign. According to the Leverage Agency CEO, “Yes, they want generate excitement with their students and alumni, but they also want to appeal beyond these two groups and create a broader fan base.” Simply put, it’s a numbers game. The more fans you generate, the more revenue streams you create.
Despite the onset of TV contracts and conference revenue sharing, the bulk of a school’s revenue is still collected in the form of contributions and ticket sales. The more fans you engage, the more wallets you have available to open up and donate to your program and attend the games. Sturner uses Duke as an example. “Duke has a smaller enrollment and alumni base than most of its Division 1 peers. But they can sell out Madison Square Garden at the drop of a hat and spent millions on new basketball facilities,” he said. How? “Because they have been successful at growing their brand beyond its borders into a national entity.”
So what does winning look like in this recent revenue battle for fans and which schools are the ones reaping the rewards? As Sturner explained above, the big schools have poured the most money into these efforts. In fact, if you look at the budgets of athletic programs today, there will be a large column for marketing expenses. Schools like Texas, Ohio State and Alabama spend more money on marketing than other Division 1 schools spend on recruiting and the cost of putting on the games combined. We’re talking about marketing budgets upward of $5 million. And as a result, those schools are seeing the return on investment far above what the competition is getting. In 2012, the Texas Longhorns generated the most revenue, coming in at roughly $163 million. A total of 13 schools generated revenues over $100 million, including Florida, Penn State and Texas A&M.
How are the schools accomplishing this? By diversifying their approach to fan engagement.
First, they borrowed a page from pro sports and turned the game day atmosphere into more of an entertainment event. You have DJs playing music, elaborate team entrances, fireworks and school branding campaigns playing on the giant jumbo screens that are now commonplace in college stadiums. Oh, and don’t forget about the white-outs, the black-outs or whatever colors represent your school.
Second, you have to be visible to grow your brand. Lucrative TV contracts and expanded programming have allowed schools to reach a wider audience. Now conferences and even schools are starting their own networks.
Next, the schools have leveraged the impact of social media via platforms such as Facebook and Twitter. Every major school has multiple social media accounts to cover their sports. Using social media keeps their brand in the hands of fans every day, all day.
Last but not least, college sports have a unique asset that pro sports can’t replicate…the rivalry. And marketing firms are treating these rivalries as key assets in brand creation.
Sturner explains the purpose behind this latest trend. “You are trying to activate your alumni with these rivalries. If you can activate your alumni, your school becomes more attractive to sponsors whose target audience tend to be those graduates in that valuable demographic all advertisers are trying to reach. The promotion of college rivalries is the future of revenue generation in these markets. It’s an advantage over pro sports whose rivalries are not as deep rooted as the college version. That’s why you see basketball games on battleships, games in Korea, or made for TV events like showcasing the Top 5 teams this past Tuesday on ESPN.”
During those televised games you always see at least one commercial from each school that basically gives the TV audience a sales pitch on why they should attend their university. It’s those “branding” campaigns that leave a lingering question in my head…how do you decide whether the campaign has worked or not on the college level, and if the intent of the campaign falls flat, how long do you wait to pull the campaign and start over?
That question has become a hotly debated topic recently in the state of North Carolina. The NC State athletic department began their “Our State” marketing campaign over a year ago aimed at staking their claim to being the dominant program in the state. In fact, billboards and signs all over the state boldly claimed, “This Is Our State.”
At the time, the concept seemed like a good idea. The football coach, Tom Obrien, claimed to have his best team yet heading into the 2012 season. Instead, the team fizzled down the stretch, including losing to rival UNC. Consequently Obrien was fired at the end of the season.
Then NC State’s basketball team was picked to win the ACC for the first time in 20 years. Instead they finished in the middle of the conference and bowed out of the NCAA Tournament in the first round. Next the Wolfpack baseball team made it to the College World Series for the first time in decades, only to be sent home by whom? That would be UNC. Noticing a pattern yet? So have fans of other in-state schools like UNC, Wake Forest, Duke and East Carolina.
Let’s bring back in Leverage CEO, Ben Sturner. “These campaigns are fun and can generate a lot of excitement because in college sports you can leverage those intense regional rivalries. The example you mentioned with North Carolina State probably started out as a great idea because in a small geographic area you have intense rivalries between them, UNC, Duke and now ECU. But in the end, the success of these campaigns still depends on a winning product on the field/court. When that doesn’t happen a backlash can occur and at that point it’s time to think about a change in direction.”
That backlash reached a fever pitch in the days before this year’s homecoming game vs. rival UNC. The athletic department changed the midfield logo on the football field. When it leaked out, fans of another area school, East Carolina, and the area media outlets, felt like the new logo had a familiar look to it. Maybe because it was an exact replica of the logo that’s been used for years on ECU’s field! What were they thinking? Particularly during a season where to date, NC State has lost to in-state foes Wake Forest, UNC and Duke. And guess who’s coming to town next week looking to complete the in-state sweep of the Wolfpack? That’s right…the ECU Pirates. Whose state? You just can’t make this stuff up. But hey, some college sports programs are still learning the ropes in this fast-changing marketing world. What hasn’t changed is the need to win in order to make this all work.
Everybody wants to be associated with a winner. Once a program can get their brand associated with “winning” in the hearts and minds of fans, their revenue options are endless. Winning sells tickets. Winning drives apparel sales. Winning drives contributions to your program. And nowadays, winning drives sponsorship dollars into your program.
Of course the key to winning involves incorporating all of the above factors into a cohesive strategy. Think about it, in order to win, you need to recruit at a high level and attract the best coaches. The best players want a great game atmosphere, they want to play on TV and they want to be part of the “buzz” in order to increase their exposure and reach their own goals. The same could be said for the coaches. And if it all works out, the schools reach their business goals at the same time.
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