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How Gallagher Is Growing Its Sports Portfolio in a Big Way

A company founded in 1927 has made a splash in the sports business world, inking two impactful deals with Premiership Rugby and the Chicago Cubs this year. 

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Sports fans in the United States and Europe may not immediately be familiar with the name of Gallagher. That will most likely change in the near future, though, after the 91-year-old insurance brokerage and risk management services firm has been adding some big sports sponsorships to its repertoire since the team started working with IndyCar racers back in 2016.

Casual observers may be asking why a company would wait almost a century after its inception in 1927 to get into this side of the business.

Arthur J. Gallagher & Co. Chief Marketing Officer Chris Mead explained that this decision had a lot to do with the company’s rapid growth, both domestically and globally with Gallagher now working in 33 countries around the world. Prior to a few years ago, the company did not have a national marketing infrastructure to justify such partnerships.

READ MORE: WNBA Teams Find Success Through Creative Partnerships

“The most important thing about a sponsorship or partnership is that you’re able to amplify it and get new customers from it,” Mead stated. “For a while, we didn’t have that infrastructure in place yet. We’ve gotten it into place now, and the timing was really good for us.”

In the past year, Gallagher has inked two very notable deals. The first includes Gallagher becoming the new title sponsor of Premiership Rugby with various other branding opportunities attached to the deal. Gallagher is also now the official insurance broker of the league. This sponsorship was an easy sell for Gallagher’s leadership team based on the sport’s global appeal and the culture of respect the rugby community prides itself on. Rugby’s quickly growing popularity in the United States didn’t hurt the appeal either.

“We look for opportunities that are reflective of our culture and who we are as a company in terms of hard work and doing the right thing. If you take a look at rugby and the global footprint, along with the fact that it is one of the fastest-growing sports domestically from a U.S. perspective, it makes sense. It’s also just the way the sport is played very competitively with a true appreciation of honor and community.”

READ MORE: What Goes Into Executing Sponsorships at the Olympic Games

The folks at Gallagher take an active role in participating in their local community too. This is why the Chicago-based company also felt compelled to initiate a partnership with a world-class organization in its own backyard: the Chicago Cubs.

In early 2018, the two parties signed a multi-year partnership that made Gallagher the official insurance broker, benefits and risk management service partner of the Cubs. Gallagher also receives exclusive marketing and sponsorship rights to the Ricketts family real estate properties, namely Wrigley Field.

“Tom Ricketts (chairman of the Chicago Cubs), the way that they run their business, the way that their players play the game and the way that they give back to the community made that partnership very appealing,” according to Mead. “It’s a one-for-one of who Gallagher is and how we operate. We’ve gotten very close to the ownership and spent time with people in the front office, who also spend a lot of time in our community. We really feel like it’s a community play for us as well.”

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In looking at Mead and Gallagher’s leadership, it is very clear that their partnership strategy extends beyond simply increasing brand exposure and garnering new customers. They want to work with brands that care about making the world a little bit better through sport.

“It’s not just about baseball and rugby, but it’s also the commitment of both the clubs and Premiership Rugby to the community outside the sport itself. They are making it a better place to live and improving the community in the United Kingdom and wherever rugby is played.”

With these partnerships, as well as Gallagher’s ventures into auto racing already going swimmingly, the brand is very open to continuing to expand its sports portfolio should the right opportunities arise.

“It’s a real simple formula for us,” Mead said. “If we see an opportunity that maps to our culture and what we stand for as a business, if it’s tied to a community that’s important to us, we’re open to it. There also has to be a direct business opportunity. The one common thing that all these sponsorships have is that they need our services and expertise in proper insurance placement and risk management. We’re looking at opportunities as they come up, and if it makes sense for Gallagher, we’ll do them.”

Joe is currently a freelance marketing professional, writer, and podcaster. His work can also be found on the SB Nation network. Joe earned his bachelor's degree in communications from the University of Louisville in 2014 and a master's degree in sport administration from Seattle University in 2017. He can be reached via email at joe@frntofficesport.com.

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Lowe’s Builds On New NFL Partnership With Draft Activations

Tentpole events are a major draw for the home improvement brand, which has a slew of local and national activations are on tap this weekend.

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Lowe's NFL Draft

Photo Credit: Lowe’s

Lowe’s is building out a full agenda for this week’s NFL Draft, one of its first major events since becoming the league’s “Official Home Improvement” partner.

The deal was announced in January, and Lowe’s CMO Jocelyn Wong said a major part of the appeal was the NFL’s approach to tentpole events.

“As we evaluated long-term partnerships, we wanted to make sure we had the right one and the right reasons,” Wong said. “First and foremost, it appeals to our target customers. Second, seasonality and events that match our business and customer needs.

“Other sports partnerships were more limiting in calendar activations.”

READ MORE: AT&T’s Logo Deal With WNBA Represents Deeper Strategy With NBA

This weekend in Nashville, Lowe’s is capitalizing on the partnership with a mixture of national and local activations in line with what the company plans to do throughout the multi-year deal. The activations will largely be anchored on a new campaign called “Pro Ready” that has a dual meaning. Beyond the obvious tie-in to the NFL’s newest crop of rookies, it also hints at the home improvement professional customer segment Lowe’s has focused on the past six to nine months.

“Obviously, we’re speaking to rookies, but it’s an awesome overlap for where we are from a business point,” Wong said. “We are now pro-ready. Admittedly, we’ve not done as well as we needed to, and when I think about drafting — rookies going pro, teams resetting, getting better — it hits on our new beginning, new focus and new energy.”

A national Pro Ready marketing campaign will debut this weekend featuring TV commercials, billboards and online ads. It’s the first campaign focused on construction professionals for the brand. From the professionals to the do-it-yourself crowd, Wong said the broad appeal to all demographics and the health of the league all also contributes to the attractiveness to the deal.

Beyond the Pro Ready theme to the weekend, Lowe’s is focused on using the draft to propel itself forward both nationally and locally with multiple activations. On the ground in Nashville, Lowe’s provided 42,000 linear feet of 4×6 lumber for the stage as well as 39,000 square feet of plywood. 

As Renie Anderson, the NFL executive vice president of partnerships and chief revenue officer, puts it, Lowe’s is literally helping build this year’s NFL Draft. 

“Our partners are instrumental in helping to bring the NFL Draft to life,” Anderson said in an email. “When we started planning the build of the NFL Draft, we knew that we could count on Lowe’s to bring its expertise as well as provide significant materials and supplies that would result in a best-in-class footprint for our event.”

Then there’s the local level. Tennessee Titans players are interacting with customers throughout the retailer’s Nashville-area stores, and the Lombardi Trophy is making the rounds as well. The league and Lowe’s also teamed up to donate turf to a Boys and Girls Club and picnic tables to Habitat for Humanity. The mix of national and local activations was key to Wong, especially as a way to engage store associates. 

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She also believes this weekend could be a jumping-off point to even bigger things. She said the company already has an eye on concepts for the start of the season this fall and has an RFP out to hire a sports activation agency after all the work thus far has been handled by its existing agency roster plus the internal Lowe’s team. Although Lowe’s isn’t a brand naturally endemic to the NFL and its players, Wong said her team is working hard to bring creative ideas to the table, and she hopes the company is challenging the league thinks about partnerships.

“We’re not like Gatorade or Pepsi, you can’t see players using us,” Wong said. “How do we make it feel natural and authentic? We found some ways to do that, and the team is very much working on how to bring it to life.”

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Celsius Makes Esports Inroads With Echo Fox Partnership

After making its name in the traditional sports sphere, Celsius is ready to take on the esports industry with its first sponsorship deal.

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Celsius Echo Fox

Photo Credit: Jeremey Freeman/Turner Sports via USA TODAY Sports

Celsius EVP of Marketing Matt Kahn never had imagined esports as a potential partner opportunity. Founded in 2004, the performance energy drink company has surged in the energy drinks space by positioning itself adjacent to the traditional fitness industry. But when the esports organization Echo Fox approached Celsius about a partnership, it only took a little research for Kahn to realize that a sponsorship made a lot sense.

“They professed to drink it while in training and tournaments,”  Kahn said. “I wasn’t shocked but found it super-interesting that these players are terrific athletes in their own right and need to focus for hours.”

According to Kahn, esports reached an audience of 335 million people globally in 2017 and is expected to grow to a market of more than 600 million by 2023. Meanwhile, brand investments — media rights, advertising and sponsorships — in esports are expected to reach nearly $900 million this year and jump to more than $1.5 billion by 2022. Those were exciting numbers for a brand that plays in a relatively new performance energy drink space, Kahn said. Competitors include brands like Bang and Monster Energy’s recent Reign product.

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“It’s new for us,” Kahn said. “But having done the research into the industry and being a student of business and marketing and a sports lover, the category is exploding.”

Prior to the partnership with Echo Fox, Celsius stayed close to the core athletic segment it felt their product aligned with best. Celsius experienced a worldwide year-over-year revenue growth of 45 percent globally and 62 percent in the U.S., in part due to growth in sporting good channels. The brand went from a 25-store test with Dick’s Sporting Goods two years ago to more than 500 locations this year. Likewise, Celsius is positioned in 300 Academy Sports stores.

But recognizing the potential growth and market penetration of esports could be a boon for the company, Kahn said. He’s excited about Celsius’ entry into what he believes could be the “next billion-dollar industry.”

To that end, he considers Echo Fox to be an ideal first partner in the industry. Founded in 2015 by NBA champion Rick Fox, Echo Fox was recently named one of the most valuable esports organizations by Forbes and boasts teams in a variety of games ranging from League of Legends to Super Smash Bros. to Dragon Ball FighterZ.

READ MORE: AT&T’s Logo Deal With WNBA Represents Deeper Strategy With NBA

“Celsius continuously innovates and pushes the boundaries when it comes to keeping athletes healthy, and their support of a diverse group of athletic competition is something we admire,” Fox said in a statement. “Ensuring our players are competing at the highest level possible is a top priority for Echo Fox, and we’re confident that our partnership with Celsius will help us achieve that goal.”

As part of the partnership, Celsius now has the ability to use team and player images and likenesses as well as player testimonials. But Kahn also expects the product to be integrated organically into the team, an increasingly common tactic when targeting younger demographics. Some areas including placing the product nearby while players engage in cardio and hand-grip exercises, as well as competing in their respective games. “We’re going to have significant behind-the-scenes footage of these guys training and consuming the product,” he said. “Authenticity is important for me, to see who really loves the product.”

Esports are a natural habitat for energy drinks, with brands like Red Bull and Monster having already established deep ties in the industry. Yet it took time for Celsius to realize the market potential for itself. Now, with Echo Fox signed on as its first partner, it appears the brand is eager to make up for lost time.

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NHL Turns to Corner Ice Placements to Grow On-Ice Ad Revenue

The NHL took over playoff team’s corner ice ad positions during the placement’s first year, as the league and its teams find new ways to add revenue.

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NHL Corner Ice

Photo Credit: Terrence Lee-USA TODAY Sports

The NHL has turned to a familiar source to add incremental revenue for this season’s Stanley Cup Playoffs. 

Prior to the 2018-2019 season, the league introduced corner ice sponsor placements this season for teams to sell, a marked change over its longstanding policy of only making center ice available for purchase. It was a smash hit: According to NHL Chief Business Officer Keith Wachtel, overall club revenue growth was in the eight figures, more than 25 percent higher than originally estimated.

The league was so pleased with the results that it decided to extend the rollout into the postseason for all 16 teams. This time, the league itself is handling the real estate firsthand, with Amazon Web Services, Enterprise, Ticketmaster and MGM Resorts serving as the designated sponsors.

READ MORE: NHL Turning to Hair to Tell Stories with Great Clips

Wachtel said the idea owes itself to having something of a good problem on its hands. The NHL is aided by a “very avid, passionate and affluent fan base,” with an approximate attendance-filled of 96 percent capacity. Short of building new arenas, however, there’s no more room to pack extra bodies into the stands.

“How can a club continue to generate year-over-year revenue growth when you’re selling all the tickets and have a finite amount of available sponsorship inventory?” Wachtel said of the league’s dilemma. “We felt what’s unique [is], unlike the other sports, we have the ability to bring partners onto the field of play as well as camera-visible dasher boards.”

The new positions in some ways are more valuable to potential sponsors than center ice, Wachtel said, as the corners are often where much of the on-ice action takes place. The exposure goes beyond the live games, too; most highlights on TV and social media are of goals and saves, which extend the life of those positions.

“The NHL playoffs are such a huge moment in time for fans everywhere and we’re fortunate to be a part of it,” said Greg Economou, Ticketmaster North America chief commercial officer and head of sports. “This provides us with another impactful touchpoint with fans to reinforce that Ticketmaster has the most tickets to see their favorite teams battle it out for the Stanley Cup live.”

Unsurprisingly, individual teams were pleased about the opportunity to both add revenue and, during the regular season, flexibility to choose where it came from. According to Jarrod Dillon, Tampa Bay Sports & Entertainment chief marketing and revenue officer, the Lightning opted for a strategy of quality over quantity. Tampa Bay quickly sold the four locations at Amalie Arena, opting to go with two partners — Heritage Insurance and Tampa General Hospital — for the four locations, rather than four individually, to “continue our brand value of doing more with fewer partners.”

“Naturally, we assumed national partners would be looking for more television visibility, but to our surprise, partners with main a local presence were also very excited about them,” Dillon continued. “The combination of national TV exposure, as well as local market TV exposure and then the in-arena local notoriety, seemed to resonate very well.”

Dillon credited Watchel and the league in opening up the new revenue stream and felt the league deserved to have the playoff corner ice positions with “great national partners.” Wachtel partly attributes the decision to logistics. Because the league was unsure of which teams would ultimately make the playoffs, it only made sense for the league to take over placements to guarantee ad partners they’d receive streamlined, guaranteed international exposure.

“We can extract that value, by and large, the goal for the league was to sell to global marketers that saw value across the world, not on a territory-by-territory basis,” Wachtel said.

READ MORE: Data Is Changing the Way the NHL Does Business

The MGM Resorts placement is part of a long-term sponsorship, while the AWS, Enterprise and Ticketmaster placements were sold on a one-year basis as incremental investments. The corner ice spaces are seen right now as a branding play, Wachtel said, and could be used in the future to help lure in larger league partners with their value.

“They’re four really great brands that see the value in the two months of hockey,” Wachtel said. “We went to find the right brands for the right value long term, which very well might be those. But we want to prove the opportunity before we go out there in the marketplace selling for more value.”

Irrespective of this program’s ultimate success, Wachtel says the NHL will continue to look for additional pathways to open up revenue streams. One could be a jersey patch sponsorship in the vein of what NBA teams have integrated over the past couple of seasons. Watchel didn’t put a timetable on the possibility, but the larger idea is in line with the league’s ambition to increase revenue and create a vibrant sponsor ecosystem without muddling the on-ice product. The endgame is still a work in progress. But the corner ice starting points have provided a strong foundation to build upon.

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