As a synergy of last year’s acquisition of Reebok, Adidas recently inked an 11-year deal with the National Basketball Association to be the official uniform provider for the league. Despite this deal, the Athletic shoe and apparel maker faces fierce competition from Nike, the leader in athletic footwear in the U.S., which uses prominent NBA players like LeBron James as well as golfer Tiger Woods in its advertising. So, are marketing sponsorships like this really all they’re cracked up to be?
The answer, as almost always in marketing is "yes and no." Consider the following examples:
- Figuring that many of its customers were likely to be car guys, DeWalt has been investing in sponsorships in NASCAR since 1993. Now DeWalt spends more than $10 million annually on NASCAR events. The company has a signature 18-wheeler known as Rolling Thunder that docks trackside on race day and transforms itself into a 6,400-square-foot demo site. As a result, Dewalt has become one of Black & Decker’s most profitable divisions. With $1 billion in annual sales, it commands a 35 percent share of the professional-tool market. Not a bad ROI for a sponsorship.
- Nike inked a deal with Tiger Woods to wear Nike-branded apparel. Now, Tiger sports shirts and hats with the ubiquitous swoosh in every ad for every company he advertises. What a deal!!
- An unnamed software company (name withheld to protect the guilty) spent more than $10 million sponsoring sporting events. Let’s see, are people who buy software more likely to be sports fans than others? Are people at a sporting event likely to want to watch a demo of a software product? On both counts, a big "no." ROI, don’t ask.
The lesson here is that smart sponsorships – those that connect your company and brand to your audience in a meaningful way – will work; those that don’t, won’t.