Tuesday, May 24, 2011

Larry Bernandez

Like many baseball fans living in the Midwest, I start getting excited for the upcoming season when the snow starts to melt.  Baseball is a sign that spring is near and that it is safe to get off the couch to go outside to enjoy a game.  Unlike nearly all of my fellow hibernating Midwestern baseball fans, I follow the Seattle Mariners.  I grew up going to games in the Kingdome and cheering for Ken Griffey Jr., Alex Rodriguez, Jay Buhner, Randy Johnson, and Edgar/Tino Martinez.  I moved to Iowa when I was in 5th grade, but have remained a huge Mariners fan ever since. 

My wife, Hailey, will disagree that the nice weather actually does get me off my couch, so the real sign for me that the baseball season is finally almost here is when the Mariners release their commercials. My favorite 2011 Mariners commercial is titled "Encore, Encore" and stars 2010 Cy Young winner Felix Hernandez.  While I am certainly biased in many ways (huge Ms fan & Felix is the only jersey I own after the Cutler debacle...) I absolutely LOVED this commercial.  Here it is:


The Mariners marketing department must have received an amazing amount of positive feedback from this commercial.  Within a few days after the commercial was first released online there was a team controlled twitter feed (@Larry_Bernandez) and they recently announced that they will be having a Larry Bernandez Bobblehead night on Saturday, August 27th against the White Sox (2011 Mariners Promotional Schedule).  

Typically I am not motivated to go to any sporting even based on promotional giveaways - at least I like to think that I'm not.  But when I found out that the Mariners were doing this and that it magically fell on a Saturday that I have absolutely nothing on my calendar, I convinced Hailey to let me look into tickets.  Unfortunately the combined cost of airlines, hotels, and tickets to the game will have to postpone my first trip to Safeco Field, but you can bet that I'll be intently searching eBay for Larry Bernandez bobbleheads on August 28th.


You can see all of the 2011 Mariners commercials here: 2011 Mariners Commercials, and get a great review of all of them from one of my favorite Mariners' blogs here: Lookout Landing.

Have you ever been coerced into buying tickets to anything due to a giveaway or a promotional handout? Comment below!

EDIT: This story was on the espn.com front page the afternoon after I wrote this post: http://sports.espn.go.com/mlb/news/story?id=6583786

Thursday, May 19, 2011

Free Marketing Idea of the Day

Last night I was at The Sands Volleyball in Des Moines and a teammate and I had a conversation before our game about how we noticed that all of the volleyball nets were supplied by various beer companies.  He suggested that the nets were probably given to The Sands by the local beer reps at a drastically reduced cost (if not for free) as a way of marketing to the thousands of players that take the sand volleyball courts every spring & summer. 

While it is somewhat of a faux pas to talk about what happens in the restroom, a bathroom stall is one of the few places left where a marketer is able reach a relatively captive audience.  Using the same strategy as the beer reps and the volleyball nets, if a toilet paper company would be willing to give public restrooms a better product in exchange for their logo on the dispenser doesn’t everyone win?

The toilet paper company would get inexpensive advertising at the cost of some reduced rate toilet paper and the signage they would use on the dispenser. The bar or public restroom operator wouldn’t have to pay any more than they are currently paying for the pathetic excuse that most places pass off as toilet paper.  Finally, the patrons would receive a better product! 

I’m not sure the cost difference in creating or supplying the high quality stuff vs the alternative, but since toilet paper isn’t something that many people are overly brand loyal to, I’d venture to guess that many consumers would be willing to switch to a quality product in a saturated market after taking advantage of a free trial sample.  

While this idea isn’t totally thought out and doesn’t have every possible scenario outlined, that is the point of a half-baked idea.  Run with it TP companies, and if it is viable, your public restroom patrons will reward you with purchases!

Wednesday, May 4, 2011

Derrick Rose is the MVP

Derrick Rose is a 22 year-old point guard who was named the MVP of the NBA for 2010/11.  Many people would automatically assume that since Derrick Rose is good, and good NBA players get paid a lot, that Derrick Rose would be one of the highest paid NBA players.

The NBA salary cap for 2010/11 was set at $58 Million per team.  Each team is allowed to have 15 people on their roster and if you were to split the $58 Million evenly, each player would have a salary of  $3.867 Million. 

Here is a list of players who are making more money than Derrick Rose this year.  I have limited it to the remaining 8 playoff teams because I believe that these teams represent most of the best teams in the league and the best teams are generally run by the smartest people and you'll see LESS bad contracts. 

Chicago:
Carlos Boozer - $14,400,000
Luol Deng - $11,345,000
Derrick Rose - $5,546,160

Atlanta:
Joe Johnson - $16,324,500
Josh Smith - $11,700,000
Jamal Crawford - $10,800,000
Kirk Hinrich - $9,000,000
Marvin Williams - $7,262,500
Al Horford - $5,444,857

Boston:
Kevin Garnett - $18,832,044
Paul Pierce - $13,876,321
Ray Allen - $10,000,000
Rajon Rondo - $9,090,911
Jermaine O'Neal - $5,765,000
Nenad Krstic - $5,543,116

Miami:
Chris Bosh - $14,500,000
LeBron James - $14,500,000
Dwyane Wade - $14,200,000

Memphis:
Zach Randolph - $17,666,666
Rudy Gay - $13,603,750
Shane Battier - $7,354,500

Oklahoma City:
Nick Collison - $13,270,000
Nazr Mohammed - $6,883,800
Kendrick Perkins - $6,696,720
Kevin Durant - $6,053,663

Dallas:
Dirk Nowitzki - $17,278,618
Tyson Chandler - $12,600,000
Caron Butler - $10,561,960
Jason Terry - $9,873,000
Jason Kidd - $8,610,500
Shawn Marion - $7,055,500
Brendon Haywood - $6,900,000

Los Angeles:
Kobe Bryant - $24,806,250
Pau Gasol - $17,823,000
Andrew Bynum - $13,700,000
Lamar Odom - $8,200,000
Ron Artest - $6,322,320
Luke Walton - $5,260,000

*All salaries taken from ESPN.com*

So that is a total of 34 players - on only 8 other teams - that are getting paid more than the league MVP.  I also threw in a couple of other guys that are making close to what Derrick is getting paid. 

So why is Derrick Rose so underpaid? The main reason is the NBA Rookie Wage scale.  Unlike the NFL or the MLB (which is complicated), the NBA has a set of guidelines that pretty much state what each team is to pay each rookie depending on when he is drafted.  Since Derrick is still performing on his rookie contract, he is getting paid less than 34 players that are still in the playoffs.  The NBA doesn't limit what players can make in endorsements and Derrick has taken advantage by doing multiple local ads as well as being one of the faces of Adidas. 

By understanding the rules that the NBA, NFL, MLB, etc, impose on their teams and players we fans can make more educated decisions regarding some of the recent hot sports topics over the last year.  For example, the NFL is currently in a lock-out and one of the sticking points is the owners would like to institute a rookie wage scale similar to the NBA.

It takes a lot of luck in the draft and a smart GM to create a title contending NBA team, usually the best choice is to go against the popular opinion and not sign a guy for more than he is worth.  I'm sure that if Derrick Rose chooses to re-sign with Chicago when his contract expires for $20,000,000 (completely made up number) per year in 2013, the Bulls fans will forget that he was ever at one time underpaid, even though many of those same fans will then complain about how he is ruining the Bulls' chances at potentially creating a title contending team. 

Wednesday, March 9, 2011

Event Marketing

Last week I went to Hilton to watch the Iowa State Men's basketball team defeat the traitorous buffaloes of Colorado.  While there I noticed that seemingly everything in the stadium was used as a piece of marketing material.  Almost every media timeout featured an ad.

- American Family Insurance had the student section "pump-up" their logo by supplanting it on a live video of the students pushing their arms up in the air.

- Delta Dental had a similar strategy as the camera found smiling fans while playing a song that basically repeated the words; "put a smile on your faaaaace..."

- Scion put their logo on the back of some large signs that the students used to organize their coordinated free-throw movements.  (A quick aside - coordinated free-throw movements are dumb and that has been proven)

- The student's t-shirts also had many sponsors, but I didn't notice any of them or remember any of the sponsors on the shirts that I wore while I was in school and in the student section.

- Toyota of Ames hosted a free-throw contest at half-time.  MC included!

- Someone won round-trip air-fare from some company by winning a dizzy lay-up competition.

- The floor used to be sponsored by Pioneer, or at least there was a Pioneer logo on the floor at one point, I didn't catch if it was still there.

- I'm sure there were many more that I either don't remember or didn't notice.

That last 'dash' point is the most concerning thing to me.  I was actively trying to notice and remember the marketing schemes that took place during the game and just a week later I can only slightly remember 7 of them.

I have no idea how much American Family Insurance pays to run that ad to a captive audience of roughly 10,000 people.  Captive meaning that we couldn't change the channel on the big-screen, not that Iowa State was forcing us to watch their basketball team against our will.  However, I bet that if you polled the 10,000 people that were present for that game last week, less than 400 (4% is a typical response rate for mailings) would be able to recall that ad and even less would be able to correctly identify the company. 

My point is, most people look past the marketing schemes we see every day.  I couldn't find up-to-date numbers on this, but according to David Shenk, in his book Data Smog, the average American encountered 560 daily advertising messages in 1971.  By 1997, that number had increased to over 3,000 per day.  With the growth of the internet and corporations seemingly making more of an effort to advertise I wouldn't be surprised if that number was approaching 10,000 ads per day. 

The trick as a marketer is to stand out above the white noise that we Americans have been forced to just look past.  Bringing that back to Iowa State basketball games, I still remember the shoot 5 for 5 promotion they ran at halftime from games when I was 6.  Benson Motors would give away a free car if anyone could make 5 shots in a row from various spots on the floor.  The trick that made me remember the name "Benson Motors" to this day is that the MC was always the same guy and he always had the crowd get involved with saying the company's name as the introduction to the contest.  I used to think Benson Motors was someplace special to go, even though in reality it was just like any other car dealership.  If a car dealership could get a 6 year-old to be excited to go there, and not bug his parents about how boooored he was, I think they would consider that a resounding WIN! 

I've read some other cool stories about companies making smart marketing decisions recently.  Jack-in-the-Box has something similar to a sports mascot star in its commercials.  That mascot, and his son, recently showed up at a LA Lakers game and just acted like they were there to watch the game.  While I'm sure the team was aware of the stunt, the Jack-in-the-Box guy didn't do anything to draw attention to himself, which in turn made it a cool story that I heard about here in Iowa.  That is successful marketing!  All it cost Jack-in-the-Box was the courtside tickets and whatever they had to pay the actor.

Right now, as I watch the Big East Tournament on ESPN I see logos for Reese's, and read that Volvo and St. Patrick's Church are official sponsors.  Really, a church!  I'm sure that all of those companies have deals that allow them to use the schools likenesses on other advertising materials, but just placing a logo on the floor isn't going to get you noticed.  Challenge your marketing department to come up with something that will generate traffic on Facebook and Twitter.  Repeating other people's ideas is lazy and is going to cause your marketing efforts to be part of the massive amount of white noise that we as American's naturally filter out every day. 

Wednesday, March 2, 2011

Major Market Advantage


Recently there has been a lot of talk about how only "Major Market" sports teams are able to compete for the right to employ the best players and subsequently compete for a title.  I decided to dive into the numbers to see if this was true.

First, I defined "Major Market" by looking up the most populated metropolitan areas in the United States according to the 2009 population numbers.  Here are the top 10:

1) New York - 19.1 Million
2) Los Angeles - 12.9 Million
3) Chicago - 9.1 Million
4) Dallas - 6.4 Million
5) Philadelphia - 6 Million
6) Houston - 5.9 Million
7) Miami - 5.5 Million
8) Washington DC - 5.5 Million
9) Atlanta - 5.5 Million
10) Boston - 4.6 Million

Now many people might not consider all of these places to be Major Markets, I certainly don't.  I would probably consider the top 5 to be Major Markets.  Although Houston and Philadelphia only have a difference in population of almost 100,000 people, the sports media tends to focus more on teams in the Eastern Time Zone and I felt like it was a nice, even cut-off point.

I defined cities 6-10 as teams that represented "Middle Markets". All other markets are made up of less than 5 Million people, and while Boston is also under 5 Million in population they would easily be more if you include the entire “New England” area (which compromises much of their fan base).

I also thought that the internet might be a factor in the results.  With the birth of blogs and the ability to see almost every game on TV these days, sports stars simply do not need to migrate to a Major Market in order to sign endorsement deals like they did in the mid-20th century.  I choose 1997 as the cut-off point because that is the year people point to as the year the internet really took off.  In 1997 nearly 10% of the people living in developed countries were using the internet, by 2010 that number had sky-rocketed to over 65% and continues to grow at almost a 2% per year rate.
It is also important to define the number of teams are in each market.  For the purpose of this exercise I included New Jersey based teams as part of the Major Market group and all Canadian based teams as part of the Small Market group.
Here are my results broken down by the 4 major American sports, the market size, and the pre/post internet era:

Major Market
Middle Market
Small Market









NFL
Titles Won
% of Total
Titles Won
% of Total
Titles Won
% of Total


1967-1996
10
33%
5
17%
15
50%

1997-now
1
7%
3
20%
11
73%

Total (45)
11
24%
8
18%
26
58%










# of Teams
% of Teams
# of Teams
% of Teams
# of Teams
% of Teams



Teams (32)
5
16%
5
16%
22
69%









NBA
Titles Won
% of Total
Titles Won
% of Total
Titles Won
% of Total


1950-1996
16
34%
19
40%
12
26%

1997-now
6
46%
2
15%
5
38%

Total (60)
22
37%
21
35%
17
28%










# of Teams
% of Teams
# of Teams
% of Teams
# of Teams
% of Teams



Teams (30)
7
23%
5
17%
18
60%









MLB
Titles Won
% of Total
Titles Won
% of Total
Titles Won
% of Total


1903-1996
44
47%
11
12%
39
41%

1997-now
7
50%
4
29%
3
21%

Total (108)
51
47%
15
14%
42
39%










# of Teams
% of Teams
# of Teams
% of Teams
# of Teams
% of Teams



Teams (30)
8
27%
5
17%
17
57%









NHL
Titles Won
% of Total
Titles Won
% of Total
Titles Won
% of Total


1927-1996
14
20%
5
7%
51
73%

1997-now
5
38%
0
0%
8
62%

Total (83)
19
23%
5
6%
59
71%










# of Teams
% of Teams
# of Teams
% of Teams
# of Teams
% of Teams



Teams (30)
9
28%
3
9%
18
56%










Titles Won
% of Total
Titles Won
% of Total
Titles Won
% of Total

ALL SPORTS

Pre-1997
84
35%
40
17%
117
49%

1997-now
19
35%
9
16%
27
49%

TOTAL
103
35%
49
17%
144
49%










# of Teams
% of Teams
# of Teams
% of Teams
# of Teams
% of Teams



Teams (122)
29
24%
18
15%
75
61%


These results prove my theory completely wrong.  If you just look at the number of titles won by Small Market teams (144) compared to Major Market teams (103) you might be able to argue that there is no advantage to being in a Major Market.  However, once you include the percentage of teams in each category, it becomes clear that Major Market teams do indeed have a decided advantage. 

The leagues with the most imbalanced title distributions are the NBA and the NHL.  The NHL is easily explained as I put every Canadian team in the Small Market category and they accounted for 41 of the 83 total titles.  Since hockey is a sport predominately played by Canadians, it makes sense that Canadian teams would place a higher importance on winning (i.e. spending money on the best players) and thus win more titles than their American counterparts.  It is also important to note that many American NHL franchises are owned by NBA or NFL owners who would much rather use their money to compete for titles in those sports.

The NBA results are probably best explained by what has happened in the NBA over the last few years.  LeBron has moved from Cleveland (Small Market) to Miami (Mid-Market) and Carmelo moved from Denver (Small Market) to New York (Major Market).  This isn’t a new trend.  In fact, NBA players are the ones most known for moving to large markets so it should make since that the titles are heavily distributed towards the larger markets as well.

All of the leagues had dynasties greatly affect the numbers.  In the NBA the Lakers and Celtics have almost 1/3 of all the titles between just the two of them.  The Yankees have celebrated 27 World Series titles, and like I said before the Canadian hockey teams account for almost half of the names etched on to the Stanley Cup.  I thought about throwing some of those dynasties out to compare numbers, but I ultimately decided that the best study was one that included all of the title winners.

So why do Major Market teams have such an advantage over Small Market teams? I was initially planning on arguing that the Green Bay Packers, San Francisco 49ers, San Antonio Spurs, etc. were able to keep their superstars and win multiple titles because they were run by smart owners and general managers.  While players ultimately decide the outcome of the games on the field, smart owners and GM’s are the people that are putting the teams together.  LeBron and Carmelo stayed with their respective teams for 6 years and gave each franchise every chance to succeed. Neither GM was able to surround their superstar with a capable supporting cast, so they left for a better environment, even if that wasn’t necessarily a better team.

While I still believe that smart people can win in sports no matter where their franchise is located, I think the smartest people choose to work in the biggest markets.  Take this for example; I heard on Mike & Mike (ESPN Radio morning program) the other morning that if Mark Cuban (Dallas Mavericks Owner/Billionaire) were to gain control of a baseball team and move it to Idaho he could make it successful by just simply choosing to spend as much on his players as the Yankees do.  While I agree with this concept, I found a fatal flaw in the logic. 

Mark Cuban is a smart businessman; this is proven by the fact that he is a self-made billionaire.  Smart businessmen generally try to surround themselves with other talented people and have very little tolerance for failure and work together to make smart choices that will most benefit their respective organizations.  Thus Mark Cuban would never move a team to Idaho.  Teams in Major Markets have 5+ Million people willing to pay for their tickets, buy their merchandise, and watch their games on TV.  This creates a decided monetary advantage for the Major Market teams, money that these organizations can use to recruit better players and then have a better chance at winning more titles. 

Finally, I wanted to touch on the 1997 internet based cut-off point that I included in my study.  If you look at each individual sport, you could probably make an argument that either the internet was helping the Small Market teams (particularly in the NFL) or hurting them.  Ultimately, when you compare the combined title winners from all sports the percentages are nearly identical.  I thought this was pretty cool, and was able to just write off the discrepancies in each individual sport to the fact that it is a smaller sample size thus more greatly affected by recent dynasties.  I would be interested to see if this trend continues or if Major Markets will always have an advantage of their Small Market counterparts.