Automakers use sports sponsorships to build brand awareness and loyalty among consumers. And they've used the benefits of sports sponsorships to strengthen relationships among dealers as well.
Sports marketing programs can range from a sponsorship of the U.S. Olympic team or the National Basketball Association, and using their logos in advertising; or a sponsorship of a golf tournament or auto race that comes with perks like signage and hospitality.
Sports organizations like the NBA, Professional Golf Association and National Football League are realizing the needs of automakers to make their sponsorship pay off.
In recent years, marketing units of these sports leagues have created divisions to help sponsors craft marketing programs that will spur sales. These efforts have increased interest and programs from some marketers.
Last month, General Motors Corp. said it reached an agreement with the PGA to make its GM Card the official credit card of the PGA.
That gives GM the opportunity to promote the program among PGA's 23,000 members at 7,600 U.S. golf facilities.
Golf is an important sports marketing event for automakers because it allows them to create loyalty with those in a lucrative demographic, whether they're at the event itself-where they can see, touch or even test-drive the vehicle-or watching the event on TV.
In fact, the media exposure of on-site and on-screen signage, or verbal mentions of the brand name, is one of the most valuable parts of the sponsorship.
According to The Sponsor Report newsletter, Cadillac had over 57 minutes of on-screen presence and 123 verbal mentions in 21 final round national broadcasts of golf tournaments last year.
Based on the average cost of a 30-second spot for those broadcasts, that translates into a value of nearly $1 million in media time.
Cadillac, affiliated with the PGA for about four years, has extended its sponsorship of several tournaments on the Senior PGA Tour through 1996. And the division also has signed on as a sponsor of Team Dennis Connor, which will compete in the 1995 America's Cup yachting race.
"We find that sports marketing works," says Peter Levin, director of advertising for Cadillac. "These events allow us to get peo ple involved with our products-to see them, even test drive them. But it also helps us build relationships with our local dealers, to give them an opportunity to pursue an affinity-golf-that they already have."
GM also plans to make extensive use of its estimated $15 million World Cup sponsorship to promote several of its nameplates, like Chevrolet, GMC Trucks and Pontiac, in various parts of the world. This marks the first time GM has executed a worldwide sports marketing initiative.
"In the U.S., we will make greater use of the sponsorship on a local level. Rights will be used by dealers to create promotions, and our allotment of tickets will used in sales incentive programs," says Jim Latham, GM's World Cup marketing spokesperson.
Sponsoring National Association of Stock Car Auto Racing events can be even more valuable. Ford Motor Co.'s sponsorship of Nascar races and cars earned the automaker over 7 hours of exposure and mentions in 70 airings of 30 Nascar races last year. That translates into nearly $21 million in media time.
"One thing that's different about this sport is that sponsors are very important to the financial underpinnings of the sport," says Alan Friedman, editor, Team Marketing Report. "Fans recognize that this sport is brought to them by these sponsors, and they appreciate that."
Despite these positive results, some are pulling back.
Chrysler Corp., involved in an array of sports marketing activites, including sponsoring the NBA through its Jeep Eagle and Plymouth lines, is reassessing its sports marketing efforts. And Mazda Motor of America dropped its sponsorship of the Ladies Professional Golf Association Championship and the Senior PGA Championship last year.
"We've trimmed down our programs. It's a tough climate in the auto industry, and we've decided to focus on programs that provide immediate sales growth," says Mitch McCullough, marketing spokesperson for Mazda.
"The rule of thumb among automakers about sports marketing is that you can't look for the payoff in 12 or even 18 months," says Mr. Latham. "You use it to ... build brand awareness. So you've got develop your strategy, sign your sponsorships and stick it out for what could be a long haul."