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Beyond the Top Tier

BMX? Bull riding? Mudding marathons? A growing number of brands are turning to niche sports to boost their sponsorship ROI
  • January 30 2012

Until recently, most marketers probably had never heard the name Tough Mudder. But when Under Armour signed a multi-year sponsorship with the military-style endurance challenge series in late 2011, a veneer of credibility suddenly formed around the events, which despite their rabid fan base remain a relatively new and unproven “sports” property.

That’s just fine with Under Armour. This is a brand that likes to “do things a bit differently,” says its senior vice president of sports marketing Matt Mirchin. “As the official outfitter of Tough Mudder, we are able to fulfill our mission of ‘making all athletes better’ while directly connecting with our core consumer.”

Under Armour isn’t alone. A growing number of marketers are breaking new ground on sponsorships outside the top tier of major league sports. These opportunities include everything from traditional sports such as boxing, tennis and lacrosse to specialized sports (bull riding, anyone?), athletic competitions like Tough Mudder, sports that blend with entertainment such as Mixed Martial Arts, and the ever-expanding action sports category led by skateboarding, snowboarding, BMX and various extreme games.

The overall sports sponsorship market is thriving. IEG estimates that in 2012, sports sponsorships in North America will be worth about $13 billion (or 69 percent of the overall North American sponsorship market). Some believe that as much as 40-plus percent of this figure can be attributed to sports beyond the majors ((the NFL, NBA, MLB and NHL, plus NASCAR, the PGA and major college sports), resulting in a so-called second-tier market worth in the ballpark of $6 billion.


Going Stealth

Alternative sports tend to attract intensely loyal followings and boast athletes who are highly accessible to their fans, creating opportunities for marketers to build deeper one-to-one relationships with consumers. “With many of the niche properties, you get the benefits of cheaper rights, less expensive media platforms and the ability to home in on a target market,” says Jeff Shifrin, president-Americas of Octagon Sports Marketing. “It allows a company that can’t afford NFL rights to include sponsorship as part of their marketing mix.”

While Under Armour covets the brand exposure afforded by its major league sponsorships with the NFL and MLB, it decided to place a bet on Tough Mudder (which doesn’t even have a TV contract) after a group of employees competed in the hardcore races and discovered how well the events were run. “A lot of people running the race, both male and female, were already wearing the Under Armour products. So we decided to reach out to them and we liked where they were taking things,” recalls Mirchin. “We think this will be a long-term partnership.”

There are 35 Tough Mudder competitions set for 2012, including events in Maryland and London, where Under Armour is the title sponsor. The brand name will be featured on a custom obstacle course, as participants brave strength challenges in ice-cold water and crawl through mud trenches laced with barbed wire.

With so many sports available, marketers need to conduct extensive research to ensure that the passions of each sport’s fans align with the expressed interests of their consumers. In selecting among less established sports, the decisions can be “more a matter of art than science,” notes Mirchin.

Post Foods’ Grape-Nuts recently became the official sponsor of USA Cycling (the sport’s governing body) in a deal that will include sampling at racing events, branding on jerseys and new Grape-Nuts packaging featuring pro cyclists such as Matthew Busche. Teaming up with the cycling organization lends instant credibility to Grape-Nuts’ healthy lifestyle message, and gives the brand access to the USAC membership, says Kelly Annis, director of consumer promotions and shopper marketing at Post Foods.

“Cycling is a very uncluttered environment. We didn’t want to go into a space where we’d be one of 40 sponsors,” says Annis. “We will be communicating to USAC members through their newsletter and conducting hospitality programs on site at events. The agreement also gives us the ability to engage individual athletes if we so choose.”

Plus, Grape-Nuts is carving out territory in a fast-growing sport. “In the last 10 years the participation rates in cycling, triathlons and running have really skyrocketed,” notes Scott Dickey, president of Competitor Group, a leading media and event company in the endurance sports industry.

Successful marketers leverage their sponsorships in a multitude of ways. Since 2006, Xyience (pronounced “ZIE-ence”) has been the official energy drink of Ultimate Fighting Championship, ensuring category exclusivity in that youth-oriented beverage category. In addition, the brand has 11 UFC fighters under contract, typically for 18 to 24 months, who provide a critical liaison to fans through retailer appearances, autograph signings and promotions. “UFC encourages all their fighters to meet their fan base,” says John Lennon, Xyience president. “It’s a great guerrilla tactic for us and it keeps the athletes, the stores and our distributors all very happy.”

Not to mention, the sponsorship boosts sales. During a major UFC fan expo last fall, Xyience drew between 20,000 and 30,000 attendees to the Houston event and recorded a 30 percent lift in beverage sales during the fourth quarter in the area, says Lennon.


Dew Diligence

If there’s a template for building a meaningful alternative sports sponsorship program, it’s Pepsi’s Mountain Dew. Now it in its eighth year of the Dew Tour, the brand has become virtually synonymous with action sports. What began as grassroots sponsorships with individual athletes back in the 1990s has exploded into a broad national marketing platform that encompasses everything from apparel, via co-marketing with Burton, to music, gaming and art through the Green Label brand.

“Music is such a big part of action sports. You see snowboarders dropping in the half-pipe and they’ve got headphones on,” says Erica Pergament, director of sports marketing at PepsiCo. “We find out what our athletes are listening to and make playlists on the [Dew Tour] website. At the events, kids can make a mix that their favorite athletes help compile.”

In 2011, Dew Tour featured a “Shop Series” promotion in which local skate shops competed to design their own Mountain Dew can. The winning shop (chosen from over 1 million online votes) had its can produced and distributed nationally. Average attendance for Dew Tour events is about 50,000, with summer events recently running as high as 75,000, according to PepsiCo.

Such success is a feather in the cap of NBC, which televises the Dew Tour through its Alli Sports cable channel and has been building a schedule with both traditional and alternative sports. This year, for example, the network considerably bolstered its horse racing coverage, added Professional Bull Riding to its lineup and will air more than 40 Major League Soccer games, both on NBC and the recently rebranded NBC Sports Network.

“Many of the smaller or more targeted sports are critical to our success,” says Jon Miller, president of programming at NBC Sports & NBC Sports Network. “They allow us to engage a different audience and offer advertisers an unbelievable opportunity to activate around a sponsorship.”