Awarding Keys to the Newly Sponsored City

Advertisers and city fathers are no longer strange bedfellows, as marketing money now ventures far beyond city-stadium naming rights. And while they are still not without controversy, private/public partnerships, once a delicate subject, have become civic policy.

In April, New York City named New York Yankees vp/business development Joe Perello its first chief marketing officer. On Sept. 9, the hire bore fruit when the city inked a $166 million Snapple-in-schools deal.

While Perello has said that major New York landmarks are off-limits to such deals, naming rights now extend to Saturn playgrounds and a Tommy Hilfiger Theatre in Long Island, “naming rights” legislation for schools and train stops in Minnesota, and solicitations for “partnerships with the private sector” from the Illinois governor’s office.

Cash-strapped states, joining private schools in charging students for traditional extracurriculars such as bands and sports, have all but put out RFPs. A Minnesota funding bill that went into effect Aug. 1, for example, gave Metro Transit naming rights for station stops along the Hiawatha light rail between the Mall of America and downtown Minneapolis. “The platforms are already named,” said director of customer services Bob Gibbons, “but we’re open to a ‘brought-to-you-by’ co-designation.”

Two Minnesota state legislators, Rep. Jim Abeler and Sen. David Tomassoni, co-sponsored a “naming rights” bill for Minnesota school properties that went into effect last month. “There was controversy and a lot of joking by naysayers about a Pepsi High or a Nike Field,” said Abeler. “We debated exposure to advertising and commercialization of the schools. … But we trust local school boards.” Abeler said he did not know if sponsors have come forward; the bill does not mandate reporting.

Sometimes a municipal partner makes the first overture. “The [San Diego] Padres pitched us,” said Shawn Underwood, a Petco rep, about the pet-supply chain’s 22-year sponsorship of the baseball club’s new stadium, which opens in April.

Some deals, like Snapple’s partnership with New York, include agency involvement. “We will create a marketing program with NYC to mutually promote each other,” said Marke Rubenstein, evp/promotions and PR at Snapple shop Deutsch in New York, an Interpublic Group shop. “This is the first deal since the city anointed a CMO. He couldn’t be more open to anything we recommend.”

Some tie-ins are obvious and entertaining: When the Pittsburgh Steelers hit the “red zone” at Heinz Field, the bottles on the scoreboard pour virtual ketchup. “It’s a big visual that connects with the fan,” said Ann Wool, svp at Omnicom Group’s Ketchum, the deal’s broker.

Municipal marketing, as it is called by research consultancy IEG in Chicago, was tracked at $10 million in 1994; by 2001, it had grown to $140 million. In 2002, it was estimated at more than $175 million, according to William Chipps, senior editor of IEG Sponsorship Report.

Nevertheless, reservations remain. Char Pagar, a lawyer at Hall Dickler Kent Goldstein & Wood in Chicago, said that while it is “more a PR issue than a legal one,” a conflict of interest may arise should one agency of a state do business with a company another agency of that state is suing.