Big Blue Gets Bang for Sponsorship Buck

Sometimes they fly under the radar in sports sponsorship coverage because they don’t resort to flashy activations, gimmicky promotions, or execute groundbreaking deals. Still, dollar for dollar, IBM is arguably the leader in integrated sports sponsorships that create a dual value-add for both sports property and brand. In the current world of scrutinized spending and ROI debate, brands and properties should look to IBM as the standard.

This week’s US Open completes IBM’s own grand slam of major sports events – the Master’s, Wimbledon, and both tennis and golf’s national championships. IBM uses each event as a platform to show off its technology, as well as extend its branding. Operating in the B-to-B market makes sports sponsorships trickier than for the traditional B-to-C brands. However, IBM successfully segmented the market, identifying two sports that have a high yield of decision makers as fans and whose overall audiences skew older and wealthier, aligning with IBM’s target customer.

Besides segmentation, IBM sets itself apart by creating a true partnership through technology. They don’t simply come in and do the basics for sports partners, IBM builds cutting-edge iPhone applications, implements back-end systems for streaming media, manages a website that will garner tens of millions of hits in the next few weeks, and even shows off its green efficiency. Behind the scenes they use IBM servers, storage systems, and various other enterprise technologies to help bring the events to life.

Here’s where the target segmentation comes in handy – IBM then has access to the biggest multi-day events in the world to entertain prospective clients and show them the technology at work. That is how you create ROI.

On the flip side, the sports property benefits from sitting at the cutting edge of technology, which drives engagement numbers, creates more advertising opportunities, and creates new sales revenue opportunities. Thus, if executed correctly, the property could actually recognize significantly more revenue from the IBM deal than just what IBM pays out.

Another successful part of IBM’s strategy is they know when to exit. In the past decade, they ended relationships with the Olympics and NFL, recognizing they had extracted as much as they could from the relationship and it no longer created a significant return. IBM built solid technology platforms for both entities, developed partnerships similar to the golf and tennis ventures outlined above, but after a number of years knew they had penetrated those particular audiences and taken the technology as far it could go for those properties at this time, so they decided to reallocate the investment.

While soda, beer, and QSR’s get most of the attention, IBM may get the most bang for the buck in top-level sports sponsorship. They put their technology in the places people look for it (ie iPhone and digital media) to maximize brand exposure outside of the traditional signage and media, and create a real-life sales presentation for potential customers.

Michael is studying for his MBA at NYU’s Stern School of Business, with a focus on business development and strategic planning in the sports industry. A passionate sports fan, Michael revels in the use of statistical analysis in sports, and continues to pursue that in his leisure. In addition to sports, Michael brings a strong interest in media, with a focus on the shift to digital media and the transformation of cable. Don't forget to check out Michael's previous posts. More of Michael's insights can be found on sennosportsbiz.com and he can be followed on Twitter at twitter.com/mjsenno.