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Why is arena sponsorship a good move from a marketer’s point of view?


Posted on 16 Jun 2014 by Gill Fleming

It’s been over a year since we announced the sponsorship of the first direct arena, and now we are once again proud to announce that the 13,000 capacity venue has been awarded the prestigious title of new venue of the year at the Stadium Business Awards in London. The award was judged by a panel of industry experts from around the world, further proof that the arena is helping cement Leeds’ place as one of the best cities in the world to live.

We aren’t the only brand sponsoring international music venues, there are many examples of companies thinking the same way, adopting stadiums across the country in multi-million pound sponsorship deals, such as the O2 Arena, which took the name of the Millennium Dome for £6 million a year in 2007. 

It’s become the thing to do – Sheffield Arena was renamed by Motorpoint, Newcastle now boasts the Sports Direct Arena at St James Park for a cool £10 million a year, while Scotland’s brand new arena is the SSE Hydro, named after the company for £15 million for ten years. 

Want further proof that naming things after your company is the trend of the decade? Sports Direct investing in Glasgow Rangers football ground, Wembley Arena’s name bought by SEE for £15m, Manchester’s arena changed from the ‘Manchester Evening News’ Arena to Phones 4 U in a multi-million pound deal that Mancunians are still catching up on. 

The biggest deal to date is the Etihad Stadium in Manchester, the home ground of football super-club Manchester City. The stadium, previously ‘The City of Manchester Stadium’ was originally built for the 2002 Manchester Commonwealth Games and sold its naming rights following the takeover of the club by current owner, Sheikh Mansour for a whopping £400 million. Manchester City’s chief executive described the move as"one of the most important arrangements in the history of world football". 

So why are companies spending so much on naming rights, and how much sense does it make from a marketer’s point of view? 

For first direct , it was a unique opportunity to invest in its home city and give something back to the home it launched in 25 years ago. The building of the arena was a milestone development for the city and sponsoring it was a clear way that we could show support. 

When the Tour de France begins in Leeds this year, 13,000 excited fans will see the cyclists the team presentation opening ceremony and although first direct is not the official sponsor, its naming rights give it a year-round brand presence for every event that takes place. The last time the Tour visited England in 2007, it raced from London to Kent and around two million people turned out over two days. 

Other benefits first direct has found has been its ability to give away tickets to its staff and customers, as well as preferential access to the arena through an express entrance. 

In a poll of 216 UK sports fans, Performance Research also found that at least some fans see value in this kind of corporate sponsorship. Twenty-five percent of those interviewed indicated arena sponsorship had or would increase purchase consideration, half said the name gave them a more positive opinion of the company, and a quarter of fans said the brand association gave positive connotations. 

The potential drawbacks are mostly to do with popular support  - ensuring that supporters of the venue aren’t in opposition to the deal, and that the name change really happens. In some cases, where names are shortened to simply ‘the stadium’ or ‘the arena’, the benefit of sponsorship could be lost. 

For football and event venues, the argument is that ticket prices are subsidised by the selling of naming rights, and although companies such as first direct don’t immediately see any uplift in their customer base, they believe the greater benefits of brand association make sponsorship a no-brainer. 

For our local staff and customers who live in Leeds, the reality of an arena in the city never seemed like it would happen, and first direct ’s deal now reaps rewards all year round. In nine months there have been 58 shows and we have given away more than 1,500 seats through competitions and prize draws to see everyone and everything; from Bruce Springsteen and Gary Barlow to X-Factor and the BBC Sports Personality of the Year Awards. 

We haven’t yet seen whether the sponsorship has brought a direct uplift in customers, but having the arena sponsorship gives the us a bricks and mortar presence it couldn’t otherwise achieve. 

For the Leeds arena sponsorship, it’s still early days, but we believes it’s met its perfect brand match in a venue that personifies many of its traits – great customer experience, customer service and the offering of something extra special – the marketer’s ideal combination. 

 

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