Following the money through pro golf sponsorships

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What is it worth to a brand to sponsor a golfer?

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The answer isn’t quite as simple as, “whatever they’re willing to pay.”

That’s because, first, if the brand is marketing itself effectively, they see returns on their golf investment several times over what they initially put in, and, second, because brand exposure metrics are not always presented in terms of actual dollars in revenue or profit for the sponsoring company.

For example, marketing researchers Kevin Chung, Timothy Derdenger and Kannan Srinivasan found in 2013 that “from 2000-2010, the Nike golf ball division reaped an additional profit of $103 million through the acquisition of $9.9 million in sales from Tiger Woods’ endorsement. Moreover, his endorsement led to a price premium of roughly 2.5 percent. As a result, approximately 57 percent of Nike’s investment in Woods’ $181 endorsement deal was recovered just in US golf ball sales alone.”

English golfer Justin Rose is surrounded by the morning papers as he reads the stories of his US Open victory at the Merion Golf Club at his hotel. AFP PHOTO

Nike got out of the golf equipment business last year, but the point here is that brands don’t always reach that degree of certain specificity in calculating exactly how many transactions, units, or dollars were gained due to the relationship it has with a golfer. What companies who track that sort of thing more commonly speak in terms of is something called “brand value.”

“When firms like ours evaluate brands that get exposure on TV or onsite, we look at a brand value like an occurrence that that somebody can fully read, clear and in focus, to identify what that brand is,” said Eric Smallwood, president of Apex Marketing Group, a Detroit firm that quantifies brand exposure value for its clients. “It has to have mental impact enough to create unaided awareness and future recognition.”

For brand marketing purposes, think of a professional golfer as a walking, golf-club-swinging billboard, whose value as an advertising entity depends largely on how often he or she is pictured on television, said Broc Sears, assistant professor in TCU’s strategic communication department.

“The idea behind successful billboard advertising is to buy a board in the right location to reach your target audience, monitor the effect it has on your goals and evaluate whether your return made the act worth it,” Sears said.

Then Smallwood’s notion of unaided awareness is the second side of the equation. When the time comes for a new golf outfit, consumers are more likely to buy one made by a company they’re already comfortable with.

One (big) way brands introduce themselves to consumers and keep their brand at the front of their minds is through television. So, the theory goes, the greater the number of instances consumers unconsciously associate the best golfers in the world with a brand, especially while in contention or at the top of the leaderboard, the more front-of-mind that brand becomes at the point of purchase with viewers, in conjunction with all the rest of the brand’s marketing activity.

Apex’ study of the telecast of the final round in the 2017 Masters is telling. Of the 17 golfers that made it onto the telecast, two were clothed head-to-toe in Adidas: the final pair of Sergio Garcia and Justin Rose, who also happened to be the winner and runner-up, even extending Adidas’ hold on the brand exposure charts for the day into a one-hole playoff.

Though six of the 17 golfers who appeared on television on Sunday at the Masters wore their Nike sponsorship on their sleeve, or their chest, as is the preferred real estate on a golfer for his or her sponsor, Garcia and Rose’s combined air time made the Masters a jackpot for Adidas, while Nike saw a brand value of about $4.1 million from the combined television exposure of Russell Henley, Paul Casey, Rory McIlroy, Thomas Pieters and Jason Day.

When it was all said and done, Garcia’s championship shoes, pants and shirt generated an estimated $13.5 million in brand exposure for Adidas, while Rose’s shoes and shirt threw an estimated $6.1 million on top for good measure. They were at or near the top of the leaderboard all day, and therefore on television all day, pounding the message into the millions of viewers the round attracted that “Adidas is golf.”

Dallas golfer and defending Dean & DeLuca Invitational champion Jordan Spieth’s head-to-toe agreement with Under Armour netted the company $4.85 million in brand exposure, according to Apex’ figures.

“It’s not so much, ‘how many widgets they sell,’ but how much exposure their brand gets to keep them front of mind in consumers,” Smallwood said.

Yet, it’s still calculated in dollars. And there are ways for companies, especially in apparel or other retail categories, to take advantage of their relationships on the golf course for immediate and measurable dividends.

When Spieth won the Masters in 2015, he did so in wire-to-wire fashion. Every day of the tournament, Under Armor featured the exact ensemble worn by Spieth on the front page of its web site.

The sales of those units (shirts, pants, shoes and hats) on those four days, and for a few days after the tournament, when those outfits were also featured prominently on underarmor.com, can largely be attributed directly to the relationship the brand has with Spieth. Under Armor signed Spieth initially in 2013, shortly after he left the University of Texas to turn pro.

With Spieth as its face of golf, the company passed Adidas as the second-best selling sports apparel brand in America in 2014. The two parties agreed to a 10-year extension on that partnership in 2015, though financial details were not disclosed. They rarely are, but most companies with the spending power to pay for relationships with professional sports stars are publicly owned, so sales, revenue and profit figures are readily available.

In the fourth quarter of 2016, Under Armour apparel sales rose 7.4 percent to $928.5 million, with strength in golf and basketball (where the company has a similar deal with Golden State Warriors guard Steph Curry), according to MarketWatch. Its apparel sales rose another seven percent in the first quarter of 2017, according to CNBC.

Spieth was second on the PGA in total pay in 2015, according to Forbes, making $52.8 million, including $32 million earned away from the course, and was fifth in total pay in 2016, according to Golf Digest, making $30.4 million, including $24 million earned off the course. The bulk of those off-the-course figures come from sponsorships.

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