Card Associations Spend Big Bucks to Score Goals

Visa has football, thoroughbred racing, the Olympics, and, as of last week, the Nascar circuit.

Both bank card associations have pieces of baseball. And both, obviously, can't get enough of sports.

Alongside other high-visibility brands like Coca-Cola, McDonald's, and Nike, the bank card groups-and to a lesser extent American Express and Discover-have sought the attention of the world's billions by making sports sponsorships an integral part of their advertising and promotion strategies.

They spend millions of dollars for the rights-$40 million to $50 million in the case of the Olympics, which is an extreme example-and multiples beyond that to maximize their marketing mileage.

They may be contributing to and perhaps profiting from a sports- craziness that disturbs certain social commentators.

But it's all business, supported by the card associations' thousands of member bankers around the world who care about community standards and are not generally inclined toward profligacy.

Mava K. Heffler, MasterCard International's senior vice president of global promotions and sponsorships, professes not to be too much of a fan. As the MasterCard ads associated with the just-concluded World Cup in France would attest, she sees no shame in associating the company's image with the public's passions.

"Sponsorship with MasterCard is not emotional," said Ms. Heffler. "It's all about cold, calculated business-building."

One calculation is that during a typical World Cup match the fleeting glimpses of MasterCard's strategically placed billboards added up to more than seven minutes of international exposure.

All the games were shown in the United States on ABC or ESPN television, and portions were "brought to you commercial-free by MasterCard," the announcers would say.

All the returns are not yet in from France '98. But from 1995 to the end of Euro '96, the European soccer championship around which MasterCard built a brand-awareness campaign in the United Kingdom, unaided consumer awareness of MasterCard jumped from 19%, to 30%-and 38% in the major U.K. cities where the matches were held.

Visa, meanwhile, has gotten a lift in transaction volumes, market shares, and other consumer survey indicators after every Olympics it has sponsored since 1988. Its analysts say these were not coincidences.

Ms. Heffler was quick to point out that this is not all scientific. Evaluations are becoming increasingly subjective as sports, or what is known in the trade as event marketing, blend more and more into any and all aspects of promotional strategy.

In Visa advertising, for example, an Olympics commercial may be just one of many on the "everywhere you want to be" theme. MasterCard's sports imagery is creeping in to its current series of "precious moments," which it is hoping will help close the market-share gap with No. 1 Visa.

"It's not just what you bought," Ms. Heffler told a press seminar in Paris last month. "I can measure the exposure of signage, for example, but it's what you do with the sponsorship that counts. The more integrated it is, the harder it is to quantify" the benefit.

Events are "experiential," Ms. Heffler said, which is important to ensuring that brands are "not just seen and heard, but experienced at multiple points."

All sides seem to agree that the return on investment is there. At least they vote that way with their dollars.

Bob Heussner, executive vice president of Advantage International, a consulting firm that works with MasterCard, said all sponsorship fees worldwide have almost doubled since 1993, to $17.4 billion. No aspect of marketing is growing faster.

Citing data from IEG Sponsorship Report of Chicago, Mr. Heussner said two-thirds of North American sponsorship spending of $6.8 billion this year will be for sports. (Arts, entertainment, festivals, and causes are the other categories.)

As multinationals, MasterCard and Visa like the idea that sports transcend national and cultural boundaries and spark the kinds of passions and loyalties that might carry over into their products.

For better or worse, the corporate-sports relationship has become symbiotic, and financial services are just one part of it.

"We bring our technology solution capabilities to the event," including Internet and electronic commerce capabilities, said Debra Gottheimer, communications director, worldwide Olympics and sports sponsorships, International Business Machines Corp. "By partnering with groups to do something different with their brand, we can differentiate ourselves from other sponsors."

"No event is possible today without sponsorship," Mr. Heussner said. It has gotten to the point where major media companies-Time Warner Inc., Tribune Co., Walt Disney Co., and Rupert Murdoch's News Corp.-have acquired sports franchises as part of their information-age versions of vertical integration. Corporate or public-shareholder ownership is a trend sweeping through the European soccer leagues.

Mr. Murdoch's Fox network is itself a brand and event-marketing powerhouse, which explains why it invested $10 million in the technology that causes hockey pucks to glow on the TV screen, said Vince Wladika, senior vice president of media relations for Fox Sports.

"Our job is to guard and promote the brand," Mr. Wladika said at a symposium this week sponsored by SportsWire, an affiliate of Business Wire.

Sponsorship interests like those of MasterCard and Visa-the latter increasingly close to Fox Sports through its football sponsorship-assure for their banking constituents a collective piece of the action.

The banking properties have locked up many more slots than American Express, which identifies itself with professional basketball and U.S. Open tennis, and Discover, which will be on view starting this weekend as the official payments sponsor of the Goodwill Games in New York (a Turner Broadcasting-Time Warner venture).

Unique among elite event sponsors, the card associations can spread their costs and benefits across their vast number of member financial institutions, which in turn can use the coveted imagery of a major sporting event in programs at the grassroots level.

The global-grassroots continuum finds parallels in soccer and the Olympics, the top two "epic events on a global scale," Mr. Heussner said. The banking industry, given its ownership of MasterCard and Visa, thus has a sponsorship interest in both.

If there is a third such "epic event," he said, it is Formula One auto racing, getting some 41 billion person-views a year via television. MasterCard got a hook into Formula One through a driver it sponsors, Eddie Jordan.

In a domestic analog, Visa seized on Nascar, the National Association for Stock Car Auto Racing, as yet another pillar of its events strategy.

Rebecca Saeger, Visa U.S.A. executive vice president of brand management, rates Nascar in a league with the Olympics, the National Football League, and the Visa Triple Crown Challenge-the annual springtime deal that includes the offer of a $5 million bonus to any horse that wins the Kentucky Derby, the Preakness, and the Belmont Stakes.

"The last time we had an opportunity like (Nascar) was 12 or 13 years ago, when American Express dropped their Olympic sponsorship" and Visa picked it up, Ms. Saeger said.

"It is a nationally based sport and the television ratings are second only to the ratings for the NFL," Ms. Saeger said.

Visa said Thursday that its 1998-99 NFL involvement will include, among other things, "title sponsorship" of the half-time reports on the Fox network, a sweepstakes, and mall promotions with Simon DeBartolo Group.

Lance Helgeson, managing editor of IEG Sponsorship Report, said Visa could have paid $750,000 to $1 million just for the right to use Nascar's logo over the three-year sponsorship period starting next Jan. 1.

Typically, he said, a company will spend four times its initial outlay to activate a successful promotional campaign.

"The Nascar opportunity is one that we are really excited about and went after aggressively," said Ms. Saeger at Visa in San Francisco.

Visa will also be the preferred card of Nascar. MBNA America Bank currently issues a MasterCard-branded Nascar card and offers other affinity products, but Visa indicates it intends to mine more sponsorship opportunities and will do substantial media advertising to support them.

Visa will have exclusive rights to supply Nascar-Visa logos to its member banks and merchants in the United States and Canada for promotional purposes.

Ms. Saeger said Nascar is by far the fastest-growing spectator sport in America. The loyal and relatively affluent core of fans has been responsible for a ten fold increase in licensed-product sales over the last seven years.

Visa is also pursuing racetrack sponsorships in hopes of getting signage and television exposure to supplement the umbrella Nascar arrangement. Visa has already become a sponsor and the official card of the Daytona 500 and the Daytona International Speedway, though it had to postpone the marketing splash because of the recent wildfires in Florida.

MasterCard will move on to other things, said William Daily, vice president of the Purchase, N.Y.-based association. "We have always felt that we have to do fewer things and do them more comprehensively to motivate audiences," he said.

"The Nascar sponsorship and the renewal proposal that was presented to us was really more about brand awareness than it was about being able to reach our audience with effective marketing programs," Mr. Daily said.

Given MasterCard's 96% awareness level, "brand exposure is not solely what we need," he added. "We need a fully integrated plan to reach our audience."

MasterCard logos have been popping up at baseball stadiums as its Major League sponsorship kicks in. With an eye to 65 million fans, the association won the national pastime last fall after Visa was said to be very close to an agreement. Visa still has "preferred card" status with a majority of the teams.

MasterCard recently announced a new golf agreement, a multiyear sponsorship of the 1997 British Open champion, Justin Leonard.

In May, MasterCard inked a four-year extension of its agreement with the Professional Golfers Association, which includes rights to the Senior PGA Tour.

"Golf is a wonderful sponsorship area for us," Mr. Daily said. "It provides an opportunity to reach 26 million golfers who are creditworthy and tend to be early adopters of things."

Mr. Daily said the image and traditions of golf "measure up very well" with what MasterCard wants to project with its brand.

Mr. Leonard said he and MasterCard made a great fit in part because of the card company's sponsorship of the British Open and the MasterCard Colonial tournament , "which is very close to my home in Dallas."

"When you see a MasterCard ad come on you don't change channels," Mr. Leonard said. "You want to stay and watch because you know something is going to happen."

He will star in "Nerves of Titanium," MasterCard's latest "Priceless Moments" spot, to debut this weekend on the British Open telecast.

"Everybody wants television exposure, " said Joe Favorito, director of communications for the Corel Women's Tennis Association Tour.

Speaking at the Business Wire sports marketing symposium, he said sponsors not only want "ownership of the game." They also want to relate to the top players.

"When you have a celebrity that has the personality and image that you want to associate with your brand, that personality plays out in advertising to reach and engage the audience," Mr. Daily said.

In addition to Eddie Jordan and Justin Leonard, MasterCard has a "personality" relationship with the soccer legend Pele, who has been appearing in advertising and as a spokesman since 1991. American Express signed the young golf star Tiger Woods, Visa works with Jack Nicklaus.

Sponsorship has also become a year-round game. Events have to be tactically chosen and timed-hence Visa U.S.A.'s ability to segue from horse racing in the spring to the NFL in the fall, soon to be bridged by Nascar.

Countering Discover and the Goodwill Games, Visa has signed on as official partner and consumer payment system of the 1998 Nike World Masters Games in Portland, Ore., next month.

Marketers build up gradually and seek the biggest impact just before or during an event, as could be seen in MasterCard's increasing television presence over the month of the World Cup.

"We have to be measured in our advertising," said Michael Lewellen, director of public relations for the Goodwill Games. "We cannot blow all our ammunition at the start of the war and then only have rocks to throw near the end."

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