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Why Do Corporations Like BMW Spend Millions To Sponsor Golf Tournaments?

Corporations spend millions to sponsor sporting events like this week's BMW Championship golf tournament. What do they get out of it?

| BY Kent McDill

This week, the PGA tour brings its third leg of the FedExCup Championship to Lake Forest, Ill., for the BMW Championship. Next week, the four-leg FedExCup Championship will culminate with the Tour Championship by Coca-Cola in Atlanta.

So, FedEx, BMW and Coca-Cola are on the hoof for millions of dollars as top corporate sponsors for PGA events. Their corporate logos will be everywhere in the communities hosting the events. In the case of the event sponsorships, you can’t say the event name without saying the event sponsor’s name at the same time.

But what do those corporations get out of their sponsorship? In simple terms, is it worth it?

The simple answer to the first question is “name recognition.” What that is worth is hard to determine.

But there are so many other factors involved in the decision to sponsor a sporting event and the effects such sponsorship has.

IEG, the world’s top sponsorship consulting firm, defines “sponsorship’’ as “ cash and/or in-kind fee paid to a property in return for access to the exploitable commercial potential associated with that property.

 

In the case of PGA events, there are three kinds of sponsorships – national sponsors, where corporations sponsor the entire tour of 37 events; individual event lead sponsorship, such as BMW has at the event at Conway Farms Golf Club in Lake Forest, Ill.,; and individual event local sponsorship, where area businesses contribute to game programs, sponsor individual holes on the course, and provide gift basket goodies to the players and officials.

 

In an interview with IEG,  BMW head of sponsoring, cooperations and product placement Eckhard Wannieck explained the company’s thinking when it comes to golf sponsorships.

 

“We want to achieve two things,’’ Wannieck said. “First we like to generate visibility for our brand and get our brand values across. The second reason, and the more important reason, is to generate a brand experience. Experiential marketing is the best way to get to know the brand and BMW brand values.”

 

The BMW Championship does both of those things. For one week, the BMW logo is everywhere in Lake County, Ill.; on all the signage in the area, including placards showing fans where to park; on all the merchandise, on everything that promotes the tournament and provides information to golf fans.

 

BMW also provides all of the courtesy vehicles for transporting competitors, organizers, sponsors and other high-rollers around the golf course and around the surrounding communities. Anyone able to enjoy that perk will get an “experiential’’ exposure to the BMW products.

 

The Professional Golfers Association has numerous national sponsors, including banner international corporations such as Anheuser-Busch, Bridgestone, Cessna, Forbes, the Hawaii Tourism Authority, MetLife, Rolex and Tiffany’s. In most cases, those are companies promoting high end products, and their sponsorship is aimed at the wealthy fan base the PGA enjoys.

In July, Met-Life renewed its commitment to sponsor golf events, including the BMW Championship.

“MetLife seeks opportunities to connect with our target audiences around the world, and one engaging way to do so is through sports,” said Met-Life vice president of global brand & marketing Richard Hong. “The PGA TOUR is truly international, with approximately 80 members of the TOUR now coming from outside the US, and over 800 telecasts of TOUR events being shown around the world this year alone. Those broadcasts reach millions of golf fans in many countries where MetLife is a growing enterprise, making the relationship a natural fit.”

When deciding to sponsor a sporting event, corporations think about these aspects of the decision:

1.       Does the event match our customer base?

2.       Will the sponsorship be seen across more than one medium (radio, TV, signage, etc.)?

3.       How many people will our sponsorship be exposed to?

4.       Does our sponsorship include event participation opportunities?

The first step has already been discussed above. Golf tournament tickets are not cheap, and golf is a sport that traditionally lends itself to the leisure time of wealthy or top corporate officials. Also, successful companies often hold their own golf events for their employees, an exposure that ties in well with sponsorship of a major tournament. It is not coincidental that BMW is the title sponsor of the tournament in the Chicago area this weekend.

The second step is about signage, and its effect is difficult to measure. On the course itself, banners surround all of the greens, attached to the seating stands. Those banners are seen by the fans in attendance as well as fans watching on television. Advertising executives claim name and brand recognition comes from exposure, and golf fans are exposed to the same names over and over again as they walk the course or watch a weekend’s worth of golf on TV.

In terms of exposure, PGA officials expect 125,000 to visit Conway Farms over the week-long event, with 25,000 or more attending the event daily when the actual competition begins Thursday and runs through Sunday.

Finally, there is event participation, and it is in this area that golf tops all other sporting events. At major golf tournaments, sponsors are allowed to host hospitality tents, where they can invite customers to come in drink, eat and enjoy video presentations of their products. These structures are often “tents’ only in the sense that they are covered by heavy tent-like material. Inside, these tents look more like country clubs, and the presentation is intensely impressive.

Add to that TV commercial time and print ad availability and there is a bountiful opportunity to advertise a company and its products.



About the Author


Kent McDill

kmcdill@spectrem.com

Kent McDill is a staff writer for Millionaire Corner. McDill spent 30 years as a sports writer, working for United Press International and the Daily Herald of Arlington Heights, Ill. From 1988-1999, he covered the Chicago Bulls for the Daily Herald, traveling with them every day through the nine-month season. He also covered the Bulls for UPI from 1985-88, and currently covers the team for www.nba.com. He has written two books on the Bulls, including the new title “100 Things Bulls Fans Should Know And Do Before They Die’, published by Triumph Books. In August 2013, his new book “100 Things Bears Fans Should Know And Do Before They Die” gets published.

In 2008, he resigned from the Herald and became a freelance writer. The Herald hired him to write business features and speeches for the Daily Herald Business Conferences and Awards presentations.

McDill also writes a monthly parenting column for the Herald’s Suburban Parent magazine.

McDill is the father of four children, and an active fan of soccer, Jimmy  Buffett and all things Disney.