Susan Krashinsky reported last week in The Globe and Mail that at the arenas that were set to host the season openers on Thursday night, the fight between the National Hockey League and its players ground the game to a halt. But for the companies who invest millions each year to link their brands to a sporting slice of the Canadian identity, the puck does not stop here.
Following months of speculation, and last week’s announcement that the NHL had cancelled the first two weeks of play, sponsors and advertisers are now anxiously drawing up contingency plans in case more – or eventually all – of the season is compromised, for the second time in less than a decade.
“The big impact for us is, we really have to plan our media strategy down two tracks – with hockey, and without hockey,” said Duncan Hannay, Bank of Nova Scotia’s senior vice-president and head of marketing in Canada.
He echoes the discussions happening right now among national corporate marketing partners of the league, such as his company, as well as individual team sponsors and other advertisers who have bought time against what they thought would be televised hockey games drawing bulk audiences.
As the season is scaled back, or possibly cancelled, sponsors get those investment dollars back, Mr. Hannay said, but they also lose the valuable connection to the league that a functional NHL provides. Sponsors such as Scotiabank need to reallocate some of that cash to keep their brand presence up – as do advertisers who can no longer count on hockey ratings for their commercials. Many are now on the type of dual-track plan Mr. Hannay describes, looking to the season ahead – and in terms of the broadcast schedule, the next 12-week buying period for TV ads – to decide how they will shift their marketing budgets.
“We review all of our advertising. We will shift our funds – that’s just the reality of the situation. Our brands have to continue to speak to consumers,” said Jack Hewitt, vice-president of marketing services for Kraft Canada, another national sponsor.
Each year, Kraft capitalizes on its sponsorship with its “Hockeyville” program in partnership with the CBC, which allows communities to compete for prize money to upgrade their local arena. Celebrations in last year’s winning town, Stirling-Rawdon, Ont., went ahead on Sept. 30. The Stanley Cup – which fans are still hoping to see in April – made an appearance. But the pre-season NHL game that was supposed to be part of the prize, scheduled for last Wednesday, has been delayed until next year. And with questions about this year’s nomination process already coming in, the company has been forced to consider whether Hockeyville will be a reality in 2013.
“We have a date we’ve agreed to with all the partners, where we’ll have to make a call on whether we continue with another community-based program,” Mr. Hewitt said, adding that the company has been working with an agency to develop that alternative event. He would not say what it would be or when the decision day falls. For Kraft, Hockeyville has been crucial to reaching its target consumers – moms – by demonstrating its community ties. That has real impact on the bottom line: Kraft Canada’s baseline sales have risen between 5 and 6 per cent in each of the six years that the contest has been running – a faster rate of growth than it had before the program launched.
Along with sales, affiliation with the NHL can really help to boost a brand in the eyes of Canadian consumers, said Gord Hendren, president of Charlton Strategic Research Inc., which conducts an annual survey of roughly 2,800 sports fans for clients including Air Canada, Tim Hortons and others. According to his research, the brand health of the NHL is “the best its ever been.” Companies that were perceived to be NHL sponsors, according to his research, enjoyed a 41 per cent lift in consumers’ opinions of their brand last season, and a 33 per cent increase in purchase consideration compared to those not seen as sponsors.
“All of that is put into flux now,” he said. As is to be expected, in 2005, when the last lockout occurred – spurring Mr. Hendren to begin the study – consumer sentiment toward the NHL was much lower, and it had to go through a process of recovering its equity with fans, as well as the ability to transfer that goodwill to sponsors and advertisers.
“It does have a significant impact,” said Mary De Paoli, chief marketing officer at Sun Life Financial Inc., which is a team sponsor for the Montreal Canadiens, the Toronto Maple Leafs, and the Vancouver Canucks. Its NHL investment is a big part of the company’s community activities every year, as it hosts “skate with” events with each of the teams and local children.
Cards and letters pour in afterwards, including one from a child using the company’s slogan, which said “Life’s brigther under the sun when you get to meet Phil Kessel.” That kind of brand imprint is priceless to a CMO. “It’s one of the ways sun life gives back to the community and raises our brand in significant ways,” she said. “Hockey does leave a big hole.”
Another league may benefit from that vacancy, however. The 100th anniversary of the Grey Cup is happening in Toronto in November, and many advertisers and sponsors are looking at expanding existing relationships with the Canadian Football League. In the coming days Sun Life will be announcing the launch of a high-profile fan event on Grey Cup Sunday, in partnership with the CFL. That “will unite tens of thousands of fans to have a once-in-a-lifetime experience with the Grey Cup,” Ms. De Paoli said.
“It’s a big investment on our part. And it’s something we may not have done if hockey was happening.”
Scotiabank is also a major Grey Cup sponsor, which Mr. Hannay considers to be good news in light of the lockout.
Still, Mr. Hannay is watching the NHL closely and says that by the late fall he will have to make a call as to whether the company makes a major shift in marketing dollars.
“Are we frustrated with the situation? Absolutely we are frustrated,” he said. “…We want hockey back.”
But like many marketers, even the frustration of a third lockout under Gary Bettman’s tenure is not enough to shake Scotiabank’s commitment to sponsoring hockey in future. That commitment was repeated by Sun Life, Boston Pizza and by Kraft Canada’s Mr. Hewitt, who was among the attendees at a meeting held by the NHL with its sponsors last week. As long as fans flock back to the NHL, marketers will feel the urge to do the same.
“We know that hockey is in the DNA of Canadians,” Ms. De Paoli said. “That’s not going to go away.”