Naming Rights
Recently, I met with a brand client of ours. We were discussing naming rights. They were insistent on “finding a building to name.” When it comes to sponsorship marketing, too many people think it is all about naming rights. The sponsoring brands think this will give them the traffic, sales, and profile they are looking for. The selling properties think it will be the answer to their woes from a financial perspective.
Perhaps the discussion was precipitated by the recent finalizing of the naming of the new Quebec City NHL team bid attempt last month. The Quebecor naming rights of $63.5 million (half this amount if no NHL team) pans out to about $2.5 million per year. This is right in line with most of the other similar market NHL building naming rights in Canada.
The questions we asked this brand were: Why a building naming? Why not an event naming that will get you more exposure in more markets and deliver better community investment ROI and actual sales opportunities than a building in one market? What are you actually trying to achieve? Is it sales and traffic? Are you just trying to buy the business from this property? Is it about employee engagement? If so, how will this building naming engage your employees, clients, prospects, and stakeholders?They didn’t have the answers. (Maybe that is why they engaged us-to help them go down this path!)
The point is that, too often, sponsors and brands jump at naming rights because they think that will take them to the big leagues. This is not always true. It may create chatter at first. It may create excitement at first. But if it is just “plunking” a sign on a building, they can kiss their investment goodbye. There must be a strategic plan and activation budget to make it work. What is often more frustrating is selling properties that try to sell naming rights. They push naming rights and convince the prospect how great it will be for them. They fail to understand the sponsor’s business. Instead, they sell them a “stock” package that doesn’t deliver results.
Recently, I have seen two five-year and three ten-year naming rights deals not renew. I can tell you why. The brands did not see results. Part of it was their fault for not activating. The sad part is that the properties cannot figure out why the sponsor is not coming back. Perhaps it is time for both those brands and properties to get some sponsorship 101 training or mentoring support. Naming rights can be very successful. But like anything else, if you overpay for them or fail to understand how to make the new “product you purchased” work, you will have buyer’s remorse.
These are just one person’s thoughts. Yours are welcomed as well. Please add your thoughts or comments to our blog by commenting below. Thank you for reading and your feedback.