Targeting the Market, Finding the Champions, Part II

Tom Danielson became a feared rider while contracted to Saturn.

 

JP: When you look at the domestic peloton these days, what do you think about the health of the sponsorship scene?

TS: Overall, cycling is healthy. Not racing, but cycling. The numbers are there for commuters, riders, racers. It’s an aging demographic, but it works for lots of people. Most cyclists have no interest in racing. You don’t need to be in racing to be a supporter of cycling.

An advertiser can use a bike in their marketing without sponsoring racing. Racing leads to another layer of cycling which leads to people riding bikes. Making bike racing a little more user friendly or making people more aware of it and why it’s an interesting activity.

So cycling itself is very healthy. Especially in our cities where it’s used more and more as a tool. Bike racing, the sponsorship, ebbs and flows, like car racing. Is racing necessary? It goes back to human nature.

I think a lot of the sponsorships … It’s expensive to sponsor a national (level) bike team. When you look at the money and measuring the return on investment, that’s the issue. If they could get return of investment at half the cost, it would be a much easier decision. It’s hard to get an American team to get to the level of Tour of California. It’s not an inexpensive activity to be involved in. Cost is a factor.

GoDaddy chooses the Super Bowl, which costs $3 million every 30 seconds. Why that and why not cycling? Car companies want to advertise how tough their trucks are, and the Super Bowl might be an easy decision.

The brand wants to get involved in an activity their customers are involved in. When it’s the non-endemics, why do they need to be in cycling? You have to make that link. Just putting your name on the team and hoping it works is not a good use of your marketing dollars

 Chris Horner enjoyed some of his most successful seasons as a Saturn rider.

JP: What about with the international peloton?

TS: In the European peloton, you see a lot more, you can kind of segment, you can see the sponsorship and see the segments or strategy a little clearer. There have only been a few true global brands that do cycling. Is Rabobank a Global Brand? I don’t think so, but they’re primarily a Dutch initiative. Their metrics, and they’re an example where they’re deep in Holland and deep across all cycling activities in Holland. It’s an example of a marketing plan where you see a return on investment.

Liquigas-Cannondale might be a business-to-business deal. I think Lampre, what is Lampre? The French brands have been national brands. There’s been Toshiba, an international brand. Motorola had potential, it was paid out of a variety budgets, but was a national brand. T-Mobile was an international brand. It had a German-American axis, but it was a national brand.

The day when more teams market globally, it will help the stability of the sport. In terms of the teams that have been around for a long time, they still don’t have a reason to go everywhere. I don’t think Liquigas sells in Holland. You have categories of true internationals, nationals, and business-to-business. There are teams based on a business relationship model. Not too many of those coming to mind at the moment. A business-to-business team is one that doesn’t influence consumers so much, but trying to get your dealer base or certain dealers.

 

JP: How about the now-departed Navigators Cycling Team (which was a pro team from 1995-2007)? Weren’t they a patron?

TS: When Navigators activated, it was business-to-business model. But to their credit, they were always trying to bring customers to entertain, even internationally.

 

JP: If ROI is important and Highroad had such an impressive ROI, why do you think they couldn’t land a sponsor? 

TS: No matter how good your numbers are, and I believe Bob had numbers to back up their sponsorships, the people believing those numbers need to be inside those companies. The team, to be successful, they have to be people in the company, pounding their chests just as hard as the Bob Stapletons and Tom Schulers about how great sponsorship is. If you had that, the sponsorship lasts. You had it at T-Mobile and Saturn.

You can get all kinds of metrics and I wouldn’t doubt that Bob’s ROI were significant, certainly enough to justify continuing or finding a new sponsor. But the people in the company have to be touting those numbers.

He turned around a ship that was taking on a lot of water. He ran a good program, and seemed to, through Cavendish and victories, I would have put him at the top of the heap for providing a return. He’s probably had six different sponsors in there. But again, if it’s just three years, it probably didn’t work as well as they could have for the company.

 Saturn was a team with unusual depth and organization.

 

JP: Do you need to find the “champions” of cycling to sponsor a professional cycling team?

TS: You need to have people inside (the company) to believe in it. It can’t be just one person. It has to be a recognition inside the company of ‘this thing works for us.’ You can’t tap someone on the head and say ‘now you’re a believer.’

We had brand managers at Saturn come and go all the time. A new person may come in and want to look at different metrics. They’re skeptical, but they look in the field and look around. I can understand how someone who inherited a cycling team comes in not being a believer. Cycling teams are multi-dimensional in terms of what they can offer a company.

 

JP: When people discuss what seems to be worse and worse news for top-level teams, two concerns are repeated, one is the state of the global economy, the second is drugs in the sport. Do you think these things are scaring away sponsors or limiting what is happening? 

TS: The global economy in general, the general trepidation of people to spend money and make those decisions. As tenuous as cycling sponsorship is, we’ve had the same go/no go decision rate in both good times and bad. You can say banks aren’t loaning money now, but I can’t say people aren’t considering cycling now. UHC (UnitedHealthCare) is a good contra indicator.

And drugs, I think we’re kind of, I think Stapleton alluded to it. It could be a country-by-country basis; it might not be as significant. In Germany, it could. Over there, at least, there are some pretty strong metrics in place to measure. But when you lose television coverage of your biggest event. So Bob’s comments are directed at the German market as much as anything. Has doping impacted the sponsorship we’ve gotten in America? I don’t think so. Vaughters program is working on moving out of that era, as was Stapleton’s. Wherever there’s a disaster, there’s an opportunity, too. Net-net, I’m not sure. I have to believe what Bob says when he says it has been an impact.

The public doesn’t seem to like The Cobra (Riccardo Ricco). But David Millar, guys like him are still heroes. I think at the end of the day, everyone feels that if it was my kid and that was the circumstances, I could understand it.

As cyclists, we might be bigger conspiracy theorists, and more skeptical. I agree that corporate America doesn’t care as much.

 

JP: What do you think teams should be doing to improve their chances to land a good sponsor?

TS: I think it’s incumbent on all the team managers to make that sponsorship as valuable to sponsors, and that’s how they can help ensure longevity. Pure impressions is one thing. If it leads to more traffic to the store, more purchases, and it’s incumbent on the managers to make things work and that will go a way to increasing the longevity of the sponsorship.