The Name Game

Sports sponsorships emerge as a favored branding tool for chains.

By Kristina Buchthal, Senior Editor -- Restaurants & Institutions, 8/1/2006

Yum! Brands’ corporate program includes sponsorship of Marco Andretti’s Indy car. Checkers and Rally’s get concession rights at NASCAR events as part of the chains’ deal.

Restaurants haven’t forsaken mass marketing to reach consumers. The industry spent $4.9 billion in 2005 on English and Spanish advertising, according to TNS Media Intelligence in New York City. But as concepts and menus more often target niche audiences, so too does marketing, and sponsorships are a primary tactic in that strategy.

The National Restaurant Association in Washington, D.C., finds 72% of quick-service restaurants (QSRs) say they will make event or sports sponsorships part of their marketing programs this year. Such alliances, not confined only to QSRs, range from global partnerships to neighborhood activities, targeting audiences as diverse as Wall Street investors and soccer moms.

Like several other chains, Checkers Drive-In Restaurants—which operates the Checkers and Rally’s Hamburgers double-drive-thru chains—saw the popularity of NASCAR as a perfect sponsorship opportunity. Tampa, Fla.-based Checkers also saw in NASCAR a way to bolster its market positioning.

“The one thing we own and should be known as is being the drive-thru specialists,” says Richard Turer, Checkers vice president of marketing. “We are all about speed and all about cars. If you study our customer demographic and NASCAR’s demographic, pretty much everyone loves cars. Seventy-five percent of our customer base falls squarely in the NASCAR fan base.”

Its NASCAR deal allows Checkers and Rally’s restaurants to feature drivers and their race cars in its advertising, and to use the NASCAR logo on drink cups and in marketing. That right has proven value: NASCAR souvenir drink cups and a NASCAR Triple Cheeseburger are sold all year. Checkers/Rally’s NASCAR Triple Cheeseburger accounts for 4% to 5% of sales; when the sandwich is promoted with NASCAR-themed advertising, it jumps to about 10% of sales, Turer says.

The chain sponsors five NASCAR-event racetracks, where Checkers

and Rally’s signs are prominently placed around tracks and where only Checkers hamburgers are available at concessions.

“We may not be able to afford a lot to national television advertising, but when I sponsor a track, I get track signage, and that gives you time on national television,” Turer says. “That not only helps gain awareness in markets we operate in, it also helps gain awareness in markets where we are trying to sign franchisees.”

A Different Type of Buyer

The official name of this year’s premier horse racing event was “The Kentucky Derby Presented by Yum! Brands.” The Louisville, Ky.-based company’s name also was visible this year on Indianapolis 500 driver Marco Andretti’s car and the shirt of professional golfer J.B. Holmes.

For Yum! Brands—which also owns Taco Bell, Pizza Hut, Long John Silver’s and A&W—the goal of sponsorships is to sell stock rather than food products, which are advertised by their individual brands.

“The majority of viewers of the Kentucky Derby, the Indy 500 and the PGA Tour are in the 25-to-54 age range and have higher-than-average household incomes,” says Jonathan Blum, chief public affairs officer for Yum! Brands. “The profile of these fans is a good match with the profile of the individual investors we are trying to attract.”

Ann Arbor, Mich.-based researcher Joyce Julius and Associates valued the exposure Yum! Brands received at the Kentucky Derby alone at $2.7 million.

Individual investors currently own about 20% of Yum! Brands stock, according to Blum. The company would like to increase that to 30%. “Individual investors tend to hold stocks longer and are also loyal consumers of the companies in which they invest,” Blum says.

Nontraditional Territory

Family-dining chain Denny’s found a demographic far apart from car or horse racing. The Spartanburg, S.C.-based concept last year inked a three-year sponsorship agreement with the Professional Bowlers Association, becoming official sponsor of what is now the Denny’s PBA Tour. The agreement puts the chain’s logo on all PBA communication, telecasts, promotions and publicity. Through Sept. 15, Denny’s restaurants are giving coupons for a free round of bowling with purchase of one of six American Dinner Classics entrées.

Milford, Conn.-based Subway focuses on nonprofessional sports, sponsoring Little League Baseball and Softball, and the Little League World Series.

“We believe in healthy, active lifestyles for kids,” says Mack Bridenbaker, spokesman for the Subway Franchisee Advertising Fund Trust. “With that sponsorship you open the eyes of people who might not consider you, the parent, the district manager and the coaches who say, ‘Hey, it’s pretty cool Subway’s sponsoring.’ And maybe they’ll have a better perception of Subway.”

Subway’s three-year deal with Little League allows it to sell sandwiches and display signage at the World Series Game, and use Little League in its national advertising.

Outback Out Front

Rather than partnering with a team, stadium or sport, Outback Steakhouse in 1996 bought title sponsorship of the New Year’s Day football game that had been the Hall of Fame Bowl. The Outback Bowl, held in Tampa, Fla., the chain’s headquarters city, is played between teams from the Southeast and Big Ten conferences.

“We have a great position; we are the first sports event of the new year,” says Bobby Silvest, Outback vice president for sports marketing. The deal includes Outback signage throughout the stadium—including its logo in the center of the field—and television commercials during the broadcast.

“Its about brand awareness,” Silvest says. “From a sports-marketing standpoint, you try to hit a certain audience—the college football fan—and hopefully you hit a chord and get your message out there, via recognition or impressions.”

The chain uses the Outback Bowl (which it will sponsor through 2010) for in-store promotions; it also sponsors contests, and hosts game-day events.

“There probably are no more passionate fans than college football fans, alumni who follow their teams week in and week out, and into the bowl season,” Silvest says.

Worldly Wise

McDonald’s approaches sponsorships globally. The Oak Brook, Ill.-based chain, which first sponsored the Olympic Games in 1976 in Montreal, renewed its sponsorship for four successive Olympics (2006 in Torino, 2008 in Beijing, 2010 in Vancouver and 2012 in London). The chain intends to double the number of stores in China to about 1,000 in time for the 2008 Beijing Games.

“As a global marketing leader, our customers want and expect us to support the world’s premier sporting events,” says Nick Marrone, McDonald’s senior director for global marketing. The games also match its “healthy lifestyles” programs.

“The Olympic Games are the ultimate expression of the spirit of McDonald’s—fun, active, youthful and relevant—and connect with people of all ages and cultures,” he says.

McDonald’s showed how a global sponsorship can be leveraged at this year’s FIFA World Cup (its fourth global sponsorship of the soccer event, held every four years). Before each of the competition’s 64 matches, players were escorted onto the field by McDonald’s Player Escorts, children from 51 countries chosen for the honor through local-market promotions.

Super Mario Car?

Sports partnerships don’t belong only to chain restaurants.

Mario Batali, chef-owner of seven restaurants, including Babbo and Del Posto in New York City, and a Food Network host, also reportedly may be inking a cookbook deal with NASCAR.

Batali, himself a NASCAR fan, occasionally appears at NASCAR events because he says the sport is “pure fun and pure Americana.”
For now, he says, “We have no concrete contract and are talking about an opportunity.”