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Wednesday
Sep022009

Why P&G Is Now Awash With Sports Deals

Q&A: Unlocking the marketing moves behind P&G's USOC, NFL deals

By Barry Janoff, NYSportsJournalism Executive Editor

(Posted Sept. 2, 2009)

Lisa Baird, CMO for the U.S. Olympic Committee.Over the past month, Procter & Gamble has morphed from a CPG giant to a CPG sports giant behind deals with the NFL and the U.S. Olympic Committee. The USOC alliance, which activates for the 2010 Winter Olympics in Vancouver and currently continues through the 2012 Summer Games in London, comes during a period when such companies as General Motors, Bank of America, The Home Depot and Kellogg have ended their marketing deals with the organization. The NFL deal, valued by analysts at $10-15 million per year, includes 13 brands, some of which will be designated as the "official locker room products" of the league. The Olympic deal, valued by analysts at $15-20 million, includes 17 brands such as Secret, Venus, Pantene, Olay, Cover Girl, Tide, Charmin, Pringles, Febreze, Bounty, Pepto-Bismol and Scope. Kirk Perry, vp-North America for P&G, shared the company's plans along with Lisa Baird, CMO for USOC, during a conference call.

The main topic here is the P&G's sponsorship with the USOC, but how does this and the recent alliance with the NFL also fit into P&G's marketing plans?
Kirk Perry: Sports are such an integral part of American society and really enable us to reach our consumers where they are. We know, for example, that the Olympics Games are the No. 1 sport of interest for women and the No. 2 sport of interest for men behind the NFL. When we evaluated it, we wanted to put our dollars to work in the hardest possible way. Opportunities like these continue to bubble up as great places to increase the return on our investment. And we fundamentally think that when we have partnerships with icons like the Olympics and the NFL that we are going to enable our brands to be presented in the best possible way with the best possible partnerships long term.

What do you see coming out of this from a marketing perspective?
Perry: Again, sports is an integral part of our society. The other thing is real simplistically: When do sports fans in Pittsburgh, Dallas, Cincinnati and New York ever come together? It's during the Olympics. I have four kids and I can tell you that I was never so exhausted as I was after the [2008] Beijing Games because we sat awake every single night and watched it. And I can't think of any other event that brings my family together like the Olympics. When we think as a company about opportunities to bring our brands together. clearly this is one of them. We look forward to having families come together in January, February, March 2010 for the Games tying our high performance brands to high performance athletes.

It seems as if P&G is increasingly leveraging its sponsorships across multiple brands. What are the benefits of doing this with the Olympics and the NFL?
Perry: Our brands individually speak to consumers but collectively give us a real opportunity to show the tremendous scale that we have as a company. And it gives us the obvious opportunity to make our dollars work harder for us across many different brands. We are in 99 1/2% of all U.S. households with our brands so this is a great opportunity to bring them together.

How does this deal enhance P&G's previous support of Team USA?
Lisa Baird: P&G was a sponsor of USA Gymnastics during the Beijing Games. This is a first-time sponsorship at the U.S. Olympic Committee level for P&G. We don't comment on financial details, but I will say that this is a sponsorship about marketing activation. We are thrilled to have Procter & Gamble in our portfolio of sponsors because they are one of the world's leading marketers. They are going to activate against our property in advertising, public relations, retail and a number of [other] things. That helps us to spread the Olympic message and get more support behind Team USA. The activation they are going to do around the Vancouver Games will be enormously important to us.
Perry: If you think about holistic marketing, we are going to be in TV, print, digital, in-store and on-shelf. We will be loud and proud during the Olympics across the portfolio of brands that are participating. (Editor's note: P&G will run TV ads on NBC with the theme, "Look Like the World is Watching.” )

How will this activation be overseen within P&G?
Perry: Our specific agreement here is with the U.S. Olympic Committee. The way we operate as a company is that each of our regions and our specific country organizations can determine their interest level in participating and sponsoring programs like the Olympics. In North America, my organization helps coordinate this across all of our different categories and brands.

How are negotiations going with other current or potentially new partners?
Baird: We really don't comment on where we are with renewals. But I will say that we are no longer in discussion with Bank of America, and our renewal discussions with AT&T are going very positively. We are in discussions with several open categories. Our focus right now is on bringing home the Games for Chicago [one of four cities being considered by the International Olympic Committee to host the 2016 Summer Games, a decision that is scheduled to be made on Oct. 2]. In the automotive category [vacated by General Motors when the contract expired at the end of 2008] there is nothing I can comment on right now that is definitive.

Considering the economy, how significant is the P&G deal and how do you think that might influence other companies?
Baird: Bringing P&G into our portfolio is a real significant achievement for us. There is no doubt that the recession has had an effect on sports sponsorships in general. What it has caused us to do is really look to present the value of the Olympic property to our sponsors. We have the most positive image for our athletes compared to every other major sport. The 2008 Olympic Games drew 4.7 billion viewers, which is 70% of the world's population, and two-thirds of America TV viewers watched it on NBC. We're really excited about potentially bringing home the [2016] Games to America once again.

Has the economy changed the way in which the USOC approaches current and potential partners?
Baird: I don't know if it is the state of the economy, but one thing we continually do is talk to our sponsors about what they want us to do to bring to market in terms of platform. We launched a new marketing platform this past summer, "America Supports Team USA." We have eight sponsors that have helped us get behind what was one of our most successful fundraisers, raising over $4.4 million. So our sponsors are asking for marketing platforms that allows them to merchandise their products. They are asking for ROI. That's the kind of thing we will be doing more of in the future.

In terms of revenue for the USOC, does P&G coming in, in addition to other recent deals signed with Ralph Lauren, Acer, Adecco and Deloitte, compensate for the loss of Bank of America, Home Depot and the others?
Baird: I am not going to comment on revenue. What I will say is that we are on a good track, we are on a solid track, to closing deals. [In addition to P&G] we are looking to announce more in the near future.


Official USOC Partners: GE, McDonald's, Coca-Cola, P&G, Acer, Atos Origin, Anheuser-Busch, Omega, Panasonic, Samsung and Visa.

Official USOC Sponsors: Adecco, 24 Hour Fitness, Allstate, Deloitte, Hilton Family, Jet Set Sports, Nike, Tyson and United.

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