A Good Bet: More Sponsorships on Behalf of State Lotteries

IEG SPONSORSHIP REPORT

June 20, 2011 800/834-4850 | www.IEGSR.com

CATEGORY UPDATE A Good Bet: More Sponsorships On Behalf Of State Lotteries

State lotteries can provide valuable marketing support through property-themed instant-win tickets.

Although their budgets may have taken a hit over the past several years, state lotteries continue to expand their sponsorship portfolios.

Indeed, much of the category’s recent activity has been with the NFL following the league’s decision in 2009 to loosen restrictions on team deals. But lotteries are increasingly aligning with other types of properties as well.

Case in point: The Pennsylvania Lottery this year has inked new partnerships with the Wawa Welcome America 4th of July celebration in Philadelphia and the AFL Philadelphia Soul and Pittsburgh Power. The ties add to existing deals with pro sports teams, collegiate teams and community events. SIDEBAR

The deals follow a slew of new ties between lotteries and NFL Tips on Selling And Working With State Lotteries teams over the past two years. Those include the Missouri Below, IEG SR offers tips on selling the lottery category: Lottery and the St. Louis Rams; the California State Lottery Provide on-site sales rights. Like other types of marketers, and the Oakland Raiders, San Francisco 49ers and the San lotteries are increasingly looking for new sales outlets. As a Diego Chargers; and the Florida Lottery and the Jacksonville result, rightsholders should offer on-site real estate for lottery Jaguars, Miami Dolphins and Tampa Bay Buccaneers. vending machines.

Where possible, properties should provide co-branded T-shirts Lotteries largely use sponsorship to accomplish three main and other merchandise to incent sales. The Kansas Lottery will objectives: gain platforms to develop instant-win tickets, leverage the June 23-26 94.5 Country Stampede presented by engage new audiences and access on-site sales rights. Verizon music festival by offering a free T-shirt to consumers that purchase $10 worth of tickets from its on-site trailer. The California Lottery activates the Oakland Raiders and other Help support community initiatives. Lotteries frequently sponsored teams by creating team-themed scratch-off tickets. use sponsorship to demonstrate community support.

“The NFL has a very passionate fan base. Sponsorship gives For example, the Massachusetts State Lottery actives its long- us an opportunity to tap into that passion and reach new running sponsorship of the NBA Boston Celtics by presenting the team’s Heroes Among Us program, a 14-year-old initiative audiences,” said Alex Traverso, the lottery’s assistant deputy that recognizes military veterans and other local heroes. director of corporate communications. “We honor heroes at every game, which ties into the The lottery pays each team $450,000 and 1 percent of ticket Massachusetts State Lottery’s community initiatives. We’ve sales, he said. been doing it for a long time, and it’s been replicated by

The California Lottery also uses sponsorship to access other teams,” said Ted Dalton, the Celtics’ vice president of season tickets and other inventory that can be used in corporate partnerships and business development. second-chance drawings. Lotteries also look for opportunities to support their fundraising For example, the lottery’s San Francisco 49ers ticket dangled missions. The California State Lottery leverages its sponsorship of the Ventura County Fair by presenting the fair’s season tickets, autographed merchandise, a trip to an away Read and Ride program, an initiative that supports the lottery’s game and other prizes as part of a second-chance drawing. mission of providing supplemental funding for public schools. Consumers entered the drawing at www.Calottery.com/Replay. Help promote prizes. In addition to scratch-and-win tickets, Other lotteries leverage pro sports teams to access promotional lotteries frequently use sponsorship to promote Powerball jackpots. platforms for second-chance offerings. The Ohio Lottery in May rolled out Boot for Loot, a second-chance drawing promotion As a result, properties should offer virtual signage and other around its sponsorship of the MLS Columbus Crew. The media assets to provide prize updates. For example, the promotion dangles the chance to win $10,000 by kicking a field Illinois Lottery leverages the NHL Chicago Blackhawks by goal at the team’s Sept. 10 home game. using virtual signage to promote jackpot prizes. “They can use the partnership to their advantage due to “The lottery category has turned from branding to activation the flexibility of virtual signage,” said Dave Knickerbocker, over the last ten yeas,” said Chris Previte, the Crew’s vice the Blackhawks’ senior executive director of marketing and president of corporate partnerships. business development.

Be prepared to work with licensing firms.Properties Property-themed lottery tickets aren’t limited to pro sports that plan to work with NBA, NHL and MLB teams should be teams. The Kansas Lottery this year leveraged its sponsorship prepared to work with MDI Entertainment, LLC, the exclusive of the Wichita Riverfest with the Riverfest Riches! lottery ticket licensee for the three leagues. instant-win ticket. Case in point: The Chicago Blackhawks worked with the NHL and MDI to create a Stanley Cup-themed scratch-and-win ticket. In addition to the ticket’s $25,000 grand prize, the lottery offered a $40,000 second-chance prize to play up Riverfest’s “If the Illinois Lottery wants to do a Blackhawks game, it’s 40th anniversary. The lottery held the drawing at the event routed through us. We have exclusive rights with the NHL,” on June 11, the last of day of the festival, said Meg Bieberle, said Steve Saferin, president of Scientific Games properties group and chief creative officer. MDI is a subsidiary of advertising coordinator with the Kansas Lottery. Scientific Games Corp., a supplier of instant-win lottery tickets.

The Riverfest Riches! ticket also dangled a free admission pin The Stanley Cup-themed scratcher sold three million tickets, as a secondary instant-win prize, said Bieberle, adding that said Knickerbocker. winners could redeem the ticket at the lottery’s on-site trailer Know time constraints. It typically takes lotteries six months for the actual pin. or less to create property-themed scratch-and-win tickets.

Partnerships with state lotteries can provide valuable exposure That time period can be shorter. The Missouri Lottery for pro sports teams and other types of rightsholders. developed an NFL St. Louis Rams ticket in less than two months, said Bob Reif, the team’s executive vice president of sales and marketing and chief marketing officer. For example, the St. Louis Rams attributes a scratch-off ticket launched last year to building exposure in non-traditional “It was amazing. We met in June and launched the ticket in marketing channels. August.”

Because money cannot “The ticket gave us exposure at retail outlets where we didn’t Be prepared for one-year contracts. be spent until annual budgets are approved, state lotteries have a presence. It helped start a conversation about our typically look for one-year contracts or multi-year contracts that brand,” said Bob Reif, the Rams’ executive vice president of allow the option of ending the deal after each year. sales and marketing and chief marketing officer. Sources Boston Celtics, Tel: 617/854-8000 The ticket’s second-chance drawing also has helped the Chicago Blackhawks, Tel: 312/455-7000 team gain fans, he added. The Rams last year converted two St. Louis Rams, Tel: 314/982-7267 non-fans into fans after they won a trip to fly with the team to Scientific Games Corp., Tel: 212/754-2233

Seattle for the last game of the season.

“We had an opportunity to convert them into fans, and now they’re season-ticket holders.”

Sources California State Lottery, Tel: 916/323-7095 Kansas Lottery, Tel: 785/296-5700 Columbus Crew, Tel: 614/447-2739 St. Louis Rams, Tel: 314/982-7267

June 20, 2011 800/834-4850 | www.IEGSR.com

ONE-ON-ONE Wheat Thins Uses Music To Support Brand Repositioning

Cracker brand gains new Facebook fans and Twitter followers as a result of music festival sponsorship.

In a category largely dominated by sports sponsorships, Kraft Foods Inc.’s (“Properties Win As Kraft Spends More At Corporate and Brand Levels,” 4/9/10) Wheat Thins has taken a different path.

For the past two years, the cracker brand has sponsored the Bonnaroo Music & Arts Festival in Manchester, Tenn. as a platform to sample product, boost consideration and engage young adult consumers through on-site activities and social media programs.

Kraft also uses the sponsorship to reposition Wheat Thins as a snack for on-the-go consumers. The company activated the June 9-12 music festival with the Wheat Thins Crunch Den, an on-site area that it used to play up the cracker’s crunchiness, an attribute typically associated with potato chips and other snacks.

The activation platform supports Wheat Thins’ The Crunch is Calling social media campaign that showcases consumers who Tweet about the brand. Kraft surprises the Tweeters with a visit by the Crunch is Calling crew, who deliver product to the unsuspecting consumers. The company videotapes the events, which it posts on YouTube and uses in TV ads.

IEG SR spoke with Melissa Renny, Wheat Thins’ senior associate brand manager, about the brand’s effort to reach young consumers, its approach to sponsorship, how it activates Bonnaroo and other topics.

Below are edited excerpts from the conversation.

IEG SR: Who is Wheat Thins’ target demographic?

Renny: Wheat Thins targets people who live each day to its fullest. They seek meaningful experiences, both big and small, that they can share with friends and family.

Wheat Thins is targeting a newer, younger consumer: men and women over the age of 25 who look for snacks that can fuel their active lifestyles. The brand’s focus on that target has been illustrated by our use of Facebook and Twitter, as well as our recent TV ads that feature real people who tweet about Wheat Thins.

IEG SR: Bonnaroo obviously draws Wheat Thins’ young-adult target. Can you elaborate on the event as a marketing platform?

Renny: Wheat Thins sponsors Bonnaroo to fuel our consumers’ passion points. Bonnaroo is the largest music festival in the country, and the sponsorship allows Wheat Thins to connect with music fans who want a snack to fuel their fun festival weekend.

Our consumer wants to be able to snack on the go and is constantly looking to be surprised and delighted. Bonnaroo lets us reach our target audience before, during and after the festival with exciting engagement and interaction through various online and in-person activities.

For example, the festival provides a platform to connect with consumers at the Wheat Thins Crunch Den, sample our product and stay connected through social media after the festival.

IEG SR: Can you elaborate on the Wheat Thins Crunch Den?

Renny: Wheat Thins’ on-site presence changes every year. This year we gave festival-goers the chance to see Grace Potter, the award-winning lead singer of The Nocturnals, who performed an exclusive set of four songs.

Festival-goers could pop in, cool off, grab a snack and lend their personality to the Joan Jett song I Love Rock ‘n’ Roll. Visitors were recorded singing or interpreting the song using all sorts of props, instruments and lyric signs, so even the less musically gifted could get involved.

All of the content, including Grace Potter’s rendition of the song and consumer participation, is posted on Wheat Thins’ Facebook page.

IEG SR: How does Wheat Thins measure success?

Renny: We measure success based on the enthusiasm and excitement we receive from fans in response to our sponsorships. It is so great to see how many people engage with Wheat Thins on a daily basis, in real time. With the help of this sponsorship we have more than 300,000 fans on our Facebook page and almost 18,000 followers on Twitter.

Source Kraft Foods Inc., Tel: 847/646-2000

Category Update

June 20, 2011 800/834-4850 | www.IEGSR.com

CATEGORY UPDATE Sunglass Marketers Eye New Sponsorships

Sunglass marketers sign new deals with endemic and non-endemic properties to reach target audiences, build credibility, prompt consideration and drive sales.

A decline in sales has resulted in new sponsorship activity on behalf of fashion and performance sunglass brands.

Recent deals include Maui Jim, Inc. and Vail Resorts; Strike King Lure Co. and FLW Outdoors; and Polaroid Eyewear, which presented the Feb. 15-17 Style360 showcase during Mercedes- Benz Fashion Week in New York City. Polaroid Eyewear is a division of Zurich, Switzerland-based StyleMark AG.

On the motorsports front, Wiley X, Inc. expanded its partnership with Roush Fenway Racing by taking title of Matt Kenseth’s NASCAR Sprint Cup Series team at two races in May, while Oakley, Inc. built on its long-running tie with Rusty SIDEBAR Wallace by inking primary status of Michael Annett’s Rusty Wallace Racing car at the March 26 NASCAR Nationwide Lens Maker Adds Motorsports To Sponsorship Portfolio Series race at the Auto Club Speedway in Fontana, Calif. Transitions Optical, Inc. (“Lens Maker Eyes More Sports Sponsorships,” 10/6/08) has expanded its sponsorship portfolio with a new tie to Penske Racing’s No. 6 IZOD Sunglass marketers are stepping up sponsorship to build IndyCar Series team. visibility and prompt consideration following a decline in sales over the past two years. The company took the tie as a platform to promote its line of photochromic eyeglass lenses. The lenses are clear indoors and at night, and automatically darken outdoors as light According to trade group The Vision Council, consumers conditions change. over the age of 18 purchased 92.3 million pairs of non- prescription sunglasses in the year ending March 2011, down Transitions will use the partnership to promote XTRActive from 100.8 million in the year ending March 2009. lenses, a line of lenses that change from a slight tint indoors to very dark outdoors, and Drivewear SOLFX, a line of sun lenses designed to improve comfort and performance while At the same time, the popularity of sunglasses has increased. driving automobiles and riding motorcycles. According to The Vision Council, 85.2 percent of U.S. adults wore non-prescription sunglasses in the year ending March The company also is using the sponsorship to test non- 2011, up from 84.7 percent in March 2009. prescription SOLFX face shields in driver helmets. “Our adaptive lens technology is a perfect match for the To no surprise, the decline in sales is largely driven by the changing light conditions that drivers—and fans—experience economy. In an April Vision Council study, 32 percent of during an IndyCar race,” said Brian Hauser, general respondents said they plan to wear their current pair of manager, U.S. and Canada, Transitions Optical, sunglasses longer as a way to save money. in a statement.

As a result, sunglass marketers are increasingly using “With margins of victory in the tenths of a second, sharp, sponsorship to accomplish four main objectives: promote clear vision can be the difference between a win and new products; tout performance eyewear to target audiences, second place.” access celebrities and gain on-site sales rights. The sponsorship builds on Transitions’ sponsorships in golf Bollé Uses Sponsorship To Reach Tennis Enthusiasts and cycling. Those ties include official eyewear status of the PGA Tour and title of the Transitions Championship PGA Tour Bushnell, Inc. uses its long-running sponsorship of the Sony stop in Palm Harbor, Fla. Ericsson Open ATP/WTA tournament in Miami to promote Bollé Competivision, a line of sunglasses for tennis players. On the cycling front, Transitions cosponsors the Team The lenses are designed to mute every color in the spectrum Garmin-Cervélo professional cycling team. except yellow, making tennis balls easier to see. Like its new Penske tie, the company uses the sponsorships to promote the overlap between healthy vision and on-field “Our foundation for being is the tennis market, and we want performance. to create awareness through partnerships with large tennis tournaments,” said Derek Schuman, Bushnell’s sports “We’ve successfully shown how photochromic technology can be applied to sports like golf and cycling,” said Hauser. marketing manager. “Improved visual performance can help provide an edge in personal performance.” In addition to visibility, the company also uses sponsorship to build authenticity in front of tennis fans and gain on-site sales. Transitions sells through America’s Best Contacts & Eyeglasses, Inc. and other chain and independent optical retailers. “On-site sales are a key aspect of our event marketing strategy. We like to recoup sponsorship fees by selling Source product at events.” Transitions Optical, Inc., Tel: 727/545-0400

The company sponsors the Sony Ericsson Open due to the large number of consumers who wear sunglasses in Florida, as well as the large number of tennis fans in the state, he added.

“Florida is a great tennis market and a key market for sunglasses.”

In addition to the Sony Ericsson Open, Bollé has sales rights at four other tennis tournaments: The BNP Paribas Open in Indian Wells, Calif.; Mercury Insurance Open presented by Tri-City Medical Center in Carlsbad, Calif.; USTA US Open in Queens, N.Y. and the Western & Southern Open in Mason, Ohio.

Bollé also sponsors golf events to promote its EagleVision lens. Ties include the PGA Championship and U.S. stops of the Ryder Cup.

Source Bushnell Inc., Tel: 913/752-3400