What's on the Menu for Quick-Service Restaurant

IEG Sponsorship Report

January 31, 2011 800/834-4850 | www.IEGSR.com

Category Update What’s On The Menu For Quick-service Restaurant Sponsorships

Rightsholders should define QSR categories narrowly but offer proprietary platforms to provide points of differentiation.

While quick-service restaurants (“Sponsorships Grow Along With Menus At Quick-service Chains,” 6/8/09) have long been one of the sponsorship industry’s most active categories, new product introductions continue to change the way how companies approach and use the medium.

Nowhere is that more evident then when dealing with exclusivity. With McDonald’s Corp. putting more focus on coffee products, Subway rolling out breakfast sandwiches, and donut chains serving up sandwiches for lunch, the lines that traditionally separated fast-food chains are becoming increasingly blurry.

On top of that, Papa John’s Int’l, Inc.’s 2010 partnership with the NFL raised the stakes even higher. The company in June announced a three-year deal to become the league’s official pizza sponsor.

“There is a lot of fragmentation in the QSR category, and the fact that pizza has gotten active changes the way properties look at the restaurant and out-of-home- eating category,” said David Paro, a former McDonald’s marketer and current president of Deep Alliance Marketing, a sports marketing and branding agency.

In such a situation, there are two ways to go: define exclusivity broadly and look for opportunities that allow sponsors to lock out all their many competitors—typically for a premium price—or slice the category thinly and focus on specific niches and multiple players.

Thus far, the QSR category has gone the latter route.

“Historically, from McDonald’s standpoint, there was a desire for broad exclusivity, but there is now a little bit more flexibility in how exclusivity gets carved out based on the QSR landscape,” Paro said.

Case in point: While the recently extended McDonald’s partnership with the NHL in the U.S. affords exclusivity in the QSR and coffee categories, it does not include pizza, Mexican, casual dining or white tablecloth offerings, said Keith Wachtel, the league’s senior vice president of integrated sales.

“It’s very difficult to do broad exclusive deals in this category,” he said, noting that many NHL clubs are also slicing the category thinly.

In addition to its U.S. McDonald’s sponsorship, the NHL late last year brought on Tim Hortons Inc. for a two-year partnership in Canada. The deal—which includes title of the NHL Heritage Classic—affords exclusivity in the coffee, donut and breakfast categories.

That means that in Canada, the league has the right to bring on Subway, KFC or other companies in the QSR category, although they would be prohibited from using the tie to promote their breakfast or coffee offerings, Wachtel said.

In a slightly different twist, some pro sports teams are getting around the issue of category exclusivity by providing “ownable” inventory to each QSR partner.

For example, the NBA Cleveland Cavaliers works with McDonald’s, Arby’s Restaurant Group, Inc. and Taco Bell Corp., each of which receives its own marketing platform. For example, McDonald’s receives prominent exposure during TV broadcasts, Arby’s gains exposure on radio broadcasts, and Taco Bell receives exposure in Quicken Loans Arena.

“We try to create areas of dominance rather than exclusivity,” said Randy Domain, the Cavaliers’ vice president of corporate sales and service.

Tips On Selling The QSR Category

Provide media exposure. While most sponsors look for media, it is particularly important to quick-service restaurants, a category that has historically been a large buyer of media during sports broadcasts.

Sports properties are increasingly supplementing QSR media buys with integrated packages that include intellectual property, on-site signage and other assets, said Ben Cahalane, vice president of corporate partnerships with the NHL Dallas Stars, adding that media buyers are now more versed in evaluating sponsorship packages.

The Stars work with Chipotle Mexican Grill, Inc. and Taco Bueno Restaurants, L.P., the latter of which came on as a new sponsor in 2010.

Help promote specific offerings.QS Rs are increasingly using sponsorship to tout new menu items and other product offerings.

For example, McDonald’s in 2009 partnered with New York City’s Mercedes-Benz Fashion Week to promote its McCafe coffee line. The company continues to use events to sample coffee, including the NHL Winter Classic and the league’s All-Star Game.

Other chains use sponsorship to promote dollar menus and other value offerings.

Consider promotional support. While cash is always king, restaurants can provide another valuable benefit: promotional support through their media buys and in their stores.

In some cases, promotional support can be just as valuable as cash.

“Cash is always a driver to any deal, but having an in-store presence or inclusion in their media is a big opportunity that few properties have the opportunity to buy,” said John Brody, principal, global sales and business development with Wasserman Media Group.

“I can’t think of any other category that touches so many people so quickly,” he added, pointing to media buys, drive-through lanes, cups, tray liners and window clings.

Brody in 2004 negotiated Taco Bell’s MLB sponsorship while in his previous position overseeing the league’s sponsorship sales efforts.

Leverage soft drink partners. QSRs frequently turn to their soft drink vendors to help fund deals. As a result, properties should try to leverage existing partnerships with soft drink companies and distributors to open doors at QSR chains they sell through.

Properties also should offer QSRs pass-through rights for their soft drink partners, Brody said.

On the flip side, properties with an existing tie with a soft drink company should not reach out to a QSR that pours a competing product.

Consider sources of funding. National properties should pitch corporate offices, while local and regional properties should approach individual operators and/or franchisee groups.

“Many QSRs have a franchisee system, and there is some degree of local autonomy,” Paro said.

Sources Cleveland Cavaliers, Tel: 216/420-2000 Dallas Stars, Tel: 214/387-5500 NHL, Tel: 212/789-2000 Deep Alliance Marketing, Tel: 630/574-3337 Wasserman Media Group, Tel: 212/704-0488

January 31, 2011 800/834-4850 | www.IEGSR.com

One-on-One McDonald’s Shares Its Three Ingredients For Sponsorship

Properties seeking chain’s sponsorship should deliver against its trio of objectives and reach both kids and adults age 18 to 34.

As director of global alliances for McDonald’s Corp., John Lewicki oversees the major pillars in the fast-food giant’s estimated $30-million-to-$35-million annual sponsorship portfolio, including international properties such as FIFA and the IOC, as well as U.S. ties such as the NHL and the Jamie McMurray-driven NASCAR Sprint Cup Series entry fielded by Earnhardt Ganassi Racing with Felix Sabates.

IEG SR recently spoke with Lewicki about the chain’s approach to sponsorship, what it looks for when vetting ties, how it activates, and more. Below are edited excerpts from the conversation.

IEG SR: Why does McDonald’s sponsor? What do you hope to accomplish from a marketing perspective?

Lewicki: We use sponsorship to accomplish three business objectives. When we evaluate a sponsorship, we ask how it can help us accelerate our business initiatives, add credibility where we may not have any, and break through the competitive clutter.

It is not about brand awareness; we are ubiquitous around the world. This is more about reaching and talking to our target audience.

IEG SR: Who is your target audience?

Lewicki: With most properties, we focus on two targets: young adults between the ages of 18 and 34, and kids. We leverage property assets to support children’s physical activities and well being. There are more kids playing on sports fields across the world as result of our local and international involvements.

IEG SR: How about employees?

Lewicki: We activate the Olympics to engage employees. At the London 2012 Olympics we will build restaurants in the athlete’s village, the main media center and in the park. We have incentives for crews around the world to participate, and that will become our hospitality program.

Other companies may bring top sales people or customers to the Games. We focus on rewarding our own people.

We began building restaurants at the Games in a big way in 2002 in Salt Lake City and the program has built from there. At first, we were going to reward employees by sending them to the Games and hire local workers for the restaurants. The crews said, “If we are the best, why don’t we get to work?” As a result of that feedback, we built a hybrid program that allows people to work in the athletes’ village restaurants and have time off to enjoy the Games.

IEG SR: McDonald’s has long been an active sponsor. How has your sponsorship strategy evolved in recent years?

Lewicki: The quick-service restaurant category is very competitive and our approach has certainly evolved over the years.

Properties have to fit into one of the three screens I mentioned earlier. One of the obvious opportunities in sponsorship is to accelerate our business initiatives, and on that front recently we have been able to use properties successfully with the McCafe launch, both locally and nationally.

For example, in 2009 we partnered with New York City’s Mercedes-Benz Fashion Week as a strategic pillar when we launched McCafe. Fashion Week is about launching new product lines, so it made sense. McCafe is a high-end product for us, but it still has a value platform. We wanted to reach a unique target audience that may not typically think about us.

McCafe is a huge business initiative for us, and we continue to look at sponsorship opportunities as we expand the line to include espresso drinks, iced drinks and fruit smoothies. We continue to use properties to talk about our new entries in the marketplace.

IEG SR: Can you provide an example of how you are using an existing partnership to promote McCafe?

Lewicki: We are sampling products at this weekend’s NHL All-Star Game. We also sampled at the NHL Winter Classic. We try to bring sampling opportunities to tent-pole events that draw large crowds.

IEG SR: Speaking of which, can you discuss the decision to extend your partnership with the NHL in the U.S. for another season this year?

Lewicki: We have been with the NHL in the U.S. for three years. We expanded the partnership because we like what they are doing with the Winter Classic and the All-Star Game. It is a great association with youth hockey and kids, which is something that we wanted to tap into.

We are activating the All-Star Game with In the Lineup, around which 12 kids will be on-ice with the two teams’ starting lineups. It is an offshoot of the World Cup player escort program we initially developed in 2000 with FIFA.

We wanted to expand the program, and it works great with the NHL. We are also looking to run the program around NBC’s inaugural Hockey Day in America presented by McDonald’s on February 20.

Source McDonald’s Corp., Tel: 630/623-3000

January 31, 2011 800/834-4850 | www.IEGSR.com

Sponsor Profile Dish Network Digs Into Home and Garden Shows

New objective for category is demonstrating how its service can be used through computers, mobile phones and other devices.

Looking to gain one-on-one marketing opportunities to talk up its products and services away from the traditional consumer electronics retail environment, Dish Network LLC has come on board as presenting sponsor of 30 consumer expos bundled under the National Home & Garden Show Series banner.

The sponsorship effort is the latest use of the medium as part of the battle for market share among satellite TV providers, cable companies and telcos (“Sponsorship Wins in Cable and Satellite Companies’ Tug of War Over Customers,” 9/22/08), all of whom are sponsoring to tout bundled offers that include TV, Internet and phone service.

Dish Network is using the home and garden shows to demonstrate its products and services in front of its target audience— homeowners and potential home buyers—and to showcase that its service can be used over computers, cell phones and other devices.

“Homeowners and potential home buyers are not only looking for a high-quality, in-home TV experience at the best value, but also innovative ways to broaden their viewing experience beyond the living room,” said Amir Ahmed, Dish Network’s senior vice president of sales, in a statement.

The company will partner with local independent satellite TV retailers and installers to activate the tie at each event, he added.

Dish Network is sponsoring the shows through a partnership with USA Expositions, LLC’s Premier Home Shows Inc. unit, which created the series in 2009 by bundling sponsorship and marketing opportunities with 30 independently produced home and garden shows under one umbrella.

A list of the shows that comprise the National Home & Garden Show Series can be found here. (http://www.premierhomeshows.com/buy-tickets)

USA Expositions—the former IMG Expositions—markets and consults with more than 50 expos across North America.

Dish Network has stepped up to presenting sponsorship after exhibiting at 13 shows in 2010, said Adam Roggenburk, vice president of Premier Home Shows.

The sponsorship affords exclusivity in the satellite provider category and blocks DirecTV, Inc. from exhibiting at the shows, Roggenburk said, noting that Dish Network and DirecTV exhibited at several of the same shows last year.

Cable and telecommunications companies can exhibit at the shows, but cannot promote satellite TV services, he added.

In addition to presenting status and on-site demonstration opportunities, the tie gives Dish Network exposure in roughly $6 million worth of media purchased by the individual shows, as well as exposure and banner ads on PremierHomeShows.com.

Consumers who purchase tickets through the national Web site can opt-in to receive incentives from Dish Network and other sponsors, Roggenburk added. National sponsors also receive exposure in email blasts, newsletters and other marketing outreach sent throughout the year to a database of more than 500,000, he said.

Dish Network will measure success by tracking lead generation and media impressions, Ahmed said.

In addition to the home and garden shows, Dish Network sponsors state fairs, college athletics and other types of properties in conjunction with its local retailers. For example, the company last year sponsored the California State Fair with Big Dog Satellite TV. Other partnerships include the NBA New Orleans Hornets and Nashville’s CMA Music Festival.

Madison, Wis.-based American Family Insurance Group is the other national sponsor of the home and garden show series; the company sponsors shows in 13 markets where it writes policies.

The series also has a partnership with Meredith Corp.’s Better Homes and Gardens, which offers a free one-year subscription to consumers who purchase tickets through the national Web site.

Sources Dish Network LLC, Tel: 303/723-1000 Premier Home Shows Inc., Tel: 440/348-0960

January 31, 2011 800/834-4850 | www.IEGSR.com

Activation Overview: NHL Sponsors’ All-Star Weekend Activations

Summary of league partners’ activation platforms

Along with the well-publicized changes to the game itself, the NHL’s All-Star Weekend has a revision off the ice as well, a presenting sponsor.

Discover Financial Services, Inc.’s Discover Card (“Sponsorships Remain A Constant Amid Changes To Credit Card Business,” 11/15/10) is the presenter, the game’s first time in over a decade.

In addition, American Honda Motor Co. serves as title sponsor of the weekend’s NHL SuperSkills Competition. Individual SuperSkills events are titled by the following brands: Blackberry, Bridgestone, Discover, McDonald’s, Gatorade G Series and XM.

Below, IEG SR highlights how those and other league sponsors are activating around this year’s festivities at the RBC Center in Raleigh, N.C.

2K Sports • Sampling NHL2K10 video game from on-site vehicle at NHL Fan Fair.

Bauer • Interactive puck shooting gallery at NHL Fan Fair with high speed camera to illustrate stick technology

Blackberry • Activating SuperSkills’ Blackberry NHL Breakaway challenge with text promotion • Sponsoring deflection zone game at NHL Fan Fair

Bridgestone • SuperSkills’ Bridgestone NHL Fastest Skater • Activating NHL Fan Fair with Bridgestone Shoot Out Challenge slap shot competition • Distributing co-branded lip balm on site

Bud Light • Presenting NHL All Star Wide Open street festival’s music series • Good Sport program recognizes positive behavior and social responsibility among fans. Consumers can sign up for the program at a designated area in the RBC Center arena.

Cisco • Presenting inaugural NHL All-Star Player Fantasy Draft • Using NHL Fan Cave at NHL Fan Fair to educate fans about the Umi HDTV consumer video conferencing system. Fans will have the opportunity to speak with NHL All-Stars via Umi and enter a sweepstakes to win a free system, installation, year of service and $2,500 Best Buy gift card

Discover • SuperSkills’ Discover NHL Elimination Shoot Out • Presenting sponsor of trophy display at NHL Fan Fair • Using tie to offer card-member perks, including meet-and-greets and 10 percent discount on merchandise purchases • Sponsoring fireworks show and event map at All-Star Wide Open

Enterprise Rent-A-Car • Player activation: customer pick-up, Friday, January 28. St. Louis Blues All-Star David Backes accompanies an Enterprise employee on a customer pick-up. On the return trip to the branch, Backes asks the customer a series of three NHL-themed trivia questions; if the customer answers all questions correctly, he or she wins All-Star Game merchandise • Player activation: airport greeters, Saturday, January 29. All-Stars Matt Duchene (Colorado Avalanche), Anze Kopitar (Los Angeles Kings) and a third player assist Enterprise employees in greeting customers at Raleigh-Durham Int’l Airport. The players engage customers on Enterprise shuttle buses and help with luggage upon arrival at the Enterprise lot. • Branding of all vehicles rented by NHL staff and volunteers with co-branded door decals. • Complimentary Pepsi Max to customers renting or returning vehicles at Enterprise’s Raleigh-Durham Int’l Airport location. Pepsi provides two branded coolers and 100 cases of product for distribution.

Gatorade G Series • SuperSkills’ G Series NHL Skills Challenge Relay • Sponsoring NHL Fan Fair’s Precision Passing activity

Guardian Project • The NHL/Stan Lee collaboration hosts a 30-foot-by-30-foot virtual motion capture exhibit with dedicated retail kiosk at Raleigh Convention Center. • Distributing limited-edition posters to fans at All-Star Game • Using All-Star Game’s live televised second intermission to launch the Guardian Project and all 30 Guardian superheroes

GEICO • Activating at NHL Fan Fair with cornhole games, giveways and Guess the Puck contest dangling a $500 gas card

Honda • Showcasing Odyssey and CR-Z vehicles at NHL Fan Fair • CR-Z green-screen experience at NHL Fan Fair • On-site experience allowing attendees to customize their own Odyssey and take photos of the vehicle at NHL Fan Fair • Sweepstakes offering a CR-Z or trip to 2011 NHL Award Show at NHL Fan Fair • Fan photos with All-Star MVP Trophy presented by Honda at NHL Fan Fair • Vehicle displays and roaming Honda ambassadors at RBC Center • Giving a vehicle to the All-Star Game MVP • Displaying Honda Insight in the NHL Green exhibit at NHL All-Star Wide Open

McDonald’s • SuperSkills’ McDonald’s NHL Accuracy Shooting • Sponsorship of Kids Zone at NHL Fan Fair • Ronald McDonald appearances at NHL Fan Fair • Presenting accuracy shot game within the Honda NHL SuperSkills gaming area at NHFL Fan Fair

• In the Lineup program at the All-Star Game, featuring 12 children appearing on-ice with the All-Star starters for opening ceremonies • Sampling McCafe beverages at NHL All-Star Wide Open

Panini America • Anchor tenant at NHL Fan Fair Trading Card and Memorabilia Show, where it will offer a wrapper redemption program and distribute Adrenalyn cards

Reebok • Locker room display

Starwood • Offering Starwood Preferred Guest loyalty program members the opportunity to receive two tickets to the All-Star Game; behind-the-scenes tour at Honda NHL SuperSkills Competition (including opportunity to attend a press conference and tour the locker room); meet-and-greet with NHL Network broadcasters

Upper Deck • Anchor tenant at NHL Fan Fair Trading Card and Memorabilia Show; where it will activate by distributing personalized trading cards, hosting a wrapper redemption program and autograph sessions by Jeff Skinner of the Carolina Hurricanes and Taylor Hall of the Edmonton Oilers

U.S. Army • On-site vehicle display and physical fitness competitions at NHL All-Star Wide Open and NHL Fan Fair • Participating in pre-game salute/tribute to soldiers who have returned from the field

XM • SuperSkills’ XM NHL Hardest Shot • Title of NHL Fan Fair’s XM Theater, an intimate round-table where fans can listen to stories from NHL alumni and team personnel. • Using on-site presence at NHL Fan Fair to promote benefits of satellite radio, demonstrate product and run a sweepstakes dangling hardware and six months of free service

Time Warner Cable • Time Warner Cable Sports’ Step Thru the Screen interactive booth at NHL Fan Fair, where attendees can show off their broadcasting and interviewing skills. TWC will post clips on its YouTube channel.

Source NHL, Tel: 212/789-2000