October 08, 2008
There are those who embrace the global economy, and then there is Roger Simmermaker. He's the author of "How Americans Can Buy American: The Power of Consumer Patriotism," which is as self-explanatory a book title since the publication of "Hockey for Dummies."
His message is clear: Buying American products means reinvesting in the United States. This mantra applies across the manufacturing landscape, including the auto industry:
The truth is the GM and Ford support far more American workers, retirees, their families and dependents that any Japanese company ever dreamed of supporting. Foreign companies aren't investing in America as much as they're using America to invest in themselves.
Even though the line between foreign and domestic automakers is completely blurred in 2008, the plight of U.S. automakers in an economic downturn is an undeniable hot-button issue this political season, especially in places like Michigan.
With millions of fans passing through the turnstiles each season, the NHL likely has its share of Roger Simmermakers in its U.S. audience -- one wonders what they think about the League's decision to sign a three-year deal with Honda, which ends the 13-year run for Dodge as the league's official automobile sponsor. From Sports Business Journal:
On the corporate side, Honda is taking North American NHL rights with its three-year deal that sees the Japanese automaker becoming the official vehicle. The deal is valued at $4 million a year and includes media buys on NHL broadcasters NBC, Versus, CBC, TSN and NHL digital media. Honda, which ranks fourth in U.S. market share, will be one of the presenting sponsors of the NHL Winter Classic in Chicago on New Year's Day and of the Jan. 25 NHL All-Star Game in Montreal. Honda picks up title rights to the All-Star Game MVP award and the All-Star Skills Challenge. Hockey-themed print and TV ads from Honda agency Rubin Postaer and Associates should break this month. The NHL sponsorship represents Honda's first national foray into any of the "big five" American sports properties.
At first glance, this deal is of the forehead-slapping "here we go again" variety for the NHL. Like choosing the money ($4 million per season from Honda) over staying with the longstanding partner -- the kind of thinking that landed the NHL on Versus rather than ESPN. Like potentially alienating (or further alienating) segments of the U.S. audience, if the jingoistic vitriol of the "Buy American" movement is to be believed.
But any honest assessment of this partnership with Honda can only conclude that it's an astute business move and smart decision by the NHL.
Forget the Boycott Factor. While the notion of "Buy American" remains viable -- Obama talked about buying Hybrid cars made in the USA during last night's debate -- the fact is that Honda, according to Autodata, is ranked as the No. 4 automaker in the U.S. during 2008, surpassing Chrysler.
There will always be Roger Simmermakers. But for most Americans, flipping from Dodge to Honda won't produce picket lines. "Consumers, and sports fans in particular, are comfortable with the idea that sponsorships do change periodically and that it's a natural course of business," said Don Hinchey, VP of communications for the sports marketing firm The Bonham Group, adding that there's never been a fan backlash against a foreign-based sports advertiser.
The NHL Doesn't Need John Mellencamp. Yes, "this is our country." And Chevy Silverado may be the vehicle of choice for Johnny Cougar, the NFL and Major League Baseball. But the NHL is a North American sports league with worldwide marketing aspirations. Yes, it will play to the domestic audiences. But it doesn't need (or attract) jingoistic, flag-waving advertisers on its broadcasts.
"The NHL has a very strategic, global perspective," said Hinchey, pointing to the large crowds for the opening games in Europe. "To me, that suggests that they're comfortable with an international sponsor and with having a more global appeal."
Ride the Downturn. Consultant Marc Ganis, advisor to several NFL teams, told Sports Business Journal:
Noting the dismal state of the auto industry, particularly the trucks and SUVs that have been heavy NFL advertisers, he cautioned, "you can't overstate the impact the auto industry's problems have with the NFL and every other sport."
The NFL is heavily involved with domestic auto advertisers. During this downturn, the NHL has made the aggressive move to shift from Dodge to Honda. From Sports Business Journal:
With the state of the domestic auto market, it's not a surprise that Dodge did not renew. Last season, at least 14 NHL clubs had a commercial relationship with Honda, and additional team sponsorships by the auto manufacturer's dealer groups are expected.
It's unfathomable how far-reaching this recession will be in the U.S. Right now, Honda is the smart bet; 2009 could be a different story, according to Autoblog:
Honda's robust selection of high volume cars has led to a 1.2% sales increase in a market that is down a disastrous 11%, and Honda expects things to continue next year, with new models like the redesigned Fit adding to already strong sales. Industry-wide, though, Honda doesn't expect a good 2009.
Honda, much like Toyota, sees more of the same sullied sales for the rest of this year and next, predicting 2009 sales at a dismal 13.5-14 million units industry-wide due to financial struggles in the banking sector.
One point of interest: Honda's new Insight petrol electric hybrid, promised to be an "affordable" hybrid, goes on sale in 2009.
It's a Demographic Love Connection. "All the automakers are really trying to ‘rifle shot' their marketing: Zero in on who they're trying to contract, and how to get to them," said Hinchey.
Which is exactly what Honda is doing. "The [NHL] demos of young, affluent suburbanites match well with our target, and when we did our research, we found that for Honda buyers, watching and attending NHL games indexed higher than for any of the other stick-and-ball sports," Tom Peyton, senior manager for advertising at American Honda, told Sports Business Journal.
The NHL also understands this match, because the League spends a great amount of time studying the economic habits of its consumers. "The NHL has a very strong bias towards researching its demographic. We know from their research that they have a demographic that's very comfortable with online activity, and they're well-known for their passion," said Hinchey.
They're Both Underdogs in the U.S. Among the top 20 sports advertisers in 2007 were Chevrolet (2), Ford (4), Toyota (7), Nissan (8) and Dodge (13). Honda didn't make the cut. They're the new kids on this block, despite being founded in 1948.
The NHL, founded in 1917 and then allegedly reborn in 2005, is still trying to make inroads into the U.S. mainstream. Perhaps the notion of two underdogs growing together towards mainstream acceptance has been spoiled by the Versus misfortune (and the SportsChannel debacle before it). If not, there's something appealing about this partnership.
NHL COO John Collins gave this line to Sports Business Journal: "We're starting to gather momentum, both from a media perspective and with partners like Honda, recognizing the strides we've been making in areas like new media and connecting to an underserved fan base."
There have been more than a few marketing missteps since the lockout. (Hello, Metrosexual Samurai) This Honda deal isn't one of them. The benefits are strong, the upside is palpable and it's nice to see an advertiser enthusiastic about courting hockey fans.