Facebook App -- Fan Page

The Facebook App I wrote about last time is working and in full-gear. Every day roughly 40 new users upload the application to track their favorite Olympic sports. Unfortunately, the application usage has grown linearly, rather than exponentially as we'd hoped, but there are some bright spots.

One of these bright spots is the fan page. Every application has a fan page--those users who are so pleased with the application that they become "fans." Usually this is a relatively minor percentage of overall users. For example, the Michigan St. Football Application has more than 6,000 users, but only 150 fans. Our Olympic Games 2008 application has only 200 users so far, but 44 fans.

Facebook, for all its flaws, allows for some pretty neat data collection. The fan page enables us to run numbers on even a relatively modest sample size, and to come up with some neat findings.

The table to the left, for example, shows the gender and age range of the fans page. It's startling to see that more of our Olympic Games Application fans are women rather than men. And, looking at the ages, 40% are minors.

It would be interesting to compare these numbers with Facebook's overall demographics or the Neilsen rating demographics for the Beijing Olympics on NBC. My guess is these numbers are much closer to the former group than the latter.

In an unrelated surprise: the 44 fans of the application aren't just Americans. There are users from Switzerland, New Zealand, China, Canada, Australia, Morocco, England, Lebanon, and elsewhere.

Olympics Facebook Application

I'm happy to announce that the Facebook application I created (with George Mandis of Snaptortoise) is now up-and-running.

Olympic Games 2008 is a fun way to track medal standings by country, rank, or event. And though we don't have high usage numbers yet, this project has taught me a lot about the opportunities and challenges surrounding the promotion of a Facebook application. I've put links on content-sharing sites like Digg and Reddit, posted on group forums like Yahoo groups and Tribe, and mentioned it on StumbleUpon. So far, my best luck has come directly from Facebook, where friends and friends-of-friends have helped our little sports app take off.

The best part of this experiment has been what I've learned about running a project that unfolds in real time. If Uzbekistan gets a medal and we don't have a flag ready for that country, or there's a tie for bronze, we need to adapt quickly or lose viewers.

The hardest part of this project has been entering in stats for each event. Was there a way to automate this? Next time I'm looking for an open source data feed.

Sports Terminology

Below is a compilation of sports business terminology.

Activation – The act of leveraging sponsorship to augment the impact on the target audience. For example, during Visa's recent sponsorship of the Olympic Games they spent $3 to $4 on marketing for every dollar spent on acquiring sponsorship rights (not including media buy).

Affect Transfer in Sponsorship – A non-conscious connection in which positive feelings for a sporting event or property transfers to a brand. For example, "I love the NFL so I love Pepsi." (The second mechanism of influence in sports sponsorship.) (Pracejus, 2004)

Affiliation in Sponsorship – Consumers define themselves in part by their memberships and affiliations to various social groups, so highly identified fans see themselves as "members" of the team and act in ways to support the team. (The fourth mechanism of influence in sports sponsorship.) (Pracejus, 2004)

Ambush Marketing – A marketing campaign by an organization with the goal of associating themselves indirectly with a sports event in order to gain the recognition and benefits associated with being an official sponsor (Sandler & Shani, 1989). An example of ambush marketing took place in the 2000 Sydney Olympics when Qantas Airlines used the slogan, "The Spirit of Australia" in imitation of the games’ slogan "Share the Spirit," despite Ansett Air being the official sponsor.

BIRGing – Basking In Reflected Glory. When a fan takes credit for a team’s success.

Blasting – A defensive mechanism similar to CORFing wherein a fan will attribute negative characteristics to the opposition. For example, after a loss to the Pistons, a Blazer’s fan might say, “The Pistons are from dilapidated Detroit, whereas the Blazers (and I) are from progressive Portland.”

Branding – The effort of distinguishing one product or service from a competitor’s product or service. Factors of branding include Brand Awareness (getting customers to recognize your sport product), Brand Image (building a customer’s belief in the product), Brand Equity (the value the brand adds), and Brand Loyalty (consistent preference of a brand).

Communication Communities in Sports – A segmentation of those who watch sports. The three Communication Communities proposed by Shoham & Kahle (1996) breaks the market into three groups:

1. Those who watch live sporting events (spectators)


2. Those who watch sports on TV (viewers)


3. Those who read about sports (readers)

Consumption Communities in Sports – A segmentation of those who participate in sports. The three consumption communities proposed by Shoham & Kahle (1996) breaks the market into three groups:

1. Those who participate in competitive sports


2. Those who participate in fitness sports


3. Those who participate in nature sports

CORFing – Cutting Off Respective Failure. When a fan distances himself from his team’s failure or loss.

Endorsement – The use of a (sports) celebrity’s name, likeness, or autograph in connection with the sale or promotion of a product or service. Fans might chose to buy the product in order to emulate the celebrity, in what is sometimes called “image transfer.” (Gardiner, 2006)

Event Management – The planning, organization, delivering, and management of an event. Typical tasks include management of ticket sales, sponsors, performers, permits, promotions, and budgets.

Experiential Consumption – When the consumer takes on an active role in the production and delivery of the consumption experience. Sports spectators are often active in their consumption of their experience, such as those who feel drained after watching a game or match. (Morgan & Summers, 2005)

Extreme Sports – Also called “Adrenaline Sports,” “Action Sports,” and “Adventure Sports,” these are sports with a perceived level of danger that often focus on performing tricks or stunts, and which are geared toward the individual rather than a team. The adherents of Extreme Sports are perceived to reject traditional marketing approaches. The X Games and Gravity Games are both examples of multi-sport events that feature extreme sports.

Fan Equity – What a fan believes he deserves for his loyalty. Also, the emotional bond that links a fan to a team. (McDonald & Milne, 1999)

Image Transfer in Sponsorship – The abstract beliefs about a property that transfer to a sponsor. An example of this is when a consumer feels that the personality of a brand takes on the personality of a property—as in Ironman watches (brand) taking on the toughness of an Olympic decathlon (property). Moderating variables include degree of similarity, level of sponsorship, event frequency, and product involvement. (The third mechanism of influence in sports sponsorship.) (Pracejus, 2004)

Implied Endorsement in Sponsorship – This mechanism requires the consumer to infer that the property is somehow endorsing the brand. Athletes are a primary example of this, as in: "If Greg Oden is wearing those shoes then I'll jump higher if I wear them too." (The sixth mechanism of influence in sports sponsorship.) (Pracejus, 2004)

Implied Size in Sponsorship – The perceived size of an event selected for sponsorship is a signal of the company's financial strength. Implied size acts as a heuristic (mental shortcut) similar to "price equals quality." (The fifth mechanism of influence in sports sponsorship.) (Pracejus, 2004)

Licensing – The method of exploiting intellectual property by transferring the rights of use to a third party without the transfer of ownership. In sports this often means the use of a logo or trademark on merchandise, such as the use of a team-specific logo on a credit card.

Marketing Sports – Marketing a sports good or service directly to sports consumers. Selling tickets is a prime example of this.

Marketing Through Sports – Using a sports affiliation to market non-sport goods and services. Selling stadium naming rights is an example of this kind of marketing, and should not be confused with licensing.

Narrowcasting – Media messages directed at specific segments of the population defined by values, preferences, or demographics. Sports marketing strategists attempt to distinguish and separate the large groups of consumers that are brought together through sports.

Olympic Effect, The – An economic boom that affects the hosting city and country of the Olympic games. Examples of this include increased housing prices in London years before the 2012 games, and the creation of jobs brought on by the Beijing 2008 Olympics.

Parasitism in Sports – The act of taking advantage of another’s representation without authorization. For example, in 1977 the state of Delaware created a lottery based on the results of NFL games without permission from the league. (Moorman & Greenwell, 2005)

Primary Sports Roles – Those who participate in sports. (See Consumption Communities in Sports.) This is also called “direct involvement.”

Reciprocity in Sponsorship – The message of reciprocity is that the sponsor supports an event an individual consumer cares about, so the consumer will go out of his way to support the sponsor by purchasing the sponsor's product. (The seventh mechanism of influence in sports sponsorship.) (Pracejus, 2004)

Relatedness in Sponsorship – The closer the relationship between properties and sponsoring companies, the easier it is for consumers to recall the sponsoring company's brand. For example, it is easier to remember that Speedo sponsored Olympic swimming than it would be to remember Coca Cola's sponsorship of the same property. (Pracejus, 2004)

Secondary Sports Roles – Those who act as listeners, readers, spectators, or viewers of sports. (See Communication Communities in Sports.) This is also called “indirect involvement.”

Seven Mechanisms of Influence in Sports Sponsorship – The seven mechanisms through which sponsorship can influence consumers. Proposed by John W. Pracejus, the mechanisms that sponsorship influences brand equity and brand positioning are, in order of cognitive elaboration needed: Simple Awareness, Affect Transfer, Image Transfer, Affiliation, Implied Size, Implied Endorsement, and Reciprocity. (Pracejus, 2004)

Simple Awareness in Sponsorship – The awareness of a brand's existence, or initial exposure to a brand. (The first mechanism of influence in sports sponsorship.) (Pracejus, 2004)

Sponsorship – A deal under which a sponsor pays a sport entity (athlete, event, league, or team) to promote the sponsor’s product or organization. The sport entity also often delivers advertising space and some level of exclusivity. (Andreff & Szymanski, 2006)

Sponsorship Recall – The recognition of a company's role as a sponsor. In a practical application: a non-leading brand must be prepared to spend more money than a leading brand to achieve high sponsorship recall. (Pracejus, 2004)

Works Cited

Andreff, W. & Szymanski, S. “Sponsorship, in Handbook on the Economics of Sport.” Edward Elgar Publishing, 2006. p 49.

Gardiner, S. “Sports Law.” Routledge Cavendish, 2006. p 433.

McDonald, M.A. & Milne, G.A. “Cases in Sports Marketing.” Jones & Bartlett Publishers, 1999. p 6.

Moorman, A. M. & Greenwell, T. C. “An examination of consumer perceptions of ambush marketing practices.” Journal of Legal Aspects of Sport, 2005. p 191.

Morgan, M..J.J & Summers, J. “Sports Marketing.” Thomson Learning Nelson, 2005. p 16.

Sandler, D.M. & Shani, D. “Olympic Sponsorship vs. ‘Ambush’ Marketing: who gets the Gold.” Journal of Advertising Research, August/September 1989, Cambridge University Press. p 9.

Pracejus, J. Edited by Kahle, L.R. & Riley, C. “Sports Marketing and the Psychology of Marketing Communication.” Lawrence Erlbaum Associates, 2004. p 175-186.

Works Consulted

Kobel, P. “International Report on Question B : Ambush Marketing Too Smart to Be Good ? Should Certain Ambush Marketing Practices Be Declared Illegal and If Yes, Which Ones and Under What Conditions?” International League of Competition Law. Accessed January 3, 2008.

The Top-Paid US athletes

Sports Illustrated released its annual listing of top-paid athletes today. For some, the findings are no surprise. For example, Tiger Woods holds on to the top spot, raking in more money than Phil Mickelson, LeBron James, and Floyd Mayweather Jr (ranked second, third, and fourth) combined. Also, NBA players made up 26 of the top earners (counting Amaré Stoudemire who was mistakenly listed as a baseball player).

However, the data leads to some interesting findings. Here are three observations:

The difference between low salary and high salary was small ($24.7 million, with a mean average of about $16.1 million and a standard deviation of $5.1 million) compared to the differences between endorsements (with a range of $104.9 million, a mean average of about $9 million and a standard deviation of $16.8 million). So while these top athletes’ salaries are relatively uniform, the amount of endorsement money they get is not.

This is illustrated more clearly in the following table.

The range in players’ endorsement money isn’t that surprising. What is more interesting is the relationship between race and endorsement. In a 1996 New York Times article David Falk, Michael Jordan’s agent, said “Very few companies call for athletes, and even fewer call for black athletes.” To see if that still held true, I divided the top 50 earners into two categories: Caucasian in appearance or not Caucasian (the second category includes Hispanic athletes like Alex Rodriguez). What I found was good news for those of us who hope for racial equality in sports: the mean salary for the Caucasian group was smaller than that of the non-Caucasian group. ($8.7 million vs $9.2 million). Moreover, when the top-sponsored athlete was removed from each category (Tiger Woods and Phil Mickelson) the sponsorship dollars still favored the non-Caucasian group ($5.9 million vs $6.1 million).

The above numbers seem to show that the business of sports has lost some of its racial baggage, since endorsements and salaries are higher for non-Caucasian athletes. But that’s not the whole story. If we start with the premise that salaries are a good indication of a player’s worth to a team, at least within his league (and I use “his” because a woman hasn’t yet broken the top 50 mark for earnings), then it should follow that the more talented athletes should rake in the greater share of endorsement dollars. But a closer look at the numbers shows that Caucasian and light-skinned athletes make more sponsorship money as a ratio of their salaries than non-Caucasians. Just look at the chart.

The ratio here is endorsements/salary, so a higher ratio indicates a greater amount of endorsement money over salary money. What we see is that, on average, a greater percentage of the Caucasian group’s total earnings come from endorsements. For an example of this, take two NBA players: Jason Kidd (white) and Jermaine O'Neal (black). Both make an identical salary, yet Kidd pulls in exactly twice as much money in endorsements.

Fifty data points is still a relatively small sample size, and the salary indicators point to an equal playing field, but these numbers should be a reminder to sponsors who use athletes in their marketing that the disparities that David Falk bemoaned may not have disappeared.

Negotiation Tips from a Sports Agent

Last week I sat down with a sports agent who represents top-level players from the NFL, NBA and MLB. In the midst of our conversation, he shared some outstanding tips on how to score big for a client, while also maintaining the personal relationships with leagues and owners that buttress his reputation.

1) Be prepared. “I happen to be in a business where you can persuade people. To do it right, we out-prepare anyone.”

2) Control as many aspects of the negotiation as you can. “Sometimes it’s just me, one-on-one at dinner. Sometimes I come with multiple people, guns blazing. You have to know who you’re dealing with and leverage the situation to your advantage.”

3) Know the other side’s priorities. “Lots of times, it’s cash. If you can give a little in one area, you can almost always gain a lot in another.”

4) Use time zones to your advantage. “If we’re on the West Coast talking to guys out East, we start late, order a pizza at 7 p.m., and beat the stamina out of ‘em. On the East Coast calling West, it’s all about the early morning negotiations.”

5) Know your opponent. “For a new negotiator, I’ll get them comfortable, bring them into my office, have my dog nuzzle up.”

6) Make them feel good in the end. “Let the other side win on the last point. You can kill ‘em in the war, let ‘em win the last battle.”

Interview with Ransu Salovaara

Last week I asked a emailed a few questions to Ransu Salovaara, CEO of Sportsyndicator Ltd., an online advertising company focused on sports sites. Mr. Salovaara was kind enough to share some of his insights on the convergence of sports and the Internet.

Q. How can sports properties benefit from the world of Web 2.0?

A. People spend significant amounts of time on sports Web sites and are therefore easy to reach with online advertising. Moreover, these interactions are totally measurable. In regards to sports, the Web has surpassed the print medium as the number one content resource. So, with Web 2.0, sports brands can create services that truly engage customers and attract them to brands. A good example of this is Nikeplus.com, which is a great way to measure and share content – specifically running information.

Q. What do you think will be the most significant change in sports advertising in 2008? In the next 5 years?

A. I see three major changes:

1. Print will die. Already we’re seeing a decline in youth magazines, like those aimed at snowboarders and skiers. Young guys don’t see a reason to buy magazines anymore since the Web is full of info, videos, and other content that appeals to them. I’m sure that outdoor, golf and running titles will soon follow as the active adult generation really picks up on the Internet as a place for news, tips and community.

2. Videos on the Web will grow substantially in coming years and advertisers will find ways to get their messages in.

3. Mobile advertising will take off. This still might be a couple years away, but mobile ads are definitely coming. Now that iPhone has opened its platform to developers, it’s easy to see how resort guides, how-to tips, etc. will work on mobile phones.


Q. What niche sports audiences are the most difficult for advertisers to reach? Why?
A. There are really no hard ones, since everyone is on the Web nowadays. However, high net-worth golfers are probably the toughest as these professionals don’t surf around the “cool” Web sites like snowboarders do.

Local audiences are also tricky. Mastering "the long tail" of sports advertising so that we can target our campaigns to a specific sport and city will be crucial for many advertisers.

Q. In terms of originality and cutting-edge content, what do you think are the top sports Web sites in Europe and the US?

A. Pinkbike.com is a great example of a cool niche site that caters to free-ride mountain bikers and has 40 million page views and 400,000 unique visitors every month. Every day people upload more than 1,000 mountain biking pictures to the service. Pinkbike is from Canada but it has a global audience as is one of the most popular sports sites some European countries.

Another great site is Newschoolers.com, a freesskiing site from California. The site has more than 100,000 registered users and is considered the Facebook of skiers.

(Mr. Salovaara’s responses have been edited for clarity.)

Top Sports Sites

Sports is big business. According to some estimates the industry rakes in around $213 billion/year. Just a fraction of that comes from the Internet ($239.1 million, according to The Sports Business Journal), so it comes as no surprise that only three of the top 100 most viewed sites in the US are devoted to sports.

ESPN Sportszone is ranked highest in this category, at 19^th overall, while NBA.com and Foxsports.com trail at 43^rd and 92^nd respectively. In China, an important emerging market for many sports properties, NBA.com is the highest-ranked sports site at 71^st place. In several European countries, Eurosport has top honors.

The graph above illustrates the disparity in overall page views for nba.com, espn.go.com, eurosport.fr and Foxsports.com.