Ambush Marketing, Crisis Management, MLB, NBA teams, NFL, NHL, New York Post, Washington Post

Squeezing Til The Sponge Is Dry…

In the 1970’s and into the 1980’s big tobacco fueled some of the most successful sports branding opportunities in history. Whether it was Phillip Morris’ support of Virginia Slims tennis or NASCAR’s Marlboro Cup, the cigarette brands created some of the most large scale and effective activation platforms in sports history. Then came all the legislation against smoking and the tobacco brands, and for the better in terms of health and social consciousness, all the spending stopped from those brands. So sports moved on, using the lessons learned in many of those activation platforms to bring in new brands who would spend, maybe not at the large numbers of tobacco, but who would continue to grow business and fill the gap. Banks and financial institutions, insurance, and technology, filled gaps with new money and new ways to reach the consumer.

In the same vein, because of the exponential growth in sponsorship, there were many categories that wanted in but were still deemed to be outside of a category that was acceptable. Hard liquor, condoms, gambling sites, even some other risqué or risky properties were passed over in lieu of more traditional spend, and that policy continued on into very recent times. Now come the financial cutbacks in brand activation that we have seen in recent years, and with it came a loosening of many categories once outside of the realm. Also into that mix fell, and continue to fall, the physical areas of advertising…jerseys, helmets, on field etc…that were also off limits at one point. Seeing spirits ads on field at Yankee Stadium, or Cash For Gold during the Super Bowl, is no longer frowned upon, as properties and media seek to make up a shortfall that now exists from traditional spending. Bottom line…the advertiser was willing to spend, and in many cases have some fun with that spend or an activation…and the brands or media companies needed the money.

Into that mix comes Spongetech, a company which emerged with big budget spends throughout this year, doling out millions in sponsorships for nothing but the biggest media properties available. From signage at MLB games to courtside at the US Open to practice jersey signage at the NFL and “official” status for Madison Square Garden’s three teams, Spongetech is there, selling its presoaped sponges to all who will buy or watch. However, as was pointed out in Darren Rovell’s great piece On CNBC and in the New York Post this week, the Spongetech media play may be drying up, and the talk of SEC violations are starting to rise. So if Spongetech and its millions were a questionable business, do sports brands have a moral obligation to look deeper than the dollar, even in tough times?

Would brands have taken advertising for Bernie Madoff’s investment firm if he was reaching out to the public, like some did with Allen Stanford’s questionable businesses or in the spends Dennis Kozlowski made in sports when he ran Tyco, and if so would they have walked away if things smelled fishy? Or did Spongetech come along, fill a gap for many brands, and since the money came in, can they leave with no harm, no foul? It poses an interesting question in challenging times for teams and media companies as to what the obligation for due diligence is. If it turns out that fans are lured to a questionable brand because of their alliance with a team, and that passion or “implied endorsement” turns into a tragic money loser for those fans, are the teams morally responsible? The answer is probably no, no more so than if an airline or a bank has an accident or financial problems that causes a fan in an affiliate or affinity program to have an unpleasant experience. The teams or the media companies are merely facilitators in most cases, and it is more a case of “Buyer Beware.” However with more categories opening up to the mainstream in the search for dollars, what will be next? And when will there be pushback from the public or from officials as to what is over the line? Spongetech from the get-go seemed like a very strange play at the level of spend, as Rovell points out in his piece. But the dollars were there, so who was to question if you are a team or a property taking the money? It certainly wasn’t a questionable product that caused danger, it was a very simple one, and one that is actually very effective for the consumer.

If someone is writing the check to you, should there be more due diligence behind the scenes, or should the dollar grab surpass the responsibility to consumer? In this case it doesn’t seem like there really was much harm, and in the end the teams and the media companies were able to fill a much needed void. But if it does turn out the Spongetech was questionable and becomes a much bigger issue away from sports and into finance, will teams and media companies take a harder look the next time “the next great thing” comes along? Time will tell, and it will be interesting to see if Spongetech is a one shot and dry up deal or if it continues to ooze trouble into the future.

Some other good reads…The Wall Street Journal had a good piece on Tuesday on video games doing more marketing to women... Business Week had a piece on why the Comcast/NBC potential deal could make sense... and the Washington Post’s Tom Boswell has a good look at the chaos revolving around the Redskins…