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OPENING DAY!: NFL Sponsors Kickoff Key Marketing Season
|The National Football League is on pace to haul in a record $2 billion in sponsorship money this year, but the brands that support it face a less certain return on investment. |
We are just hours away from the official start of the 2022-23 NFL season! The defending Super Bowl champion L.A. Rams are slight home underdogs against the Buffalo Bills, Vegas oddsmakers’ pick to hoist the Lombardi Trophy in February.
For NFL sponsors, a grueling 20-week test of brand power also gets underway. Like the Rams, some brands are starting the season confident and ready to defend their turf. Others have had forgettable off-seasons and are just hoping to make the playoffs.
From tire manufacturers and motor oil companies to pizza chains and beverage makers, more than a dozen official NFL sponsors will pour serious marketing dollars into getting their brands noticed over the next several months. Soon stadium signage, TV ads, and online promos will be decorated with familiar brands hoping to become even more familiar to consumers.
There must be some value to a prime-time mention from Jim Nantz & Tony Romo but how much is hard to say. Like any other ad campaign, it’s a gamble many companies are willing to take given the incredible global popularity of the sport.
Here at LikeFolio, we don’t have the magic formula that equates sponsorship to revenue, but we do have a powerful platform that translates social media discussion to brand sentiment.
And while having a happy customer base heading into Week 1 doesn’t guarantee that those sponsor dollars will be well spent, we think it could provide a head start. As the chart below shows, some sponsors are starting their opening drive past midfield—and some are backed up to their own goal line.
|Arguably, it could be a good thing that a brand is struggling to connect with consumers—more to gain! |
Then again, building off a satisfied customer base can be like having first and goal on the 2-yard line.
Microsoft Surface users have historically been a happy bunch (Coach Belichick’s tablet-smashing tantrum aside). The current positive sentiment of 78% confirms that customers still like the brand. Microsoft is hoping that its newest lineup of Surface laptops and 2-in-1s will appeal to not just NFL quarterbacks but a range of creative types.
AB InBev’s Bud Light also has some solid happiness data going into the season. We have noticed strength in the brand and in particular Bud Light Lime mentions which are up YoY.
Consumer sentiment around Align Technology’s Invisalign braces has come down over the last few years. Then again, anything associated with a trip to the dentist is a tough sell! Still, the company is banking on its sponsorship of the NFL Coach of the Year Award to ‘straighten’ its brand reputation.
This brings us to Uber Eats. Only one-third of its food delivery customers are happy, one of the lowest scores in our coverage universe. Can exposure to the hundreds of millions of NFL fans help re-vitalized the brand?
We’ve yet to mention a few of the other names on our NFL sponsor roster. That’s because there’s more to brand strength than satisfied customers. Purchase Intent (PI) mentions, and overall buzz are additional ways to understand where the consumer is going.
When we incorporate all three data points, we arrive at the 2022 LikeFolio Preseason NFL Sponsor Awards:
1. Pro Bowl Candidate: Courtyard by Marriott
Consumer Happiness Mentions of Marriott’s Courtyard hotels are up slightly YoY on a 90-day moving average basis. A 74% happiness rate may not seem great, but pleasing business and leisure travelers is no easy task.
More impressive is the brand’s Total Mentions count which soared to an all-time high in Q2. Since Courtyard is one of the company’s lowest tier ‘Select’ properties, we think this speaks to its increasing relevance in an inflationary environment.
Travelers that would normally book a room at a Premium hotel like Sheraton or Westin appear to be opting for the more affordable Courtyard. Demand for both Sheraton and Westin was down in Q2 while it spiked for Courtyard.
This tells us that a trade-down effect may be underway in the hospitality industry, similar to what we’ve seen with shoppers switching to value retailers like Dollar Tree or Ollie’s.
|Having a strong brand like Courtyard heading into the fall and winter travel seasons is a good sign when you’re a hotel operator. It helps that Courtyard represents a significant portion of Marriott’s global footprint. Through the end of Q2, there were 1,243 managed or franchised Courtyard properties worldwide representing 16% of total Marriott units.|
The average daily rate for a Courtyard room jumped 40% YoY last quarter, more than any other Marriott brand. More importantly, at around $159 a night, it remains the company’s cheapest rate.
Mentions of reserving or staying in a hotel are up +52% YoY. To meet pent-up travel demand (and pay their higher bills) even the shoddiest of 2- and 3-star hotels are raising their room rates. This has made the prices of inferior hotel rooms similar if not higher than those of Courtyard. Advantage: Courtyard.
In Q2 Marriott booked better than expected EPS growth and saw its all-important RevPAR metric surpass 2019 levels. This gave management the confidence to reinstate its stock buyback program—and has us feeling confident that led by Courtyard, Marriott can continue to outperform.
2. Comeback Player of the Year: Pizza Hut
We really like what we are seeing from Yum’s Pizza Hut brand. In an extremely saturated world of national and local pizza chains, the Hut is reinventing itself and finding favor with consumers again.
As Pizza Hut has changed its recipe for success, demand has followed. PI mentions are up +49% YoY on a rolling 90-day basis.
|Lately, the brand seems to be in better tune with consumers’ tastebuds and budgets. Taking a page out of Domino’s book, it has deals like 2 medium 1-topping pizzas for $6.99 each. Just in time for football season, the Big Dinner Box throws in breadsticks and the choice of pasta, wings, or a 3rd pizza for not much more (money, not calories).|
Yes, Pizza Hut is the third wheel in Yum! Brands restaurant buffet after KFC and Taco Bell. But it is a business the company is counting on to be a growth contributor having added nearly 800 Pizza Hut locations over the past year.
Pizza Delivery mentions are up only slightly YoY, but the Hut seems to be getting a bigger slice of the pie. By comparison, Domino’s PI mentions are down -12% YoY, a potential sign that Pizza Hut is beating Domino’s at its own takeout and delivery game. (Maybe it finally realized that today’s convenience-minded consumers don’t want to be on their second red plastic cup refill when the pizza finally comes out.)
What is up significantly are Deal Discovery mentions, +30% YoY. We think Pizza Hut has itself discovered the need to offer good deals and could be an increasingly popular order come football Sundays.
3. Super Bowl Favorite: DraftKings
Like Pizza Hut, DraftKings doesn’t have a great sentiment score at the moment, but it may not need it. That’s because it is experiencing an excellent long-term uptrend in comprehensive demand.
With sports betting legalized in an increasing number of states, brand awareness is on the rise. So too is social media buzz, +41% YoY. Compare this to DraftKings stock which is down -80% over the last year.
What a divergence!
When it comes to the potential for share price appreciation over the next 12-24 months, we’ll take the over.
Wait, there’s no way that DraftKings could be performing well in this economic environment! People don’t have the discretionary budgets to place prop bets on MLB mascots let alone football games.
Consumer mentions of betting on sports are up +24% YoY. Better yet, the buzz around the upcoming NFL season is well underway. Mentions of gambling on NFL games, historically the most lucrative U.S. sports betting market, are up +40% YoY.
Seems counterintuitive in a weakening economy but it is consistent with what recent industry data has shown.
The latest American Gaming Association report revealed that U.S. gaming revenue (including casino games, iGaming, and sports betting) hit a new record in Q2 despite the tough macro backdrop and year-over-year comps. Sports betting accounted for roughly 10% of the $14.8 billion.
Sure, there could be some temporary pent-up entertainment demand built in, but the rise of the sports bet seems to have only just begun.
After beating Q2 revenue and earnings estimates, DraftKings brushed off the bleak economic outlook and raised its full-year revenue forecast to $2.13 billion at the midpoint.
CEO Jason Robins said, “We continue to see no perceivable impact from broader macroeconomic pressures”. The start of the NFL season should be a big catalyst!
So too should DraftKings’ expansion into NFTs including its recently announced hookup with UFC for the Reignmakers collectibles and game. NFTs are one of the hottest trends we are seeing right now with mentions up over +800% YoY!
DraftKings appears to have the stamina for a Super Bowl run that could usher in MVP-caliber stock performance in 2023.
Enjoy tonight’s game!