AT&T has bought the naming rights to the Dallas Cowboys football stadium.
Reportedly they are paying about $18 million a year for the rights. It is one of the biggest naming rights deals.
Companies that buy stadium naming rights will tell their shareholders that it’s great for brand building, but in many cases these deals have forecast the imminent downfall of the company.
The deal is complex, with AT&T also getting signage in the stadium and other rights, and providing more services within the stadium to its subscribers and enhanced Wi-Fi for everyone. And with many major sports events scheduled for the stadium besides the Cowboys games, including the annual Cotton Bowl, the 2014 College Men’s Final Four and the first ever college football championship game in 2015, the AT&T name is sure to gain hundreds of millions, if not billions, of new impressions annually.
What else might AT&T have done with that money (besides just giving it to Oxfam, say)? There are a lot of ways that you could calculate the opportunity cost of the deal, but one of them is that that $18 million translates into about 3.5 million clicks annually on a Google ad, given approximate cost per click of about $5. While elsewhere I’ve written that you shouldn’t try to predict ROI using industry benchmarks, those 3.5 million clicks by people who are searching on relevant keywords could be expected to bring AT&T tens of thousands of new customers, worth millions of dollars in revenue annually. But that would be just the tip of the digital iceberg.
Since click through rates on a given ad will typically only be a few percent, that ad will have many times more impressions than clicks. So those 3.5 million clicks would be joined by tens of millions of impressions. If the money was applied to remarketing, people who have already shown an interest in AT&T’s services could see follow-up ads for several weeks, and that would probably result in 1.5-2 times as much new business as just a basic AdWords campaign.
Or AT&T could have spent the money on social media – $18 million of paid ads on Facebook, Twitter and other social media channels would have produced tens of millions, maybe hundreds of millions of impressions. Or homepage takeovers of Yahoo!, YouTube and many other properties for many days.
You get the idea. The digital options for that money are endless. And those online ads would be conveying a richer message about the brand than just a reminder of its already well-known name.
But AT&T wanted the big number of name-only impressions, and to associate its name with “America’s Team”. When this is done online, companies are mocked for just being interested in aggregating “eyeballs”. But presumably AT&T sees a value in it beyond bragging rights.
This really is one of the most vexing issues in marketing: attribution. How much more likely am I to get an AT&T plan because I heard the company’s name several times during a Cowboys-Patriots game? (Not at all, in my case, since the AT&T network has long had a poor reputation for reliability.) What combination of brand and direct marketing is likely to be most effective? How should we split our marketing dollars between offline and online?
Many marketers have attribution theories and models, but the reality is that it’s complicated. Very.
This article was originally published on the IDG Connect blog.
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