SlideShare a Scribd company logo
1 of 20
Download to read offline
Colorado Springs Sky Sox
                    Valuing Non-Traditional Media Inventory


                                                          Leeds School of Business
                                                      Business of Sports Program



                                                                      July 23, 2010




                                          Research Team: Mark Ernster
                                                         Gregory Hall
                                                         Thomas Moles
                                                         Spencer Thomas

Business Research Division │ Leeds School of Business │University of Colorado at Boulder
                                                                                           1
Table of Contents                                                         Page
Table of Contents                                                            i
List of Figures                                                              i
List of Tables                                                               i
Executive Summary                                                            3
Introduction                                                                 4
Methodology                                                                  4
        Assumptions & Equations                                              6
Comparative Analysis                                                         8
        Air Force Academy                                                    8
        Cheyenne Mountain Zoo                                                9
        South Australian National Football League (SANFL): AAM Stadium       10
Theories and Variables Used In Valuing Non-traditional Media                 10
Clutter Analysis                                                             13
Suggestions                                                                  13
        Sky Sox Outfield Sign Adjustment                                     13
        Concourse Signage                                                    15
        Standardization of Signage                                           16
        Suggestions for the Future                                           16
Conclusion                                                                   16
Appendix                                                                     17
References                                                                   19
Bibliography                                                                 20

List of Figures

Figure I: Aggregate Square Footage v. $/ft2/K Impressions                    5
Figure II: Aggregate Impressions v. Value                                    6

List of Tables

Table 1                                                                      17
Table 2                                                                      17
Table 3: Colorado Springs Sky Sox                                            17
Table 4: Omaha Royals                                                        17
Table 5: Albuquerque Isotopes                                                18
Table 6: Syracuse Chiefs                                                     18
Table 7: Aggregate                                                           18
Table 8                                                                      19
Table 9                                                                      14
Table 10                                                                     15


Business Research Division │ Leeds School of Business │University of Colorado at Boulder
                                                                                           2
Executive Summary

       The CU Business of Sports Sky Sox team has been asked by Assistant General Manager

of Corporate Partnerships & Marketing at Colorado Springs Sky Sox Baseball, Matt Person, to

conduct a study examining methods of valuing signage, specifically, to value an “eyeball,” or an

impression. It was designed to examine the return on investment sponsors are receiving from

advertising at Security Service Field. The Sky Sox fear they are undervaluing their signage, and

without appropriate justification, have no leverage to change their prices. This study will help the

Sky Sox‟s ability to justify prices set on signage to their sponsors.


       The Sky Sox market includes companies located in the Colorado Springs area interested

in advertising to the minor league baseball demographic, which is heavily family oriented. Their

competition includes in-house advertising, the Cheyenne Mountain Zoo, the Air Force

Academy‟s Falcon Stadium, the World Arena as well as the numerous outdoor activities

available in the Colorado Springs area.


       We are proposing comparative analysis as a means for comparing the cost of signage at

Security Service Field to the cost of signage of other minor league baseball teams, similar sports

clubs and local competition. We have factored attendance for each team, size of the sign,

location and an analysis of clutter into our research. By aggregating the pricing structure of four

minor league teams and analyzing the Sky Sox place within them, the team will be able to justify

their pricing if they decide to increase it. Our team has also included the subjective aspects of

selling signage and theories behind valuing impressions such as the effects of clutter, location

and size. Additionally, there are a number of new ideas presented concerning new sign locations

and orientation of the signs (notably in the concourse).




Business Research Division │ Leeds School of Business │University of Colorado at Boulder
                                                                                                  3
The Sky Sox revenue is dependent on a number of aspects. In-stadium revenue sources

include concessions, event sponsorships and stadium signage. Although concessions generate the

most revenue for the Sky Sox, their partnerships with sponsors have a significant impact on the

bottom line.


Introduction


        This document presents the challenge facing the Sky Sox, comparative analysis aimed to

aid the Sky Sox in better understanding the situation, and suggestions to help the Sky Sox

accurately measure the return on investment for their inventory. Return on investment on

advertising is difficult to quantify in any industry, because it is difficult to track the effectiveness

of the advertisement. In order to present the Sky Sox with a resolution, comparative analysis

allowed for insight into similar minor league baseball teams as well as local competition, an

international reference and marketing agencies. By doing this the Sky Sox can identify problems

with their current method for valuing signs and create a more justifiable method.


Methodology


        Through comparative analysis of four minor league baseball teams we were able to place

an estimated value on stadium signage. We considered three factors for each set of stadium

signs: attendance (impressions), location & clutter of the sign, and size. These factors

allowed us to compare price per square foot values in association with the number of impressions

they receive. This way we have an even playing field, so to speak, in comparing how stadium

signs are priced. Through this analysis, we noticed a downward trending value for the price per

square foot per thousand impressions ($/ft²/K impressions) in relation to total square footage




Business Research Division │ Leeds School of Business │University of Colorado at Boulder
                                                                                                      4
across the board. This finding wasn‟t necessarily surprising, but it provided a benchmark for us

to determine a true value in stadium sign sponsorship.


       The downward trend in Figure 1 (below; note: each figure is based on a respective table

in the appendix) demonstrates the decreasing price our selected clubs (Albuquerque Isotopes,

Omaha Royals, Syracuse Chiefs and Colorado Springs Sky Sox) charge per square foot of

signage dependant on how many impressions those signs receive. Through this aggregate study,

we can estimate an average value of one thousand impressions in relation to the value of the sign.


Figure 1




       Assuming that a sign of a given size draws a specific price per ft² per thousand

impressions that it coordinates to on this graph (for a value x, there is a y), we can estimate the

value of a sign dependent on its size, location relative to clutter and the number of impressions it

receives. The return value is an approximation for the value of a sign based on the pricing

structure of the four teams‟ prices we analyzed. As indicated by Figure 2, the value of the sign

increases exponentially as the number of impressions increases.




Business Research Division │ Leeds School of Business │University of Colorado at Boulder
                                                                                                  5
Figure 2




       These assumptions are based on our research of the benefits of a good sign location at a

venue, the effect of clutter on the effectiveness of a sign and previously enstated pricing

structures. Essentially, a smaller sign will receive less impressions, a sign in a cluttered area will

receive less impressions and vice-versa. Applying these numbers to each team, specifically the

Sky Sox, the organization is able to have concrete numbers to justify a pricing scale. Tables 3-8

provide an estimation for the value for each sign based on the assumptions made above. Initial

$/ft²/K impressions are based on original pricing; actual $/ft²/K impressions are based on

aggregate graph.

      Assumptions & Equations

           o Base impressions (total number of people viewing a sign) = (size of sign/size of

               average sign) x (attendance)

           o Clutter/location multiplier (based on clutter analysis): 1 = cluttered; 2 = medium

               clutter; 3 = low clutter, good location

           o Total impressions = base impressions x clutter/location multiplier

           o Value (potential return on investment) = (price/ft²/K impressions) x (ft²) x (base

               impressions/1000)


Business Research Division │ Leeds School of Business │University of Colorado at Boulder
                                                                                                    6
o Estimated price per thousand impressions: based             How we derived a formula for
                                                                         determining value:
               on aggregate graph of square footage vs. $/ft²/K
                                                                                Discover a base value for
               impressions                                                       price/K impressions
                                                                                 dependant on ft² (based on
       In our initial research, our assumptions led us to believe                graphs).

that every sign had a value greater than its price, yet this is not             Multiply this value by the
                                                                                 square footage of the given
the case. Some values, as indicated in Table 8, are actually less                sign.

than the price that is charged. This could be attributed to the                 Then multiply by estimated
                                                                                 impressions of that sign and
value placed on a sponsor‟s relationship with the team, the                      divide by 1,000 (need to keep
                                                                                 units straight, we’re working
quality of the advertisement, or exclusivity rights we have not                  in thousands of impressions).

accounted for. The fact remains, however, that sponsors must                    Units are key:

see a return on investment in order to advertise with these teams,                   o   $/ft²/K imp * ft² =
                                                                                         $/K imp
so the value of a given sign must be greater than the price being
                                                                                     o   $/K imp * imp/1000
charged.                                                                                 = $ (value)


Possibilities as to why signs are overpriced:

      Competitive sponsorship market
      Exclusivity
      Perks
      Lack of sponsor‟s knowledge

       As indicated by the team sign valuations in Tables 3-6, some teams that have overpriced

their signs did not account for the size of their sign at such a considerable distance. A sign at a

distance of at least 400ft (since spectators at a minor league baseball game are concentrated

around the infield) must be an adequate size for the majority of people to read it. Therefore, a

smaller sign (i.e.: 50ft²) as opposed to a 250ft² sign in the outfield isn‟t going to draw enough

impressions to make up for its price, if priced too high.



Business Research Division │ Leeds School of Business │University of Colorado at Boulder
                                                                                                  7
Comparative Analysis

       With a population of over 300,000, Colorado Springs offers a medium-sized market.

Sport and entertainment events at the Air Force Academy, Cheyenne Mountain Zoo, and the

Colorado Springs Sky Sox offer several forms of entertainment for people to enjoy. In order to

better understand how the Sky Sox could value advertisements, comparative analysis of the Sky

Sox‟s major competitors is believed to be beneficial to our research. Also, an international

comparison to the South Australian National Football League, which plays its matches at AAMI

Stadium in Adelaide, Australia, was taken into account to demonstrate the difficulty almost

every sporting venue faces when valuing signage.


Air Force Academy


       CBS Collegiate Sports Properties in partnership with Falcon Sports Marketing holds

exclusive marketing and multimedia rights to Air Force Athletics, most notably Air Force’s

Division I football program. Falcon Stadium, the home of Air Force football, boasts a capacity of

roughly 52,000 and draws an average of 37,000 fans per game. On a yearly basis, Falcon

Stadium hosts approximately 275,000 people. With similar annual average attendance as the

Sky Sox, the Air Force Academy serves as a suitable comparison when analyzing the value of

stadium signage and event nights.


       Falcon Sports Marketing uses a rate card as a reference when valuing stadium signage,

but typically the size of the sign, location, and the relationship with the sponsor will cause rate

card prices to fluctuate. Therefore, Falcon Sports Marketing does not use a standardized price for

any of its inventory; rather prices fluctuate according to the characteristics described above.



Business Research Division │ Leeds School of Business │University of Colorado at Boulder
                                                                                                  8
Garrick Dorn, CBS Collegiate Sports Properties West Region Sales Manager,

approximated that value to be $0.10 per impression. Though this offers insight to the value of an

advertisement, it is merely an estimate. Additionally, the number of impressions per person is

unknown through the duration of an event. Depending on location, the average spectator at a

sporting event such as baseball or football (similar duration) will see the advertisement anywhere

from ten to thirty times during a game, as approximated by Dorn.


Cheyenne Mountain Zoo


       One of the main competitors for the Sky Sox organization within Colorado Springs is the

Cheyenne Mountain Zoo. With an average attendance of over 500,000 people annually, the

Cheyenne Mountain Zoo is a lucrative site for sponsors to pursue. That is why it is important for

the Sky Sox to be able to provide competitive sponsorship packages while still being able to

make money. While interviewing Jeanne Gordon from the Press Box of Cheyenne Mountain

Zoo, we were able to retrieve some interesting information. The main obstacle for the zoo to gain

sponsorships is convincing the sponsors to avoid in-house advertising campaigns and gain

competitive advantage by partnering with the zoo. The zoo pushes their sponsorship packages by

explaining that there is a lot of added value for a company to partner with an organization that is

heavily involved with the community. Their community outreach campaigns, although non-

profit, allow the zoo to push their sponsorship packages for a premium and form positive long-

term relationships with their partners. If the Sky Sox became more heavily involved in

community outreach, then the organization would be able to sell their signage for higher prices

as well as form stronger relationships with their partners. This in turn would increase the return

on investment for the investor and increase the retention of sponsorship partners.



Business Research Division │ Leeds School of Business │University of Colorado at Boulder
                                                                                                 9
South Australian National Football League (SANFL): AAMI Stadium


       AAMI Stadium is the home to the South Australian National Football League. Its

capacity reaches just over 51,000 and hosts nearly 1 million guests annually through sporting

events as well as other entertainment such as concerts.


       According to Mark Lukowicz, Corporate Partnerships Manager of South Australian

National Football League Inc., there is no set in stone equation used to measure the value of a

sign. The reality is that prices are adjusted to allow for several factors with the biggest emphasis

being on exposure or positioning, followed by the size of the sign, length of supplier relations

and demographics. When asked about the quality of the advertisement, he perceived it as a non-

issue stating that a poorly designed sign reflects negatively on the organization as well as the

sponsor.


Theories and Variables Used In Valuing Non-traditional Media

       The basic idea of valuing signage is simple as you take the size, location, and comparison

of signs relative to similar clubs in the industry. This can only provide organizations with a

minor justification for their pricing and it is easier for the advertiser to lower its payment.

According to Jon Carlson, Manager of Business Development for the Denver Broncos, the

bottom line is that the value of a sign is only what people are willing to spend on it. If you can

provide more facts to further justify that the value of your sign is greater than what the sponsor is

offering they will be willing to pay more.


      Valuing Signage
          o Size of sign
          o Isolated vs. clutter
          o Monetization of signage on TV
                  = Duration x spot rate x quality impact score


Business Research Division │ Leeds School of Business │University of Colorado at Boulder
                                                                                                   10
Other methods attempting to measure the value of signage more precisely include

determining the number of detections certain signs receive. This is done by monitoring the

audience with manpower or, taking a more radical approach, utilizing recent technological

advances. Various companies now track audience detections through RFID (radio-frequency

identification) tags on tickets, video monitoring and laser monitoring systems. These systems

claim to track where people are directing their attention, how long they are looking there, and

whether or not the person is fully engaged with the sign. Although the effectiveness of these

technologies is not completely proven, some stadiums within the sporting industry are beginning

to implement them as they could provide more concrete support when justifying signage value.


      Determining Number of Detections
          o Proprietary audience measurement
                  Video audience measurement
                         Size of walk-by/opportunity for audience to see sign
                         Number of impressions generated by display
                         % of walk-by traffic that engaged with sign
                         Quality of engagement
                               o Time (lingering, glance)
                               o Demographic make-up of audience
                                       Age markers
                                       Gender markers
                                       Ethnicity markers
                                       Content reaction
      Valuing Detections
          o Duration of detection
          o Number of detections
          o Quality of detection
                  Duration of detection
                  Type of detection
                         Full-attention
                         Glance
      Engagements within an event night
          o Tracking members of audience
                  How do they interact with the display during event
                  RFID tags in tickets
                  Concession sales
                  Laser impression tracking

Business Research Division │ Leeds School of Business │University of Colorado at Boulder
                                                                                               11
Through our research we have found that when pricing a sponsor‟s sign there is an

abundance of ways to sell signage for a higher value. Jon Carlson of the Broncos expressed the

importance of supply and demand. As the number of signs increases, sponsors have more

leverage in lowering the price below the club‟s desired price, potentially claiming clutter and the

lack of exclusivity deteriorate their return on investment. So increasing the size of the signs

overall decreases the overall amount of signs, it then becomes easier to justify a higher price.

However, there is a break-even point. Sponsors of minor league baseball teams are only willing

to pay so much for signage. Therefore, as the number of signs decreases, a price ceiling will be

created, stunting the profitability of increasing the size of signs. Additionally, if the sponsor has

a similar target market as the organization they will be more willing to pay an increased price for

certain signage.


      Pricing Signage
           o The price of signage is very subjective
           o It involves comparative analysis with other industry organizations
           o It involves measuring impressions and also the increase in sales by the sponsor
               itself
           o Monitoring ROI is crucial
           o In the end its about selling the signage to the sponsor
                    You want to get the sponsor to pay as much as they are willing and think
                      is fair
                    Providing explanation for signage pricing is key

       The final aspects to take into consideration are increasing attendance and the state of the

economy. The Sky Sox have not re-valued their signage in a relatively long-time while their

attendance has steadily increased throughout the years. Therefore, there is an obvious need to

increase the value of signage. Also, it is important to consider the state of the economy. As Jon

Carlson expressed, “It is important to evaluate what is fair, without bastardizing your product by

„giving it away‟.”


Business Research Division │ Leeds School of Business │University of Colorado at Boulder
                                                                                                   12
Clutter Analysis


       Advertising clutter poses a major problem for sponsors. As the number of signs increases

in a particular area, so do consumer‟s ad avoiding behaviors. Clutter is defined as “perceived

excess of advertising messages within a medium” (Elliott and Speck 1998). Clutter has been

found to reduce attention, processing and memory of advertisements.            The effect can be

explained in terms of information overload; due to limited cognitive resources consumers cannot

attend to all the information exposed to them (Nan and Faber 2004). Even if consumers do

attend to an ad and remember the message, clutter makes it difficult for consumers to associate

the message to the right brand (Pham and Johar 1997; Dahlen and Rosengren 2005). The effects

of clutter are stronger when consumers are not necessarily involved and when the advertised

brand is unfamiliar (Burke and Srull 1988; Kellar 1991; Kent and Allen 1994; Laroche 2006).

On one hand clutter can potentially bring in extra advertising revenue, while on the other hand, it

can reduce the effectiveness of the sign. By reducing clutter and increasing the size of signage at

Security Service Field, return on investment for sponsorship partners will increase by providing

exclusivity, which leads to increased brand awareness and overall advertising effectiveness.


Suggestions


Sky Sox Outfield Sign Adjustment


       The overall goal for any business is to increase revenue. If this is so, then the Sky Sox

must look into how they may go forward and possibly change signage size and price based on

our analysis. The Sky Sox may choose to eliminate a number of signs, and replace them with

larger, more clutter free signs; specifically concerning the 128ft² outfield signs. Table 9 shows




Business Research Division │ Leeds School of Business │University of Colorado at Boulder
                                                                                                 13
how an increase in the size of the sign will eventually lead to an increase in revenue, assuming

that the team will price the sign at 75% of the sign‟s value.


Table 9: Potential Revenue Adjustment

size (ft²) Base impressions
                     Clutter/LocationImp
                               Total rating      Price                                    Value
                                                         Actual $/ft²/K impressions impressions
                                                                          Initial $/ft²/K         Est. total #   Revenue
      128 256,000           1    256,000       $5,250          $0.28        $0.16     $9,175                40   $210,000
      150 300,000           1    300,000       $4,050          $0.12        $0.09     $5,400                34   $137,700
      180 360,000         1.5    540,000       $8,019          $0.11        $0.12    $10,692                28   $224,532
      200 400,000           2    800,000      $12,000          $0.10        $0.15    $16,000                25   $300,000
      225 450,000           2    900,000      $13,669          $0.09        $0.14    $18,225                21   $287,044
      256 512,000           2 1,024,000       $17,695          $0.09        $0.14    $23,593                20   $353,894

       Note that revenue initially dips. This is due to the fact that the team is merely removing

signs, and not providing enough benefits in terms of lack of clutter. Another important point is

that at an initial estimation of 40 total signs sized 128ft², the total area is set at 5,120ft². There

are only so many sign combinations that can fit within an outfield wall configuration. Therefore,

it is reasonable to double the initial size of 128ft² to 256ft² in order to ensure that all the signs

will fit within the outfield wall configuration. Reviewing Table 3, one may notice that the price

and values for the 256ft² sign are deflated. With this proposal, the decrease in total signage will

decrease clutter for this size of sign and increase value. The final point in this case indicates a

revenue increase of $143,894.


       One flaw in changing the Sky Sox‟s sign structure overnight is alienating previous

sponsors that will no longer be able to fit within the Sky Sox‟s outfield sign inventory. A

solution to this problem would be to only eliminate 50% of the original 128ft² signs, and replace

them with 256ft² signs. While the price charged in this case would be less (due to remaining

clutter), a revenue increase would still occur, as indicated by Table 10. Note that the revenue

and estimated total number of signs are halved due to the assumption that we are working with

50% of the current inventory.


Business Research Division │ Leeds School of Business │University of Colorado at Boulder
                                                                                                                        14
Table 10: Potential Revenue Adjustment @ 50%

size (ft²) Base impressions
                     Clutter/LocationImp
                               Total rating      Price                                    Value
                                                         Actual $/ft²/K impressions impressions
                                                                          Initial $/ft²/K         Est. total #   Revenue
      128 256,000           1    256,000       $5,250          $0.28        $0.16     $9,175                20   $105,000
      150 300,000           1    300,000       $4,050          $0.12        $0.09     $5,400                17    $68,850
      180 360,000         1.5    540,000       $8,019          $0.11        $0.12    $10,692                14   $112,266
      200 400,000         1.5    600,000       $9,000          $0.10        $0.11    $12,000                12   $108,000
      225 450,000         1.5    675,000      $10,252          $0.09        $0.10    $13,669                11   $112,767
      256 512,000         1.5    768,000      $13,271          $0.09        $0.10    $17,695                10   $132,710

Additionally, sponsors that can no longer advertise in the outfield have several other methods of

advertising in Security Service Field such as concourse signs and advertisements located near

concessions.


Concourse Signage


       Considering the current configuration of the concourse signs, our team noticed they are

relatively small compared to the amount of space available. Also, there is no obvious reason to

look up at the concourse signs. Therefore we suggest that the size of the concourse signs be

increased, which will allow the Sky Sox to better justify the pricing of their partnership

packages. Next, in order to better draw the eyes of the venue‟s attendees to the concourse signs

we suggest that the concourse section number signs be placed parallel with the concourse

signage. This will not only allow for guests to more easily find their section but will also draw

their eyes to the concourse advertisements. This would allow the Sky Sox to have another

justification for their pricing as well as increase return on investments for their partners. We

believe if the concourse signage is reconfigured it will benefit both the Sky Sox and associated

sponsors.




Business Research Division │ Leeds School of Business │University of Colorado at Boulder
                                                                                                                        15
Standardization of Signage


       While attending a Sky Sox game our team noticed some signs with poorly designed

advertisements.    According to Mark Lukowicz of the SANFL, poorly designed signage

deteriorates the return on investment for the sponsor simultaneously reflecting poorly on Security

Service Field and the Sky Sox organization. Our team suggests that the Sky Sox standardize the

criteria for their signage. For example, there could be a limited number of characters allowed on

each sign making the advertisement more readable for the spectators. This will not only increase

the return on investment for sponsorship partners but will enhance the aesthetic viability of

Security Service Field.


Suggestions for the Future

       As previously mentioned, the Sky Sox could employ technologies designed by companies

like Micro Target Media to better track impressions within the stadium. Micro Target Media

uses video and laser monitoring to track people‟s eyes, how long they are looking in that

direction, and how focused they are on signage. This allows for the exact measurement of

impressions on certain signage, which provides concrete justification for the pricing of signage.


Conclusion

       Ultimately, when considering the value of non-traditional media there are many aspects

that must be taken into account. Clearly, a comparative analysis of other organizations within

the industry is necessary as well as a review of competition within Colorado Springs. After

performing the comparative analysis it is indubitable that the Sky Sox can make changes to their

signage and pricing structure, which will positively influence the bottom line. Additionally,

there are many theories that play into selling signage and sponsorships that all can affect the final



Business Research Division │ Leeds School of Business │University of Colorado at Boulder
                                                                                                    16
price and the value of the partnership. Conclusively, valuing non-traditional media is a complex

process that has an imminent affect on an organizations profit margin.


Appendix

Table 1: ft² vs. $/ft²/K impressions                     Table 2: Total Impressions vs.
                                                         Value
   size (ft²)           $/ft²/K impressions
          50                       $1.04                   Total Imp               Value
          76                       $0.26                     256,000              $9,175
          80                       $0.60                     371,000             $13,297
        120                        $0.69                     397,227             $13,585
        128                        $0.16                     400,000             $10,600
        128                        $0.17                     418,133             $13,380
        130                        $0.23                     418,133              $8,028
        135                        $0.09                     440,000              $9,680
        144                        $0.08                     712,320             $12,309
        160                        $0.16                     720,000             $27,648
        168                        $0.11                     768,000             $17,695
        200                        $0.02                     831,040             $16,754
        210                        $0.08                   1,040,000             $28,392
        220                        $0.06                   1,108,053             $17,374
        224                        $0.05                   1,568,000             $28,224
        256                        $0.08                   1,620,000             $39,366
                                                           2,520,000             $37,044
Table 3: Colorado Springs Sky Sox
Location        size (ft²) Base impressions Total Imp
                                    Clutter/Location rating Price          Actual $/ft²/K impressions                Value
                                                                                            Initial $/ft²/K impressions       Difference
Scoreboard            120 240,000          3 720,000 $20,000                      $0.32           $0.69        $27,648             $7,648
Outfield wall         128 256,000          1 256,000       $5,250                 $0.28           $0.16         $9,175             $3,925
Scoreboard video ribbon 20 440,000
                      2                    1 440,000       $6,000                 $0.10           $0.06         $9,680             $3,680
Outfield wall         256 512,000        1.5 768,000 $10,500                      $0.09           $0.08        $17,695             $7,195

Table 4: Omaha Royals

Location         size (ft²) Base impressions Total Imp
                                      Clutter/Location rating      Price   Actual $/ft²/K impressions                 Value
                                                                                            Initial $/ft²/K impressions       Difference
Outfield fence          128 371,000         1    371,000         $8,200            $0.28           $0.17        $13,297             $5,097
Scoreboard              144 356,160         2    712,320         $8,200            $0.12           $0.08        $12,309             $4,109
Scoreboard              168 415,520         2    831,040        $14,700            $0.12           $0.11        $16,754             $2,054
Outfield fence          224 554,027         2 1,108,053         $13,500            $0.07           $0.05        $17,374             $3,874




Business Research Division │ Leeds School of Business │University of Colorado at Boulder
                                                                                                                                        17
Table 5: Albuquerque Isotopes

Location     size (ft²) Base impressions
                                  Clutter/Location rating
                                             Total Imp        Price                                     Value
                                                                      Actual $/ft²/K impressions impressions
                                                                                       Initial $/ft²/K           Difference
Scoreboard           50 200,000          2     400,000      $20,800         $0.53         $1.04    $10,600           -$10,200
Scoreboard         130 520,000           2 1,040,000        $30,800         $0.21         $0.23    $28,392            -$2,408
Scoreboard         135 540,000           3 1,620,000        $20,000         $0.18         $0.09    $39,366            $19,366
Scoreboard         210 840,000           3 2,520,000        $40,800         $0.07         $0.08    $37,044            -$3,756

Table 6: Syracuse Chiefs

Location        size (ft²) Base impressions Total Imp
                                    Clutter/Location rating   Price                                      Value
                                                                      Actual $/ft²/K impressions impressions
                                                                                      Initial $/ft²/K            Difference
Scoreboard              76 198,613         2    397,227      $8,000        $0.45         $0.26      $13,585            $5,585
Scoreboard              80 209,067         2    418,133     $20,000        $0.40         $0.60      $13,380           -$6,620
8x20 Outfield wall    160 418,133          1    418,133     $11,000        $0.12         $0.16       $8,028           -$2,972
                      200 522,667
Rotating (3) scoreboard                    3 1,568,000       $7,000        $0.09         $0.02      $28,224          $21,224

Table 7: Aggregate based on ft²

size (ft²)       Base impressions
                           Clutter/Location ratingTotal Imp         Price                                          Value
                                                                               Actual $/ft²/K impressions impressions
                                                                                                Initial $/ft²/K
            50    200,000                   2     $400,000        $20,800             $0.53          $1.04        $10,600
            76    198,613                   2     $397,227         $8,000             $0.45          $0.26        $13,585
            80    209,067                   2     $418,133        $20,000             $0.40          $0.60        $13,380
           120    240,000                   3     $720,000        $20,000             $0.32          $0.69        $27,648
           128    256,000                   1     $256,000         $5,250             $0.28          $0.16         $9,175
           128    371,000                   1     $371,000         $8,200             $0.28          $0.17        $13,297
           130    520,000                   2 $1,040,000          $30,800             $0.21          $0.23        $28,392
           135    540,000                   3 $1,620,000          $20,000             $0.18          $0.09        $39,366
           144    356,160                   2     $712,320         $8,200             $0.12          $0.08        $12,309
           160    418,133                   1     $418,133        $11,000             $0.12          $0.16         $8,028
           168    415,520                   2     $831,040        $14,700             $0.12          $0.11        $16,754
           200    522,667                   3 $1,568,000           $7,000             $0.09          $0.02        $28,224
           210    840,000                   3 $2,520,000          $40,800             $0.07          $0.08        $37,044
           220    440,000                   1     $440,000         $6,000             $0.10          $0.06         $9,680
           224    554,027                   2 $1,108,053          $13,500             $0.07          $0.05        $17,374
           256    512,000                 1.5     $768,000        $10,500             $0.09          $0.08        $17,695




Business Research Division │ Leeds School of Business │University of Colorado at Boulder
                                                                                                                            18
Table 8: Aggregate based on total impressions

size (ft²)   Base impressions
                      Clutter/Location rating
                                   Total Imp       Price                                      Value
                                                           Actual $/ft²/K impressions impressions
                                                                           Initial $/ft²/K            Difference
        128 256,000             1    256,000     $5,250         $0.28         $0.16       $9,175          $3,925
        128 371,000             1    371,000     $8,200         $0.28         $0.17      $13,297          $5,097
          76 198,613            2    397,227     $8,000         $0.45         $0.26      $13,585          $5,585
          50 200,000            2    400,000    $20,800         $0.53         $1.04      $10,600       -$10,200
          80 209,067            2    418,133    $20,000         $0.40         $0.60      $13,380         -$6,620
        160 418,133             1    418,133    $11,000         $0.12         $0.16       $8,028         -$2,972
        220 440,000             1    440,000     $6,000         $0.10         $0.06       $9,680          $3,680
        144 356,160             2    712,320     $8,200         $0.12         $0.08      $12,309          $4,109
        120 240,000             3    720,000    $20,000         $0.32         $0.69      $27,648          $7,648
        256 512,000           1.5    768,000    $10,500         $0.09         $0.08      $17,695          $7,195
        168 415,520             2    831,040    $14,700         $0.12         $0.11      $16,754          $2,054
        130 520,000             2 1,040,000     $30,800         $0.21         $0.23      $28,392         -$2,408
        224 554,027             2 1,108,053     $13,500         $0.07         $0.05      $17,374          $3,874
        200 522,667             3 1,568,000      $7,000         $0.09         $0.02      $28,224        $21,224
        135 540,000             3 1,620,000     $20,000         $0.18         $0.09      $39,366        $19,366
        210 840,000             3 2,520,000     $40,800         $0.07         $0.08      $37,044         -$3,756

References

Mike Baron, Vice President of Business Development and Sales for Image Impact

Jon Carlson, Manager of Business Development for the Denver Broncos

Garrick Dorn, CBS Collegiate Sports Properties West Regional Sales Manager

Megan Eisenhard, General Manger Buffalo Sports Properties

Jeanne Gordon, Press Box of Cheyenne Mountain Zoo

Chuck Griswold, Sponsorship Account Executive Altoona Curve

Brian Gurnee, President of California Outdoor Advertising Inc.

Mark Lukowicz, Corporate Partnerships Manager SA National Football League

Dave Madsen, Associate General Manager Buffalo Sports Properties

Roger Payne, Research, Valuation, Sponsorship ROI for Navigate Marketing

Robert Wickstrom, Associate California Outdoor Advertising Inc.




Business Research Division │ Leeds School of Business │University of Colorado at Boulder
                                                                                                               19
Bibliography

Elliott, Michael T. Speck, Paul S. “Consumer Perceptions of Advertising Clutter and Its Impact
         across Various Media.” Journal of Advertising Research. (January-February 1998) : 29-
         41. Print
Rosengren, Sara. “Publicity vs. Advertising in a Cluttered Environment: Effects on Attention and
      Brand Identification.” Journals of Current Issues and Research in Advertising. Volume
      30, 2. (Fall 2008) : 27-35. Print.




Business Research Division │ Leeds School of Business │University of Colorado at Boulder
                                                                                                 20

More Related Content

Viewers also liked

2015 Toyota Camry | Toyota Dealer Serving Wilkes Barre
2015 Toyota Camry | Toyota Dealer Serving Wilkes Barre2015 Toyota Camry | Toyota Dealer Serving Wilkes Barre
2015 Toyota Camry | Toyota Dealer Serving Wilkes Barrescranton toyota
 
A közoktatásról szóló 1993
A közoktatásról szóló 1993A közoktatásról szóló 1993
A közoktatásról szóló 1993Drahos Andrea
 
BXP DM EST Meeting - July
BXP DM EST Meeting - JulyBXP DM EST Meeting - July
BXP DM EST Meeting - JulyJazman Barizi
 
CliqTags - Funktioner och fördelar
CliqTags - Funktioner och fördelarCliqTags - Funktioner och fördelar
CliqTags - Funktioner och fördelarCliqTags
 
ADF Software Factory - Software aus der Werkstatt
ADF Software Factory - Software aus der WerkstattADF Software Factory - Software aus der Werkstatt
ADF Software Factory - Software aus der Werkstattenpit GmbH & Co. KG
 
Ứng dụng Phân tích hành vi khách hàng
Ứng dụng Phân tích hành vi khách hàngỨng dụng Phân tích hành vi khách hàng
Ứng dụng Phân tích hành vi khách hàngMaru Lord
 
A közoktatásról szóló 1993
A közoktatásról szóló 1993A közoktatásról szóló 1993
A közoktatásról szóló 1993Drahos Andrea
 
Is It Permissible to Release News Through Social Media? It Depends.
Is It Permissible to Release News Through Social Media? It Depends.  Is It Permissible to Release News Through Social Media? It Depends.
Is It Permissible to Release News Through Social Media? It Depends. IR Smartt Inc.
 
The blink Style - References
The blink Style - ReferencesThe blink Style - References
The blink Style - ReferencesDaniel Ruke
 

Viewers also liked (11)

2015 Toyota Camry | Toyota Dealer Serving Wilkes Barre
2015 Toyota Camry | Toyota Dealer Serving Wilkes Barre2015 Toyota Camry | Toyota Dealer Serving Wilkes Barre
2015 Toyota Camry | Toyota Dealer Serving Wilkes Barre
 
A közoktatásról szóló 1993
A közoktatásról szóló 1993A közoktatásról szóló 1993
A közoktatásról szóló 1993
 
BXP DM EST Meeting - July
BXP DM EST Meeting - JulyBXP DM EST Meeting - July
BXP DM EST Meeting - July
 
CliqTags - Funktioner och fördelar
CliqTags - Funktioner och fördelarCliqTags - Funktioner och fördelar
CliqTags - Funktioner och fördelar
 
ADF Software Factory - Software aus der Werkstatt
ADF Software Factory - Software aus der WerkstattADF Software Factory - Software aus der Werkstatt
ADF Software Factory - Software aus der Werkstatt
 
READING
READINGREADING
READING
 
Ứng dụng Phân tích hành vi khách hàng
Ứng dụng Phân tích hành vi khách hàngỨng dụng Phân tích hành vi khách hàng
Ứng dụng Phân tích hành vi khách hàng
 
A közoktatásról szóló 1993
A közoktatásról szóló 1993A közoktatásról szóló 1993
A közoktatásról szóló 1993
 
Is It Permissible to Release News Through Social Media? It Depends.
Is It Permissible to Release News Through Social Media? It Depends.  Is It Permissible to Release News Through Social Media? It Depends.
Is It Permissible to Release News Through Social Media? It Depends.
 
2557 โครงงาน
2557 โครงงาน2557 โครงงาน
2557 โครงงาน
 
The blink Style - References
The blink Style - ReferencesThe blink Style - References
The blink Style - References
 

Sky Sox Deliverable

  • 1. Colorado Springs Sky Sox Valuing Non-Traditional Media Inventory Leeds School of Business Business of Sports Program July 23, 2010 Research Team: Mark Ernster Gregory Hall Thomas Moles Spencer Thomas Business Research Division │ Leeds School of Business │University of Colorado at Boulder 1
  • 2. Table of Contents Page Table of Contents i List of Figures i List of Tables i Executive Summary 3 Introduction 4 Methodology 4 Assumptions & Equations 6 Comparative Analysis 8 Air Force Academy 8 Cheyenne Mountain Zoo 9 South Australian National Football League (SANFL): AAM Stadium 10 Theories and Variables Used In Valuing Non-traditional Media 10 Clutter Analysis 13 Suggestions 13 Sky Sox Outfield Sign Adjustment 13 Concourse Signage 15 Standardization of Signage 16 Suggestions for the Future 16 Conclusion 16 Appendix 17 References 19 Bibliography 20 List of Figures Figure I: Aggregate Square Footage v. $/ft2/K Impressions 5 Figure II: Aggregate Impressions v. Value 6 List of Tables Table 1 17 Table 2 17 Table 3: Colorado Springs Sky Sox 17 Table 4: Omaha Royals 17 Table 5: Albuquerque Isotopes 18 Table 6: Syracuse Chiefs 18 Table 7: Aggregate 18 Table 8 19 Table 9 14 Table 10 15 Business Research Division │ Leeds School of Business │University of Colorado at Boulder 2
  • 3. Executive Summary The CU Business of Sports Sky Sox team has been asked by Assistant General Manager of Corporate Partnerships & Marketing at Colorado Springs Sky Sox Baseball, Matt Person, to conduct a study examining methods of valuing signage, specifically, to value an “eyeball,” or an impression. It was designed to examine the return on investment sponsors are receiving from advertising at Security Service Field. The Sky Sox fear they are undervaluing their signage, and without appropriate justification, have no leverage to change their prices. This study will help the Sky Sox‟s ability to justify prices set on signage to their sponsors. The Sky Sox market includes companies located in the Colorado Springs area interested in advertising to the minor league baseball demographic, which is heavily family oriented. Their competition includes in-house advertising, the Cheyenne Mountain Zoo, the Air Force Academy‟s Falcon Stadium, the World Arena as well as the numerous outdoor activities available in the Colorado Springs area. We are proposing comparative analysis as a means for comparing the cost of signage at Security Service Field to the cost of signage of other minor league baseball teams, similar sports clubs and local competition. We have factored attendance for each team, size of the sign, location and an analysis of clutter into our research. By aggregating the pricing structure of four minor league teams and analyzing the Sky Sox place within them, the team will be able to justify their pricing if they decide to increase it. Our team has also included the subjective aspects of selling signage and theories behind valuing impressions such as the effects of clutter, location and size. Additionally, there are a number of new ideas presented concerning new sign locations and orientation of the signs (notably in the concourse). Business Research Division │ Leeds School of Business │University of Colorado at Boulder 3
  • 4. The Sky Sox revenue is dependent on a number of aspects. In-stadium revenue sources include concessions, event sponsorships and stadium signage. Although concessions generate the most revenue for the Sky Sox, their partnerships with sponsors have a significant impact on the bottom line. Introduction This document presents the challenge facing the Sky Sox, comparative analysis aimed to aid the Sky Sox in better understanding the situation, and suggestions to help the Sky Sox accurately measure the return on investment for their inventory. Return on investment on advertising is difficult to quantify in any industry, because it is difficult to track the effectiveness of the advertisement. In order to present the Sky Sox with a resolution, comparative analysis allowed for insight into similar minor league baseball teams as well as local competition, an international reference and marketing agencies. By doing this the Sky Sox can identify problems with their current method for valuing signs and create a more justifiable method. Methodology Through comparative analysis of four minor league baseball teams we were able to place an estimated value on stadium signage. We considered three factors for each set of stadium signs: attendance (impressions), location & clutter of the sign, and size. These factors allowed us to compare price per square foot values in association with the number of impressions they receive. This way we have an even playing field, so to speak, in comparing how stadium signs are priced. Through this analysis, we noticed a downward trending value for the price per square foot per thousand impressions ($/ft²/K impressions) in relation to total square footage Business Research Division │ Leeds School of Business │University of Colorado at Boulder 4
  • 5. across the board. This finding wasn‟t necessarily surprising, but it provided a benchmark for us to determine a true value in stadium sign sponsorship. The downward trend in Figure 1 (below; note: each figure is based on a respective table in the appendix) demonstrates the decreasing price our selected clubs (Albuquerque Isotopes, Omaha Royals, Syracuse Chiefs and Colorado Springs Sky Sox) charge per square foot of signage dependant on how many impressions those signs receive. Through this aggregate study, we can estimate an average value of one thousand impressions in relation to the value of the sign. Figure 1 Assuming that a sign of a given size draws a specific price per ft² per thousand impressions that it coordinates to on this graph (for a value x, there is a y), we can estimate the value of a sign dependent on its size, location relative to clutter and the number of impressions it receives. The return value is an approximation for the value of a sign based on the pricing structure of the four teams‟ prices we analyzed. As indicated by Figure 2, the value of the sign increases exponentially as the number of impressions increases. Business Research Division │ Leeds School of Business │University of Colorado at Boulder 5
  • 6. Figure 2 These assumptions are based on our research of the benefits of a good sign location at a venue, the effect of clutter on the effectiveness of a sign and previously enstated pricing structures. Essentially, a smaller sign will receive less impressions, a sign in a cluttered area will receive less impressions and vice-versa. Applying these numbers to each team, specifically the Sky Sox, the organization is able to have concrete numbers to justify a pricing scale. Tables 3-8 provide an estimation for the value for each sign based on the assumptions made above. Initial $/ft²/K impressions are based on original pricing; actual $/ft²/K impressions are based on aggregate graph.  Assumptions & Equations o Base impressions (total number of people viewing a sign) = (size of sign/size of average sign) x (attendance) o Clutter/location multiplier (based on clutter analysis): 1 = cluttered; 2 = medium clutter; 3 = low clutter, good location o Total impressions = base impressions x clutter/location multiplier o Value (potential return on investment) = (price/ft²/K impressions) x (ft²) x (base impressions/1000) Business Research Division │ Leeds School of Business │University of Colorado at Boulder 6
  • 7. o Estimated price per thousand impressions: based How we derived a formula for determining value: on aggregate graph of square footage vs. $/ft²/K  Discover a base value for impressions price/K impressions dependant on ft² (based on In our initial research, our assumptions led us to believe graphs). that every sign had a value greater than its price, yet this is not  Multiply this value by the square footage of the given the case. Some values, as indicated in Table 8, are actually less sign. than the price that is charged. This could be attributed to the  Then multiply by estimated impressions of that sign and value placed on a sponsor‟s relationship with the team, the divide by 1,000 (need to keep units straight, we’re working quality of the advertisement, or exclusivity rights we have not in thousands of impressions). accounted for. The fact remains, however, that sponsors must  Units are key: see a return on investment in order to advertise with these teams, o $/ft²/K imp * ft² = $/K imp so the value of a given sign must be greater than the price being o $/K imp * imp/1000 charged. = $ (value) Possibilities as to why signs are overpriced:  Competitive sponsorship market  Exclusivity  Perks  Lack of sponsor‟s knowledge As indicated by the team sign valuations in Tables 3-6, some teams that have overpriced their signs did not account for the size of their sign at such a considerable distance. A sign at a distance of at least 400ft (since spectators at a minor league baseball game are concentrated around the infield) must be an adequate size for the majority of people to read it. Therefore, a smaller sign (i.e.: 50ft²) as opposed to a 250ft² sign in the outfield isn‟t going to draw enough impressions to make up for its price, if priced too high. Business Research Division │ Leeds School of Business │University of Colorado at Boulder 7
  • 8. Comparative Analysis With a population of over 300,000, Colorado Springs offers a medium-sized market. Sport and entertainment events at the Air Force Academy, Cheyenne Mountain Zoo, and the Colorado Springs Sky Sox offer several forms of entertainment for people to enjoy. In order to better understand how the Sky Sox could value advertisements, comparative analysis of the Sky Sox‟s major competitors is believed to be beneficial to our research. Also, an international comparison to the South Australian National Football League, which plays its matches at AAMI Stadium in Adelaide, Australia, was taken into account to demonstrate the difficulty almost every sporting venue faces when valuing signage. Air Force Academy CBS Collegiate Sports Properties in partnership with Falcon Sports Marketing holds exclusive marketing and multimedia rights to Air Force Athletics, most notably Air Force’s Division I football program. Falcon Stadium, the home of Air Force football, boasts a capacity of roughly 52,000 and draws an average of 37,000 fans per game. On a yearly basis, Falcon Stadium hosts approximately 275,000 people. With similar annual average attendance as the Sky Sox, the Air Force Academy serves as a suitable comparison when analyzing the value of stadium signage and event nights. Falcon Sports Marketing uses a rate card as a reference when valuing stadium signage, but typically the size of the sign, location, and the relationship with the sponsor will cause rate card prices to fluctuate. Therefore, Falcon Sports Marketing does not use a standardized price for any of its inventory; rather prices fluctuate according to the characteristics described above. Business Research Division │ Leeds School of Business │University of Colorado at Boulder 8
  • 9. Garrick Dorn, CBS Collegiate Sports Properties West Region Sales Manager, approximated that value to be $0.10 per impression. Though this offers insight to the value of an advertisement, it is merely an estimate. Additionally, the number of impressions per person is unknown through the duration of an event. Depending on location, the average spectator at a sporting event such as baseball or football (similar duration) will see the advertisement anywhere from ten to thirty times during a game, as approximated by Dorn. Cheyenne Mountain Zoo One of the main competitors for the Sky Sox organization within Colorado Springs is the Cheyenne Mountain Zoo. With an average attendance of over 500,000 people annually, the Cheyenne Mountain Zoo is a lucrative site for sponsors to pursue. That is why it is important for the Sky Sox to be able to provide competitive sponsorship packages while still being able to make money. While interviewing Jeanne Gordon from the Press Box of Cheyenne Mountain Zoo, we were able to retrieve some interesting information. The main obstacle for the zoo to gain sponsorships is convincing the sponsors to avoid in-house advertising campaigns and gain competitive advantage by partnering with the zoo. The zoo pushes their sponsorship packages by explaining that there is a lot of added value for a company to partner with an organization that is heavily involved with the community. Their community outreach campaigns, although non- profit, allow the zoo to push their sponsorship packages for a premium and form positive long- term relationships with their partners. If the Sky Sox became more heavily involved in community outreach, then the organization would be able to sell their signage for higher prices as well as form stronger relationships with their partners. This in turn would increase the return on investment for the investor and increase the retention of sponsorship partners. Business Research Division │ Leeds School of Business │University of Colorado at Boulder 9
  • 10. South Australian National Football League (SANFL): AAMI Stadium AAMI Stadium is the home to the South Australian National Football League. Its capacity reaches just over 51,000 and hosts nearly 1 million guests annually through sporting events as well as other entertainment such as concerts. According to Mark Lukowicz, Corporate Partnerships Manager of South Australian National Football League Inc., there is no set in stone equation used to measure the value of a sign. The reality is that prices are adjusted to allow for several factors with the biggest emphasis being on exposure or positioning, followed by the size of the sign, length of supplier relations and demographics. When asked about the quality of the advertisement, he perceived it as a non- issue stating that a poorly designed sign reflects negatively on the organization as well as the sponsor. Theories and Variables Used In Valuing Non-traditional Media The basic idea of valuing signage is simple as you take the size, location, and comparison of signs relative to similar clubs in the industry. This can only provide organizations with a minor justification for their pricing and it is easier for the advertiser to lower its payment. According to Jon Carlson, Manager of Business Development for the Denver Broncos, the bottom line is that the value of a sign is only what people are willing to spend on it. If you can provide more facts to further justify that the value of your sign is greater than what the sponsor is offering they will be willing to pay more.  Valuing Signage o Size of sign o Isolated vs. clutter o Monetization of signage on TV  = Duration x spot rate x quality impact score Business Research Division │ Leeds School of Business │University of Colorado at Boulder 10
  • 11. Other methods attempting to measure the value of signage more precisely include determining the number of detections certain signs receive. This is done by monitoring the audience with manpower or, taking a more radical approach, utilizing recent technological advances. Various companies now track audience detections through RFID (radio-frequency identification) tags on tickets, video monitoring and laser monitoring systems. These systems claim to track where people are directing their attention, how long they are looking there, and whether or not the person is fully engaged with the sign. Although the effectiveness of these technologies is not completely proven, some stadiums within the sporting industry are beginning to implement them as they could provide more concrete support when justifying signage value.  Determining Number of Detections o Proprietary audience measurement  Video audience measurement  Size of walk-by/opportunity for audience to see sign  Number of impressions generated by display  % of walk-by traffic that engaged with sign  Quality of engagement o Time (lingering, glance) o Demographic make-up of audience  Age markers  Gender markers  Ethnicity markers  Content reaction  Valuing Detections o Duration of detection o Number of detections o Quality of detection  Duration of detection  Type of detection  Full-attention  Glance  Engagements within an event night o Tracking members of audience  How do they interact with the display during event  RFID tags in tickets  Concession sales  Laser impression tracking Business Research Division │ Leeds School of Business │University of Colorado at Boulder 11
  • 12. Through our research we have found that when pricing a sponsor‟s sign there is an abundance of ways to sell signage for a higher value. Jon Carlson of the Broncos expressed the importance of supply and demand. As the number of signs increases, sponsors have more leverage in lowering the price below the club‟s desired price, potentially claiming clutter and the lack of exclusivity deteriorate their return on investment. So increasing the size of the signs overall decreases the overall amount of signs, it then becomes easier to justify a higher price. However, there is a break-even point. Sponsors of minor league baseball teams are only willing to pay so much for signage. Therefore, as the number of signs decreases, a price ceiling will be created, stunting the profitability of increasing the size of signs. Additionally, if the sponsor has a similar target market as the organization they will be more willing to pay an increased price for certain signage.  Pricing Signage o The price of signage is very subjective o It involves comparative analysis with other industry organizations o It involves measuring impressions and also the increase in sales by the sponsor itself o Monitoring ROI is crucial o In the end its about selling the signage to the sponsor  You want to get the sponsor to pay as much as they are willing and think is fair  Providing explanation for signage pricing is key The final aspects to take into consideration are increasing attendance and the state of the economy. The Sky Sox have not re-valued their signage in a relatively long-time while their attendance has steadily increased throughout the years. Therefore, there is an obvious need to increase the value of signage. Also, it is important to consider the state of the economy. As Jon Carlson expressed, “It is important to evaluate what is fair, without bastardizing your product by „giving it away‟.” Business Research Division │ Leeds School of Business │University of Colorado at Boulder 12
  • 13. Clutter Analysis Advertising clutter poses a major problem for sponsors. As the number of signs increases in a particular area, so do consumer‟s ad avoiding behaviors. Clutter is defined as “perceived excess of advertising messages within a medium” (Elliott and Speck 1998). Clutter has been found to reduce attention, processing and memory of advertisements. The effect can be explained in terms of information overload; due to limited cognitive resources consumers cannot attend to all the information exposed to them (Nan and Faber 2004). Even if consumers do attend to an ad and remember the message, clutter makes it difficult for consumers to associate the message to the right brand (Pham and Johar 1997; Dahlen and Rosengren 2005). The effects of clutter are stronger when consumers are not necessarily involved and when the advertised brand is unfamiliar (Burke and Srull 1988; Kellar 1991; Kent and Allen 1994; Laroche 2006). On one hand clutter can potentially bring in extra advertising revenue, while on the other hand, it can reduce the effectiveness of the sign. By reducing clutter and increasing the size of signage at Security Service Field, return on investment for sponsorship partners will increase by providing exclusivity, which leads to increased brand awareness and overall advertising effectiveness. Suggestions Sky Sox Outfield Sign Adjustment The overall goal for any business is to increase revenue. If this is so, then the Sky Sox must look into how they may go forward and possibly change signage size and price based on our analysis. The Sky Sox may choose to eliminate a number of signs, and replace them with larger, more clutter free signs; specifically concerning the 128ft² outfield signs. Table 9 shows Business Research Division │ Leeds School of Business │University of Colorado at Boulder 13
  • 14. how an increase in the size of the sign will eventually lead to an increase in revenue, assuming that the team will price the sign at 75% of the sign‟s value. Table 9: Potential Revenue Adjustment size (ft²) Base impressions Clutter/LocationImp Total rating Price Value Actual $/ft²/K impressions impressions Initial $/ft²/K Est. total # Revenue 128 256,000 1 256,000 $5,250 $0.28 $0.16 $9,175 40 $210,000 150 300,000 1 300,000 $4,050 $0.12 $0.09 $5,400 34 $137,700 180 360,000 1.5 540,000 $8,019 $0.11 $0.12 $10,692 28 $224,532 200 400,000 2 800,000 $12,000 $0.10 $0.15 $16,000 25 $300,000 225 450,000 2 900,000 $13,669 $0.09 $0.14 $18,225 21 $287,044 256 512,000 2 1,024,000 $17,695 $0.09 $0.14 $23,593 20 $353,894 Note that revenue initially dips. This is due to the fact that the team is merely removing signs, and not providing enough benefits in terms of lack of clutter. Another important point is that at an initial estimation of 40 total signs sized 128ft², the total area is set at 5,120ft². There are only so many sign combinations that can fit within an outfield wall configuration. Therefore, it is reasonable to double the initial size of 128ft² to 256ft² in order to ensure that all the signs will fit within the outfield wall configuration. Reviewing Table 3, one may notice that the price and values for the 256ft² sign are deflated. With this proposal, the decrease in total signage will decrease clutter for this size of sign and increase value. The final point in this case indicates a revenue increase of $143,894. One flaw in changing the Sky Sox‟s sign structure overnight is alienating previous sponsors that will no longer be able to fit within the Sky Sox‟s outfield sign inventory. A solution to this problem would be to only eliminate 50% of the original 128ft² signs, and replace them with 256ft² signs. While the price charged in this case would be less (due to remaining clutter), a revenue increase would still occur, as indicated by Table 10. Note that the revenue and estimated total number of signs are halved due to the assumption that we are working with 50% of the current inventory. Business Research Division │ Leeds School of Business │University of Colorado at Boulder 14
  • 15. Table 10: Potential Revenue Adjustment @ 50% size (ft²) Base impressions Clutter/LocationImp Total rating Price Value Actual $/ft²/K impressions impressions Initial $/ft²/K Est. total # Revenue 128 256,000 1 256,000 $5,250 $0.28 $0.16 $9,175 20 $105,000 150 300,000 1 300,000 $4,050 $0.12 $0.09 $5,400 17 $68,850 180 360,000 1.5 540,000 $8,019 $0.11 $0.12 $10,692 14 $112,266 200 400,000 1.5 600,000 $9,000 $0.10 $0.11 $12,000 12 $108,000 225 450,000 1.5 675,000 $10,252 $0.09 $0.10 $13,669 11 $112,767 256 512,000 1.5 768,000 $13,271 $0.09 $0.10 $17,695 10 $132,710 Additionally, sponsors that can no longer advertise in the outfield have several other methods of advertising in Security Service Field such as concourse signs and advertisements located near concessions. Concourse Signage Considering the current configuration of the concourse signs, our team noticed they are relatively small compared to the amount of space available. Also, there is no obvious reason to look up at the concourse signs. Therefore we suggest that the size of the concourse signs be increased, which will allow the Sky Sox to better justify the pricing of their partnership packages. Next, in order to better draw the eyes of the venue‟s attendees to the concourse signs we suggest that the concourse section number signs be placed parallel with the concourse signage. This will not only allow for guests to more easily find their section but will also draw their eyes to the concourse advertisements. This would allow the Sky Sox to have another justification for their pricing as well as increase return on investments for their partners. We believe if the concourse signage is reconfigured it will benefit both the Sky Sox and associated sponsors. Business Research Division │ Leeds School of Business │University of Colorado at Boulder 15
  • 16. Standardization of Signage While attending a Sky Sox game our team noticed some signs with poorly designed advertisements. According to Mark Lukowicz of the SANFL, poorly designed signage deteriorates the return on investment for the sponsor simultaneously reflecting poorly on Security Service Field and the Sky Sox organization. Our team suggests that the Sky Sox standardize the criteria for their signage. For example, there could be a limited number of characters allowed on each sign making the advertisement more readable for the spectators. This will not only increase the return on investment for sponsorship partners but will enhance the aesthetic viability of Security Service Field. Suggestions for the Future As previously mentioned, the Sky Sox could employ technologies designed by companies like Micro Target Media to better track impressions within the stadium. Micro Target Media uses video and laser monitoring to track people‟s eyes, how long they are looking in that direction, and how focused they are on signage. This allows for the exact measurement of impressions on certain signage, which provides concrete justification for the pricing of signage. Conclusion Ultimately, when considering the value of non-traditional media there are many aspects that must be taken into account. Clearly, a comparative analysis of other organizations within the industry is necessary as well as a review of competition within Colorado Springs. After performing the comparative analysis it is indubitable that the Sky Sox can make changes to their signage and pricing structure, which will positively influence the bottom line. Additionally, there are many theories that play into selling signage and sponsorships that all can affect the final Business Research Division │ Leeds School of Business │University of Colorado at Boulder 16
  • 17. price and the value of the partnership. Conclusively, valuing non-traditional media is a complex process that has an imminent affect on an organizations profit margin. Appendix Table 1: ft² vs. $/ft²/K impressions Table 2: Total Impressions vs. Value size (ft²) $/ft²/K impressions 50 $1.04 Total Imp Value 76 $0.26 256,000 $9,175 80 $0.60 371,000 $13,297 120 $0.69 397,227 $13,585 128 $0.16 400,000 $10,600 128 $0.17 418,133 $13,380 130 $0.23 418,133 $8,028 135 $0.09 440,000 $9,680 144 $0.08 712,320 $12,309 160 $0.16 720,000 $27,648 168 $0.11 768,000 $17,695 200 $0.02 831,040 $16,754 210 $0.08 1,040,000 $28,392 220 $0.06 1,108,053 $17,374 224 $0.05 1,568,000 $28,224 256 $0.08 1,620,000 $39,366 2,520,000 $37,044 Table 3: Colorado Springs Sky Sox Location size (ft²) Base impressions Total Imp Clutter/Location rating Price Actual $/ft²/K impressions Value Initial $/ft²/K impressions Difference Scoreboard 120 240,000 3 720,000 $20,000 $0.32 $0.69 $27,648 $7,648 Outfield wall 128 256,000 1 256,000 $5,250 $0.28 $0.16 $9,175 $3,925 Scoreboard video ribbon 20 440,000 2 1 440,000 $6,000 $0.10 $0.06 $9,680 $3,680 Outfield wall 256 512,000 1.5 768,000 $10,500 $0.09 $0.08 $17,695 $7,195 Table 4: Omaha Royals Location size (ft²) Base impressions Total Imp Clutter/Location rating Price Actual $/ft²/K impressions Value Initial $/ft²/K impressions Difference Outfield fence 128 371,000 1 371,000 $8,200 $0.28 $0.17 $13,297 $5,097 Scoreboard 144 356,160 2 712,320 $8,200 $0.12 $0.08 $12,309 $4,109 Scoreboard 168 415,520 2 831,040 $14,700 $0.12 $0.11 $16,754 $2,054 Outfield fence 224 554,027 2 1,108,053 $13,500 $0.07 $0.05 $17,374 $3,874 Business Research Division │ Leeds School of Business │University of Colorado at Boulder 17
  • 18. Table 5: Albuquerque Isotopes Location size (ft²) Base impressions Clutter/Location rating Total Imp Price Value Actual $/ft²/K impressions impressions Initial $/ft²/K Difference Scoreboard 50 200,000 2 400,000 $20,800 $0.53 $1.04 $10,600 -$10,200 Scoreboard 130 520,000 2 1,040,000 $30,800 $0.21 $0.23 $28,392 -$2,408 Scoreboard 135 540,000 3 1,620,000 $20,000 $0.18 $0.09 $39,366 $19,366 Scoreboard 210 840,000 3 2,520,000 $40,800 $0.07 $0.08 $37,044 -$3,756 Table 6: Syracuse Chiefs Location size (ft²) Base impressions Total Imp Clutter/Location rating Price Value Actual $/ft²/K impressions impressions Initial $/ft²/K Difference Scoreboard 76 198,613 2 397,227 $8,000 $0.45 $0.26 $13,585 $5,585 Scoreboard 80 209,067 2 418,133 $20,000 $0.40 $0.60 $13,380 -$6,620 8x20 Outfield wall 160 418,133 1 418,133 $11,000 $0.12 $0.16 $8,028 -$2,972 200 522,667 Rotating (3) scoreboard 3 1,568,000 $7,000 $0.09 $0.02 $28,224 $21,224 Table 7: Aggregate based on ft² size (ft²) Base impressions Clutter/Location ratingTotal Imp Price Value Actual $/ft²/K impressions impressions Initial $/ft²/K 50 200,000 2 $400,000 $20,800 $0.53 $1.04 $10,600 76 198,613 2 $397,227 $8,000 $0.45 $0.26 $13,585 80 209,067 2 $418,133 $20,000 $0.40 $0.60 $13,380 120 240,000 3 $720,000 $20,000 $0.32 $0.69 $27,648 128 256,000 1 $256,000 $5,250 $0.28 $0.16 $9,175 128 371,000 1 $371,000 $8,200 $0.28 $0.17 $13,297 130 520,000 2 $1,040,000 $30,800 $0.21 $0.23 $28,392 135 540,000 3 $1,620,000 $20,000 $0.18 $0.09 $39,366 144 356,160 2 $712,320 $8,200 $0.12 $0.08 $12,309 160 418,133 1 $418,133 $11,000 $0.12 $0.16 $8,028 168 415,520 2 $831,040 $14,700 $0.12 $0.11 $16,754 200 522,667 3 $1,568,000 $7,000 $0.09 $0.02 $28,224 210 840,000 3 $2,520,000 $40,800 $0.07 $0.08 $37,044 220 440,000 1 $440,000 $6,000 $0.10 $0.06 $9,680 224 554,027 2 $1,108,053 $13,500 $0.07 $0.05 $17,374 256 512,000 1.5 $768,000 $10,500 $0.09 $0.08 $17,695 Business Research Division │ Leeds School of Business │University of Colorado at Boulder 18
  • 19. Table 8: Aggregate based on total impressions size (ft²) Base impressions Clutter/Location rating Total Imp Price Value Actual $/ft²/K impressions impressions Initial $/ft²/K Difference 128 256,000 1 256,000 $5,250 $0.28 $0.16 $9,175 $3,925 128 371,000 1 371,000 $8,200 $0.28 $0.17 $13,297 $5,097 76 198,613 2 397,227 $8,000 $0.45 $0.26 $13,585 $5,585 50 200,000 2 400,000 $20,800 $0.53 $1.04 $10,600 -$10,200 80 209,067 2 418,133 $20,000 $0.40 $0.60 $13,380 -$6,620 160 418,133 1 418,133 $11,000 $0.12 $0.16 $8,028 -$2,972 220 440,000 1 440,000 $6,000 $0.10 $0.06 $9,680 $3,680 144 356,160 2 712,320 $8,200 $0.12 $0.08 $12,309 $4,109 120 240,000 3 720,000 $20,000 $0.32 $0.69 $27,648 $7,648 256 512,000 1.5 768,000 $10,500 $0.09 $0.08 $17,695 $7,195 168 415,520 2 831,040 $14,700 $0.12 $0.11 $16,754 $2,054 130 520,000 2 1,040,000 $30,800 $0.21 $0.23 $28,392 -$2,408 224 554,027 2 1,108,053 $13,500 $0.07 $0.05 $17,374 $3,874 200 522,667 3 1,568,000 $7,000 $0.09 $0.02 $28,224 $21,224 135 540,000 3 1,620,000 $20,000 $0.18 $0.09 $39,366 $19,366 210 840,000 3 2,520,000 $40,800 $0.07 $0.08 $37,044 -$3,756 References Mike Baron, Vice President of Business Development and Sales for Image Impact Jon Carlson, Manager of Business Development for the Denver Broncos Garrick Dorn, CBS Collegiate Sports Properties West Regional Sales Manager Megan Eisenhard, General Manger Buffalo Sports Properties Jeanne Gordon, Press Box of Cheyenne Mountain Zoo Chuck Griswold, Sponsorship Account Executive Altoona Curve Brian Gurnee, President of California Outdoor Advertising Inc. Mark Lukowicz, Corporate Partnerships Manager SA National Football League Dave Madsen, Associate General Manager Buffalo Sports Properties Roger Payne, Research, Valuation, Sponsorship ROI for Navigate Marketing Robert Wickstrom, Associate California Outdoor Advertising Inc. Business Research Division │ Leeds School of Business │University of Colorado at Boulder 19
  • 20. Bibliography Elliott, Michael T. Speck, Paul S. “Consumer Perceptions of Advertising Clutter and Its Impact across Various Media.” Journal of Advertising Research. (January-February 1998) : 29- 41. Print Rosengren, Sara. “Publicity vs. Advertising in a Cluttered Environment: Effects on Attention and Brand Identification.” Journals of Current Issues and Research in Advertising. Volume 30, 2. (Fall 2008) : 27-35. Print. Business Research Division │ Leeds School of Business │University of Colorado at Boulder 20