Editor’s note: The Focus on Research column highlights different research projects and topics being explored at Penn State. Each column will feature the work of a different researcher from across all disciplines.
Everyone knows that the March Madness “Big Dance” equals big hype; but for sports marketers, this yearly NCAA basketball tournament equals big opportunity. For the sport’s most loyal fans, watching the 40 minutes of play on the court is just a small portion of their interest and need for interaction with their favorite team — and that team’s brand. Conversely, the sports industry — like any business — depends principally on these heavily involved consumers, in this case, the fans.
$500 billion spent by sports fans last year in the U.S.
It is crystal clear that the most important aspect to the sporting industry is the fans that buy tickets to attend the games, purchase merchandise and memorabilia from their favorite teams, and consume media to passionately follow their favorite team or sport. In 2015, this pulled in approximately $500 billion in the U.S. and $1.5 trillion for sports industries worldwide, according to Plunkett Research Ltd.
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The most passionate fans
Imagine one of the most passionate sports fans you know — maybe your dad who hasn’t missed a Pens game in five years or your best friend who just can’t get enough of the Phillies. They seem to have a strong emotional connection to the game or team that goes beyond the normal interested fan. Your dad can passionately recall the score of a close game from 10 years ago, and your friend becomes emotionally upset when her team loses.
We were the first to formally define and research the idea of “fan avidity” in 2009 at the Center for Sports Business & Research in the Smeal College of Business. Fan avidity is the level of interest, involvement, passion and loyalty a fan exhibits to a particular sports entity (i.e., sport, league, team and/or athlete). Depending on the sport, it has been estimated that such fans may comprise as much as 35 percent of all sports fans. From a marketing perspective, these “avid fans” are dream customers who are typically eager consumers of all things associated with the sport, team and/or specific athlete(s).
And while they may be rooting for opposite ends of the state, the two fans described above probably have a few things in common, according to Kevin Dixon, of Teesside University in the United Kingdom. Avid fans typically display three common themes: acquiring knowledge or passions from peers or family members; conducting purchasing behavior (purchase merchandize, tickets, etc.) to strengthen identity and feelings of belonging; and integrating fandom into daily routines by involving their favorite sport team in almost every aspect of their lives.
Taking it a step further, our research at the CSBR has found there are many different behaviors that lead to becoming an avid fan, including revenue generating expenditures such as purchasing team merchandise; enhancement of social experiences such as attending games in person with friends; commitment of time and involvement such as watching the March Madness basketball games on TV, etc.; or some combination of various types of these activities. These pathways to fan avidity were discovered by the CSBR via the development of quantitative spatial models of the different activities actual college football fans exhibited in following their favorite team during a recent season.
The CSBR is extending its research into exploring the variety of associations between fan avidity and these activities while simultaneously deriving market segments of such fans for marketing purposes. The goal is to identify which fans to target with a specific marketing campaign to as to maximize potential profitability.
Money from the madness
College basketball fans are among sports’ most avid fans in the United States, and with Punxsutawney Phil claiming that spring is on the way, such fans now turn their attention toward March Madness.
The NCAA Men’s Division I Basketball Tournament began in 1939 and featured eight teams, gradually increasing to 64 in 1985.
Since 2011, the field has consisted of 68 teams — 32 conference winners and 36 at-large berths into four regions to determine the national champions. Sunday is “Selection Sunday,” when the teams are chosen, then seeded and placed into the championship brackets for the single-elimination tournament.
With so many games and so much fan interest, the Big Dance involves big money. The NCAA’s 14-year agreement with CBS and Turner Broadcasting Systems Inc. runs through 2024 to the tune of more than $10.7 billion for all TV, Internet and wireless rights.
Kantar Media indicates that March Madness advertisers spent more than $7.5 billion in TV advertising from 2005-2014. The highest viewership in 22 years occurred in 2015 where TV ad revenue was $1.07 billion, according to CNN Money. Only the NFL playoffs can compete with such revenue figures.
And while hoops fans were entertained last year by the championship game with Duke defeating Wisconsin 68-63, battles had also ensued on the court of branding. 4C Insights analyzed 2015 March Madness television advertisers during the entire NCAA tournament, focusing on which companies received the biggest brand lifts through social media engagement (mostly Twitter retweets and favorites, and Facebook likes, video views and shares). Their Final Four winning advertisers were Nationwide, Target, AT&T and Samsung.
With the average basketball game in March Madness lasting about two hours in total broadcast time and the high viewership ratings, it is a perfect venue for marketers to reach their designated target market segments of avid fans/consumers to make their media expenditures as efficient as possible.
In any event, this year promises to be another boom for sports marketers involved with the 2016 March Madness. Hey, President Obama, have you formed your brackets yet?
Wayne S. DeSarbo is Smeal Chair Distinguished Professor of Marketing and executive director of The Center for Sports Business & Research (CSBR) in the Smeal College of Business at Penn State. Chris McKeon is a research associate with the CSBR.