[ Fall/Winter 2007 ]

Defining and Maximizing the Power of Experiential Marketing: A Conversation with rEvolution's John Rowady

John Rowady is president and founder of rEvolution, a pioneering consultancy specializing in sports media and marketing. His commitment to building brand equity and forging stronger relationships between rights holders and marketers led him to build rEvolution from the ground up in 2001. Rowady's belief in the power of experiential marketing was firmly established during his tenure as managing director of ISL Worldwide, a $5 billion European sports marketing firm. Earlier in his career, Rowady honed his sales and sponsorship skills as vice president of sales for Fox Sports Net.

rEvolution's roster of clients includes such powerhouse brands as Target, Subway, Motorola, ESPN, Polaris, Aetna, Nissan and Suzuki Automobiles. Recently Knowledge Networks and rEvolution formed a strategic alliance, with rEvolution utilizing KN's unique, proprietary model for tying sponsorship effects directly to product sales. A*I/R recently had a chance to talk to Rowady about his deep experience in sports marketing, and how tomorrow's sponsorships will dramatically reinvent the sponsorship game.

What were the marketplace needs you saw when you decided to launch rEvolution?

I was on a plane to New York on September 11th – that was a powerful moment for me, and the concept of rEvolution was born later that year. The cost of sports marketing was on the rise, and I saw the need for a very high-end outsourcing group that marketing departments for major companies could hire. We would provide on-demand sports marketing expertise – not only in strategy, but also in activation and the all-important research and measurement function.

That was about when the concept of ROI was gaining such currency – I assume you saw that as part of your role.

More pressure was definitely being put on marketing departments inside major companies to justify the dollars they were spending in sports. We wanted to be ahead of that curve – to change the sports marketing landscape, put it in a better place. Clients weren't utilizing data to understand why they were spending, or how to make their spending more conducive to growing their business. We added research and intelligence into the equation, in terms of how we approached our clients' "big ideas," to help them build strategy. Our organization is about utilizing the best business intelligence and research before we approach a client's sports marketing objectives.

How have you seen sponsorship measurement change in the past five or ten years?

Through the 1970s and '80s, and even into the '90s, above-the-line agencies – those focused on creative and planning, often for TV – had a stranglehold on marketing budgets. So all the measurement models were based on television analytics, such as viewer impressions. But sports environments created what we call today "experiential marketing;" and we found through qualitative research that we could learn about the behavior of passionate fans; and that changed the way that marketers wanted to look at this information.

In the mid-90s, the catalyst that really pushed things further was "Version 1" of the Internet boom; traditional media companies started to get concerned about what that would do to their television business. Now we approach television as an activation component of sponsorship marketing. The television folks don't want to hear that, but it's a fact. TV is part of a bigger platform, so having TV metrics ported into a dashboard of information so that you can measure them against your objectives is very important.

Thanks to our alliance with Knowledge Networks, we're able to study fan or buyer behavior and correlate it with actual changes in sales – way beyond the old CPM models.

Talk a little more about the ability to connect sports marketing efforts directly to sales; that is such an important component.

Inside the corporate community, the sales and marketing organizations had always battled for the relevancy. As consolidation occurred globally and competition became fierce, these two opposing groups had to become bedfellows, and sales started to see that marketing needs to be their competitive differentiator. So marketers said, "We need to have models that answer the question of why we're spending money in sports or entertainment, with analytics that tell us how much we're actually selling with these things." If you go into a boardroom with that type of information, you can't be fired. Chairmen and CEOs love walking into their shareholder meetings with proprietary analytics that show their NASCAR sponsorship is helping to sell X cases of a particular product.

That's one reason we designed rEvolution to be client-centered but property neutral. When marketer dollars dried up in 2001, I watched this industry shift drastically and very quickly, which tells me that marketers are the influencers, the ones who have the ability to drive sports marketing to new heights. rEvolution is designed to help them innovate in this space.

And within that context, what is the fit between rEvolution and Knowledge Networks?

At rEvolution, we're able to leverage business intelligence and competently sit in a room with a marketer to understand their business and their objectives. We're able to turn that into a business-building strategy.

Knowledge Networks delivers understanding of the market forces, the consumer and fan trends. Without the leading-edge information from Knowledge Networks, which is plugged into our ability to consult at a much higher level, we would be losing a competitive advantage over other top-tier consulting groups out there.

How do you see the actual approach to sponsorship changing among clients, in terms of activities and goals?

I think that companies are now looking at sponsorship as a marketing platform, and they're saving their dollars to put towards the activation of that platform. Marketers used to do an official deal with the NFL, for example, and that would be the end of it; but they've found through research that sponsorship alone does not drive brand retention from a consumer perspective.
That's one of the things that we do, that we help them with – through the right strategy, the right way of buying and negotiating sponsorships, with the right activation plan.

Can you describe for me what an unactivated plan is versus an activated one?

If you've bought a primary sponsorship in a top NASCAR team, usually that comes with certain rights or benefits – your logo is on the cars and the driver; you get certain hospitality benefits. But what do you do with those rights? You can do PR, consumer events, employee events. What kind of advertising do you do to integrate the messaging that comes off of this? How do you use the driver as a spokesperson? All of that takes an additional team to be able to draw out the value of the rights that you've just bought.

Some companies are business-to-business – they don't need consumer promotion and a lot of advertising. They'll have their sales force drive customer business through hospitality programs or meet-and-greets with the driver. With a consumer-based group, it gets more dynamic; they'll run sweepstakes, creative on television; and they may also be doing business-to-business, as well.
All those types of programs are what we would consider the activation budget; one-to-one spend from rights to activation is not enough. We're encouraging clients to push for a two-to-one or three-to-one spend for activation versus the actual cost of the sponsorship.

How much of your work with clients is around the process of setting objectives?

It's moving into a majority of our work, and that's a good place for us to be. In the past, companies have bought and then asked, "Okay, what happened?" And this is one of the areas where we've really come together as an alliance with Knowledge Networks – through the idea of bringing research to the planning and objective stage, before they buy. When you back into objectives, you're really missing the ability to optimize, and that's one of the ways that we want to change the industry. The few major clients who understand that process are in a much better position before they even go into the activation of those sponsorships – and before they spend their dollars

Does a client ever turn to you and say, "Why should I believe this data?"

All the time.

And how do you answer that question?

We point out our expertise, and our roster of clients. There are a lot of consultants out there telling clients that they have the latest and greatest ROI model; it a huge challenge to fight through that clutter. This is another area where Knowledge Networks, with its credibility and the representative panel, helps us show that we're different. We tell them we have a proprietary model, that we use it for "X" number of clients, and that our expertise in these areas means you need to listen to us if you strive for better performance. And we get a great response.

What do you think a typical sponsorship of ten years from now will look like? How will it be different from what people do today?

Sponsors are going to want a lot less clutter from a lot less organizations. They're going to want more exclusivity, and they're going to want more rights to take the platform offsite. We're seeing that in NASCAR right now – they've carved out so many categories, there are so many organizations playing, and the cost is rising. For marketers to stay in and pay those prices, they want more of an exclusive landscape in which they can build and create their own customized marketing programs.

The sports marketing environment is not enough any longer. We need to take the experiential benefits to the next level and make these programs about the company. Currently they're more about the rights holder than the official partner, and those roles are going to have to switch for the dollars to continue to rise. Eventually clients will want to move into an environment that's completely custom, something that they own without being hooked into the rights fees.

So it's really about experiencing brands.

It is. Sports is one of those unique languages that brings brand communication – the openness to brand awareness – to its very highest level. Our clients are saying, "Make this about our business, about building our business, and then show us that we're actually selling products." So the experiential concept is being applied to brands at the most elemental and important level for marketers.