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In an effort to build name recognition among agents and consumers, three insurance industry companies have bought the right to name major league sports facilities.
In Washington, Seattle-based SAFECO Corp. has announced a deal in which it will have the naming rights for 20 years for a new stadium. The 45,600-seat stadium will be the home of baseball's Seattle Mariners beginning in July 1999.
In Indiana, Carmel-based Conseco Inc. has a 20-year agreement for the naming rights to the Indiana Pacers' new field house, scheduled to open for the 1999-2000 National Basketball Assn. season. Conseco will pay $2 million a year out of its advertising budget for what will be known as Conseco Fieldhouse. A re-evaluation of the deal after the first 10 years will adapt this price to market conditions.
In Columbus, Ohio, Nationwide Insurance Enterprise last year announced plans to finance the majority of a stadium for a new National Hockey League team. Sprucing up the downtown area also is part of Nationwide's plan.
The main goal of these naming rights deals is building name recognition, a marketing professional says.
"All companies that have low name awareness and enter into naming rights deals virtually become household names over-night," said Dean Bonham, president of the Bonham Group, a sports and entertainment marketing consulting firm in Denver. "The difference to traditional advertising is that you have very high image association with a sports team that consumers have an emotional attachment to. This attachment is important, if there are so many different" companies competing for customers.
Insurance companies, with their broad array of services and broad demographic bases, are natural candidates for naming rights deals, said Mr. Bonham. He noted that there are "at least $12 billion worth of sports facilities scheduled to be built in North America over the next three to five years and at least 30 new naming rights opportunities," and he said he "wouldn't be the least bit surprised" if more insurance companies name stadiums.
For Conseco, the naming rights agreement is part of a major branding campaign launched last fall, said Jim Rosensteele, senior vp-corporate communications. He helped organize the deal.
"Our research showed that we had no recognition with consumers and low recognition with our own agents," he said. The main reason was that Conseco-owned companies previously worked under their own names and did their own marketing.
"We believed we needed to establish one single brand," said Mr. Rosensteele. Conseco last October launched its branding campaign. The company had thought about trying for the arena naming rights and also got a call from the Pacers about the opportunity, according to Mr. Rosensteele.
He expects that the fieldhouse naming rights, which include signage inside and outside the stadium, "will increase the awareness of the name Conseco faster than any other form of advertising."
In addition to the naming rights, Conseco also plans to air
TV and radio ads. Conseco also is paying for kiosks in the arena that will provide information on Conseco company products. The advertising and kiosks are in addition to the money the company is paying for the naming rights to the Indianapolis arena.
Mr. Rosensteele said, "The nationally televised games will get our name before fans nationwide," in addition to the 18,500 fans that fit into the arena.
Besides current or potential customers, Conseco also wants to reach agents and investors, as well as raise its community profile. "We depend on a lot of local support services, and it is important for us to be an employer of choice," said Mr. Rosensteele.
SAFECO had similar motives when it agreed to pay $1.8 million a year for the Mariners' new "SAFECO Field." SAFECO Chairman Roger Eigsti said in a release that "our advertising, marketing and visibility needs are bigger and more diversified now," after the company's 1997 acquisition of American States Financial Corp.
"We got exposure and agents in parts of the country where we hadn't had them before," said George Johnson, vp-corporate marketing and communications. Based on an assessment of similar deals in other industries, baseball seemed a good vehicle to show support for the new agents, Mr. Johnson said.
The SAFECO release also said the stadium deal will help advance SAFECO's goal of becoming the premier company selling insurance and financial services through independent agents.
The naming rights also come at a reasonable cost. A national branding campaign including media such as television and print could cost $100 million or more, Mr. Johnson said.
Last year, Nationwide announced it would build and name the arena for the NHL's new Columbus Blue Jackets, scheduled to begin play in the year 2000.
With competition growing and branding becoming increasingly important, some insurance marketers expect naming rights deals to proliferate as alternative promotions vehicles.
"We will all spend more time promoting our brands and doing so in various ways," said Steve Johnston, vp-advertising at Nationwide. The company agreed to pay about 90% of the $150 million planning and construction cost for the Blue Jackets' new 18,500-seat "Nationwide Arena," which will be adjacent to the company's headquarters in downtown Columbus, according to Johnston.
But Mr. Johnston said the investment will be worth it. "We will get a fair rate of return from the arena. And it will help us promote our brand on a national and international basis."
For him, he said, it is a chance to "remind people of who we are: a large and stable company. And that's very important in the financial services industry."
But Nationwide officials emphasize that their deal goes beyond name recognition. It is designed to "show our continued commitment to downtown Columbus," said Mr. Johnston. To make the district around its headquarters more appealing for customers and employers, Nationwide will invest an additional undisclosed amount to make downtown more attractive by building what Nationwide calls an "urban village" with a park, stores, office buildings, residential units and entertainment facilities.