Sports Business

Sports Business: How Pokemon Go can help sports teams

Sports Business: How Pokemon Go can help sports teams

The Pokémon Go mobile game was released on Apple (AAPL +0.03%) iOS and Google (GOOGL +0.80%) Android platforms on July 6. Not only did it almost immediately become one of the most popular games of all time, the app passed Twitter (TWTR +0.43%) and Facebook (FB +1.01%) in daily users in less than two weeks. So how did a game that features small colorful monsters that users “catch” by visiting real world locations become so popular so quickly?

Pokémon Go is the latest game to take advantage of Augmented Reality (AR). AR enables users to view data overlaid on the real world. Computer vision and object recognition allow devices to change the user’s perception of the physical reality around them. For Pokémon Go, this means overlaying the interactive game map on the real streets and buildings of reality and allowing users to catch Pokémon using their camera. What makes Pokémon so attractive to users is this intersection of the virtual and real world as created by AR.

This is something that should be embraced by all sports organizations. In particular, sports teams of all sizes are facing issues with having fans come to stadiums for games and live events. While media agreements do drive significant revenue for major professional and collegiate sports organizations, attendance is a multibillion-dollar issue. College football has seen attendance drop for the past five years.

The problem for many sports teams is that viewing the game at home can often be better than coming to a venue. A sports fan can sit on his/her favorite couch, order his/her favorite food, not have to deal with traffic issues, and often have better views of the action from home. Bathrooms are only a room away as well. Because of this dynamic, many sports organizations have already made building connectivity into the fan experience a central part of the solution to this problem. The NFL has spent years bringing Wi-Fi to stadiums so that fans can have the same connectivity in the stadium that they do at their homes.

However, AR can add something unique to this equation. People leave their houses playing Pokémon Go because the only way to catch the monsters is to actually go to the stadium. Developing unique content, rewards, and information that can be only be obtained by coming to a venue provides a new reason for fans to leave their houses during games. Many of these features are already available through third party apps like ESPN or theScore. Integrating these features with stadium specific content and facilitated venue access increases the sense of community that makes attending a game so special and truly augments the reality of the experience.

As the technology develops, sports organizations and their partners will be able to develop new corporate partnership opportunities as well. In addition to statistics and information, these apps will give the franchise a new advertising forum to sell to brands. What makes this so attractive from a sponsorship perspective is that you can have an engaged audience that will follow specific call-to-action campaigns in ways that are organic to the experience. In addition, teams and their partners can track behavior in real-time and send targeted ads to fans that are near the venue, concession stand or store to maximize in-venue purchases. This is already happening with Pokémon Go and McDonald’s exploring a potential partnership that would help drive Pokémon Go players to its restaurants.

The UFC and eSports have demonstrated how sports organization can leverage new technologies to generate revenue in more traditional revenue streams. AR is a great example of how to execute this strategy. Implementing AR to provide the fans and corporate partners unique experiences will enable sports organizations to more effectively monetize the in-venue experience.

Adam Grossman is the president of the sports sponsorship and analytics firm Block Six Analytics. He is also the co-author of "The Sports Strategist: Developing Leaders for a High-Performance Industry." In addition, he is currently an adjunct lecturer at Northwestern University, where he teaches classes on entrepreneurship and quantitative analysis. Grossman also contributes to Forbes. Follow Adam Grossman on Twitter @adamrgrossman.

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Why Cirque du Soleil, NFL experience could come to Chicago

Why Cirque du Soleil, NFL experience could come to Chicago

With the success of the NFL Draft going mobile, the league may eventually decide to take another NFL experience on the road.

The NFL has partnered up with Cirque du Soleil to launch an interactive exhibit in New York City this fall.

The attraction, titled NFL Experience Times Square, will include interactive screens, an auditorium for 4D shows, coaches clinics, autograph sessions and much more.

[BEARS TICKETS: Get your seats right here]

CSN Sports Business Insider Rick Horrow explains why taking the experience on the move could be a good thing for the franchise value of the Bears.

"This is an example of a $25 billion NFL business joint-venturing with another pioneer in the entertainment industry Cirque du Soleil to make it better," Horrow explained. "Here's the case, because the NFL Draft has become mobile with Chicago leading the way, then Philadelphia, the Pro Bowl, the Super Bowl, you can't believe it's not an opportunity for potentially doing this NFL experience along the streets of Madison Avenue, along State Street, as well as Michigan Avenue.

"How about downtown Chicago on the way to other places."

Watch the video above to see what else Horrow had to say about the NFL Experience possibly coming to Chicago.

Sports business: Using targeted promotions to earn more dollars

Sports business: Using targeted promotions to earn more dollars

In Monday's episode of National Public Radio’s (NPR) Fresh Air Joseph Turow, professor of communications and associate dean for graduate studies at the Annenberg School for Communication at the University of Pennsylvania, ominously "Warns That Brick-And-Mortar Stores Are Watching You."

While this may seem a bit like the real-life equivalent of "Big Brother" from George Orwell's book 1984, Turow is describing the reality that the tracking companies do in e-commerce has moved more fully into the offline stores. Using technology including mobile applications, iBeacons, loyalty cards, geo-targeting, and geo-fencing companies have more information about customers in-store buying and behavioral patterns. This enables companies to design targeted adds and promotions specifically tailored to customers that can increase the likelihood of them making a purchase.

While the ethical implications of this activity would require and entirely separate blog post, Turow and host Terry Gross discussed an important idea that comes from having this technology. In the past, companies have focused on rewarding and retaining loyal customers. Those are the customers that keep coming back and buying a company's products or service offerings. Because the cost of keeping a customer has been much lower than attracting a customer it would seem to make sense that companies would want to focus on keeping the customer's they have.

However, this may no longer be the optimal strategy for maximizing revenue growth. Instead, companies should be focused on the marginal customer rather than the most loyal customer. A loyal customer is loyal for a reason – he / she likes the company's service offerings. Why spend money on advertising and promotions if that person is already likely going to buy the product anyway?

Instead, targeted promotions should be focused on customers that will only make a purchase if they are influenced in the right way. For example, let's say a customer is indecisive about buying a pair of jeans. In the past, this customer may have tried a pair of jeans on and then left the store without purchasing them. Now, a customer can download a company's app to access additional content, deals, and other helpful information. In return for delivering these benefits the company can receive information from the app that shows the location of the person while he/she is in a store. It can then use a geo-fence, a virtual fence that surrounds a geographic area, to determine when a customer leaves a specific geographic area. If this customer leaves the store without making purchase after spending a certain amount of time (i.e. the time to try on the jeans) then the company could send a targeted ad saying that the customer has 15 minutes to come back to purchase the jeans at a 15 percent discount. Essentially, companies now can identify "disloyal" customers and then attempt to bring them back to stores to make purchases.

Using technology to reward "disloyal" customers is something that sports organizations need to increasingly focus on given the demands of the business. More specifically, there are loyal fans that are going to buy tickets, watch games, and purchase merchandise even if they do not see any advertising from a team. These customers add significant value and should not be ignored. However, sports organizations want to focus on targeting the marginal customer using new technology to encourage ticket sales, in-venue purchases and increase game viewership.

The added benefit of using technology and customer outreach in this way is that it should increase sponsorship revenue as well. Not only can sports organizations use targeted promotions to help their current sponsors expand reach, but organizations can also show how these targeted marketing efforts cause lifts in purchasing. For sports teams, clearly communicating how sponsorship/marketing assets are used to create a lift in sales provides powerful evidence of how similar tactics can drive new revenue for partners. Rewarding "disloyalty" seems counter-intuitive, but there are many ways that targeting marginal customers should lead to substantial revenue growth.

Adam is the CEO and Founder of Block Six Analytics. He is also a lecturer for Northwestern University's Masters of Sports Administration and the co-author of The Sports Strategist: Developing Leaders For A High-Performance Industry.