The tostitos® fiesta bowl in college football is an example of which type of sponsorship?

Milwaukee-based insurer and financial services company Northwestern Mutual has spent a reported $25 million annually since 2015 to put its name on the bowl game in a deal that ends with this season’s Jan. 1 matchup between Oregon and Wisconsin.

A decision on whether Northwestern Mutual returns as presenting sponsor will be made after that, according to Dan Lobring, vice president of marketing for Chicago-based integrated sports marketing agency Revolution, which is Northwestern Mutual’s sports marketing agency of record that handled its Rose Bowl work.

It’s a regular occurrence that bowl naming rights change every few years, and for decades the result of corporate thirst to be associated with college football’s postseason games has resulted in both headline-grabbing dollars and some goofy names.

In the case of the Rose Bowl, like other games and sponsors, it will come down to whether Northwestern Mutual still feels that it’s getting the return-on-investment metrics it desires from its relationship with the bowl and with ESPN, which handles marketing sales such as naming rights for the Tournament of Roses committee that owns the Rose Bowl game.

Why do these companies – little local outfits to enormous Wall Street behemoths – opt to spend a collective $100 million for the naming rights to bowl games? Experts say the reasons vary: To create or boost brand awareness that leads to increased sales. To create new customers, especially young ones. As a lab to activate new products and services. As a reward for key clients and valued employees. As a place for B-to-B network amid swanky corporate hospitality for a week. To feed the corporate ego. For any and all of those reasons.

Northwestern Mutual chairman and CEO John Schlifske in 2014 outlined the company’s justification for spending millions on the Rose Bowl and college football in general: “This sponsorship is a natural fit for our company, because many of our clients and prospects follow college sports and many of Northwestern Mutual’s top financial representatives are former NCAA student-athletes,” he said in a statement.

Northwestern Mutual was the fifth company to put its name on the Rose Bowl (following AT&T, Sony’s PlayStation 2, Citi, and Vizio). Such churn also is typical of how bowl naming rights work. Many bowls have had a number of sponsors over the years as companies opt to move on if they don’t get the ROI they’re seeking or are forced by market pressures to roll back spending.

How much the next corporate sponsor will pay to put its name on the “Granddaddy of Them All” is pure guesswork. Naming rights for the elite bowl games – usually handled by ESPN as part of its deals with the game organizers – are typically part of a broader spend on an integrated package of advertising and sponsorship.

For games such as the Rose Bowl, the naming rights are often part of a wider spend with a network.

“They’re essentially getting the bowl sponsorship as an inducement for all the commercial spots they’re doing,” said Jonathan Jensen, a sports marketing expert and professor at the University of North Carolina-Chapel Hill.

Various reports had Northwestern Mutual spending $25 million a season on its Rose Bowl deal (which was as a presenting sponsor instead of a title sponsor). It certainly hasn’t broken the insurer’s bank: The company did $28.4 billion in revenue for 2018.

Most bowl entitlements are much cheaper than the New Year’s Day and playoff games, ranging from $300,000 for the lesser bowls earlier in December to closer to $1 million later in the schedule. The New Year’s and college playoff bowls are in the tens of millions.

Cheaper naming rights costs for smaller bowls are a lower barrier of entry that newer and emerging brands can surmount to generate buzz, or to refresh a legacy brand in the minds of consumers.

The result can be some head-scratching bowl names (and fuel criticism of commercialization of college sports). Who can forget the Poulan/Weed Eater Independence Bowl that existed from 1990 to 1996?

This season, the bowl lineup includes the Tropical Smoothie Cafe Frisco Bowl, Bad Boy Mowers Gasparilla Bowl, Cheez-It Bowl, Tony the Tiger Sun Bowl and TaxSlayer Gator Bowl.

(Douglas DeFelice / USA TODAY Sports)

The names may trigger confusion, eye-rolls or chuckles, but the bottom line is cash – for the bowls, networks, schools and conferences. The brands, in return, get to achieve business goals.

Various accountings of bowl game naming rights deals put the total annual spend at about $100 million – and it’s probably well past that threshold. Capital One, for example, reportedly pays $25 million for the Orange Bowl rights.

Allstate has reportedly paid $17.5 million a season to sponsor the Sugar Bowl since 2007. Like other major spenders, it was a wide array of college football deals beyond the bowl game.

“The Allstate Sugar Bowl is part of a larger strategy to reach consumers via live sports. This strategy includes integrated partnerships with 94 schools, which allows us to connect with college football fans in the communities where we live and work,” Allstate spokeswoman Kari Mather said via email.

The brands typically pay the naming rights fee to ESPN or other networks with the rights to air the game. ESPN owns 14 bowls outright. The remainder are held by nonprofit committees or conferences that charge the networks hundreds of millions of dollars for the TV, radio and digital broadcast rights.

Even with the nine-figure payouts, the networks are profiting because of the ad rates charged during the bowl games, which out-perform the non-football TV competition. Brands are willing to pay a premium for the commercial airtime to reach those bowl audiences, experts say.

“For ESPN, this is heaven for them, this two weeks,” said Larry Mann, an executive vice president at Revolution and a former ESPN vice president of sales. “The bowls will do a better (ratings) number than talk shows. They sell a ton of advertising. It’s a huge moneymaker.”

Jensen, the sports marketing professor, said companies view bowls as a way to be heard in a crowded advertising space, particularly because viewers will watch commercials during live sports.

“These sponsorships are a way to break through the clutter that consumers are exposed to,” he said. “Bowl games provide brand integration. The brand is being exposed not just during commercial breaks but during the actual event. When you leave the Outback Bowl in Tampa, you have a much higher chance of remembering Outback.”

Timing is part of it.

“These bowls are on during a time when a lot of people are off work, sitting around with relatives watching television, with not a lot else to do,” Jensen said. “People are in a mood for consumption. Marketers want to get messages out to folks, to get them to change behaviors or purchase something. The timing is great (for bowls) from where they’re placed on a calendar. If a football game is on, it will out-rate almost anything else.”

Last year’s bowl games averaged 5 million viewers each on TV (compared to 1.8 million on average during the regular season) while in-game bowl attendance averaged 41,000, according to data from the National Football Foundation.

“Heavily commoditized brands – insurance, credit cards, banking – they’re trying to reach college-age kids. When they’re out of school, they will remember the brand, even if it’s subconscious,” Jensen said. “They might have them for 60 years.”

So how much cash value are brands getting for their naming rights spending?

Making a bowl into a brand commercial can generate awareness at a cheaper rate than just buying traditional airtime, according to Joyce Julius & Associates in Ann Arbor, Mich., which specializes in measuring the financial value of sponsorships across all forms of media, including bowl games.

“In terms of in-broadcast television exposure for a title sponsor of a mid-level (bowl) game, generally they average anywhere from $9 million to $12 million (in media value), with the majority of the exposure and value coming from form the national television highlights,” Joyce Julius president and director of client relations Laura Webb said via email.

Joyce Julius calculates exposure value for a brand by indexing its number of mentions during the telecast against the ad rates charged for the game. Also factoring into the value is an accounting of print articles and digital news stories, along with on-site sponsorship elements and promotions.

Corporate names on college bowl games began in the mid-1980s amid the gilded age of Reagan Era swinging capitalism, when the Fiesta Bowl convinced Sunkist to pay $2 million for the naming rights, followed by Mazda putting its name on the Gator Bowl.

Pete Derzis, ESPN’s senior vice president of college sports programming and events, has nearly 30 years of insight on why companies choose to spend on bowl games.

“The one thing that has stood out since we launched the business is that everybody has a different reason and justification and different way to measure the success of their sponsorship and entitlement,” he said. “They desire access to that college football fanbase that tends to be well-educated, well-moneyed and in the right demographic for their particular brand.

“You’ve got some very strong legacy companies that have seen the value. Major players dedicate significant portions of their advertising buys to college football.

“Some want access into specific markets they’re about to enter. There’s no quicker way than to be the entitlement sponsor to activate with a community. The bowls are very layered in terms of community activity. There’s usually a committee of executives and civic leaders, and a charitable component. When a company comes in, they get right into the machinery of bowl promotion in that market.”

Corporate hospitality is always a major element of how brands activate bowls for business purposes. That takes the form of B-to-B networking and rewarding clients and employees.

“It’s something they want to do for their clients and business partners,” Derzis said. “We’ve got companies that have wanted to do it because they’re positioning to take themselves public at some point.”

It’s Derzis’ job to extol the virtues of college football for ESPN, but the evidence backs up his assertion that companies find value in the bowl spending. They keep coming back.

“The entry point can be $300,000 to $3 million to $4 million (annually),” Derzis said. “There’s a lot of inherent value in it at a reasonable price point. That may be a winning margin on an investment that would take three or four times as much if you were buying straight advertising.”

Brands get their name not only mentioned in broadcast, digital and print media, but also their name and logo are on the field, on the uniforms, and splashed across signage and marketing materials.

All of it is good business for the network. ESPN will televise 35 of the season’s 40 bowls, and it owns 14 of them. The network will add three more bowls to its collection of owned-and-operated games next season: New bowls in Myrtle Beach and at Fenway Park, and the Cure Bowl played since its 2015 launch in Orlando, Derzis said.

Mann, the sports marketing executive, is skeptical of some of the bowl spending. The ROI, he said, is really limited to exposure.

“It’s hard to isolate the bowl game (value) beyond awareness. That’s what you’re getting. You’re not going to create a ton of call-to-action. It’s a three-hour informercial for your brand,” Mann said.

He called out two bowls in particular: Battle Creek, Mich.-based cereal and snack food giant Kellogg Co. last year picked up the title sponsorship of the old Copper Bowl/Cactus Bowl to rename it the Cheez-It Bowl, and this year put its Frosted Flakes mascot on the Tony the Tiger Sun Bowl.

“Everybody knows what Frosted Flakes is,” Mann said. “What the heck are they doing sponsoring a second-tier bowl game?”

Name recognition is the chief benefit of a bowl entitlement, but less so for legacy brands.

“I think it’s a great way to grow a brand, but brands with great brand recognition also do it. Cheez-It already is sky-high. Do they need the million dollars of a bowl game?” Mann said.

Kellogg declined to comment on its ROI expectations for the games.

“As we searched for the right opportunity, we were drawn to the Cactus Bowl for many reasons, including its great history, great football, and the first-class experience it provides for student-athletes, alumni, families, and all the fans,” said Jeffrey Delonis, marketing director of Cheez-It, in a statement after the company announced the 2018 entitlement.

(Mark J. Rebilas / USA TODAY Sports)

Some bowl name deals are obvious. In Detroit, the NFL’s Lions in 2014 launched a bowl at Ford Field and quickly inked a three-year, $1.8 million deal with Quick Lane Tire & Auto Center for the naming rights. Quick Lane is Ford Motor Co.’s chain for more than 800 auto service outlets, and the Lions, Quick Lane and Ford are all owned by the Ford family.

All declined to discuss bowl expectations, but the initial deal was touted as a brand play to goose the business of oil changes and maintenance work.

“We’re hoping to continue to raise awareness among consumers for the fast service, value and convenience our Quick Lanes deliver,” said Frederiek Toney, president of the Global Ford Customer Service Division, in a statement in 2014.

Quick Lane in June announced a three-year extension of the bowl deal through 2022. Other brands have opted to exit the bowl space, such as department store chain Belk, Walk-On’s Bistreaux & Bar, Tostitos and possibly Northwestern Mutual.

Danny Morrison, executive director of the Belk Bowl played on Dec. 31 in North Carolina, is part of the effort to find a new title sponsor after the North Carolina-based Belk department store chain earlier this year announced it wouldn’t renew the deal. The relationship began when Belk took over the bowl name of what had been the Meineke Car Care Bowl in 2011.

“We are now actively talking with potential naming rights partners,” Morrison said via email.

A Belk Inc. spokeswoman didn’t reply to a request for comment, but the company told the Charlotte Observer that it was “investing in new corporate giving initiatives that will have a greater impact on our hometowns” rather than spending on the bowl naming rights.

Companies end their bowl deals for various reasons, but it usually comes down to failure to meet expectations, whatever those might have been.

“I don’t think it’s resonated or expanded their business or met their KPIs,” Mann said.

Having the right strategy and expectations before a deal is signed is critical, he said, because bowl games can deliver different results for brands and it’s not always an immediate uptick in sales.

“It’s not because bowl games didn’t deliver, but they bought in for the wrong purposes,” Mann said. “If they do try to do any ROI on it, it tends to fall short. In our world, everyone talks about having a signature asset. That’s what some of these brands see (a bowl) as. When they do the ROI, it’s not that signature. Whatever they’re paying, it’s hard to look at anything beyond the TV viewership.”

That said, it’s a relatively safe investment, particularly with mid- and lower-tier bowls that can be a cheap spend for big brands with marketing budgets in the tens or hundreds of millions, he added.

“You’re not spending crazy money on these bowl games,” Mann said, noting that it’s typically between $500,000 to $1 million annually for a non-New Year’s Day or playoff bowl naming rights deal. “The challenge is, how do you prove it out, that it works?”

Not all bowl naming rights deals are traditionally corporate. The most recent example is the Chicago suburb of Elk Grove Village, Ill. paying $300,000 to put its marketing slogan on what is now the Makers Wanted Bahamas Bowl in Nassau. Elk Grove Village mayor Craig Johnson told USA Today in 2018 that the investment has generated millions of dollars’ worth of publicity as part of the village’s strategy to lure manufacturers to its industrial park near O’Hare International Airport.