Selling Sponsorship Opportunities
Developers are increasingly looking for ways to drive net operating income—the fastest way to do it is through driving alternative revenue, sponsorship and media/advertising using the shopping centers they own.
Since the late 1990s, developers have seen meteoric monetary growth from alternative revenue streams. With this expansion, the roles and responsibilities for managing this newfound revenue stream have varied greatly. Some shopping center developers have created a management team focused on this business activity, while others have blended it into the marketing, specialty leasing or the management function of the company. In some instances, the role of the specialty leasing manager has expanded from leasing and sales to booking agent for special events that bring in large weekend traffic, such as farmer’s markets, product brand introductions, and more. Wherever the responsibility rests, it is clear: turning shopping centers into multi-media destinations is where big money can be made.
Simon Properties, among the first in the industry to recognize this revenue stream, formed Simon Brand Ventures in 1997, which to this day has a team of executives solely focused on multimedia marketing, live events, mall displays and digital, social and mobile programs that serve retailers and brands alike. As the industry leader in this area, they have made it easy for media agencies to buy and execute campaigns by standardizing banner sizes and providing nearly turnkey on-site execution. Yet, the industry as a collective group, still lags well behind the airport industry when it comes to demonstrating standard measurements and metrics of traffic. This remains one of the most challenging obstacles for media companies to sell the mall as a medium—despite the efforts of developers to adjudicate the need for consistent industry metrics.
Caruso Affiliated, the largest privately held real estate company with a portfolio of renowned retail and mixed-use destinations, has captivated the California market for years producing headliner turnkey experiential events. From events with brands like Citi, and Cadillac to headliner acts including Katy Perry, and Aerosmith among others, the strategic alliance team is a powerful player. Citibank has promoted credit card usage by partnering with The Grove to support the Los Angeles shopping center’s Summer Concert Series.
The strategic alliance team, led by the company’s Executive Vice President Daniel Burgner, has also targeted loyal guests through an event called “Taste of The Grove” that included many partners in addition to Citi and Cadillac. Brands such as Smartwater, Heineken, and appliance companies like Sub-Zero and Wolf, participated. The event included ride-and-dine experiences, chef demonstrations, restaurant samplings and VIP parties for loyalty members. Caruso has been equally successful in bringing consumer brand events to the center including an “Oreo’s 100th Anniversary” event.
The Canadian perspective
Canadian developer and asset manager, Morguard, operates this business within the framework of both the roles of marketing and specialty leasing. “Sponsorship was an area that we had never focused on aggressively before. We knew to make this objective successful, we would need both marketing and specialty leasing to work together on this initiative,” said Jennifer Thomas, Director of Specialty Leasing.
Under the corporate direction of marketing, center management and specialty leasing, center teams are tasked and rewarded with bonuses when they achieve their goals. “Since launching this sponsorship objective five years ago, we have seen a 500% increase in sponsorship revenues across the portfolio,” said Thomas. “Also, the quality and sophistication of our deals have dramatically improved,” she added.
Morguard has received significant industry recognition for their efforts including winning “The Best of The Best Award” at last year’s Sponsorship & Advertising Conference. This award recognized the Pandora jewelry store’s entry into Canada with a first-to-market “Style Lounge” at Coquitlam Centre, Coquitlam, BC. The two-year deal included naming rights to the lounge, branding opportunities within the lounge area and throughout the center and extensive traditional and digital advertising.
Morguard continues to work with new-to-market retailers and has more recently launched an H&M Personal Shopping experience store at Uptown Centre in Victoria, BC. The room is situated near the center’s guest services area and hosts personal shopping appointments. The center team worked closely with H&M’s public relations and national marketing team to customize the concept store (a two-year deal) to fit their needs.
Partnering for profits
Mike Tvrdik, Director of Corporate Partnerships at Mall of America, says that most of the revenue generated through sponsorship is reinvested in the center’s marketing budget. His team of three full-time professionals is responsible for all sponsorship sales and fulfillment. Mystic Lake Casino Hotel has been a long-term partner at the property. Today, this partner has in-mall retail space, in-mall advertising and a shuttle that takes shoppers between the center and the casino. “This has been a successful sponsorship over the past 10 plus years and because of our great relationship, Mystic Lake signed up as a part owner of a new JW Marriott hotel that is being built in the new expansion at Mall of America and is set to open in 2015,” Tvrdik says. This project, like most of the sponsorship projects at Mall of America, is layered with marketing activities, food and beverage services, and tourism, all vital to the marketing of the property.
These examples are proof positive that with a little creative thinking, sponsorship and advertising opportunities are ready to be had.