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So You Want To Name A Stadium…

June 14, 2022

by:

Joe Patti

Via the Marginal Revolution blog I came across a piece analyzing the economics of stadium naming. The basic conclusion was that if you see a corporation buying naming rights for a stadium, you should sell your stock because most of the time the company ends up under performing.

What got me to read through it was the promise that by the end I would know:

How to decide whether a company you run or advise should buy the naming rights to a sports venue (e.g. high school stadium, college stadium, major league stadium, etc).

I was hoping there would be some differentiation between the benefits of sponsoring a high school or college stadium vs. major league stadium which might point to a possible benefit to a company for sponsoring performing arts venues and interior spaces. Unfortunately, the article only deals with major league stadiums and doesn’t cover college or high school at all. There is a promise of a more detailed analysis if you subscribe to the author’s newsletters.

Overall the analysis is interesting to read due to the context of why different company’s stocks under performed. Banks and financial institutions were bailed out by the US government. Energy companies profiled were involved with all sorts of scandals or were part of a sector that just broadly under performed.

There were two examples of companies that beat the overall trend and did better: Qualcomm which stepped in when San Diego was desperate for funding to complete a stadium expansion. As a result, Qualcomm paid much, much less than they might otherwise have.

Target was the other example. Their deal apparently included additional enhancements that sponsorships generally don’t. Among them were appearances of NBA players at stores and potentially merchandise deals.

I have never really paid much attention to stadium naming news, but the insight the article provided about some of the arrangements and how beneficial it has been to the company stock† sheds light in an easily digestible format into an area which isn’t widely reported on.

†Since I frequently mention that not all measure of value are relevant, I feel I should point out that just because the stock for many of these companies didn’t do well doesn’t mean the naming arrangements weren’t valuable to the companies in other ways.

Fundraising, Marketing/PR, State of the Arts

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This Place Has Rats. But They Will Be Gone Soon!

June 13, 2022

by:

Joe Patti

I know for a fact that for at least 30 years now, market textbooks and classes have made the distinction between marketing and advertising/promotion the first definition provided. That has pretty much been a useless effort because people generally think of the terms as synonymous.

I don’t expect to move that needle much at all today, but I thought I would share a recent post Seth Godin made on the topic to get readers thinking about their own practices.

If an exterminator puts signs and banners in front of a fancy house when they’re inside killing rats, that’s promotion. But it’s not good marketing.

Marketing is creating the conditions for a story to spread so you can help people get to where they hope to go. Marketing is work that matters for people who care, a chance to create products and services that lead to change.

[…]

If you have to interrupt, trick or coerce people to get the word out, you might be doing too much promotion and not enough marketing.

I especially like this first illustration he uses. While it isn’t a universally applicable example of the difference, it does make the point that what is good promotion doesn’t necessarily create an environment that is in everyone’s interests.

In the same way, a message of “come see this show” is different from “this is a place that provides an opportunity to share experiences with family and friends.” The latter is part of a narrative about attaining what people aspire to rather than selling a single specific product.

Audience Relations, Marketing/PR, State of the Arts, Working In The Arts

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Upgrade Your Theatre Seat For More Legroom?

June 8, 2022

by:

Joe Patti

I caught a story on NPR’s Marketplace yesterday that discussed the way airlines use premium seating. One of the people interviewed mentioned that airlines craftily use the separation of time to get people to upgrade. Because the flyer is offered the opportunity to change to premium economy around the time they check in, months or weeks after they purchased the ticket, consumers view the upgrade payment as a different transaction from the initial seat purchase rather than thinking about the total amount they have spent.

Of course, that got me thinking about how this could be applied in the arts realm. While there are performing arts venues that employ dynamic pricing to extract additional revenue from ticket sales, by and large most organizations don’t have the interest or the computing infrastructure to implement that sort of ticketing.

However, many venues have ticketing systems that are capable of providing the view of the stage from a particular seat or notes about which seats have more leg room. There may be other characteristics about the performance space people value that can be integrated into seating choice as well.

An email can be sent out a week before the event with information about how to prepare for the visit, including parking, restaurants, etc., and offering an opportunity for an upgrade in terms of sight lines, leg room, or whatever.

The offer of the upgrade doesn’t have to wholly be driven by a profit motive. It can be offered as a loyalty incentive to help fill houses now and in the future. Because you have been a loyal attendee or purchased well in advance, you can upgrade from the $35 seat to a $60 seat for an additional $10 rather than $25.

If you know that part of your audience base are price sensitive, last minute purchasers, you have just freed up a cheaper seat that can be sold and incentivized loyal patrons who plan in advance to continue to do so.

While I was thinking about all this, I recalled an instance where a person on my staff suggested that a renter do something of an inversion of the usual seat pricing approach and price seats up close less than those further back. I was a little conflicted about this because while we as insiders felt that seats in rows G-L are among the best seats, pricing should be based more on what seats the buyer thinks are the best.

But I also wondered if people have been trained by the way things are priced to think the highest priced, closest seats are the best? Given their choice in a general admission setting at a live, non-festival experience, people rarely head immediately to the front and fill in as close as they can possibly get. More often than not, the front 2-3 rows are virtually empty by the time the show starts unless the event is close to sold out.

Is there a psychological element inherent to reserve seating events that changes the calculus for people? If the front few rows are priced less than those behind, do people think the venue management are fools and they are getting away with something by paying less? And is that necessarily a bad thing if it has people watching closely for when tickets will go on sale so they can grab those great seats at a cut rate? Will they relent and buy slightly higher tickets if the cheaper ones sell out before they get there?

Of course they need to be confident those seats did sell and weren’t held back to manipulate sales or weren’t grabbed by resellers. This approach wouldn’t work well in places that are subject to scalpers with an automated purchase process.

Arts Facilities, Audience Relations, Pricing

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My Freshman English Grade ≠ 2022 Writing Proficiency

June 7, 2022

by:

Joe Patti

There was an article on The Conversation website back in March by Elisabeth Gruner discussing how she stopped giving grades on student papers in favor of comments and wished she had done so sooner.

I was reminded of Robert Pirsig’s book Zen and the Art of Motorcycle Maintenance where he mentions doing the same thing in his classes at Montana State University in the late 1950s. Pirsig’s students reacted much like Gruner’s did some 70 years later. Basically, they freak out at the prospect of not being given a grade.

I have written about Pirsig’s book before, though it has been about 15 years since my last reference to it. My experiences since then have somewhat supplemented my perspective. In recent years I have been writing on the idea that just because you can measure it, doesn’t mean the resulting data is an accurate depiction of value.

In the same way, a grade doesn’t really help you master content and improve. While an instructor can obviously provide a grade and comments, as Gruner notes, students will flip past all the comments to find the grade and then they are done.

Granted, students always have the option of ignoring comments and choose not to improve their skills. But that is a choice all humans have when faced with critique and not limited to educational settings.

The other issue is that grades and comments are only a measure of your level of mastery at a moment in time.

As I mention in my post from 15 years ago, I wrote a paper based on Pirsig’s book arguing for comments on papers in favor of grades. My professor took me at my word and didn’t give me a grade until after we discussed her comments. (She was obligated by the school to provide a grade, I didn’t feel the need for one.)

Another professor commented on another paper I wrote, observing that the grammatical mistakes were legion, but that I had done a fantastic job of capturing the voice and flavor of the work upon which I based my composition.

There was a grade on that paper. I don’t remember what it was, but I remember the comment. Arguably, my writing skills have improved since then. There have been many factors which have contributed to my higher standard of writing, but it really wasn’t the grades. Memories of my educational experience and how I professors dealt with me are what have endured.

In a similar manner, measures of value that are often applied to the arts like economic impact are meaningless. How does economic impact inform organizational decision making? How does knowing the economic impact number influence how those in the community conduct their lives?

There is a lot of other data which will help organizations strive to do better or effect change. There are other ways in which people’s lives will be impacted by an arts organization. The value of all this can be examined and observed over the course of years.

Something I wanted to call attention to that is somewhat unrelated to my point about the relevance of grades and certain metrics used to measure organizational value. I feel this is important to note for people who want to read Pirsig, or my early posts on his book, and take some lessons from his experience with grading.

In Pirsig’s book, when he talks about his experience eliminating grading in the classroom, he mentions that the A & B students’ work improved, C students either improved a bit or stayed average, and D & F students basically kept sinking. Basically, the idea was that the students’ natural talent and work ethic were a constant regardless of whether they were graded.

Gruner has different perspective which I think is a reflection of the differences between who got to attend university in 1958 and 2020s.

My studies confirmed my sense that sometimes what I was really grading was a student’s background. Students with educational privilege came into my classroom already prepared to write A or B papers, while others often had not had the instruction that would enable them to do so. The 14 weeks they spent in my class could not make up for the years of educational privilege their peers had enjoyed.

While I know that background influences the degree to which people are prepared for an educational experience, until I read that paragraph, my recollection of Pirsig’s observations about grading dominated my perspective.

Building Public Will For Arts And Culture, State of the Arts, Working In The Arts

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