"Georgia Tech May Auction Tickets to Clemson Game"

From Athletic Business

View from the Northwestern News Network

Analysis by Kristina Mohler in KIN 501

Georgia Tech University is looking into adapting a new ticketing approach that Northwestern University has found to be successful. This approach is a Dutch-auction style, modified from a Netherlands style of selling flowers. Northwestern University economics professors Jeff Ely and Sandeep Boliga pitched their customized version of this auction to the athletics department for their ticket sales.

In this case, Northwestern would tailor ticket prices according to demand and popularity and set them accordingly. As game days approached, ticket prices would drop until the section was sold out. However, differing from normal Dutch auctions, if you bought a ticket at a higher price than the final buyer, you would be refunded the difference in prices in the same section. This way, everyone in the same section pays the same price and no one feels cheated. For example, if tickets go on sale for $80.00 and you buy one right away, but the price drops to $65.00 right before the game, you would be refunded $15.00. A “price floor” would be set to never go below what season ticket holders pay. This method encourages fans to not wait to buy tickets, increases revenue, fills seats, and makes season tickets more appealing. The sooner you buy, the better seats you are guaranteed. Additionally, there is a chance that the ticket price will drop and you could receive a rebate. Season tickets may be more appealing because you avoid the chance of tickets selling out at a higher price, and you avoid the auction all together.

Some schools and professional teams have started using dynamic pricing systems. These two systems are similar that their ticket prices fluctuate according to demand. However, dynamic pricing can go up or down, increasing as demand increases or decreasing as demand decreases. Therefore, someone who buys the first ticket to a game or event will pay less than the person who buys the last ticket. The Dutch auction style will only decrease, never increase. Also, dynamic pricing locks the buyer in at the price they purchase at. Northwestern’s “Purple Pledge” allows for a refund if the price drops in their section after purchasing. Both styles encourage fans to buy tickets early.

Georgia Tech’s Bobby Dodd stadium holds 55,000. Adjusting ticket pricing to higher and lower demand games could help fill seats and increase revenue. Clemson will be the largest selling game of Georgia Tech’s 2014 season, but I bet hosting Georgia in 2015 could be an even greater revenue generator. In the article, it states that Georgia Tech struggles to break even financially and does not currently fully fund scholarships for its track, cross country, or swim programs. As long as Georgia Tech truly uses increased revenue for positive incentives such as scholarship funding, I think this is a great method that could be adapted across the board.

One of my favorite parts about this is how it potentially cuts out the “second market” (StubHub, Craigslist, etc.). Some have also proposed the idea of venues having a buyback option of which they can resell for profit, instead of having a final sales policy which causes buyers to resell their tickets on such second market venues. This could be lost revenue for the original venue, especially for sold out events. To me, it makes the most sense to offer a full refund for tickets that they could then resell, especially for high-demand or sold out events. I understand how not having a buyback system avoids sales loss for events that do not sell out however. Most second markets charge a fee of their own, so fans do not receive their full money back, and new buyers usually overpay (unless tickets are marked way down). A venue buyback could potentially be a win-win for themselves and buyers, and could help eliminate second markets and perhaps some scalping. I tried selling tickets on StubHub, and it was going to be impossible for me to get my money back. The demand for the game had decreased since I bought the tickets, and I would have had to post them for more than I bought them for in order to end up with my money back after StubHub got their percentage of the sale.

The article states that Northwestern did not offer sales figures to Georgia Tech, but said that the auctions had been successful. I am interested to see final numbers for both schools for both the higher demand games and the lower demand games.

"Super Bowl Ad Placement Key to Brand Recognition"

From Sport Marketing Association

Analysis by Jessalyn Stone in KIN 501

The largest football game of the year, the Super Bowl, was played on February 2, 2014 and as always the cost for the advertisement slots were steep. On average the cost for a 30-second commercial to be aired during the Super Bowl cost $4 million. According to sports marketing researchers the companies whose commercials are aired earlier in the game, particularly during the first and last block of commercials in the first period, also referred to as pods, will have a greater likelihood of brand recognition. Accordingly the effectiveness of advertising decreases as the game goes on while it peaks in the earlier game quarters. Specifically the commercials during the first and last commercial breaks of the first quarter of the game, yield the greatest results if the goal of the advertisement is to increase awareness of brand among sports viewers. Based on this research advertisers can gain a better understanding of when the most ideal time is to place an ad in a commercial break of the Super Bowl to maximize brand awareness as well as knowing how to increase advertising rates during the prime “pods”.

From a sports marketing standpoint research provided in this article could be very beneficial to advertisement and the goals of those specific ads. With this particular research it discusses the goals of advertisements as a means to increase brand recognition. That could be a very beneficial tool for companies knowing how to place ads, especially during the Super Bowl. If however ad recognition is already very well known the company should instead focus on what quarter of commercials to place their ad. Although this research isn’t full proof it can provide valuable information to marketing agencies. This particular year however this research was proven to not be entirely true. The overall number 1 commercial of the Super Bowl occurred during the 2 minute warning of the last quarter of the game. There obviously are other factors to consider as well including the target audience and how the audience is being drawn in by the ad.

Throughout this course we talk about how to target specific populations and how to appeal to a variety of individuals. The Super Bowl obviously is a key example of a large variety of individuals that are viewing the same thing. People of all ages, ethnicities, incomes, regional areas and so on are all viewing the same event. Marketing is used to try and appeal to all kinds of people. Knowing how to target a variety of audiences while getting your branding to the audience is a very important component. Articles such as this one can be utilized in this class to try and focus on the goals of marketing.

"KD well past tired of talking about LeBron"

From ESPN.com

Analysis by John Kim in SRM 334

In every sport, there are elite players and the media always try and compare to determine who the best player is. In recent years, LeBron James of the Miami Heat and Kevin Durant of the Oklahoma City Thunder are considered one of the best players in the National Basketball Association. Even though they were compared for a few years now, the debate has fired up even more this season due to the fact that Kevin Durant is considered by many experts to likely take the Most Valuable Player Award after James has received it the past two seasons (Wallace, 2014). After the endless debate about these two players and the constant questions that they receive, Kevin Durant said that he is tired of being questioned about James. However, James told the press that he has no issues addressing questions about Durant (2014).

The media has been comparing elite athletes for a while now and it could be too much for both the athletes and the audiences. Even though many athletes are not too thrilled about the media asking them questions about other athletes constantly, the media keeps bombarding athletes about other players or potential rivals. The media’s intentions for comparing athletes could be to relate to the audience and promote drama; if players are compared and the media creates a “rivalry” between the players to relate to other audiences that are not so interested in sports, it could cause the audience to be interested. Also, sports audiences are interested on what the athletes say about their rivals, so they will tune into interviews, thus creating more views benefiting the media. 

This article is relevant to our course because we have constantly talked about the drama that the media creates and how it attracts both audiences that are extremely passionate about sports or not so passionate about sports. By releasing stories that include rivalries and dramas, the media relates to the audience and attracts them to what interests them. Even though Kevin Durant stated that he was tired of being questioned about James, the media will not stop asking questions about James or other athletes because people want to hear what Durant has to say about other players that he is compared with.