Corporate sponsors reaping big dividends
By Dan Nakaso
Advertiser Staff Writer
Oceanic Time Warner Cable officials escorted important advertisers around the Sony Open last month and then gave away 40 or so tickets for the NFL Pro Bowl.
Handing out free tickets to the few big-time professional sports events that hit the Islands each year gives businesses like Oceanic an opportunity to thank customers and, at the same time, keep their corporate names in front of distinctly different audiences.
For an Island state without its own professional sports franchise, the one-month span from the Sony Open to the Pro Bowl represents a busy few weeks for companies such as Oceanic, which this year also became one of four new "platinum-level" corporate sponsors — the highest level — for UH sports events.
"The Pro Bowl youth camps that we sponsor encourage the youth, the younger ones 7 to 20 years old," said Norman Santos, Oceanic's vice president of operations. "The Sony Open caters to a different class of clientele. ... UH? That just caters to the local population in general."
Local marketing budgets, which often include entertainment expenses, seem to be up about 10 percent this year, said Malia Lagerman, president of Sales and Marketing Executives of Honolulu.
"Last year was a good year and this year is starting out looking to be even better," Lagerman said. "I think it's just that the economy's improving and people are more optimistic and feel more comfortable spending the money."
Lagerman has seen more and more companies over the last year buying tables at events and inviting important clients to the functions.
"You've got your hard sell and your soft sell," she said. "Even though you're taking out a client or an executive to dinner, it may not be sitting in your office pushing your product, but nonetheless, you're pushing your product."
Willis Turner, president and chief executive officer of Canadian-based Sales and Marketing Executives International, said he knows of no group that tracks corporate spending for marketing and business entertainment.
"I can't answer with statistical evidence that it's on the increase or on the decrease," Turner said. "I do know that companies are trying to focus their marketing dollars in ways that are most effective on the consumer."
Some businesses even hire other companies to entertain clients by setting up corporate suites at professional sports events that include amenities such as spa treatments, Turner said.
"They call it experiential marketing ... and those kinds of things work very well," he said.
Locally, banks, resorts and hotels tend to focus on entertaining clients where other large organizations, such as health groups, don't emphasize it as much, some business executives say.
"Obviously it's a way to have one on one contacts with your clients and be close to your clientele," said Wayne Kirihara, Central Pacific Bank's director of marketing. "In our business, especially the business banking area, a lot of time is spent learning and understanding our clients' business needs."
Business entertainment expenses, which can include lunches and dinners, tend to be fully tax deductible. But how much even similar-sized companies budget each year on corporate entertainment can vary.
"I bet everybody defines it differently," said Bank of Hawaii spokesman Stafford Kiguchi. "We track things like sponsorships and our corporate donations. ... But we could do it one way and Central Pacific could do it another way."
The UH athletic department has seen an increase in corporate sponsorships in just the last year, when the number of platinum-level sponsors jumped from eight to 12.
"More and more companies only want to spend money where they'll see a return on their investment," said Scott Harada, corporate sales director at the UH athletic department. "In the past, most of them would spend money just to have an image association with UH. Now they want direct results that they can see when they market their products and services."
UH's platinum-level sponsorships cost "in the six figures," Harada said, and include signs and banners at UH events and the opportunity to put on half-time, promotional events.
They also include about 10 season tickets to every UH game, which companies often use for "client cultivation," Harada said.
"We use those for both employees and clients," Santos said. "It's nice to spend some time away from the job to take care of each other."
First Hawaiian Bank also used the Sony Open to host more than 800 clients over four days at the bank's skybox on the 18th green.
"First Hawaiian is a relationship bank and we want to reward our customers for the business they bring us," said Brandt Farias, First Hawaiian's marketing director. "The more business you do, the more benefits you receive or invitations to special events like the Sony Open."
Like Oceanic, First Hawaiian also became a platinum-level sponsor this year, increasing its UH spending from $75,000 annually.
"There is no professional sports team here so we are very proud of our affiliation with UH," Farias said.
UH's corporate sales people now work with companies to find out what products they're trying to market to which demographic groups, Harada said.
The result is that First Hawaiian passes out brochures at UH basketball games and volleyball matches for its first-time checking account program aimed at people 18 to 29 years old, Farias said.
But the bank also has found that lots of retirees specifically attend Wahine volleyball matches, which has proven to be a good place to tout First Hawaiian's prime-time senior program for customers 50 years and older.
"By virtue of our size, we have lots of target demographic groups that fall within the spectrum of UH sports," Farias said. "It's a good fit for us. I'm very satisfied with the response we've gotten."
First Hawaiian's relationship with UH started to take off four years ago when the bank installed a $240,000 sound meter in the Stan Sheriff Center to measure the cheers of the hometown crowd.
Every time the crowd noise hits the top of the meter, First Hawaiian donates $50, for a total of about $6,000 to $7,000 per year.
"When the crowd makes the meter go all the way, we call it a power of yes moment and we make a contribution to the UH athletic department," Farias said. "It helps extend the First Hawaiian bank brand, reinforces our power of yes philosophy and contributes to the university athletic department."
First Hawaiian competitor Central Pacific Bank instead makes $100 donations toward a UH scholarship endowment fund for student athletes for every UH volleyball service ace, football touchdown and three-point, basketball shot.
The fund has $125,000 in it, Kirihara said.
"We started what we call the Central Pacific Bank loyalty awards three years ago as a fun way to get the audience behind the home team," Kirihara said. "Supporting the University of Hawaii is a big part of supporting the community in general. It's the only Division I team we have here, so that generates a lot of community pride."
Two years ago, CPB also set up a skybox at the 18th green of the Sony Open and invited several hundred of its biggest clients.
"We asked our banking officers to invite their clients and there was a big demand," Kirihara said. "For the bank, the visibility and the television coverage of the Sony Open just does so much to promote Hawaii as a visitor destination. In the banking industry, it's really kind of our role to fuel economic development and look at areas where we can support economic growth for the state."
As CPB officials enjoyed their new relationship with the Sony Open, they dropped their sponsorship of the Pro Bowl because the events were so close together, Kirihara said.
"It was just the timing," Kirihara said. "When the (Sony Open) skybox became available two years ago we decided to give that a try. It was met with such a warm reception from our customers that we decided to keep it."
But Oceanic officials, for now, plan to keep their UH, Sony Open and Pro Bowl relationships going.
After nearly a year of doing all three, Santos' only quibble has been the placement of Oceanic's sign at UH basketball games.
It seems to be clearly visible only to the fans sitting near each basket, Santos said.
"We get some exposure, but the sign is definitely in the wrong spot," Santos said. "We'll have to talk about that for next year."
Reach Dan Nakaso at dnakaso@honoluluadvertiser.com or at 525-8085.
