Golf Business Monitor

Golf rocks tennis' TV audience in US

I was surprised to read in the latest edition of The Economist (June 11th 2011) that in US people prefer to watch golf over tennis. I started to check worldwide ranking of US tennis players where I had to realize that there is no US tennis player in the TOP5 in the ATP ranking (men). Although Rafael Nadal, Wiliams sisters and Roger Federer are playing very well it will not attract sufficent size of audience in the US. It is no brainer to say no advertiser will consider to sponsor such tournament where his brand cannot get sufficient exposure.

But why golf is getting bigger viewership in televisions? Why beneficial to sponsor a golf tournament in the US? Especially when we know golf is more expensive to broadcast than other sports (networks need an army of cameras covering an immense outdoor space) If we check from taxation point of view then it is easier to understand the situation (I still have not found on www.irs.com the right answer). Since Deane Beman (headed PGA Tour between 1974 and 1994) corporates can account for golf tournaments as charities. I cannot believe that the US Tax Authority can be fooled so easily. Such PGA Tour event sponsorship is arround 7-8 million USD, but at the end the exposure will worth up to 55 million USD. Thus the cost of 1 GRP is even cheaper (+ add quantity, agency and other special discounts that advertisers get)

Still why Americans prefer to watch golf? I have couple of answers:

1. More successful American players: Tiger Wood, Phil Mickelson, Bubba Watson, Jim Furyk etc.
   
2. Winning Ryder Cups
3. Our society is still chasing such nobel values of honesty, integrity, respect, confidence, responsibility, courtesy, preseverance etc what golf is standing for. Well, some of these values have not seen in the last to years from Tiger Woods, but these values that we really esteem.

The current business environment is/was not in favour of PGA Tour's business model thus total direct revenues fell from 486 million USD to 461 million USD between 2008 and 2010.

Golf participation in Europe 2010

Those who are familiar with the golf industry they know that KPMG prepares from year to year a survey about golf course development and golf participation trends. 2010 is not an exception. ;) Since the last decade of the 20th century the pace of golf course building and participation is much slower that worsen in the past five years. Last year there was in fact a 4% decrease in the number of golfers in Europe's largest golf market: UK&Ireland.

 
KPMG tries to keep up the illusion that it is still lucrative to invest in golf industry. He does not mention the current economic climate that recently hit Ireland. Ireland is now asking for EU financial help, just like Greece, Spain and Portugal. You can imagine what will be next year when you try to play in Spain and Portugal...prices will reach the sky and people will abandon this lovely sport.

KPMG also forget to mention other curcial factors that I mention in my previous post, namely golf course owners' lack of relevant management knowledge and education.

Two other interesting facts from this survey: in Germany is the highest ratio of female golf players. In Turkey is the highest ratio of junior golfers.

Ireland's stumbling golf tourism marketing - part 2

As I promised in my previous post I will keep on analyzing Golf Ireland's Facebook communication. If I have to give KPIs for a Facebook brand page the following would be:

• Clear Community Expectations: what the brand (in our case Golf Ireland) is expecting from the FANs + what FANs can expect from the brand. I think this page meets the expectations: OK.
• Provide Cohesive Branding: the branding of the page is in line with the offline communication.
• Be up to date: well the last post was published this Tuesday, but in general the page does not tell too much about Irish golf championships, golf courses and competitions.
• Live Authenticity: we men of the street would like to connect to real people and the same behavior applies to Facebook brand pages as well. What I like in social media is that it humanizes brands, companies. Golf Ireland is does not move into this  direction. :-(
• Participate in Dialogue: well the page has only 50 fans, 3 comments, 4 "LIKE"s since 20 July 2010. So there is no much we can expect but they do not respond to these few comments.
• Enable Peer-to-Peer Interactions: it is still early to talk about it, but the benefit of enabling P2P communication is indispensable. 
• Foster Advocacy: I cannot highlight enough the importance of Word of Mouth (WOM). I think it is one of the biggest achievement what a brand can achieve in social media. 
• Solicit a Call-to-Action: this is one of the 2 great traits of this brand page by requesting to tell a golf story that happened with us in Ireland.

As the bottom line, Golf Ireland's Facebook brand page is almost dead and boring. They should think about content that motivates people express their feelings, thoughts + invite others to join. 

Finally, here is cool Irish golf course, Old Head Golf Links (Kinsale):http://oldhead.com/golf/course-overview/.

Ireland's stumbling golf tourism marketing - part 1

According to United Nations World Tourism Organization (UNWTO) the expected rebound of international tourism (arrivals, receipts, expenditure) is measurable. This recovery started according to UNWTO in Q4 of 2009. However this positive change will be seen mainly in South-East Asia, South Asia, North-East Asia and in the Middle East.  In Western Europe there will only +3% growth/change in comparison to the same period of the year (H1).

But what is happening in Ireland? The Irish economy is in recession since 2008 and it will stay there also this year, although the forecasted drop back will be much smaller than in 2009 ( -7.6%) "only" -0.5%. Some analysts say that the Irish budget deficit can reach this year to 20%. If this figures are not dashing than here come some KPMG research data: in 2009 in GB & Ireland region the number of round played decreased by 3% + operational costs increased at 43% of the golf courses they surveyed. The CEO of Club Managers Association of Europe (CMAE) Jerry Kilby says in the last 18 months there is a declining trend among young generations in golf club membership and the less frequency of play by casual golfers.

In light of these dire facts Fáilte Ireland (National Tourism Development Authority of Ireland) launched a massive image campaign (in spring 2010; including print media, online media and radio) to boost golf tourism and to show Ireland as an attractive golf playing country. Nice bunch of people from different organizations came together (Carr Golf, Killeen House Hotel, Helen's Bay G.C., Killarney G&F Club, NITB, Tourism Ireland, Fáilte Ireland) in March 2010. They looked for ideas how to position Ireland Golf to win, attract more golf tourists over such countries like Spain, Portugal, Turkey and South Africa (...always the sun....do you remember this song?) and give potential golf tourists reasons to prefer  playing golf in Ireland. Hmm..well, really challenging job I must admit.

The golf weather is not in favour of Ireland (but it is not so pleasant to play in hot weather (30 Celsius +) either. The accessibility of Ireland is not so easy (only by air and sea). What is their communication strategy of their image campaign? They claim  Golf Ireland's  USP (unique sales proposition) is "Inspiring Golf & Genuine Engagement on & off the Golf course". Their insight (I have not found any reference to any kind of market research) what golf tourists are expecting from Ireland is "an authentic golf challenge with stimulating shared experiences &moments" (like from any other golf tourism destination country). I put in italic the phrase shared experiences, because it says to me that they started to grasp that social media is really important in tourism communication. The brand personality Golf Ireland was defined as friendly, welcoming, unassuming, infectious. Are they serious? Is Ireland the only golf country that can claim these values?? I am not sure. The bottom line was: tagline = Time to Play. They think it is  unique to Ireland (LOL).

In their presentation I could not find answers to my following questions (based on P.O.S.T. method):

1. People: Who they want to reach? Why should we target them? What is the number of potential golf tourists?
2. Objectives: what do you want get out of this campaign? what would you consider as a successful campaign? More number of rounds on golf courses or booked rooms on golf courses and hotels? etc.
3. Strategy: how we will reach our objectives??
4. Tools: What technology should we use? What tools would make sense to help carry out out our strategy and reach our objectives?

Since the target audience was not defined and these unknown people media habit is unknown it is questionable the usage of print media and radio. To utilize Irish tradition of storytelling is a great idea (I guess every nation has such tradition, but never mind) as we are collecting information and ideas via social media. It was great to read that Golf Ireland wants to utilize such social media channels as YouTube, Flickr, Facebook. But how about golf social networking sites such as TheGolfSpace.com, MyCrazycaddie.com, iGolf.to, Golf-finder.net, Golfbuzz.com or GolfSn.com (there are many many more)? They also missed some well-known tourism social media portals such as Tripadvisor.com, Gusto.com, Wayn.com and MyTripBook.com...

From the very same document it does not turn out how they would:

• Define social media channels + who are the ideal social media channels?
• develop content for social media?
• participate in dialogs?
• foster advocacy?
• solicit call to action? etc.

In my next post I will give you answers how Golf Ireland could maximize Facebook. Till then here is Golf Ireland's Facebook page (http://www.facebook.com/#!/pages/Golf-Ireland-Time-to-Play/103509856365026?v=wall&ref=ts). So far they have only 20 fans/"LIKE":

TaylorMade is reinventing POS communication

TaylorMade recently came up with a witty solution to engage sauntering potential customers by placing touch screen TVs in golf pro shops. It is a great help to those who do not know how to buy and what are the differences between golf clubs. As far as I know in 40 US stores were installed these touch screen TVs.

The idea came from a small digital agency called Hello Design. From there website we cannot know whether they utilized the touch screen TV to collect personal data for future communication or bluetooth technology to reach those who are passing by these stores...It is a good start...

Anyway, all my respect to Taylor Made and Hello Design!!

TaylorMade Touch Screen from Hello Design on Vimeo.

MacGregor Golf is Back

I was really happy to read today on The Golf Wire that the iconic golf equipment brand MacGregor Golf is returning with a new, revamped lineup of premium golf equipment. For those who are not familiar with the history of this iconic golf equipment brand, here is a brief history of MacGregor Golf:

It is a 113 years old golf equipment brand. MacGregor Golf, which was based in Albany, Ga., claims that more majors (59) were won with MacGregor Golf clubs than with clubs made by any other company. Many of those majors were accounted for by Jack Nicklaus. Unfortunately Jack Nicklaus sold the company in the 1980s. More recently, MacGregor Golf was associated with Greg Norman, making The Greg Norman Collection apparel line. Greg Norman acquired partial ownership of MacGregor Golf several years ago, but when Greg Norman switched to playing TaylorMade golf clubs recently many saw the writing on the wall for MacGregor Golf.

To have a positive end of the story last year, Golfsmith acquired MacGregor Golf and turned it to a so called "house brand". Just to understand the popularity of MacGregor Golf in the 1980s and 90s that we could see it in the movie of Caddyshack:

Now here are my doubts about the future of MacGregor Golf. When we are thinking about the future, for how many of us will be relevant the history of this golf equipment brand? Do we really care what was in the past? How many of us will afford a  premium golf equipment (especially in light of the declining number of rounds on golf course)? Is Golfsmith able to give a significant communication support for this golf equipment brand?

Acushnet prefers to focus on golf balls

Recently I came across with the news that Acushnet (the golf business of Fortune Brands, Inc. (NYSE: FO)) the owner of Titleist, Footjoy golf mega-brands is likely to sell its golf club brand Cobra Golf to the German PUMA AG. Puma AG, is relatively new in the golf equipment industry. Puma entered the golf market in 2006, offering golfers technical performance gear that helped players look better, feel better and play better on and off the course. Today, Puma Golf athletes include newcomer Rickie Fowler, Geoff Ogilvy, Johan Edfors, Jeff Overton and Anna Nordqvist.

Two things are clear from this Puma AG wants to enter to the golf equipment market without investing in developing a brand new golf club brand and technology. So he makes a classic management step acquires an existing brand, technology and with the acquisition also a market share. This is how Adidas Golf was created in 1998 by the acquisition of TaylorMade. Last year Adidas Golf made further acquistions in the apparel segment. The other reason behind the sale of Cobra Golf is the not so rosy sales results. Thus at Acushnet decided to focus on their core competences golf balls and golf shoes.

Both sides are still waiting for regulatory approval. Puma Golf will also gain quite strong social media presence as well. Although it might not part of the balance sheet, but personally I consider it as part of the brand equity (IAS 38 is the relevant to this issue). Since what people find about your brand will influence the attitudes and associations toward the brand.

Currently Cobra Golf, has: a blog http://cobratourblog.com/(that is more likely a brand site and not a blog); 2 Twitter accounts with significant number of followers ((cobratour (2,028); cobragolf (3323)) and a less successful Facebook brand page.

EA's social media power with Tiger Woods

Do we remember that EA (Electronic Arts) "Walk on Water" spot with Tiger Woods from 2009?

The ad went viral and generated 4,682,727 views (8/3/2010) within less than a year. How much it would cost to reach such a big number of potential customer via TV, print or even "classic" online media? From my computer I cannot tell how many of us forwarded or embedded this spot. Let's say at least cca. 10 million people at least saw the video from their free will in total. With this smart step, EA directly engaged with the influencers in a creative way to stop the chatter about possible issues, turned it on its head and immediately into his/her favour. EA not just saved millions of dollars, but gained credibility among potential customers. I do not want to repeat myself about social media importance. It is a smart way for golf courses to promote themselves during the golfing season and in off-season period.

Why do I highlight this issue is because while many Tiger Woods sponsors are abandoning Tiger Woods, but their ads with the golf player is still alive in social media. This will not stop until they remove these videos from YouTube or any other video sharing portals. And even they remove they cannot be sure that nobody will see his brand with Tiger Woods.

I think this is what these brands like Gatorade, Accenture, AT&T forget, that they cannot control everything especially not on the internet and within in it social media.

Wrestlers on golf courses

We would think golf is a peaceful sport and game, but there are companies that think differently. Namely, Armourbite came out with a teeth-protector. To justify themselves, they say (and it is true in general) that when we train and compete, our natural reaction is to clench our jaw. Our clenched jaw and teeth compress our temporomandibular joint (TMJ) and may trigger the release of performance-sapping substances that contribute to fatigue. Here is how this Armourbite teeth-protector looks like:

I am asking myself when was the last time, when I really needed some kind of teeth-protector during my golf play or even when I played basketball. NEVER. I can only come up with one situation and it has nothing to do with sport: sleeping. Yes I am living a stressful life in my job, where I have to achieve certain sales targets in each every month. My girlfriend will be happy, because she will not hear when I am gnashing my teeth during the night. I am already equipped with Respir Activ against snoring. If so, why Armourbite is advertising in Golf Magazine (February 2010, page 33; 1/1 ad). Please do not fool me!! :)

Virtual golf course or an added value service?

Thursday I had a great day. I got involved in an interesting initiative of Business Golf International. As companies and not just golf courses are highly motivated to come up with ideas, solutions that will motivate potential customers to spend more money (even if they have not planned) and give them reason for repurchase and brand loyalty. The George-based Business Golf International and the world largest airline, Delta Airlines developed a new loyalty program schema, International Links Golf Club for SkyMiles members. This will be launched 1 March, 2010.

They promise to give access to 300 US golf courses and many others around the world. Here some of the big names: Doral in Miami, The K Club in Ireland, Trump National in Los Angeles, Son Anten Golf Resort, Valencia, Spain etc. Hopefully the Hungarian golf course Old Lake Golf Club will also join. :)

Well, they have not reinvented the wheel, because we can find many similar initiative with similar interests. As we know 2009 was not an ideal year for the golf tourism industry.

Singapore Airlines and American Express are offering access to Platinum Golf Card holders to 30 golf courses in Singapore and around the world. Last year golf tourism in Asia is bucked the global recession and gave the region a much needed boost.

What is more interesting, as it is more complex: Air France-KLM's FlyingBlueGolf program (with 850 destinations). They thought about golf players' life and their needs, such as car rental, community, tee time arrangement plus their website serves as social networking portal: www.flyingbluegolf.com.

Emirates' loyalty program Skywards Golf Fee Card is even more impressive. They offer to members up to 50% reduction on green fees at more than 2,300 golf courses in 112 countries.

My concern is, how many of us are joining such loyalty programs and do we maximize our credit points that we earned with flying with certain airline?  Those people who are traveling with their golf clubs, they must be ardent golf players. What is the ratio of ardent golf players among golf players? Last year the round of play declined even more which makes such offer less attractive and motivating.

In general airlines have the following rule regarding golf club equipments: you can take one item of golfing equipment is accepted as part of a customer's free baggage allowance. This means 14 golf clubs and 12 golf balls and 1 pair of golf shoes. Fore more information: http://www.theworldofgolf.com/travel.asp