According to an article in the Arizona Republic dated April 4, 2008, Ron Ostlund, owner of Phoenix, Arizona based Riviera Pools, has signed a deal with the Arizona Diamondbacks Baseball Team to sponsor the famed swimming pool just past the home run fence in right field for $1 million over 5 years.

It’s no secret that stadium and team owners are looking at any way possible to drive more revenue, and corporate sponsorship of almost every square inch of the stadium is being sold to corporations big and small throughout the Valley to afford to pay salaries of big name ballplayers. But is there a return on investment to the marketer?

According to the article, Ostlund admits he has no idea whether his sponsorship will help him sell more pools. “It’s more of a gut feeling than anything else”, he is quoted as saying. Ostlund said his company built 630 pools last year and is on track to sell 900 this year, before signing the D-backs deal.

Ostlund says he expects the D-backs deal to help him reach even more potential clients. “The best part is the credibility it gives you,” Ostlund said. “It’s just amazing how many people I know who are die-hard D-backs fans. It gives us credibility that will help us sell pools.”

Perhaps.

According to the Association of Pool and Spa Professionals, a major trade group representing pool builders throughout the US, swimming pool builders usually work with a 20% margin on the price they charge for pool installation. If the average pool in Arizona is about $20,000 installed, that means the gross profit is around $4000 per pool. So for Ostlund to break even, he needs to sell about 50 more pools that he would not have sold each if not for the sponsorship each of the five years of his deal.

How is this to be measured? According to Ostland, he is already cruising to a 45% increase in pools built for 2008.

Also, you must look at the fact that there have been at least 3 other pool companies in Phoenix that have sponsored the Arizona Diamondbacks pool in the past. If it had a demonstrable return on investment, then why would they give up a plum position?

I can’t help but wonder what would happen if Mr. Ostlund poured that $200K a year into online advertising with an optimization of his website on all the search engines and a dozen well written landing pages for every conceivable keyword on Google. At least then he would have metrics that showed the return on investment. He could test dozens of headlines, offers, etc. and never have to rely on ‘gut feeling’s to determine if his investment was making him money. With a $200,000 online advertising budget each year, he could probably dominate the pool building industry in his trading areas in short order.

And here’s another thing to ponder: Riviera Pools is also helping their competitors get business. If Riviera is successful in generating “credibility” and brand awareness, then their competitors would be wise to benefit from it as well. All they need to do is buy variations of the Riviera name in paid search advertising on Google. Every time some searches using the Riviera name in the Google search bar the competitor’s ad will appear.

I’m reasonably sure Riviera doesn’t what that to happen.

If Riviera wants to play in the big leagues, we suggest they quit acting like a star struck teenager. Sound marketing decisions are not based upon “gut feelings.” The foundation for business growth lies in the application of many factors, none of which we know lies in hopes and prayers.

Tags: ad spend, Arizona Diamondbacks, Crappy Marketing, Riviera pools, sports sponsorships, swimming pools

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This entry was posted on Wednesday, May 7th, 2008 at 10:14 am and is filed under Advertising, Branding, Crappy Marketing, Lead Generation, Media Buying . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.