For years, Papa John's and NFL football have been synonymous due to a sponsorship agreement that both parties have cultivated over a period of many years. That's the way sport sponsorship deals are. They are like marriages, and branded product marketers count on the affinity that fans have for their teams transferring onto the brands that associate with these teams and leagues through the sponsorship arrangements. And sponsorships do work a lot of the time depending on how marketers "activate" or "leverage" the relationships. This one seemed to work for a long time, and Peyton Manning liked the pizza so much he ended up owning over 30 locations. But things have changed.
After experiencing a sharp drop in pizza sales during the past two NFL anthem protest years, company founder Papa John Schnatter blamed the revenue drop on the protests and the NFL association, which is certainly at least partly true. After all, if an association between a sponsor (Papa John's) and sponsee (the NFL) works in a positive way, shouldn't it also work in a negative way as well? And we all know about the drop in NFL viewership over the past few seasons. So, perhaps Papa was right, but he probably didn't need to say anything about it publicly. That's where so many CEO's these days go wrong, and it can really affect the brand.
Well, Papa John has been removed as CEO, Peyton just sold his pizza franchises, and more shockingly, Papa John's and the NFL agreed to part ways a full two years before the sponsorship was scheduled to end rather than quietly waiting it out. That is a fairly divorce right there. But in a nod to brand's cherishing the opportunity to partner with a sports property as huge as the NFL, Pizza Hut immediately stepped in to fill Papa's sponsorship slot and even extended beyond the two remaining years of the contract into a long-term sponsorship agreement. After all, short-term sponsorship agreements never work out. It takes a while for the association between the brand and the sports property to sink in.
And so Papa John's is left holding an empty box and has shifted some spending to digital platforms while altering its TV advertising strategy to focus on the product, instead of the relationship with the NFL. Perhaps it's all for the best. And due to Manning's long-term endorsement deal with the brand, he will remain a celebrity spokesperson, albeit out of uniform. Generally speaking, marketers could use this as an opportunity to re-brand and perhaps even re-position entirely. It remains to be seen.
And so perhaps Papa John's can make some delicious lemonade out of this whole jar of lemons. Manning is still wildly popular among the general public, and the company could use him as a way to "ambush" Pizza Hut's sponsorship by using ads featuring Manning and placed in and around TV football broadcasts. It's a fairly common and effective practice among major competitors, and it just may be what the marketers at Papa John's have in mind.
Discussion: What do you think Papa John's needs to do to turn things around? Would you use Ambush Marketing as a marketing strategy or would you distance yourself from football? Explain.
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