Bill James headlined the second annual SABR Analytics Conference in Phoenix last weekend. Brian Kenny from MLB Network’s Clubhouse Confidential acted as a roving emcee of sorts. Joe Posnanski was there. Rob Neyer was there. And our own Dave Cameron and David Appelman were there. The three days of sessions led to lively discussions about WAR and knuckleball academies and the mythical analytics-scouting divide.
But this year’s conference wasn’t limited to questions about how best to measure and project on-the-field performance. Analytics have moved to the business side of the front office. And it’s your off-the-field performance in watching, listening to, and attending ballgames that is now the subject of intense study. Sports marketing isn’t new but the techniques used to measure fans, create new ones, and motivate both groups to purchase tickets and merchandise have become much more sophisiticated.
Scarborough Sports Marketing works with teams in all four professional sports leagues and the leagues themselves. Bill Nielsen, Scarborough’s Vice President of Sales, explained the building blocks for the company’s marketing campaigns: identifying each team’s unique fans — those adults who watch, listen to, or attend games in the team’s Designated Market Area, or DMA. In essence, the team’s TV market. The number of unique fans differs from a team’s attendance figures and TV ratings because many fans attend more than one game in a season. Scarborough conducts paid phone interviews and collects detailed demographic data: age, gender, race/ethnicity, job, family income, address, TV and radio preferences, other entertainment interests, and so on. Each DMA is updated every six months.
The New York Yankees lead all professional sports teams with more than 7 million unique fans. The New York Mets, Los Angeles Dodgers, Philadelphia Phillies, and Los Angeles Angels of Anaheim are the other MLB teams on the top ten list. In the Chicago DMA, the White Sox actually out poll the Cubs for unique fans because so many Cubs fans live outside the Chicago area, thanks to superstation WGN. The Texas Rangers have had the largest growth in unique fans among all MLB teams — 40% since 2010 — and for the first time ever, had more unique fans than the Dallas Cowboys. The Rangers fan growth, according to Bill Nielsen, shows that team performance is the number one factor affecting fan identification and attendance.
The Cleveland Indians have worked with Scarborough Marketing for years but in the last two years, they’ve stepped up their research and marketing game even more. Working with a company called Think Vine, the Indians have created what they call an agent-based marketing model. What does that mean? Using five years worth of data about fans who bought single-game tickets, the Indians and Think Vine built a model that simulates the ticket-buying habits of the team’s actual fans. The model takes into account the exogenous factors that push attendance higher and lower: team performance, opponent, weather, and other entertainment options in the Cleveland DMA.
With that data in the model, the team then simulates the varying success and profitability of the promotions run throughout the season: dollar hot dog days, bobble heads, kids fun days, hats, concerts, and fireworks. The model tells the Indians which promotions are likely to bring in the biggest crowds in particular days and what the likely return on investment will be. For example, bobble head giveaways are quite popular and raise attendance significantly. But bobble heads are expensive to produce. If the Indians give away 10,000 bobble heads, they maximize attendance and profit; if they give away 15,000 bobble heads, attendance increases marginally over giving away 10,000, and the team takes a loss on the promotion.
The Indians’ model also told them that most fans buy single-game tickets within three days of the game they attend. The team uses that information to tailor the subject and timing of ads, whether on digital outlets, print, billboard, radio and TV. As Alex King, the Indians’ Vice President of Marketing and Brand Management explained, the team has moved from gut-based marketing decisions to data-driven marketing decisions. The change brings the business side of the Indians’ front office in line with analytics-driven baseball operations side. There’s now a consistent data-first approach throughout the front office under the leadership of team President Mark Shapiro.
In the late 1990′s and early 2000′s, the Indians played before sell-out crowds at Jacobs/Progressive Field. The new ballpark, fan-favorite players and winning seasons were all the marketing the team needed. That at all changed when the economy soured, the losses piled up and attendance fell through the floor. The Indians had no choice but to innovate. Their commitment to data and analytics in baseball operations opened the door to a similar approach on the business side. This season will be a real test of this new data-driven marketing.
Other teams are watching carefully. After his presentation, Alex King was surrounded by marketing representatives from other teams eager to learn more. Perhaps thus time, the Indians will write the book on the next revolution in baseball. I’m picturing Ryan Gosling in the movie version.
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