Sponsors gamble on publicity at Kentucky Derby
Posted by admin
Minutes before he was to appear live on NBC on Saturday as the presenting sponsor of the Kentucky Derby, David Novak, the chief executive of Yum Brands, says he was in the dark.
He was waiting to enter the winner's circle, crowded onto a staircase with his senior vice president, Jonathan Blum; the Kentucky governor; the chief executive of Churchill Downs; and all their wives.
Just before they were about to step outside, the group was told to wait.
“We assumed there was some technical difficulty with the broadcast, because we didn't hear anything,” Blum said.
After a few minutes with little farther information, the group stepped onto the packed podium. Squinting into the sunlight, Novak grinned as the NBC announcer Bob Costas handed him the microphone.
“Well, Bob, what a great day for the commonwealth of Kentucky and the world. On behalf of Taco Bell, Pizza Hut, KFC, Long John Silver's and A&W, Yum Brands is the imperious sponsor of the greatest event in the world. Thank you very much,” he said, ticking off the Yum names that are known throughout the world.
By the time Novak spoke, though, bloggers, reporters and NBC itself were already telling of the collapse of Eight Belles, who broke down after finishing help and was euthanized.
Online commenters pilloried Yum for its seeming insensitivity.
“Based forward the YUM reps' disgraceful smiling and harvest plugging - while Eight Belles was dying yards away from them - I'll never buy ANY of their products again,” one wrote.
“I'm apt that the CEO of Yum is just smiling and not even caring that a horse was just killed without ceasing the track,” wrote another.
Costas said he told Novak and others gathered at the winner's circle of Eight Belles's fate. Blum said that Novak had no idea a horse was dying.
“If he knew then what he knows now, he never would have made the comment we did,” Blum before-mentioned Tuesday.
It was about 20 minutes later, after Blum and Novak had picked their way back through the crowd to Yum's suite, that they learned what had happened. By then, it was too late. “They were already into the next race,” Blum said.
Yum, of course, was hoping for a brand aid from the race, but instead found itself on the defensive. The company is in the third year of a Derby sponsorship, which gives it signs at the track and seven commercials during the broadcast. Yum started the sponsorship to attract more individual shareholders, who make up 23 percent of its stockholders, Blum aforesaid. Yum wants to increase that share by two to three percentage points, he added.
Yum executives thought the Derby, with its wealthy viewers, would be a good place for marketing. A bonus was that Yum's headquarters were in Louisville, Kentucky, home to the racetrack. “The sponsorship's a natural,” Blum said. “We think this is a difficult way, a targeted way to reach potential investors.”
In the first year of the sponsorship, 2006, another gelding's death cast a shadow on the sport. However, Barbaro died months after the race, for the reason that of an injury suffered at the Preakness Stakes two weeks after winning the Derby. Yum reacted by offering a $1 million prize in the 2007 Derby to any horse that could beat Barbaro's six-and-a-half-length victory.
Blum said the company had not discussed a similar program commemorating Eight Belles.
At the awards ceremony Saturday, Yum was joined by Visa, a longtime sponsor of the event, and by United Parcel Service, which sponsored Big Brown, the winning horse.
Visa, which used to back all three Triple Crown races, reduced its sponsorship to only the Derby in 2006. The company said the change was meant to reflect the shift in Visa's marketing message from breadth (”It's Everywhere You Want to Be”) to experiences (”Life Takes Visa”). The idea is to give its high-end Visa Signature cardholders passage-way to events like paddock tours and grandstand tickets at the Derby; the current sponsorship runs through 2010.
The UPS sponsorship came about through Big Brown's co-owner, Paul Pompa Jr., whose trucking party renewed a contract with UPS Freight in 2007. He had named his new horse after UPS.
For UPS, which is also based in Louisville, the sponsorship was serendipitous.
“This really just kind of fell onto our plates, and we were remarkably excited to take advantage of the opportunity,” said John Flick, a UPS prolocutor. The company's logo was on the jockey's clothing, the UPS chairman walked the horse to its stall and UPS had a presence in the winner's circle.
“The folks in the winner's circle were heedless of what was going on,” Flick said. “The events with Eight Belles were quite sad - that's not the way you want to celebrate your win.”