AT&T Ohio Market Analysis

Prepared by Max Alpert

Introduction AT&T has deployed a sponsorship strategy that covers national and local events. These events range from a wide variety of sporting events to charitable events in local communities. AT&T has the name sponsorship on multiple sports venues, such as San Antonio’s AT&T Center and AT&T Park in San Francisco. AT&T also gets involved with high-profile national events, such as the Final Four, Pebble Beach, Major League Soccer, and the Olympics. What’s great is that AT&T does not stop there. They are also very involved with local events such as 5k’s and festivals in local communities. This proposal will offer a plan for Ohio that goes along with the company’s strategy to reach out to both business and consumer customers. There are many opportunities in the state of Ohio for AT&T to partner with in the music, entertainment, and sports industries that will help increase brand preference and grow market share. Most major events occur in one of the state’s three main cities, each with its own selling points. Those cities are Cincinnati, Cleveland, and Columbus.

This proposal focuses on extending AT&T’s strategy of partnering with a variety of highly visible sports, community and entertainment sponsorships in order to gain market share.

This report will provide an overview and analysis of each market and recommendations for sponsorships based on demographics. Each city will be analyzed individually for its growth patterns and demographics. All of this information is crucial when determining how to increase AT&T’s market share in Ohio. For sponsorships to be effective they need to be either innovative or solution oriented. For example, in the Cincinnati section of the report, there is a growth trend of younger adults moving to the new downtown area. This is a great opportunity for AT&T to take advantage of while this area is still in the growth stage. The other way to be effective in a market is to use AT&T technology to solve a communication problem that people have. For example, the Cincinnati Reds stadium, Great American Ballpark, many people have complained about the poor cell phone reception within the stadium. This is not only a problem that needs to be solved, but this exactly the kind of sponsorship that AT&T can cater to. This report will not only contain an advanced market analysis of the various cities in Ohio, but it will also provide tangible ideas for AT&T to consider. Whether it is bringing the “Rethink Possible” campaign to life in a whole new way, or creating a new concert venue in an up-and-coming area, all aspects of the market will be analyzed.

Cincinnati

Market Trends Cincinnati is an up-and-coming city in Ohio, and it appears that the younger crowd is contributing heavily to the growth of the city. There is one specific area of Cincinnati that I think will be the most beneficial in terms of growing market share. Downtown Cincinnati Inc. publishes an annual report called State of Downtown Report. Here is a chart they published that shows the growth in the central business district (CBD) and in the Over-the-Rhine and Pendleton neighborhood downtown. Over-the-Rhine and Pendleton are neighborhoods in the downtown area that are promoting growth of the city to the younger demographic.

Age Range Percentage of Population

Under 18 22.3% 18 to 24 12.3% 25 to 44 28.7% 45 to 64 24.7% 65 and older 12.0% Median Age 35.7 Population 333,013

Race Percentage of Population

White 51.0% Black 44.4% Other 4.6%

As the trends show, it is not the central business district that is growing at a rapid pace, but it is in fact the areas that are attracting the post-college aged youth that are experiencing pretty substantial growth. 41% of the population in Cincinnati is between the ages of 18 and 44. A large part of this recent development is because of an area called The Banks. This is a project in downtown Cincinnati that started its construction in 2009. The goal of the project was to create a new image of downtown that appeals in an urban way to get the younger crowd more involved downtown. There was a very large, undeveloped area between the two sports stadiums downtown, Great American Ballpark (home of the Cincinnati Reds) and Paul Brown Stadium (home of the Cincinnati Bengals.)

 Courtesy   of   thebankscincy.com    

In the picture above, Paul Brown Stadium is on the left, and Great American Ballpark on the right. In between the two is a very large area of land that is now home to the Banks. The Banks project set out to create a new nightlife scene, with an array of urban apartments and entertainment that appeals to the new crowd in the area.

Courtesy  of  thebankscincy.com    

The previous picture is what the current phase of the Banks looks like. It is much more lively and vibrant than just the lots that were there before. Phase II of the project is underway, which is focusing on building a new parking facility, developing a new transit system, and creating more apartment space. As the Banks becomes a more and more developed area, it is safe to assume the growth trends will continue in the same positive direction. The growth that this area is experiencing is not common in most cities like Cincinnati, which is why this is a great opportunity for AT&T to explore. According the Banks website, they are still interested in private development opportunities and public infrastructure opportunities in the project. AT&T Pavilion As the younger crowd continues to move to the rapidly growing area between the stadiums, there is a great opportunity for AT&T to get involved. There is currently a growing nightlife scene that appeals to the post college aged demographic, which will continue to grow and become more popular. On top of that, people that age have historically appreciated live music and entertainment. This is currently an unchartered field in the Banks area that AT&T can take advantage of. The idea here is that AT&T can develop and build a pavilion that is suited to host concerts and performances, right in the new bustling area of Cincinnati. This new pavilion will come close to mimicking the AT&T Performing Arts Center venue, Strauss Square.

 Courtesy  of  AT&T  Performance  Arts  Center  

 This alone will increase AT&T awareness in the area, but there is more to this project. Here is where the sponsorship aspect arrives.

As mentioned in an article in The Daily Markets website, AT&T already has deals with the two stadiums in relation to cell phone towers in this specific area. The Cincinnati Reds and Bengals could also sponsor this new pavilion as well. For example, select days during the month after Reds games, the AT&T pavilion can host “Bands After Ball.” This will feature live music at the pavilion after the Reds game that night. People with tickets to the Reds game from that night will be given free admission to the show, as well as general admission tickets being sold to the public. Not only will this help increase the attendance at the baseball game, but AT&T can get its name involved with some of the hot upcoming artists that will be booked at the pavilion. The final aspect of the pavilion is the defining feature. Right behind the stage, there will be a cellphone tower (whether it is actually functional or not.) Cell phone towers are normally built to be inconspicuous and unnoticeable, but this one will be different. It will be able to be seen from a far distance, which will bring attention to the fact that the pavilion is there. This cell phone tower will have high-powered lights that will act as if they were part of the music production of the show going on. It is a unique idea that will add a savvy flair to the pavilion. The classic AT&T “globe” logo could also sit atop the tower, making the presence even more noticeable. Because there is already a sponsorship in place with the sports venues in Cincinnati, this specific opportunity would be taking the partnership to a new level. AT&T is not only solving the cell service issue in the stadiums, but it is also drawing people to the fact that AT&T wants to be a part of the new development in downtown Cincinnati. Both the Reds and Bengals are starting to improve on the field, which is always a factor in sports sponsorships. By sponsoring a new venue in a growing area and the sports team, this could be considered a monopolistic opportunity for AT&T. AT&T is constantly upgrading its 4G and LTE networks, making it very appealing to the generation that is constantly focusing on technology. If the AT&T network has an overwhelming presence in the area, general logic will suggest that when young adults move to the area, they are more likely to get the phone service that is everywhere. On top of the physical presence, the partnerships with the sports teams are a crucial aspect to increase the awareness of AT&T in the developing area. AT&T can also come up with new ad campaigns that will demonstrate just exactly what AT&T is doing. For example, one billboard can be placed in the outfield of Great American Ballpark (Mock billboard below.)

Hometown  Sports,  Live  Music,  Top  Notch  4G  Cell  Service?  Now  that’s  a  triple  play.      

Great  American  Ballpark     AT&T  Rethink  Possible  

Cincinnati Symphony A lot of this analysis has shown that AT&T can raise its market share by marketing to the youth. A good compliment to that, the Cincinnati Symphony attracts just about every other age group aside from the youth. The Cincinnati Symphony is nationally renown as being one of the premier symphonies, but also one of the oldest, dating back to 1895.

Not only do those that find classical music appealing go to these symphonies, but it is also an event that businesses attend with clients. Sponsoring this event would not only market to the individual consumers of AT&T services, but also the business customers as well. This is a very unique event that Cincinnati is very proud of, and being able to be a part of it could be a very opportunistic opportunity. AT&T can also host a gala similar to the gala it sponsors for the Dallas Symphony Orchestra. It is a great event that brings the community together to raise money for the symphony orchestra. Summary The growth that Cincinnati is experiencing is a huge opportunity for AT&T not only because of the pavilion idea, but also because of the rapid growth itself. The best analogy is to compare the situation to investing in a company. You don’t want to invest when a company has already hit its peak; you want to get in while the company is growing in order to capitalize at its maturity. By sponsoring a new music venue and expanding its partnerships with the Reds and Bengals, the opportunities are endless. As the Banks area continues to grow, so will AT&T in the Cincinnati market. According to the AT&T 2012 Fourth-Quarter report published on their website, U-verse has been experiencing a good amount of growth (36.3% growth in U-verse revenue.) It is becoming clearer that consumers are ready to move on from cable and evolve into a new brand of watching television. I believe that a partnership with the Banks could be very beneficial. Many apartment complexes have deals with TV and Internet partners, so why not AT&T? U-verse is becoming very popular, especially with the younger generations that are more focused on large quantities of HD channels, as well as easy accessibility.

U-verse can provide customers with all of the above, so working out a sponsorship with the new apartments being built would be very beneficial to growing AT&T’s market share amongst the newer generations.

Cleveland

 

Market Trends It is very clear in Cleveland that the people love their sports teams, the Cavaliers, the Browns, and the Indians. Cleveland, compared to other cities with three major sports teams, is a small market. This makes it more of a “family” feel that the fans have for their teams. In this technologically growing environment, more people are concerned with technology and at-hand information during sporting events, making wireless/phone reception a must during sporting events. AT&T has made great strides in that focus in Cincinnati, but in order to be successful in the other markets, we need to take a look at the competitors in Cleveland. Very recently, according to an article on the Cavaliers website, Verizon Wireless has moved into Quicken Loans Arena (“The Q,” home of the Cavaliers) with a new distributed antenna system (DAS). This new system is being combined with the WIFI network that The Q already has in place. The idea behind this is to engage the fans in social media and in-game promotions on their smartphones. Because this partnership is just beginning, it would be very hard to combat it head-on. The best way to be successful in this case is to not start a “wireless war” in the arena (even if they did allow AT&T to become a partner as well,) but there are other ways to get AT&T out there in the same market. According to ESPN NBA attendance rates, the Cavaliers have the ninth worst attendance in the NBA this season, averaging 16,034 fans a night (78% of arena capacity.) The Cavs are the NBA’s youngest up and coming team with budding superstars like Kyrie Irving, causing the telecast ratings to rise again after the departure of LeBron James a few years ago. There are out-of-arena sponsorship opportunities with the Cavaliers that could make just as big of a splash as the new Verizon network within the arena.

Age  Range   Percentage  of  Population  

Under  18   25.4%  18  to  24   9.7%  25  to  44   26.9%  45  to  64   25.4%  65  and  older   12.6%  Median  Age   36.9  Population   431,369  Race/Ethnicity   Percentage  of  

Population  White   40.4%  Black   52.5%  Other   7.1%  

Cleveland Cavaliers As U-verse continues to grow at a fast pace, so does the technology associated with it. One specific aspect of U-verse that I believe will work in this market is the H.O.R.S.E. application that was unveiled during NCAA March Madness this year. Fans watching at home now have the opportunity to play a fun interactive game while watching their favorite players on the court. By partnering with the Cavaliers and their television affiliate, you can create a game-specific program. For example, every fan at home that successfully wins a game of H.O.R.S.E. during the telecast will automatically be entered into a raffle. At the end of each broadcast, a little banner on the bottom of the screen will display the “AT&T H.O.R.S.E. Champion of the Game,” displaying the username of the winner of the raffle. This person would then win some sort of AT&T/Cleveland Cavaliers prize package (T-shirt, hat…etc.) This would be a repetitive segment at the end of every Cavaliers game, which would subconsciously stick in the heads of the viewers. Various commercials and ads will be made advertising Cavaliers H.O.R.S.E. throughout the telecast, increasing the awareness of AT&T, specifically U-verse.

 Young  Cavaliers  Stars,  Courtesy  of  NBA.com

The Cavaliers are one of the most hot, young, and upcoming teams in the NBA. This is their starting lineup with ages: Kyrie Irving (21), Dion Waiters (21), Alonzo Gee (25), Tristan Thompson (22), and Tyler Zeller (23). This makes their average age for the starting lineup a startling 22.4. All of these players were in college in the very recent past, making them relative to the younger generation of basketball fans. That same generation of basketball fans is also those that are interested in social media and newer technology, such as the demographic that the H.O.R.S.E. application was appealing to in March. Because of this demographic, I think it could really catch on with younger teams because of their young and growing fan base.

Cleveland Marathon The Cleveland Marathon started in 1977, and has been run every year since. This race features runners from all over the country and is listed as one of the top qualifying races for the Boston Marathon. In 2012, there were 2,635 contestants in the marathon. Since it started in 1977, the marathon has contributed over two million dollars to local charities in Cleveland. As far as demographics go, people of all ages run marathons, which makes this even so marketable. There is plenty of advertisement space among the 26.2-mile race that can be taken advantage of. Whether it is sponsoring an overpass ad space or the many water stations that the runners pick up water from, there are plenty of opportunities to get AT&T out there. A sponsorship could include a runner tracking application for AT&T subscribers. A map could be seen with live updates of runners’ paces and progress throughout the race. On top of all of this, this is a huge event in the Cleveland community. This would be a great way for AT&T to sponsor a high-profile event that is also seen as a staple in the community.

Columbus

Market Trends On Numbers reports that Columbus is ranked the 20th best city for young adults among 102 metro areas in the United States. The number one city was Austin, TX. These can be compared because they are both home to very large public universities, causing more post-college adults to want to stay in the city they have been living and networking in for the past four years. As the demographics show, 69.5% of the population is under the age of 44. There are various local events that are held in Columbus that go right along with the sponsorships AT&T already has. To complement that, Columbus is also home to a Major League Soccer team, a current partner of AT&T. As an up and coming city, AT&T has the opportunity to get involved in this community while growth is still occurring. Pelotonia Pelotonia is becoming a huge event in Columbus. Started four years ago, Pelotonia is a philanthropic bike race in which every entrant raises money for the Arthur G. James Cancer Hospital. 100% of the funds raised are donated to this hospital for the purpose of cancer research. In just its first four races of existence, Pelotonia has had 11,100 riders in the race, and has raised over 42 million dollars that has been donated to cancer research. The only way to make sure that all of the funds raised are donated to cancer research, Pelotonia is sponsored by corporate funding partners.

Age  Range   Percentage  of  Population  

Under  18   24.3%  18  to  24   12.6%  25  to  44   32.6%  45  to  64   21.8%  65  and  older   8.7%  Median  Age   32.3  Population   773,021  Race/Ethnicity   Percentage  of  

Population  White   65.4%  Black   26.4%  Other   8.2%  

AT&T has shown a desire to not only sponsor some of the biggest national events in the country, but local events that are for a worthy cause, such as Pelotonia. AT&T wants to show that the company is more than just profits, but also emphasizing community action. Growing market share does not always mean earning a profit on every sponsorship, especially if it means associating AT&T’s name with a terrific philanthropic event such as this one. As the numbers have shown, this is a growing event that AT&T should consider sponsoring. Columbus Crew Because AT&T already has a partnership with Major League Soccer, the Columbus Crew is a good outlet for AT&T to explore. According to Major League Soccer, the Columbus Crew had 2011 attendance averages of 12,185 per game. In 2012, the number rose by 18.15%, becoming 14,379, which was the second highest growth rate from 2011 to 2012 among all MLS teams.

 Crew  Stadium,  Courtesy  of  thecrew.com  

Courtesy  of  Pelotonia.org  

Currently, the Crew plays at “Crew Stadium.” The primary purpose of the stadium is for Crew soccer games, but it also hosts NCAA and U.S. National soccer matches. In addition to soccer, the stadium also hosts numerous concerts every year. Because this venue does not have a corporate name, this would be a great sponsorship opportunity for AT&T. Sponsoring a sport venue is a process that AT&T is already used to, going through it in San Francisco (AT&T Park) and San Antonio (AT&T Center.) This is a chance for AT&T to be the primary sponsor of a multipurpose venue in a young city that is currently growing. As is the case with most large stadiums, cell phone service is normally an issue. This is another chance for AT&T to create a cell service network around the stadium to try and solve this issue.

Final Analysis There are a lot of sponsorship opportunities for AT&T to take advantage of in this area. After breaking down the demographics of each area, the next step was to find interesting and profitable opportunities in each specific city that relates to those demographics. This part of the process involved creating new, innovative marketing campaigns, creating completely new ideas, or just improving current cellular situations. In terms of partnerships, there are many opportunities as well. When it came to sponsoring sports team and venues, AT&T already has a background dealing with those kinds of sponsorships. The main theme with sponsorships in Ohio is growth. As a lot of the analysis covers, there is growth going on in cities, developing areas, and even growth amongst sports teams, such as the Cavaliers. If AT&T can create or uphold strong partnerships with these outlets during times of growth, the idea is that AT&T will experience parallel growth. I also believe that there are multiple established events, such as the Pelotonia bike race and Cleveland Marathon, that AT&T would be advised to become apart of. It does not have to be those events specifically, but those types of events. These types of events not only help these cities economically, but it also creates a strong bond throughout the community. These community driven events would be a great way for AT&T to get involved on a more personal level with the potential customers in the area. I hope that with these final few comments to compliment the entire market analysis, AT&T has a better idea of the opportunities within the Ohio market to raise its market share. There is a diverse range of opportunities that can be taken advantage of, each of which would be great opportunities for AT&T moving forward.

Works Cited

“2012-2013 NBA Attendance” http://espn.go.com/nba/attendance “AT&T Brings 4G to Cincinnati”

http://www.dailymarkets.com/stock/2011/03/28/att-brings-4g-to-cincinnati/

“AT&T Fourth-Quarter 2012 Earnings”

http://www.att.com/gen/pressroom?pid=23672&cdvn=news&newsarticleid=35937

“AT&T U-verse H.O.R.S.E.” http://www.uversehorse.com/ “Cincinnati Symphony Orchestra” http://cincinnatisymphony.org/Content.php?id=42 “Cleveland Cavaliers – Depth Chart” http://sports.yahoo.com/nba/teams/cle/depthchart “Cleveland Marathon” http://www.clevelandmarathon.com/ “Columbus one of the best cities for young adults”

http://www.bizjournals.com/columbus/morning_call/2013/04/columbus-best-in-state-for-young-adults.html

“Folks are mad about bad cell phone service in and around Great American Ballpark”

http://hardballtalk.nbcsports.com/2012/10/11/folks-are-mad-about-bad-cell-phone-service-in-and-around-great-american-ballpark/

“Largest Cities in Ohio”

http://voices.yahoo.com/largest-cities-ohio-2011-6121982.html “Pelotonia” http://pelotonia.org “The Banks” http://thebankscincy.com/ “The Q Speeds Ahead with New Digital Technology” http://www.nba.com/cavaliers/releases/q-wireless-130411

“Thousands of new residents now calling downtown Cincinnati home”

http://www.urbancincy.com/2012/05/thousands-of-new-residents-now-calling-downtown-cincinnati-home/