One of the sports world’s biggest advertisers, State Farm doubled down this week, buying the naming rights for the home venues of the Atlanta Hawks and Arizona Cardinals.
State Farm Arena and State Farm Stadium, commitments of 20 and 18 years respectively, are the insurance giant’s answer to a rapidly changing media landscape. Long reliant on network television advertising, State Farm is seeking new, more permanent ways to promote itself.
“Our world has changed,” said Rand Harbert, State Farm’s Chief Agency and Marketing Officer. “We have depended so much on traditional media here, and it’s been good to us, but as traditional media continues to change, and we’ve been a part of that change, so too does digitization and how you reach millennial customers.”
Digital advertising, which gives companies a more targeted approach, is good for winning new customers. Harbert needed new ideas for brand promotion. Alongside suggestions like a blimp partnership and a bigger push into esports, his team proposed buying the naming rights for the Atlanta and Glendale venues.
There are only a few companies that have their name on multiple buildings in the major U.S. leagues (American Airlines, Mercedes-Benz), and none announced those commitments in the same week. State Farm wouldn’t say how much it agreed to pay, but it’s not unusual for naming rights in areas like these to fetch $10 million a year or more, which would make State Farm’s commitment worth well more than $300 million.
Harbert’s marketing budget isn’t changing. To offset the costs, State Farm will be doing less advertising across television, radio and print. Harbert said the average consumer “won’t really notice the changes.”
State Farm also has its name on a small arena in Hildalgo, Texas (a contract it doesn’t plan to renew), and the arena at the University of Illinois, 50 miles from its Bloomington headquarters.
Now the company’s brand will have a larger presence in two cities where it has regional hubs. Harbert said State Farm likes the idea of having increased representation in two different time zones and in the country’s fastest-growing league (NBA) and its most popular (NFL).
“The fact that these came open, in two leagues and two markets that we care about, really was a luck and timing thing,” Harbert said.