Ep. 3: Generating New Revenue Through Technology with Adam Grossman
In each episode of The GameDay Playbook presented by FanFood, Rob Cressy discusses how leaders are transforming the sports and live entertainment industry by leveraging technology to enhance the fan experience and operate gameday more efficiently.
Adam Grossman, CEO at Block Six Analytics, joins Rob Cressy to talk about how to generate new revenue through technology. What pieces of data & information are becoming more validating and meaningful? How does the use of technology in sports sponsorships help improve the overall fan experience? Why do you need to be paying attention to Blockchain technology?
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Rob Cressy: (00:05)
Welcome to the Gameday Playbook presented by FanFood, a discussion around how leaders are transforming the sports and live entertainment industry by leveraging technology to enhance the fan experience and operate gameday more efficiently. I’m your host Rob Cressy. And joining me today is Adam Grossman, CEO at Block Six Analytics. Adam, super excited to have you on the show.
Adam Grossman: (00:31)
It’s great to be here.
Rob Cressy: (00:33)
Can you give a quick overview on who you are and what you do?
Adam Grossman: (00:37)
Yeah, so I’m the CEO and founder of Block Six Analytics. It’s a sports sponsorship technology and analytics company. We work with teams, some of which you can see behind me, brands and agencies to help them better generate revenue through sponsorship. So if you’re a team, it’s obviously to help sell sponsorships more efficiently and more effectively. If you’re a brand or sponsor, how can you use sponsorship to more effectively engage with your target audience in order to generate incremental revenue growth. And if you’re an agency, it’s to help the brands and the teams or you know, leagues or athletes or entities, more effectively communicate with one another and more effectively drive revenue and meet brand goals that are important to both sides of the sponsorship equation. I’m also a professor at Northwestern, have a Masters of Sports Administration program where I’ve developed three classes and currently teach two classes and then the co-author of the book, the Sports Strategists, developing leaders for a high performance industry.
Rob Cressy: (01:36)
Awesome. So let’s get started with this. There’s a lot of conversation about how teams can better use and leverage data and stadiums are also becoming more digitized. There is a lot more technology in sports. What pieces of information are becoming more validating or meaningful so that these teams or sponsors or brands can start taking action on them?
Adam Grossman: (02:01)
Yeah, there’s two real things that we would want to follow, particularly when it comes to data. It’s how do we better understand fit and engagement. So fit. It’s not just necessarily the volume only in terms of who’s at the stadium, who’s watching television, who’s participating in digital or social media. It is who are those people? How are they a good fit for the company? And the company could be the team itself in terms of how can I better? Um, so how can I more effectively sells tickets? How can I more effectively sell concessions? How can I more effectively sell merchandise? How can I more effectively make the gameday experience better for my core audiences? But the idea behind it is we need to understand who is interacting with our content. And as the idea of content continues to emerge, whether it’s the game itself at the stadium or using digital social, virtual reality, augmented reality, the idea of who is interacting with the content is very important.
And then the second piece is engagement. It really is understanding, you know, how likely is somebody to interact with content that I’m creating? Again, whether that’s in venue or in digital or in linear television, or other channels that are beginning to emerge in the sports industry, and the idea of how likely is somebody to interact is definitely something — from a sponsorship perspective — that brands are really into. Not just in terms of sports sponsorship but advertising more generally. It is can I create engaging content? And usually one of the frames they look at that is through unique experiences, and that’s where sports organizations and sports content can really differentiate itself both in terms of it having to be consumed live, but also in terms of the unique experiences created through sports. You know, the women’s World Cup is happening right now. We’re recording this. But the emotions that come from the US women winning the World Cup you know. We just had a terrific wrap over the NBA finals, the NHL, NHL Stanley Cup. Those are unique experiences that are hard to recreate in other channels. So the ability to understand fit and engagement is something that’s central with the evolution of technology.
Rob Cressy: (04:12)
And certainly I think this is something that’s evolving for the entire industry as a whole. As you look at how content has gone from desktop to mobile and social and everything going from impression based to engagement base, knowing that you can slap banner ads on any website anywhere and get millions of impressions, but the true value of something is how much is someone going to engage with it, which really helps build the relationship a lot more with someone to get them to take the desired action.
Adam Grossman: (04:43)
That’s exactly right. And the idea of how is content specifically beneficial to specific audiences. Reaching a large audience can and is beneficial to some folks, and for some companies. But you know, per what you just said, the idea of being able to reach a targeted audience and get them to engage with the content, that increases the likelihood of brand sentiment, brand perception, brand awareness, purchasing behavior, purchasing intent, customer retention. Each company is going to have very different goals, uh, even within the same industry, potentially in terms of what they’re trying to accomplish. Who are they trying to target and what’s the most effective way to reach their demographics. And if you can prove that engagement occurs in variety of different channels: One, you need to be able to track that; and Two, you really need to be able to understand the value of that and really understand the value of that for your business. And that’s more and more both on the teams themselves. Like I mentioned, the sellers typically, whether it’s the teams, the leagues, the events the athletes or the buyers of sports sponsorship, the large companies, some of which we’ve worked with, they’re all asking the same question and how is all of this technology beneficial to my business and how is it going to drive specific business business results that are important, my return on investment and return on objectives.
Rob Cressy: (06:00)
So let’s keep going down this in terms of how it’s improving the overall fan experience. So how is the use of technology and sports sponsorships helping improve the overall fan experience? And what do you think teams and brands need to do more to engage fans? They want to see their desired business results, but at the same time they still have to think from the lens of a consumer, because I do believe that one area where a lot of brands struggle is they think about their needs, but at the end of the day, fans want to be working with or supporting brands that get them and want to provide value for them.
Adam Grossman: (06:38)
Yeah, I think one of the things that we’ve talked about in this context is something called cause marketing, which is probably maybe familiar to your audience, but it’s essentially the alignment of businesses with certain, ypolitical, economic, social goals that usually fall outside the ideas of what people would traditionally think about companies. When people normally think about companies, they’ll take the least controversial stance to offend the least amount of people. Offending people is almost worse than being able to engage them. What we found, particularly with the growth of cause marketing, is that companies more and more frequently are taking stances that do resonate with the issues that are important to their consumers. And that’s one way that they can differentiate themselves in a competitive environment. So one example — that we actually brought up is in the context of the US women’s national team — is Luna Bar saying that they were going to pay for the difference between what the women and men’s national team players made throughout the course of a World Cup cycle, particularly in 2019 with the US women competing right now.
And that is a company taking a stance saying, you know, we believe in gender equality and we’re going to put our money where our mouth is, and support these US women athletes. I believe it’s over $30,000 per athlete to make up the difference between where the men and women can make in terms of their base salary. And the idea is that sports offers these opportunities to take advantage of cause marketing capabilities. And that’s because people care about sports. People care about their teams, they care about the athletes, they care about the coaches. Even the media members become part of the audience and the idea that fans are authentically engaging with athletes, teams, leagues and events. That’s something where data can show the increased value of sports, particularly as we move in this direction. So for fans, you know the idea is how do we create experiences that align with things that are important to them. And that’s what brands have increasingly saw value in and increasingly saw themselves as a way to differentiate themselves. So you know, for the Luna Bar example, we wrote a post about this. It may be hard to, for the average consumer, to differentiate Luna bar and Clif Bar: which is the company that owns Luna Bar from other nutrition bars in the market. But if you can say, look, Luna Bar stands for what I stand for and Luna Bar believes in what I believe in. And there are a lot of people who are on the other side of gender equality, particularly when it comes to paying athletes in sports. And particularly when it comes to paying men’s and women’s athletes at the same rate. That’s definitely a controversial stand to take. They could alienate potential customers. Both what they found and what you could see is that Luna Bar actually determined that the US women’s national teams audience was a good fit for their brand, that this type of message would resonate with their core consumers. And again, it was a way to differentiate themselves in the marketplace. So there’s the opportunity to do well by doing good. And that’s something where sports can provide a unique advantage while is still resonating with what the fan is looking for from the sports experience.
Rob Cressy: (09:52)
That’s a great example. And what I like about it so much is being able to speak to your core demographic instead of worrying necessarily about those who aren’t going to purchase. Because I believe that the brands that succeed the most in this current digital and relationship oriented landscape are the ones that you’re going to be able to have shared values with who get you. And you have to imagine the brand loyalty of Luna Bar is going to be significantly higher among that audience as opposed to the fringe people who say: I’m not really sure if this is for me. So next thing, let’s talk about generating new revenue through technology. This seems like a no-brainer, but oftentimes there’s a resistance to new technology because it’s new. How do you overcome this?
Adam Grossman: (10:43)
Yeah, that’s a great point. That is definitely something that happens both inside and outside of the sports industry and inside, outside of sponsorship. What you really need to do is, and I know this is a little bit of a refrain that we’ve had throughout this conversation, but breaking in things. If you take new technology and break them down into their component parts. Like what is the impact of virtual reality? What is the impact of augmented reality? What is the impact of moving away from traditional signage and move them into new activations and breaking them down into their component parts.
So the way we do that in our company is we have a model called the corporate asset valuation model. We break everything, every type of asset down into essentially a three by two matrix. If you think about it in terms of the x-axis, we look at initiatives, demographics, and channels; on y-axis, we look at return on investment and return on objectives. And if every single activation item can be broken down to say, what is the top impact either on top line, revenue growth, bottom line, revenue growth, customer value, lifetime customer value, whatever the metric is you’re using, how does each company make money and how does this activation impact the ability and the probability of a company receiving a lift in revenue growth? And then the second line, you know, from return objectives is how does all of these factors impact what’s important to the brand?
And typically, we’ve mentioned some of these factors before, but what does the impact on brand sentiment, brand awareness, brand engagement, and how does that impact those things? On the x-axis, you’re looking at initiatives. What are you trying to accomplish? Demographics — who are the people you’re trying to target and channels? Where’s the most effective way to reach those demographics? So what you need to do, and I tell this in my class all the time, is people are lazy. Like that’s just the definition of people. People want to know what’s in it for them. And people find that losses impact them more than gains. So when you lose something, it’s worse off than if you gain the same amount. And the second thing is the best way to incentivize or to make somebody do the thing you want them to do is not to incentivize them to take action, but is to remove all the obstacles that would prevent them from taking action. So if you can say, here’s this new technology, here’s how this breaks out across this two by three matrix. Here’s how this fits for your business and you take something that looks scary and break it into the component parts that say this is how it impacts you. This is how it impacts you, your company and your stakeholders. It makes new technology seem less scary to makes it seem like the way that they would evaluate other assets, other advertising and other marketing opportunities.
Rob Cressy: (13:56)
I absolutely love that. That was fantastic. What has your eye right now from a sports and technology standpoint that we should be paying attention to?
Adam Grossman: (14:07)
Yeah, I mean I think the big thing that may be coming… And people asked us, you know, our company’s name is block six analytics, they ask if we have anything to do with blockchain since we have “block” in the title. But unfortunately we don’t have anything directly to do with blockchain. But I do think blockchain technology could really impact sports. I don’t think blockchain is actually necessarily been as beneficial as it could be for other industries. But the sports industry in particular can benefit given the revenue streams that make up the primary ways that people generate a revenue from the sports industry in particular. You know, blockchain for ticket sales, being able to track every ticket sale and everywhere the tickets go both in the primary and secondary market. So, you know, not just you, more and more teams are moving to mobile ticketing because it’s able to more easily track that. But if you had a blockchain approach, you could track it. Not only could you track it, but anybody could really track who had access to the blockchain, where a ticket has gone. And is this the authentic ticket? And had somebody tried to use this before? So I do think blockchain from a ticketing perspective. And one of the things I talked about in a previous blog post is from a media perspective, particularly when it comes to direct to consumer or over the top or OTT consumption, is there is a way to potentially eliminate piracy to a certain degree or to a large degree, plus be able to track exactly who’s consuming the content and being able to charge people directly every time somebody opens a video stream. You can track it in the blockchain; you could see who that was and charge them a micropayment.
So the idea of changing media consumption potentially from an advertisers report model. There’s nothing wrong with that. But you know, in terms of being able to more efficiently and effectively monetize direct consumption of content, particularly as we move to more streaming platforms, blockchain can really have an impact on sports. And again, this has nothing to do with what people traditionally say. If there is a traditional thing when you’re talking about directly with currency, it’s more the technology itself that can really have an impact on the sports industry. I think it could still have an impact. You know, teams and leagues are already exploring ways they can use blockchain where there’s some kind of transaction that simulates currency. That’s definitely something to explore. But I actually think the core ways that sports organizations generate revenue can and will be impacted by a blockchain technology.
Rob Cressy: (16:33)
Yeah. Blockchain is something that is very interesting to me and I want to give actually one tip to the listener. There may be some people out there that have heard about blockchain technology and don’t actually understand really what it is, where crypto comes in. Like is there a blending of all of this? And I was like that at one point where I had a friend of mine who just kept on mentioning blockchain, blockchain until I got to a point where I said, listen, I’m either gonna be able to have conversations with him intelligently about this or not. So what did I do? I just went and found, hey, what is the leading book on blockchain technology? And then I read it. Does this mean I’m an expert at blockchain? No, but what this does allow you to do is filter all the noise that you see in the media about the roller coaster of cryptocurrency. Have them go up and down in value in how blockchain is different than all of that. Because I think people who don’t know just lump it all together. Once you understand blockchain technology, it’s quite fascinating and quite frankly it makes complete sense to me. The first time I heard that I was like: duh, why do we not do this?
Adam Grossman: (17:42)
Yeah, and I think the big thing you’ve just brought up is a really important point is what’s the difference between cryptocurrency and blockchain technology. I take it as a really important step because the understanding of how the underlying technology versus how it just specifically works in currency is something where I think that’s what people are actually potentially even more excited about. I think the blockchain piece of it on its own could really impact sports industry and then industries more generally.
Rob Cressy: (18:15)
Yeah, totally agree. You wrote a book, “the Sports Strategists — developing leaders for a high performance industry”. And when I was checking it out there was a specific thing that you meant that was mentioned on your Amazon page that really stood out to me and said “the demand for innovative leaders who can address issues and make tough decisions on which challenges to prioritize has never been greater”. So how do you prioritize challenges?
Adam Grossman: (18:45)
Yeah, I mean, so one of the things we articulated in the book is a framework to prioritize challenges in particular, it’s called “the revenue generating framework”. So it’s a little different for my company than it is for other companies in the sports organization. It’s a little different if you’re on the the rights holder property side versus other potential audiences that are in the sports industry. It’s complex. Things are happening all the time, both in terms of the evolution of technology versus the changing boundaries from a competition perspective. The idea that the English premier league would be the number one soccer league in the United States in terms of television consumption 20 years ago or even potentially more recently than that was not something that would be necessarily on people’s radar.
And the idea that an English premier league can compete successfully in the United States. And in fact it’s the biggest league around the world, particularly it has a much larger audience in Asia than it does even in Europe. It’s something we want to factor in. So the idea behind this is how do you prioritize all of these different strategic challenges? Whether it’s on a very local level to the broadest international level. And how does your company make money? How does your company build its brand? How does the company engage with fans? Who are the types of fans you should engage with and who are the types of fans maybe never really are impacted by marketing or never really impacted by the things you’re trying to accomplish as a business.
So being able to identify the marginal fan or the marginal audience member is something that we really want to put together. So we have a variety of different frameworks that we use in the book that helps sports decision-makers. Obviously sports strategists identify the challenges that are most important to their business and have the frameworks to address those in multiple different contexts. Starting from the chapters of the book to the frameworks of the book to the case studies we have in the book, those all give instructional guidance about what to focus on. Because strategy is all about choices. It’s all about making decisions, it’s all about prioritization and understanding what’s important, understanding how to deal with what’s important and understanding how to communicate what’s important to internal and external audiences is absolutely critical. And that’s the foundation of the book.
Rob Cressy: (21:27)
Adam, I really dig everything that you’ve got going on. Where can people connect with you and Block Six Analytics?
Adam Grossman: (21:34)
Yeah, absolutely. So you can go to www.blocksixanalytics.com. We’re on Twitter @block6analytics, and Facebook and Instagram @blocksixanalytics. But you know, we’re in all of the normal social media channels, particularly given that we have a social media listening tool. You can also reach out to us either by going to the website or contacting us at Info@blocksixanalytics.com.
Rob Cressy: (22:07)
And as always, I would love to hear from you about this episode. Did it cause you to think or take action? Hit us up and let us know. You can hit up FanFood on Twitter @fanfoodondemand, on Instagram @fanfoodapp or on LinkedIn. And you can always hit me up on LinkedIn by searching Rob Cressy.