Goldman Sachs (GS) recently announced a two-year endorsement pact with U.S. golfer Patrick Cantlay—the first athlete sponsorship in the 150-year history of the firm. Cantlay will serve as a spokesperson for the Marcus by Goldman Sachs brand, adorning the company logo on clothing during PGA events and starring in a series of national TV spots. On the surface, it may seem odd that the global investment banking, securities and investment management firm is entering the sports sponsorship arena after a century and a half of sitting on the sidelines (never mind in the midst of an economic depression). But the timing of the deal makes more sense when one realizes that ‘Marcus’—introduced just four years ago—is GS’s first-ever ‘consumer business’ (think: personal loans, high-yield online savings accounts ) and thus the company now has a need to “create awareness [amongst the general public] that the brand and [its] products exist” (which it didn’t previously).
Our Take: Dustin Cohn explained that Marcus was slow coming out of the box—relying on “more telegraphic-type of communications” over the first three years—before venturing into “above the line” advertising for the first time earlier this year. The Head of Brand Marketing–Consumer and Investment Management Division said the Cantlay sponsorship is a “way [for the company to] dip [its] toes into the water—to understand the benefits and value [sports sponsorship] brings to building brand awareness.” One of the lessons learned thus far is that sponsorships drive earned media (like this story). Cohn says that’s a valuable benefit that may be overlooked as “it gives [the brand] a chance to tell [its] story.”
With both the company’s primary research and secondary data indicating “that sports—and golf in particular—over-index against the customer base,” sponsorship of a PGA Tour player was a logical place for GS to promote Marcus. It’s less obvious why GS elected to sign a player that lacks household name recognition to its first athlete partnership. Cohn explained that aside from being a “young, up-and-comer [within the sport]” (which is how GS thinks of the brand), his “genuine interest” in helping to educate people about the company and financial wellness also made him a “great fit.” Timing was certainly a factor too. “The front of his hat was available and that [location] is one of the most prominent places to have branding on the PGA Tour.” As a Top 30 player in the world, Cantlay should certainly have opportunities to showcase the Marcus brand.
It’s worth noting that while the Cantlay deal was done to expand Marcus’s reach, GS has already been able to leverage the player endorsement across the company. The PGA Tour pro and his coach (Jamie Mulligan) recently did a call with some of the firm’s private wealth management clients. Cohn said those “high-net worth [individuals] enjoy having access to someone like Patrick.”
The Cantlay partnership kicked off just two weeks ago at the Memorial, so it is far too early for GS to draw conclusions about its success (or lack thereof). But the company is already planning to expand its sports sponsorship portfolio. It would be inaccurate to assume their focus will remain on country club sports. Said Cohn: “Marcus is looking to reach a broader audience. While [the brand’s products] can benefit high-net worth individuals, that’s too narrow of an audience [for the company to target exclusively].”
To be clear, GS understands that it’s going to be “hard to point to one ad, one person or one sponsorship and measure what that does for brand awareness” (i.e. the ROI). But with a more holistic approach, that doesn’t sound as if it’s going to be issue for them. The company views the Cantlay deal as just one part of the “surround sound and media mix” that amplifies the Marcus message. Cohn said the belief is “if [the company] creates more brand awareness that it will ultimately lead to more accounts opened and new customers engaging with [their products].”
Market Snapshot:
JohnWallStreet Index: 3,313.77 (-0.14%)
NASDAQ: 10,363.18 (-0.94%)
S&P: 3,215.63 (-0.62%)
DJI: 26,469.89 (-0.69%)
