By: Terry Lefton | Sports Business Daily | The Lefton Report
We’ve always considered beer among the most endemic sponsorship categories in sports. Outside of softball, beer isn’t normally found on the field of play, but it has long been the lifeblood of big-time sports.
Symbiotic doesn’t begin to describe the comfy relationship of suds and sports. The upstart 19th century American Association of baseball clubs differentiated itself from the established National League by promoting two “sins” — playing on Sunday and selling beer at games. Four of the six teams in the association were owned by brewers.
These bonds between sports and suds have been firm and fixed. Whether sports sold beer or beer sold sports is immaterial; it’s a relationship of long standing that’s known to foam up considerable profit.
More than 110 years after the American Association folded (though Pittsburgh, Cincinnati, Brooklyn/L.A. and St. Louis are still around as National League clubs), suds and sports still constitute some of the most lucrative commercial relationships in sports. Beer brands were among the first to advertise on both radio and TV sports broadcasts. Anheuser-Busch’s first deal with ESPN was an essential early sign of the sports network’s legitimacy.
Breweries are among of the biggest spenders on sports marketing and media, and brewers still own teams. Sports, meanwhile, is still the programming of choice in taverns. Yet other than scale, the “on-premise” sale of beer hasn’t changed much since the days of the American Association.
After seeing Apple transform recorded music sales with iTunes, Kickstarter alter the model for startup funding, and Airbnb take a piece out of the hotel industry’s bottom line with “community hospitality,” the question is whether smartphone technology can be used to disrupt on-premise beer sales — where beer is served from a tap at traditional restaurants and taverns. It’s a market that various estimates put at between $94 billion and $100 billion, so think about affecting even a 1 percent market share shift.
If a mad scientist can be said to be tinkering within the on-premise market, there’s one just outside of Philadelphia looking to reshuffle the beer market with this very concept. Like taxis, music, hotels and startup funding, it’s a market that’s been nearly immune to innovation.
The idea came to Alliance Marketing’s Jamie Robinson a year ago. As the former agency for Pilsner Urquell, Robinson had tried for years to stage promotions in bars but had failed to create anything of sufficient scale that wasn’t too costly or labor intensive. So there was Robinson, quaffing a Guinness in a suburban Philadelphia sports bar, staring at a row of tap handles. He was ruminating about how long beer had been dispensed in that same way and how the only difference between the various taps was their decoration.
“I just started thinking about using taps to deliver stuff besides beer,” Robinson said.
Soon thereafter, he was with an attorney seeking IP protection. At a time every big marketer is looking for content plays, the idea is to turn beer taps into a distribution system for content, along with beer.
With American and overseas patents both granted and pending, the T’app system hopes to disrupt on-premise beer sales like Uber has changed the taxi business. Like Uber, you’d download an app, which could be from the beer brand, the bar or both. Then, every time you were in a bar equipped with the technology, the beer tap (or taps) would exchange data with your app each time a new draft beer is pulled.
The marketing applications that could ride atop this technology are nearly limitless, though certainly some would be subject to beer’s status as a regulated commodity. Trivia contests as well as frequency and loyalty programs would be simple; think of it as Coke Rewards for beer.
How about a 25-cent discount after every Bud Light ad during Sunday NFL games? How about highlights of the day’s biggest games sent in close-to-real-time as a perk with purchase? Arenas selling beer at concerts could offer music downloads as a gift with purchase. Once the smartphone becomes your primary payment device, there will be endless marketing data that marketers would love to collect.
Robinson has pooled his patents with some from Ciright, which sells digital signage that integrates with mobile apps and social media. Ciright CEO Joe Callahan said that with adequate funding, roughly $1 million, T’app is six to eight months from dispensing beer and data.
“Everyone’s already staring at their smartphone in sports bars. This is just a way to take advantage of that,” Callahan said.
A la Kickstarter, there’s also a crowdsourcing play. “Crowd drinking” could see the cost of a draft beer get cheaper after a certain amount is sold. If a bar wanted to simplify the ordering and delivery of beer on premise, that also could be accomplished through the app. (Start multiplying those possibilities against the amount of beer sold at chains like Buffalo Wild Wings.)
There should be marketing opportunities outside of the beer markets as well. Wouldn’t the daily fantasy brands like DraftKings and FanDuel love to reach millennials in bars watching their players and reward them with fantasy points or discounts for ordering one beer brand over another? How valuable would it be if Uber were able to send out discount coupons near the end of the game to the millions in bars watching the Super Bowl, or on any night just before closing time?
There’s been at least one similar product. A-B and Sprint teamed earlier this year to offer illuminated tap handles that flash when teams score. While A-B promised expanded interactivity for these devices eventually, for now they are more akin to intelligent point-of-sale displays than anything else.
Robinson’s shown the T’app technology to a handful of on-premise marketing types, but he’s looking for a beer brand as a technology partner. The business model would have a brewer paying for the technology.
There’s also potential applications for the fountain soft drinks. Currently, if McDonald’s wanted to run a soft-drink promotion with game pieces attached to its paper cups, it costs two or three cents per cup. For a national promotion, you are into the low seven figures. Robinson said a fountain beverage version of T’app could cut those costs by 90 percent.
“Just like Uber with taxis or iTunes with music sales, we’re injecting technology where it doesn’t exist now,” Robinson said. “And just like them, we’re hoping to swing preference and market share by doing that.”
Terry Lefton can be reached at firstname.lastname@example.org.