2004 Ad

Mortgage Banking, Oct, 2004 by Steve Bergsman

WHEN BUDDY RICE TOOK THE CHECKERED FLAG AT THE INDIANAPOLIS 500 EARLIER this year, there were a lot of happy people in the stands--including TV talk-show host David Letterman and former Indy 500 winner Bobby Rahal, co-owners of Rahal-Letterman Racing. Rice was Rahal-Letterman Racing's driver, and this was the team's first victory. * Not seen on camera, but cheering just as wildly at the outcome, was a huge group of Argent Mortgage Co. LLC brokers who attended the big race. Irvine, California-based Argent, along with Pioneer Electronics (USA) Inc., Long Beach, California, sponsored the winning car--which meant both corporate logos were thickly splashed across Rice's Honda G-Force car. * Better publicity than that is hard to come by. And for the lucky mortgage brokers who got to attend the event, that's one corporate trip still being talked about. Argent got everything it ever dreamed of from its sponsorship of that one sporting event.

[ILLUSTRATION OMITTED]

It was no accident. In a relatively short period of time, Argent cranked up a powerhouse sports-marketing program that would be hard to top even by much bigger companies. It's so pumped up with sports sponsorships, the company now calls the program "Team Argent."

[ILLUSTRATION OMITTED]

Argent, however, is not the only mortgage banking firm in the race for sports sponsorships, as a small but growing group of like-minded companies have entered the fray--including Countrywide Financial Corporation, Calabasas, California; HomeBanc Corporation, Atlanta (parent of HomeBanc Mortgage Corporation); ditech.com, Costa Mesa, California (a division of GMAC Mortgage); and Argent's sister company, Ameriquest Mortgage Co., Orange, California (both subsidiaries of Ameriquest Capital Corporation, also of Orange, California).

There's really no set reason why mortgage companies suddenly perceive that sports is a good vehicle for broadening name recognition, although Ameriquest may have gotten to the heart of the matter when it chose to sponsor baseball back in 2002; it reasoned mortgage banking had a natural synergy with baseball.

"America's pastime and Ameriquest becoming a full-service mortgage lender looking to serve American families--it was a perfect synergy," says Adam Bass, senior executive vice president of Ameriquest Mortgage. "Baseball was our first choice to enter sports marketing. Baseball has the widest following, high family attendance, all the dimensions we were looking for."

Homeownership being as American as apple pie and baseball, is one patriotic reason to attempt sports marketing. There are other reasons as well, such as a fundamental rethinking of traditional marketing venues.

Most financial institutions, including mortgage banking companies, have marketed through the traditional media outlets of print, television and, to a lesser extent, radio. Many still do, although as Andy Bielanski, Countrywide's senior managing director for marketing and public relations, observes, "Paid advertising has diminished over the past several years. Traditional marketing venues are still very important to the overall marketing plan, but in this fragmented marketplace, paid advertising does not have the impact it once had."

If you accept that assumption, Bielanski adds, then you have to look at other marketing approaches "and that's where [sports] sponsorship can really play a key role," he says.

For a mortgage bank, Countrywide has good insight into sports marketing, because the company has been doing it longer than most. Countrywide sponsored events on the senior golf tour beginning in 1997, when it got involved with what is now called the Champions Tour.

"When Countrywide went into the golf world, our goals were very modest in those sponsorships," recalls Bielanski. "We were just trying to raise our profile. We wanted to be considered a top-tier player in terms of not only mortgage banking, but in terms of citizenship, so the sponsorship was used to elevate Country-wide in terms of overall stature."

While no longer sponsoring the seniors tour, Countrywide remains involved with professional golf--in particular the Target Challenge, a December Tiger Woods event, and the LA Open, a PGA tour event. Also, it sponsors tennis events.

In the view of Countrywide, sports marketing must do three things: fit Countrywide's target audience, perform on a national level and in some way be a unique opportunity.

Currently, Bielanski figures sports marketing accounts for 10 percent of Countrywide's marketing budget, but could move up to 15 percent by 2005. So far, Countrywide doesn't have a diverse game plan in regard to sports, but it may get wider in the future--one option being motor sports. "I cannot ignore the numbers from NASCAR," says Bielanski.

The industry's trade association, the Mortgage Bankers Association (MBA), has jumped on this bandwagon as well. According to Cheryl Crispen, MBA senior vice president, communications and marketing, "Even the association has seen the value of reaching out to consumers through sports events and through sports marketing. The demographics of baseball, auto racing and other professional sporting events tie into the association's mission of investing in communities."