The largest ever naming rights sponsorship to be signed in Scotland was agreed by SSE two years ago, worth £15m, when the utility agreed to become naming rights partner for the £125m music venue in Glasgow.
Last night, the venue opened its doors for its first gig by adopted Scot Rod Stewart. The deal, second only to the O2 deal in the UK, will see the Hydro referred to as the SSE Hydro for the next 10 years, with a further £2.5m generated through annual sponsorship from brands such as Coca Cola, Sony, Heineken, Scotrail and the Clydesdale Bank.
Nathan Kosky, senior director of sales, global partnerships at AEG discussed the deal and what it means for its partner brands, not least SSE, once the doors on the venue have opened.
What has it taken to get to this stage?
AEG has been working in partnership with the Scottish Exhibition and Conference Centre (SECC) for three years now and it really has been an excellent partnership. Right from the outset we have been using AEG’s experience in the area, but with the SECC’s local contacts and local understanding. We’ve been working side-by-side to deliver this huge naming rights deal. We have a good range of partners which has delivered a successful commercial proposition which is obviously great for Glasgow and the venue.
What will those partners get back for their money?
The £15m is obviously just the naming rights deal, so the SSE Hydro is more than just putting a badge on a venue, which no one can afford to do any more, it’s about giving key assets of the venue to their customers, and allow them to engage with their customers and takes it away from being a utility purchase and makes it something that allows them to engage with their customers in one of their key pastimes, which is going to concerts, because we know that Scotland is the most passionate place for attending music venues.
Then there are the other partners; Scotrail wants to get its customers here by rail and provide their customers with benefits, Clydesdale Bank is all about the community aspect of their business and making sure that they are in the heart of Scotland and Heineken wants to sell beer in great venues and this is one of them. Each has a different objective which means they all sit nicely next to each other.
How much work was put into this deal during such a difficult economic climate?
It is difficult to get people to commit to that kind of money. When something is not open, you have to show them what is going to happen. You also have to get the right brand as well. We didn’t want to get a brand that just wanted its name on the arena. We wanted a brand that was going to bring the experience to life and when people come and see what SSE has done here, they will see why it is integral to the arena, whether it is customer lounges, ticket access, just enhancing the whole experience and that was the kind of brand that we were keen to have and we are pleased that they doing that.
How do naming rights partners benefit?
We all see the brand recognition side of it, but to own a slice of people’s key enjoyment time, coming to their most anticipated show of the month, year or even one they have waited their whole life to see, to have that enabled by a brand allows them to do more than sell products. In fact we tell them that they shouldn’t be selling products, they should be building a connection with their audience and their brand and there’s no more powerful way of getting into people’s emotions and music is a huge part of that.
Were other brand interested in the deal?
We spoke to some key people, whether they are already involved in music sponsorship or we thought that the opportunity was good for them so that they had the right kind of audience and SSE was one of the brands. Obviously we were talking to a number of brands, but SSE was the one that saw the opportunity and stepped up quicker and I don’t think either party has looked back. They have invested a huge amount into the area, not just the sponsorship, but the infrastructure to enhance people’s enjoyment.
What will that bring SSE?
It will bring a huge amount of awareness and hopefully everyone that comes through the doors will be touched by it along the way, be it through their tickets or speaking to their team of hosts helping them through their journey. Somewhere along the way, hopefully SSE has touched somebody along the way and some people are making decision over their utilities, clearly having access to tickets will be a consideration. SSE is about giving people a great time here, and a lot else will fall into place afterwards.
What do they expect as naming rights partner to happen over the next 10 years?
To become established as one of the great stop off points on the European tour market, and certainly one of the best in the UK. That is what I am sure this place is going to deliver.