By Karen Epper Hoffman
Locking in customers’ loyalty in their teens or even adolescent years has long been seen as wise marketing strategy. And financial institutions have increasingly been reaching out to curry favor with the youth market.
In recent years, legal developments are allowing banks to also utilize young college and high school sports figures for their marketing, in effort to connect with younger prospects and to display their connection to their community and region. However, in the five years since the Supreme Court decision in NCAA v. Alston threw wide the doors to amateur college and high school teams and individual athletes profiting from the use of their “name, image and likeness,” or NIL, in marketing, this space has matured to an estimated $2.5 billion segment. And banks, big and small, have been placing their bets.
Case in point: North Country Savings Bank in Canton, New York — less than 20 miles from the Canadian border — is a small community bank that sits smack-dab between four colleges within 10 miles, two of which have Division I hockey programs. “We have always advertised with those schools, but it was more traditional advertising like banners in arenas or our logo on the ice arena boards,” says Morgan Elliott, marketing manager for North Country Savings Bank. “With NIL, everything has really changed. With our ability to pay players, we could get direct access to the team and brand ourselves around an already very popular product in our area.”
North Country Savings Bank brought the college players “into the bank [and] created a series of videos that spoofed on them ‘working’ for the bank in full uniform”, in the mold of those classic ESPN ‘This is Sportscenter’ commercials,” Elliott explains. “We realized we could not only directly reach these popular players’ audiences, but create an entire new audience of people that remember us for making them laugh with comedic content.”
“Within a year, our surrounding communities began to associate us as the bank that supports local sports,” he adds. “It was important that we didn’t just grab a headshot of them and slap up a graphic saying they support our products. We knew that wasn’t going to move the needle in the way we envisioned. It had to be interactive and memorable.”
Even prior to the 2021 changes, which began allowing college and high school athletes and their teams to receive compensation from corporate sponsors, changes were already afoot as early as 2019 with California’s Fair Pay to Play Act, copied by almost all other states, protecting the right of student athletes to enter into agreements to use their name, image and likeness rights in exchange for compensation, according to Max L. Forer, partner with Portland, Oregon’s Miller Nash LLP law firm. The NCAA eventually responded to this tidal change by passing its own interim NIL policy in 2021.
Indeed, U.S. banks have long been a major marketing partner for professional sports teams and athletes. In 2021, some estimates pegged as much as 58% of all sport and athlete sponsorship deals in North America to financial institutions, which were paying out more than $770 million at that time on athlete-related marketing campaigns. Aside from campaigns with local or regional teams or athletes, banks have nabbed the naming rights on several major event centers, including Bank of America Stadium, Chase Field, Citizens Bank Park, Comerica Park, KeyBank Center, Wells Fargo Center, TD Garden, PNC Park and on and on.
But with the genie out of the bottle, the market for using college and high school NIL is expected to explode more rapidly, rising to an estimated value of $917 million in its first year, and more than $1billion in 2023, according to a presentation by consultant Allyson Twiggs Dyer at the 2023 ABA Bank Marketing Conference.
The ‘second inning’
These seminal changes have shaken up the sports marketing industry across the board. For players, there is an opportunity to cash in on their athletic prowess and local fame, before they even ascend to professional ranks. For banks, the value of this approach is showing their commitment to local or regional athletic stars or programs — to engender support from bank customers and prospects — and to potentially promote the next Michael Jordan or Serena Williams before they reach professional and global prominence.
“The changes have been revolutionary, but we’re still at the very beginning,” according to Forer. “We are only in the second inning.” Just over three years ago, he says, there was barely a market here. But now NIL marketing is “evolving quickly, because of the extreme popularity of college and high school sports.”
However, NIL marketing of college or high school athletes is a double-edged sword. Sure, you might lock in a marketing relationship with a future sports star — but those deals are still in the minority, even among high-profile college players. Also, student-athletes can tend toward being tired or overwhelmed, not dependable or stable, and may be prone to be sidelined by a major injury or scandal.
Hence, there is a risk in promoting them, or tying a bank’s name or reputation to theirs. Nonetheless, banks are quickly signing up these deals, because they are less expensive and carry more potential upside if they pay off, and they provide entry to reach a more localized market. The Bank of Hawaii signed up eight student-athletes within just a few months of the landmark 2021 NCAA change. FAB&T of Jacksonville, Arkansas, was another community bank to quickly leap into NIL marketing, seeking out college and high school athletes as well as local team with whom to partner. Banterra Bank of Marion, Illinois, also jumped into NIL marketing deals with regional college athletes in 2024.
“We’re seeing a trend here for banks … for sponsorships of schools and athletes,” says Forer, adding that state laws regarding student sponsorship were already shifting earlier this decade. “Because we’re in really early days, there’s an opportunity for some banks to be leaders here.”
Forer sees banks largely playing it safe, with NIL marketing deals “trickling in” as they wait for this market to mature. In many cases, the athletes in question might be minors (under 18 years old), which requires the involvement of parents or guardians, and more potential legal issues. And then there is the quagmire that is the wider field of student athletes.
Banks may be reviewing potential partnership deals with thousands of athletes, as opposed to hundreds in the world of professional sports marketing. And those relationships also can present a mine field of deep-seated personal connections. What happens if your bank uses one state team or popular athlete in your marketing, which happens to be a top rival to another major regional college team?
“There can be so many creative ways to get involved in NIL marketing, but you have to be willing to think outside the box,” says Forer, adding that the easiest way to approach this market is to “engage with the school directly.”
Karen Epper Hoffman is a freelance writer. In addition to the ABA Banking Journal, her work has appeared in American Banker, Bloomberg BusinessWeek, the Wall Street Journal Europe and other outlets.
Boost your marketing acumen at the ABA Bank Marketing Conference, Sept. 23-25 in Austin, Texas. Early-bird rates end July 31. Register at aba.com/bmc.
