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Why IBM Is Paring Down Its Tennis Sponsorships

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Mar. 10 2018, Updated 11:21 p.m. ET

IBM terminates relationship with tennis tournaments

IBM (IBM) recently cut its relationships with two major tennis tournaments. The company is no longer the computing services partner of the Australian Open and the French Open. The Australian Open tournament ended in January, while the French Open tournament kicks off in May.

IBM is expected to continue its relationship with the two other major tennis tournaments—the United States Open Tennis Championships and the Wimbledon Championships.

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Opportunity to showcase products

As a partner, IBM provided a range of technology services to all four tennis grand slams. The services included web hosting and functionality for the tournaments’ mobile apps. The tennis events also provide the company with the opportunity to showcase its products and connect with customers.

Realigning marketing initiatives

IBM’s decision to reduce its tennis exposure seems to be about the company trying to make every marketing dollar count.

“IBM continually looks at future marketing initiatives to ensure they align with its business direction,” an IBM spokesperson noted.

About ending the relationship with the Australian Open and the French Open, the New York Business Journal reported that IBM’s chief of sports and entertainment partnerships, Noah Syken, stated, “We were planning to diversify our portfolio” and added that the company had been “overly concentrated in tennis.”

IBM’s marketing and administrative expenses increased 4.1% YoY (year-over-year) in 4Q17. Amazon (AMZN) and Google parent Alphabet (GOOGL) registered respective 36.0% and 38.7% YoY increases in marketing expenses in 4Q17. Marketing expenses rose 12.2% YoY for Microsoft (MSFT) and rose 88.9% YoY for Alibaba (BABA) in the same period.

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