Sponsorship specialist Velocity Sports & Entertainment has hired Jeff Ferguson to head up a new division focused on municipal marketing.

The agency anticipates that this marketing niche could reach $1 billion by the end of 2004 as a result of naming rights and other sponsorship deals involving some 44 cities across the USA.

As many cities have struggled to meet fiscal responsibilities in recent years, an increasing number of municipalities have begun to leverage their high-profile properties.

"When we looked at the need and the opportunity, we saw this as an area in which we needed to become involved," said Chris Caldwell, a VP based in Velocity's Wilton, CT, office. "Municipal marketing is the new frontier in the world of sponsorship."

Ferguson, former head of the Marketing Alliance Group, has been recruited to lead Velocity Municipal Marketing, and will bring with him several of his former clients. These include the cities of Orlando and Miami, as well as several undisclosed brands. He co-founded the Orlando Fan Fairs with the Florida Citrus Sports Association for events ranging from the 1996 Olympics to the Capitol One Bowl Games. Ferguson co-developed Kennedy and Blanche Parks in Miami's historic Coconut Grove District through a sponsorship with Ralston Purina.

The League of Cities reports that 75% of U.S. cities were less able to meet their financial needs in 2003. In 2003 alone, states cut revenues by $2.3 billion. In response, cities such as Dallas, Miami and Seattle have spent significant dollars creating their brand and leveraging their local assets (e.g. parks, playgrounds, community buildings, schools, etc.). The money is then earmarked to help offset municipal budget shortfalls and save community programs.

"Cities are becoming much more proactive when it comes to marketing," Ferguson said. "In 2003, 11 municipalities issued RFPs; we've tracked 33 cities that have done so already in 2004. And each is asking that brands deal with them as a unique entity."