Simon Rines comes to us from International Marketing Reports (IMR); a global sports marketing intelligence publisher. IMR is best known for publishing Europe's best selling and most highly aclaimed sponsorship report; Driving Business Through Sport. More recently the company has published titles examining sponsorship law ans sponsorship and CSR. The company is currently working on new titles examining the roles of experiential and digital marketing in sponsorship. To read more about IMR, see thier listing on our resources page.
That the sponsorship industry has matured in the past ten years goes without saying and this has happened in several stages. Sponsorship started as a ‘media buy’; in return for a set fee, the sponsor gets its name on either perimeter boards, player shirts, cars or it has rights to the official name of tournaments or stadia etc.
The industry then moved on to realise that it was important to ‘activate’ those rights. This involved using public relations, sales promotion, hospitality, merchandising and other marketing techniques to link to the sponsorship, bring it to life and drive the objectives.
Arguably the next development was to realise that sponsorship wasn’t just about marketing to the public and building the brand. It could also be used for internal communications, business-to-business relationships, communicating to the media and analysts etc. Effectively, sponsorship became a business platform for many companies and rights were used across a range of departments within organisations. Indeed, in the next issue of the International Journal of Sports Marketing & Sponsorship we will publish research that proves that companies that sponsor are actually better companies – and this is irrespective of whether they met their sponsorship objectives.
The question is where will sponsorship go next and what issues does the industry face? The big buzz in the past few years has concerned digital media and this represents both huge opportunities and threats.
Sponsors are increasingly keen to utilise digital media as part of their activation strategies for three reasons. First, it is becoming increasingly difficult to use conventional media to engage with large numbers of people. The media has become fragmented and many segments of the population simply no longer read newspapers or watch TV in the way that they used to. Digital media helps to plug the gaps and for some demographics this is the preferred option.
Second, digital media offers an opportunity to develop a more interactive and, the theory goes, deeper relationship with the consumer. For example, Sprint’s NASCAR sponsorship has included a sophisticated, informative and fun section on its website, which allows visitors to view and interact with data concerning NASCAR. IBM’s sponsorship of Wimbledon has included a dedicated app that allows spectators to simply point their phone to navigate round the Wimbledon site and to receive information about matches being played on a particular court. Other sponsors have used Twitter, Facebook, YouTube etc to entertain and inform.
Finally, one of the great benefits of digital media is how it offers the opportunity to react more quickly to events to create greater impact – a message about a cup final victory delivered within minutes of the action finishing is much more powerful than one the following day.
The big problem with digital media in sponsorship to date, however, is that very few companies have really got to grips with it. Some will post a video on YouTube, others will create Facebook page, Tweet or produce a microsite and develop apps. But most are playing an uncoordinated game of catch up, waiting to see what others do and, when practicable, taking the good ideas.
At a recent sports marketing conference featuring some of the world’s leading sponsors, all the speakers present said that they still didn’t know how the use of digital media would pan out in the future and didn’t think that they were making the most of it.
Interestingly, later in the day, the audience was asked to vote on which companies gained most from the 2010 FIFA World Cup. The answers included Puma, Nike and Bavaria (a small Dutch beer brand), none of whom were official event sponsors.
It is interesting to note the reasons why these brands fared so well. Bavaria’s success was entirely down to a publicity stunt in which they had smuggled a group of women into the stadium who stripped off their outer clothing to reveal a ‘uniform’ of orange (Bavaria’s colours) hot pants. FIFA overreacted to the ambush and ejected the group and they were threatened with arrest. The story went global within minutes and its spread included a significant element of social media distribution. Nike and Puma on the other hand invested heavily in, among other initiatives, digital media to create content featuring players signed to the brands. They didn’t need official rights to create the content and despite the fact that they couldn’t directly refer to the World Cup, it didn’t really matter. They were promoting soccer at the time of the event with major stars from the event – they saw no need to spend tens of millions of dollars on official rights when that money could be spent on creating and distributing content.
This represents a major challenge for the sponsorship industry. If major corporations believe that they can achieve significant results from digital campaigns without buying official rights, the value of those rights could fall. Similarly, at events where there is more than one official sponsor, the one that gets the digital activation right can eclipse all the others and effectively reduce the impact and value for those other sponsors.
It will therefore be up to the rights holders to ensure that they do more to help all sponsors to make their rights offering work and this certainly includes improving their levels of understanding of digital media. One sponsor, for example, recently told me of a rights holder that hadn’t introduced wifi to its stadium which severely curtailed an idea to create mobile content.
Another debating point is whether sports clubs that create Facebook pages are actually losing their audience. The argument here is that if fans opt for Facebook, rather than club websites, has the club effectively lost them? The digital media industry will point to the argument that says you should trust the public to take content, run with it and distribute it for you - and this can indeed work. But an opposing argument says that once they have left, you have no control over what they might do and they might not come back.
Rights holders have traditionally been slow to understand the sponsorship process and how brands use rights. They now need to take a quantum leap to find a balance that works for both them and their sponsors in the digital age.
Similarly sponsors are going to find that the old ways of doing things will no longer suffice. Even if ambushers or co-sponsors don’t outwit them, the public now has an appetite for great content and a huge pool of providers to choose from. Official sponsorship rights still give brands an advantage, but it is one that requires more hard work than ever to get the desired result.