Welcome to our Sport Monetisation Series, a brief catch-up with industry leaders who share their viewpoints, experiences and top tips on how sport organisations can find various ways to become more financially sustainable. Today’s talking point: sport sponsorship activation.
THE ROSTER
We’ve asked two sport industry leaders about their views on sport sponsorship activation and its potential of generating positive returns, their experiences around building powerful campaigns, as well as the upcoming trends in sponsorship, and suggestions on how should sport organisations prepare winning strategies. Get to know whom we’ve spoken to!
Aslı E. Koç
Asli on sport sponsorship activation
Aslı E. Koç is the digital PR for a Media Group in Turkey. Although she has graduated from Sciences, Chemistry, she has worked within the Corporate Events industry at several agencies and has gotten involved in a series of big national and international sports events. Her passion for sports, as well as being a huge football fan, combined with her interest for sports marketing and communication that has grown bigger and bigger, have led to her decision to also undertake a Sports Sponsorship Master’s degree at Bahçeşehir University.
Lorand Balint
Lorand Balint on sport sponsorship activation
Lorand Balint has been the Marketing Director of the Romanian Handball Federation, as well as the Advisor of the Romanian Olympic Committee’s President. With an experience of over 17 years in advertising and communication, including roles such as Leo Burnett Romania’s Managing Director and BBDO’s Strategic Planner, he is currently the Head of Strategic Planning at Propaganda Creative Marketing. Moreover, his academic background involve studies across marketing, leadership and business in Romania, Canada, the UK and the Netherlands.
SPORT SPONSORSHIP LITERATURE REVIEW
Commercial sponsorship has become a widely utilised form of marketing communication. The intangible assets of a brand have the power to increase its value up to 80% (Masterman, 2007; De Chernatony et al., 2011), hence sponsorship and its activation campaigns should be considered as a significantly valuable and value-adding approach.
Moreover, within the world of sport, competitive advantage has become significantly difficult to achieve, given the high level of existent expertise in creating unique marketing strategies (Maloney, 2002). Therefore, sponsorship deals have ascended as common practices for organisations to differentiate themselves, interact with exclusive markets and reach their target audiences using distinctive approaches (Meenaghan, 1991).
Some scholars, such as Cornwell (1995), perceive sponsorship as an activity purely dedicated towards the commercial value associated with it, whose outcome is driving mutual financial benefits for the parties involved. Nonetheless, others regard sponsorship as a more lucrative initiative, capable of instilling extended advantages, such as fostering long-term alliances, contributing to an organisation’s strategic development, or driving sport globalisation (Farrelly, 2010; Renard and Sitz, 2011).
Before finding out the virtual panel’s input, let’s indulge in some business numbers; explicitly, global sponsorship’s value has increased by 20% since 2012, reaching $60.2b in 2016, 70% out of which being invested in sport sponsorship (Degaris, 2015; IEGSR, 2016).
- Global Sponsorship Value in 2016: $60.2 billion;
- Sport Sponsorship Value: 70% of the global sponsorship value;
- Sponsorship Spending Forecast: 4.9% increase in 2018.
VIRTUAL PANEL DISCUSSION
Question 1: On a long-term basis, how can sport organisations monetise the variables involved in a successful sponsorship activation campaign?
Aslı E. Koç:
Sport is continuously changing with the implementation of new technologies, while sponsorship basically remains the same, and in sports, this entails three players: fans, teams and brands. First of all, it is not just about the brand/team, it is about putting up a nice win-win plan for both the sport organisation and its partner. Sponsorship objectives include improving brand reach, awareness, visibility, selling or showcasing products, increasing brand loyalty, community goodwill, personalising consumer entertainment and leveraging the right to use a sport organisation’s logo, etc.
Fans are at the core of any sponsorship, so fan engagement is the core strategy of an activation plan. Using a sport club’s fans, brands activate their investment. Similarly, the former should activate the sponsorship at their end, as well, by taking advantage of the digital era, in order to lead and help the sponsors activate on digital. Moreover, the fact that consumers’ behaviours shift to digital, also gives brands the flexibility to segment their target among fans. Fans/consumers have never been as smart as they are now; they know what they want and know where to find it – on their smartphones. They no longer pay attention to clichés, such TV ads or stadium billboards. Therefore, sport clubs must give them something to be a part of, experience, talk about, post and share. For instance, everyone takes a selfie and posts it somehow, somewhere in a stadium. Unless sport entities mark it, this becomes a disconnected content for them and their sponsors. There is no way to track this content or monetise it alone; nonetheless, providing and promoting a hashtag specific to the sport clubs, they end up owning and being related with the content
Furthermore, giving fans exclusivity could also lead to a successful sponsorship activation. For example, in 2017, Real Madrid offered fans all over the world a rare behind-the-scenes glimpse into the corners of the world’s biggest football club, a series of exclusive content with the diverse set-up of dozens of cameras of GoPro by partnering with the brand. The series reached 96m people on the platform, driving 30m+ total views to date. Besides, the 2017 Wimbledon generated 200m video views, an increase of nearly 75% compared to the previous year.
In conclusion, e-ticketing, photo filters, live interactions, exclusive content, behind-the-scene moments, or premium loyalty programmes are examples of what fans desire to reach on their mobile phones, as they are constantly online: before the game, during the game, after the game. Hence, sponsorship activation is now in its simplest form. Digitise it, track it and monetise it.
Lorand Balint:
On a long-term basis, sport organisations should take into consideration the following three aspects, in order to maximise sustainability and monetisation potential:
- To develop their internal culture by making partnerships development a priority, alongside the willingness to provide tangible benefits to the sponsors and partners. Thus, the sport organisation should treat the collaboration with its partners as natural and seamless as possible, and not as a burden.
- To deeply understand the partnering entities in order to be able to propose relevant projects and develop campaigns that respond to the needs of the partners. For instance, when a sport organisation’s marketing team is under-resourced, it is essential for it to propose sponsorship activations that do not require much involvement from its part.
- To understand that the partners and sponsors have a complex budget structure; more important, that several budget resources and types are available, on top of the one dedicated specifically towards sponsoring. For instance, internal communication, CSR (Corporate Social Responsibility) or sales are very appealing areas for such sponsorship proposals. Therefore, should such value-adding opportunities be related to the partnership’ success, extra budgets might be unlocked and taken advantage of, on top of the initial collaboration.
Question 2: What is the top sponsorship activation campaign you’ve contributed to / been a part of?
Aslı E. Koç
Well, I cannot decide between three sponsorship activation campaigns. The first one is Turk Telecom’s activation as the naming sponsor for Galatasaray Stadium; the second one is TEB’s activation as a naming sponsor of the tournament WTA Championships in Istanbul in 2011-12-13.
However, I think Doğuş Group’s activation as the main sponsor of Euroleague Final 4 in 2015 in Berlin, is still on top of my list. This was a global, and a proud work for both me and my boss. We have done branding work at the Mercedes Benz Arena, as well as at the fan zone in Alexanderplatz. Besides, we activated one of our CSR projects, Stay In The Game, which aims to empower children all over Turkey to play basketball, do sports, live well and avert them from bad habits such as smoking, drugs, alcohol. Thus, we have dressed children who danced in branded clothes, throughout the season, and also on the fan zone in F4. They were also our guests at our fan zone’s stand, where we painted branded hats, offered face painting, posted photos on social media and used the coverage to create awareness through a hashtag.
Lorand Balint:
The partnership between BRD Societe Generale and the Romanian Handball Federation has implied a collaboration whose main objective was to revive the domestic handball both as a sport and as a brand. This particular partnership has been shaped in order for the Federation to benefit from direct financial support, which is extremely important for the daily activities’ running, but also to maximise the impact produced by the marketing initiatives and campaigns that have been developed by the Romanian Handball Federation’s team.
Therefore, a brand portfolio strategy has been created, followed by the launch of individual Federation-owned brands, alongside promotion-oriented campaigns and events. The activation campaign most dear to me is the conception of the first 3D poster that showcased a beloved top handball player, created for the visually impaired fans of the Romanian handball, in order for them to be able to ‘see’ Cristina Neagu, the world’s best female handball player.
Question 3: What do you see as the top 3 trends in sport sponsorship that are generating the most value to both the sport organisation and the business? On the same note, how should sport clubs prepare such a strategy to be able to implement them?
Aslı E. Koç
Well, the growth of digital technology and social media opportunities have heavily influenced the landscape of Sport Sponsorship in 2017, and are still set to dominate it in 2018. In my opinion, social influencers will play a bigger role in sponsorship because of the huge costs of celebrities. In the digital era, you do not have to be a celebrity to be followed by millions of people. You just have to give the public something interesting and that’s it! You’re an influencer, whether you’re a sportsman or not. But in sports, of course, it’s better going with Cristiano Ronaldo. Every brand wants to go with Cristiano Ronaldo. The thing is here is that you need to create content that is attractive to both the end consumer/fan and the influencers, who are the gatekeepers of mass organic reach.
However, if I were to select the top three trends, I’d go with the following: “data” will be used more effectively, “live experiences” will become richer, and particularly in the US, “shirt sponsorship” will explode.
As rights-holders seek to attract more fans, sponsorship is set to become the latest area that uses the big data analysis more frequently and more effectively. Given that creating interesting content represents a challenge for both brands and right-holders, increasing the results on revenues would also make them co-work on this aspect.
Beginning with the arrival of Periscope, continued with Facebook Live and now, with AR and VR, new technology gives brands more ways to deliver unique experiences to fans or customers. And the best part is you don’t have to be in a stadium or a sports venue, you can just experience it all at home. Brands can reach way more people at the same time for the same game. Live content plays a major role in activation plans as more venues become connected.
The teams of the top 5 major leagues of Europe have been wearing the logos of their sponsors on their chest for over 30 years, but in the big leagues in the US, such as NBA, NHL, MLB, NFL, MLS, it’s only now taking shape as an opportunity to generate new significant revenue.
With around 70% of the spectators in stadiums using a mobile, sport clubs should prepare strategies that can explore new ways of using the huge potential of mobile technology to engage with fans. It’s fan engagement that brands look for, advertisers look for, and most of all, that fans look for.
Lorand Balint:
One of the realities that could both represent an opportunity and a threat is that people allocate more and more importance and time to sport – either by practising it or by consuming sport-related content. Thus, those organisations that will succeed to convert individuals into fans will develop a strong relationship with the fan-base and will, in turn, benefit from earning share of time. On the contrary, those clubs that will fail achieving this level of attachment will lose, as people will keep dedicating their time towards the micro-channels created by those sport and sport-related organisations that are investing in capturing their attention.
There is a lot of relevant content created by sportspeople, sport clubs, sport federations, Olympic-related entities, fans and grassroots movements, which accelerates the fight over the public’s share of time, which also competes against other entertainment factors, such as movies, plays and productions, concerts, books and so on.
Another reality that is taking shape is the development of the amateur sport and the rise of grassroots initiatives, which generate extraordinary positive energies among people. Hence, sport organisations have the chance to get involve, cultivate and grow the sector.
Nonetheless, presumably the key trend is the realisation of sport’s importance in one’s life, from healthy lifestyles to the positive effects it has on the mental well-being, which stimulates the increase in physical activity and sport taken up by more and more people.
In closing: Engage. Network. Develop.
Let’s continue the conversation around successful sponsorship activation campaigns and how can they improve a sport organisation’s sustainability on a long-term. Do you have any examples you’d like to share?
Reference
Cornwell, T. B., Weeks, C. S. and Roy, D. P. (2005) ‘Sponsorship-Linked Marketing: Opening the Black Box.’ Journal of Advertising. 34(2) pp. 21-42.
Degaris, L. (2015) Sports Marketing. A Practical Approach. Abingdon: Routledge.
Farrelly, F., Quester, P. and Greyser, S. A. (2005) ‘Defending the Co-Branding Benefits of Sponsorship B2B Partnerships: The Case of Ambush Marketing.’ Journal of Advertising Research, 45(3) pp. 339-348.
IEGST. (2016) As Sponsorship Borders Fall, Spending Rises. 5th January. [Online] http://www.sponsorship.com/IEGSR/2016/01/05/As-Sponsorship-Borders-Fall,-Spending-Rises.aspx.
Maloney, P. (2002) ‘Do sponsorship measure up?’ Marketing Magazine. 107(27) pp.13.
Masterman, G. (2007) Sponsorship for a return on investment. Oxford: Butterworth-Heinemann.
Meenaghan, J. (1991) ‘The role of sponsorship in the marketing communication mix.’ International Journal of Advertising, 10 pp. 35-47.
