Rupert Pratt, Managing Partner and Co–Founder of Sport, Sponsorship & Entertainment Agency Generate, recently presented at the Sports Marketing Days, International Sport and Business Event hosted by Sport Win. Generate have create a series of blogs based on the content presented, focusing on the evolution of sponsorship evaluation, key trends, challenges and opportunities and the need for a more sales and loyalty focused approach to benchmarking sponsorships impact and value.

In parts 1 and 2 we examined the evolution of sponsorship evaluation and argued that whilst the sponsorship evaluation debate was over, maybe the industry had not been focusing on its strengths and the ‘real value’ of sponsorship.

In part 3 we look at the current trends within the sponsorship industry, the opportunities (and threats) they present and argue for a more sales and loyalty focused approach to benchmarking the value of sponsorship.

The evolution of sponsorship

Originally, sponsorship has been used as a platform by which to differentiate your brand or a specific product; rather than using the increasingly cluttered advertising space. Ironically however, sponsorship has now followed a similar path to advertising whereby more brands are looking to associate themselves with the best sport, league, team or person (think of Manchester United as a prime example; currently affiliated with 28 different sponsorship brands) to try and get the upper hand over a competitor. As a result, we are now living in a world where everything and anything is deemed to be ‘sponsorable’.

A cluttered sponsorship marketplace

The cluttered marketplace means that sponsorship is no longer able to provide an exclusive association for a brand (Manchester United has 7 telecoms partners, an admirable commercial platform but hardly an exclusive association). 

A content and data (CRM) era

Content and data are key drivers in helping sponsorship cut through both media and rights fragmentation. Content is able to directly serve consumers/fans in a targeted and therefore arguably more cost effective manner, however it is unable to do this singlehandedly and will therefore be reliant on the savvy use of data to boost effectiveness. Data can be used to determine appropriate communication channels, fan profiles, lifestyle habits, attitudes and behaviour, all of which provide insight into how to distribute and direct content successfully.

Do we need rights holders at all?

If content and data are however deemed to be the new king and queen (especially for digital/social media), it is important to consider whether we actually need traditional sponsorship and rights holders at all? Yes they facilitate the channels by which to distribute the engaging and emotive material to the consumer but are they truly essential; is it possible for brands to do this without sponsoring a property at all? Furthermore, do brands need to use ‘official’ channels (i.e. rights holders) by which to distribute content? 

Major rights holders were slow to respond to the digital era – a threat

We are not predicting a world without rights holders but perhaps one where compared to the traditional model their value would be reduced to a backdrop for conversation with consumers as opposed to being the channel that owns the content. The traditional advertising model has changed rapidly over the last few years; advertising has responded as a result, and now sponsorship needs to as well.  A rights holder ‘owns its fans’ because this is its commercial equity, it only allows access to its fans by carefully controlled channels such as broadcast. The advent of digital and social media opened new channels which sponsors were quick to experiment with and exploit. A few years ago there was a real risk of rights holders not owning their ‘digital fanbase’, as a result we now see rights holders starting to invest heavily in digital and CRM platforms. 

What does the future hold?

The privacy era?

Potential backlash from consumers/fans is possible given the likelihood of sponsors and rights holders being able to over-exploit their data and personal details (just think spam emails, but at every touch point). This could create a privacy controlled market whereby consumers or fans avoid opt in’s and double check the T&C’s! 

If data/CRM was important, quality data and relevant, engaging content is now critical

So what would happen when consumers/fans don’t want to share the data needed to develop the complex CRM systems (required to engage fans or evaluate sponsorship), or be served advertisements based on what shopping they brought the previous week, or what they have typed into various search engines?

What role for rights holders and sponsors?

Rights holders could become retailers and adopt the same approach as shops, supermarkets and car dealers in order to best target the consumer. So what role for sponsors? It is likely that this will be determined by brand and product quality, there could be a place for your brand if, and only if, you are able to produce a desirable product that drives demand amongst consumers and fans which therefore makes you part of the content story.

‘Win Win’ Partnerships – grow my fanbase and I’ll grow your sales

The above questions help to reinforce the importance of determining what association the brand/rights holder want to project. Recently, partnerships have become the new word for sponsorships, however all successful sponsorships are based on mutual benefits for both parties (rights holder and sponsor) and therefore it can be argued that they are one and the same. In order to generate a truly successful sponsorship, both parties will need to understand, engage, manage, reward, retain and grow their fan bases. If carried out successfully (by using a combination of data and CRM) a targeted and emotive campaign can be created. Sponsorship will then be truly capable of driving commercial success and product sales via a Fan Engagement Platform (CRM).

Figure 3.jpg

The power balance has shifted; fans and consumers are now in control, therefore get to know them and treat them well!

In part 2 we examine the evolution of sponsorship evaluation and how to grow demonstrate the ‘real’ value if sponsorship whilst growing your fanbase, commercial revenue and sponsorship income.

To receive the full report or to find out more about the work our sponsorship consultancy team are doing to cost effectively demonstrate sales impact and the ‘real value’ of sponsorship please contact Rupert Pratt (@RupertPratt), Managing Partner at rupert.pratt@mongooseagency.com

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