17.01.2017

The Sports Marketing Iceberg - Does your sponsorship inventory reflect digital consumption? 

The growth of digital consumption poses an interesting question for the sports marketing and PR industry:

Is your sponsorship inventory or sports marketing campaign balanced proportionality with digital rights for the current commercial agenda? 

Do you have the right tools & platforms in place?

Are you successfully engaging, growing and commercialising your fan base? 

And most importantly:

Are other parties (broadcasters, publishers and influencer/content platforms or rival/non sponsoring advertisers) monetising it instead?

Do you have digital fan engagement platforms that harness social media, grow traffic and engagement, capture data and monetise your fan base or activate your partnership effectively?

Interestingly enough if you are one of the top rights holders or major sponsors (who have the resources and agency support to innovate) or an innovative rights holder / sponsor the answer to this question will be ‘yes but we should be doing more’. 

According to Nielsen’s 2014 Year in Sports Report, more than 70 million people consumed sports on either their smartphones or computer in the third quarter of 2014. And of that group, the top 20%—10 million on phones, 15 million online—consumed 85% of the total sports minutes viewed in that quarter. 

Yet the vast majority of rights holders still fill their sponsorship inventory with a disproportionate list of traditional rights and don’t have the required platforms to access and monetise their digital fan bases. 

This issue is not new, we have been talking for a number of years about the threat and opportunity digital presents. 

https://mongooseagency.com/news/what-real-impact-facebook-and-google-sponsorship/

https://mongooseagency.com/news/part-3-content-and-data-king-and-queen-sponsorship/

At the 2013 Connected Sport Conference in Paris I highlighted how digital platforms like Heineken Star Player and The Castrol Index can cut through the value chain, bypassing rights holders and getting straight to fans – which is what sponsors want. 

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I also questioned whether digital fan activation platforms needed official rights and the significant investment that comes with it to be successful. In fact, maybe their potential success was being weighed down by the diversion of budget into the rights fee.

How long will it be before advertisers cut out ‘The Middle Man’ (Rights Holders) and go to fans direct. 

The world is full of examples of digital disruption iTunes, Facebook Amazon, Uber, Just Eat, Booking.com and Airbnb all involve a direct to consumer model cutting ‘middle men’ or unnecessary process out the chain. 

In 2012/2013 I was talking about an iceberg forming and the need to invest in ‘owning your digital fanbase’ as well as a ‘Wild West’ fight for fans between Rights Holders, Broadcaster and digital platforms. 

The continued increase in broadcast rights is just a smokescreen – propping up traditional and outdated commercial right holder models 

In fact, all that has happened since 2012/13 is that the value of broadcast rights has risen, the likes of Facebook, Twitter etc. resisted the temptation to invest in traditional rights and have only recently started playing with the idea through highlights and some livestreaming.

Whether or not they step in and make a major investment isn’t really an issue -  they will simply become yet another broadcaster pushing up the price of the value chain. Instead, what they are doing though is creating a 2nd economy around the traditional model. 

The creation of a 2nd and 3rd tier Sports Digital Economy

Most importantly, they have created and monetized a secondary sports economy of social, content and influencer platforms. This is based on advertisers and rights holders needing to get access to fans digitally and using their platforms to distribute content and most recently live streaming. 

This is the threat to the Rights Holder and Broadcaster value chain, the monopoly won’t be broken, but it could be and can be devalued. This is a potential threat to their ability to make a return on the eye watering investments made in broadcast rights and big investments = big threats. 

The evidence 

But didn’t advertisers always have access to fans ‘unofficially’ via publishers? 

Yes, and look at what is happening to the value of the publishing world. Yes, they are / have moved online and are offering video content but they are also moving into an already crowded sector filled by influencer networks. 

They’ve enabled digital communities and platforms to grow hence the rush by rights holders to get a hold of their social and digital fanbases. 

@rupertpratt @mongooseagency 

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