01.07.2014

WHY DIGITAL IS YOUR FRIEND

I recently had the privilege of delivering an introductory presentation for a panel session at the Think! Sponsorship Conference in London http://bit.ly/1tiY3zM. The focus of this panel session, was to explore the contemporary (and future) role digital rights presented for rights holders, and question whether digital content & creation will become friend or foe to rights holders.

It’s no big secret that we live in an age where media platforms are increasingly fragmented, with consumers increasingly controlling when and what they watch, listen to, read and see. Social media is now a dominant force in many people's lives and power is now in the hands of the consumer – not the brand. Traditionally brands valued (and invested) in sponsorship rights based on the unparalleled access such rights provided to reach an engaged audience of potential consumers. Benefits delivered by rights holders, coupled with a sizeable investment in activation and relevant media generally ensured brands could reach, engage and ultimately convert consumers. It can be argued that the majority of these traditional sponsorship rights leveraged a one way conversation between the brand and the fan. Channels were limited, and tightly controlled by rights holders and official broadcasters.

And along came digital. The power base shifted to these fans, who could now choose how and when they engaged. Rights Holders jumped to ring-fence rights (which often didn’t exist), confronted with competition from sponsors, broadcasters, media owners, and non-sponsor brands all eager to claim their share of audience and subsequent commercial return. Conversely, this has also presented a new commercial world for rights holders and sponsors who have moved to maximise respective returns available.  So just how are rights holders commercially capitalizing on this opportunity, and what are the negatives (if any) to rights holders in the digital age.

Digital has opened up a myriad of new commercial opportunities for rights holders. Owned digital platforms, when developed and managed effectively offer rights holders the opportunity to both upsell existing partners and entice new sponsors with a greater suite of commercial inventory.

Digital allows rights holders to grow their fan base and deepen engagement with fans, ultimately providing rights holders and associated sponsors with additional commercial opportunity. However the engagement offer for fans in this context needs to be compelling enough for fans to choose to engage with a rights holders digital platform. Take the example of Arsenal’s digital engagement and CRM strategy in which engage their digital audience globally by way of free digital memberships that offers fans access to unrivalled team and player content. http://bit.ly/1beKJh0. This strategy has not only allowed Arsenal to grow their international fan base but has also allowed them to develop a comprehensive customer profile of this audience, and allowed both Arsenal FC and its associated commercial partners the opportunity to commercially capitalise. This requires a unique balance in its own right, between providing fans with an engaging and compelling platform, and not over-commercialising the content to the extent that fans are turned off.

Increasingly rights holders across both sport and lifestyle properties are broadcasting digital content to provide not only a platform to reach and engage with fans unable to attend the live experience, but as a valuable commercial revenue opportunity. A prime example is the ASP, who have teamed up with ESPN as the exclusive US domestic broadcaster, whilst the ASP YouTube channel http://bit.ly/1xLXrl8 exclusively provides fans with more than 3,000 hours of free programming, taking the broadcast global and into the hands of surf fans everywhere. Youtube as the primary channel for broadcast provides 2 clear commercial opportunities for The ASP, being the opportunity for broadcast integration of commercial partner product/brands into live and curated content and revenue share generated from advertising hosted on the youtube channel.

And then there’s the example where rights holders are able to effectively package and sell these digital broadcast rights to sponsors looking to engage a broader audience than those attending live. Take the Coachella music festival in the US. This year, fans who wanted to catch the action didn’t have to endure the heat, dust, lines and crushing crowds, as the entire festival was available for live streaming on YouTube, courtesy of sponsor T-Mobile. In this instance Coachella is able to sell the commercial sponsorship rights to a partner that assists in delivering a quality live streaming product to fans across the globe, the partner receives access to a global, targeted and engaged audience.

Rights holders have also moved to align with social media platforms to ensure they are commercialising on audience engagement. Take the NFL that has developed a marketing and branding partnership with Twitter. The social media partnership enables fans to get customized NFL video content (including match highlights) , created specifically for the Twitter platform.  As a commercial opportunity in this scenario, Twitter supplies ad inventory to the NFL Network, which in turn sells that inventory to advertisers in a revenue share model. Importantly for rights holders and sponsors alike, such rights are best utilised when the rights holder reserves this inventory exclusively for official sponsors, limiting ambush potential and maximising leverage opportunities for official partners (at a cost of course).

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