While the nature of sports sponsorship has developed significantly over the past few years, becoming less about ‘chairman’s choice’ and more focused on addressing business development issues, the way we measure the impact of sports sponsorship has remained unchanged for over 20 years.
With sponsorship now firmly established as a marketing-influenced discipline, does the sports industry need to re-evaluate how it measures the success (or relative failure) of a brand partnership? The existing model has long relied on treating sponsorship as an ‘advertising metric’ i.e. treating a sponsorship the same as you would an advert on TV.
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If a brand partners with a property that attracts strong TV audiences, and its logo is seen in enough places (or in a ‘high-value’ space) the brand’s ‘calculated media value’ will be high. This equals lots of happy commercial directors and brand managers basking in the glory of their ‘successful’ partnerships.
The existing model has long relied on treating sponsorship as an ‘advertising metric’ i.e. treating a sponsorship the same as you would an advert on TV
For the larger sports with huge TV presence, this model does work. Partnering with the Premier League, the NFL or the NBA is a no-brainer for most brands that can afford it. These are sports with a huge global following guaranteeing an audience of millions for each individual game, while sports with loyal followings on TV like rugby and tennis are also attractive to sponsors because of their strong and consistent TV audiences.
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By GlobalDataOver the course of a season the potential media value for a
key partner of a Premier League team can be calculated in the hundreds of
millions of dollars based on the amount of time a logo appears on screen across
TV, press and online. In Formula One, which has suffered a steady decline in TV
audiences globally, according to the annual F1 Global Media Report, the idea of
logo space on a car is still the prevalent sponsorship metric.
So Heineken entered into a title partnership with Formula One
last year at a cost of $21.43 million a year, despite being limited as to the
number of races at which its branding can appear because of local alcohol
advertising laws, a challenge also faced by Johnnie Walker and Martini (but not
an impediment to their partnerships, either).
Meanwhile, one of the sport’s most famous teams enters another season without a title sponsor. Ron Dennis, the former McLaren chairman, said that he would “rather be without a title sponsor than undersell the space” on his team’s Formula One car, declaring that the era of title partnerships for teams was dead. This claim hasn’t subsequently stood up to scrutiny, with BWT and Martini each entering multi-year partnerships with Force India and Williams respectively.
Less traditional rights-holders such as WWE are capitalising on a new era of sport as entertainment, following the advance of social media and OTT platforms
But an alternative view of Dennis’ comments would be that the old model of cash for a space to put your logo on is dead, especially among those sports that might not have the viewership of other, more TV-friendly sports.
Less traditional rights-holders such as WWE are capitalising
on a new era of sport as entertainment, following the advance of social media and
OTT platforms, highlighting how the development of fan experiences is intrinsic
to providing value to partners and sponsors, which in turn leads to global
growth and interest in the core offering.
The opportunities available to rights-holders to build
relationships with fans is today unmatched, yet many rights-holders are simply
not taking advantage of them, focusing only on traditional means of engagement
such as TV, in the belief that having a Twitter handle and Facebook page represents
meaningful engagement.
Brands involved in sport sponsorship are looking for more from their partnerships and so it is the brands, not the rights-holders, that are leading the way
Even sports with huge resources such as Formula One are way behind in this area, showing that such resources are not necessarily an indicator of forward thinking. At the other end of the spectrum, because some rights-holders have limited resources, they dare not move away from their traditional models because of the risks involved. Yet this short-sighted approach negates a huge opportunity for those sports to reach new fans.
Brands involved in sport sponsorship are looking for more from their partnerships and so it is the brands, not the rights-holders, that are leading the way by engaging with fans in an authentic way. Developments in social media and TV broadcasting allow fans ever greater access to their sporting heroes, which in turn gives brands greater access to those fans.
Measuring the impact of sponsorship solely in terms of media
value undermines much of the work brands do to activate their partnerships
through these conversations, creating an actual experience which marketers
would argue provides greater value to the fan than just sticking their logos in
the right place.
Rights holders that understand this will be much better
placed to offer compelling narratives to brands as to why they should partner
with their sports. By waiting for an industry-wide change to come, rights
holders in less highly televised sports are missing out on opportunities with
brands that are eager to reach their fans.
If rights holders don’t innovate and offer something beyond space for a logo to their partners, someone else will.
