Whether it’s football, Formula 1, tennis, basketball, or even the Olympics, sporting events cannot occur without sponsors and sponsorship agreements!
A sponsorship is a form of investment in cash or in kind to support a sport which offers mutual benefits for both parties involved and can be towards an event, organisation or individual. It can happen at all levels of sport from grassroots football teams to professional athletes.
The evolution of sports sponsorship has gone from the Greeks and Roman times when gladiator fights, the Olympics and chariot races were a source of entertainment and brought prestige to the host city, to the early 20th century which focused on product placements and many sponsorships offered free equipment and apparel to athletes. Whilst the mid to late 20th century was all about brand visibility and the loyalty of sports fans meant the adverts would be noticed. Currently the 21st century is more about fan engagement/relationship due to the increase and accessibility to digital media.
In the last 2 decades, sponsorship has seen significant growth – a whopping $37.9 billion was spent globally on sports sponsorship in 2007 which increased to a $55.3 billion in 2014 and a further $65.8 billion in 2018. The industry is dominated by companies based in 3 regions of the world – North America (36.7%), Europe (26.7%) and Asia Pacific (25.2%).
As a promotional tool, sponsorship has increased due to people having more free time to actually watch events, inflated prices of traditional advertising and the proven effectiveness of sponsorships.
Sports providers offer a blend of features that make it a very popular and attractive sponsorship target:
- A large audience
- Huge media coverage
- Unrivalled level of engagement from audiences
- Platform to connect with consumers from a non-commercial perspective
- More effective in reaching target markets than traditional mass marketing channels
- Flexibility in how sponsorship can be leveraged
- Creativity in how their brands/companies can be presented
Partnership is key in sponsorship and for an agreement to be successful, it must increase perceived customer value, provide competitive advantage and offer numerous activation opportunities. Brand image is vital in associating with the positive characteristics of a sports entity.
Sports is engaging, has the power to bring people together and can get very emotional. There is a huge global appetite and as a result of the pandemic many spectator sports were forced to shut down increasing the demand and excitement for the resumption of live events.
As parts of the world begin to open up again and sporting events plan their comeback for live audiences many sponsors are having to adapt to a new reality. Sports sponsorship is one of the industries that has no doubt changed as a result of the pandemic. Many brands will have to reinvent themselves to help sporting events engage with fans whilst proposing new ways to monetise and generate new revenues.
We know that the rise of digital has become a major part in trending and developing the future of the sports industry as many events have had to be held behind closed doors and in empty stadiums whilst still needing to give fans access to content to keep them engaged.
For new sponsorship agreements to be established, brands will need to come with a strategy that creates a new experience for the fans by understanding what they want. They have to diversify and venture into new markets in order to evolve.
The pandemic created new viewing patterns – sports that didn’t get much attention before have grown in popularity. Facebook data showed there are 700 million sports fans on Facebook and 400 million on Instagram and according to GMI, as of Q3 2020, 54% of global sports fans viewed coverage or highlights online.
Many fans are also taking the conversation of sport online via social media platforms such as Twitter, Instagram, Facebook and even YouTube alongside creating podcasts, discussions over gaming forums and even their own personal group chats via Whatsapp.
The Q3 2020 report also showed two-thirds of sports fans used their social media whilst watching TV, whether they were reading the news, playing games or searching for products related to what they are watching. These people are known as the double screen generation.
This clearly shows that technology has become a major player and many brands need to utilise it when it comes to sports sponsorships. Partnerships on digital platforms offer new ways of broadcasting; such as through social media. This can increase engagement and give access to data that can help them track their performance. Data is what will help them know their success and measure their return on investment.
They can use data to create bespoke content, track campaigns and allow brands see more accurately who their fans, what they want to see and convert this to help them make better marketing campaign choices in terms of selling and consumption. They need to engage with fans in the comfort of their homes and enhance their mobile and digital engagement.
Potential sports sponsors should consider the following as the new normal becomes a reality and the world slowly but surely opens up again:
- Amplify brand association by developing a meaningful link with their chosen sporting event/organisation or individual among their audiences – by demonstrating why, they are interested and decided to get involved, increases awareness amongst fans and can lead to as much as a 30% uplift in commercial effects.
- Enhance face-to-face experience by creating a different emotional experience than your competitors and reinforcing the connection between the brand and event/organisation/individual and offer some exclusivity or innovative and enriching content that drives a deep emotional connection – e.g., die hard Arsenal football fans and the club, no matter how they season is going they still show loyalty. When fans are aware of a link and believe that the sponsorship experience is beneficial to them there can be as much as a 71% commercial uplift.
- Trigger consumption opportunities because sales are important. Generating a commercial return is the overall objective for sponsors, and this is the best way to integrate a brands product/service into the fabric of the event. Focus on products connected to the event to create a natural fit or can be enjoyed during the event. Campaigns should promote the product/service at relevant moments including athlete participation.
This year, sponsors really need to expand the reach of their sponsorships and who they choose to sponsor so it’s beneficial to both parties.