We live in a society that is more than ever data-driven. Almost every aspect of our lives is tracked, analysed and stored. It comes as no surprise that also sports sponsorships are leaning towards this approach considering audience insights as the key to success.
Today brands can obtain large but also specific data when talking to a sports property to understand if that sport and that team are the right fit for them. But why should a brand undertake this analysis?
Because it would be very superficial to select a sport or a team over their competitors only based on how big their audience and fan base are. What matters are more specific demographic data, buying habits, hobbies, passions, disposable income and so on. Those are the data that a brand should look for when comparing sports properties.
For example, Formula 1 fans are more likely to be interested in finance and investments than average, so probably if you are a fin-tech brand, this is the sport where you should be. However, each team has their own fan base which is the people that you, as a partner, will speak to the most.
So, the second step of the analysis is to look into that fan base going way beyond reach and engagement, instead, you should focus on understanding if there is an affinity towards your products and services.
In our previous article, we talked about how authentic storytelling is essential to the success of a sports sponsorship, but if you are telling this story to an audience that is not interested, it will all become pretty useless.
That's why every time we talk to a brand, presenting them with several options, we provide audience insights: to make sure that there is not only a good story to tell but an audience interested to listen to it as well.
When faced with a sports sponsorship opportunity some brands say that they don't have enough marketing budget, but then, after a series of questions, you understand that they are spending 10 times the money required for the sports sponsorship on plan advertising. Is it the right choice? It depends.
An advertising campaign (online/offline) is a pretty simple tool to manage for a brand, so if you are a company with a small marketing department and perhaps you are still working on your brand's story, probably it is easier to manage an advertising campaign rather than a sports sponsorship.
However, the effectiveness of a sports sponsorship is much higher than plan advertising, here is why:
We don't deny that a sports sponsorship can be challenging to deploy at first. A sports sponsorship is not a tool but a toolbox and therefore requires coordination within the company. Moreover, because of the emotional factor connected to a sports sponsorship, a brand needs to have clear storytelling.
However, there are agencies that support brands exactly in doing that: from developing a sports marketing strategy to structuring a sports sponsorship with the right team in the right way.
Conclusively, who is the winner between sports sponsorship and advertising? NBC and 21st Century Fox have already made plans to eliminate 50% of commercials shown during live television events to keep viewers from shying away.
That's a clear answer and a clear winner.
When looking at which sports property to sponsor, there is one aspect that is overlooked: How team culture influences sponsorship acquisition.
A sports sponsorship is, after all, a relationship between two entities that seek mutual benefits and there is no benefit if there is no cultural fit.
A sentence that we often say when we advise a brand on who to sponsor is "This is a good team to work with", but what does it mean?
It means that the team has a positive attitude, a flexible approach and a strategic way of working with the partners. This makes the overall process much more efficient and the results much more effective.
A sports sponsorship is often a multi-year agreement and, as a brand, you don't want to work long-term with a sports property that is over-protective of their marketing rights, slow in replying to your requests and unwilling to go a bit beyond their contractual obligations to satisfy your needs.
The last couple of years have been very challenging for the sports marketing industry, but some sports properties have been able not only to retain their partners but also to acquire a large number of new sponsors, why? Because those are properties with the right culture.
How can a brand know if the culture of that team is more commercially-minded than the other one? Simple, by relying on experts that have a large network in the ecosystem and know exactly how each team operates.
Sports sponsorship and B2B: It is one of the most recent trends in the industry, it is the tendency for deals to include a B2B proposition. What does it mean?
Simply put, a deal is partially or even totally connected (and dependent) to a B2B relationship between the property and the sponsor.
Some sports sponsorships are effectively born from an existing business relationship between the parties or when negotiated, the property and the sponsor agree to a variable or fixed value connected to the B2B element. Let's give some examples.
You are the lubricants supplier of an automotive manufacturer who happens to have a Formula 1 team. You want to strengthen the relationship and perhaps promote the association, what can you do? Engage with the Formula 1 team and invest a small part of the money you make with the B2B relationship into the racing team.
Another example: you are a technology company and agree to supply your products for free to the Formula 1 team in exchange for marketing rights. On top of that, you recognise to the team a commission if you make a business deal thanks to their introduction.
By looking at those two examples, we would all agree that the B2B element in a sports sponsorship deal is an opportunity. But sometimes, it can also be a threat.
When the focus of the deal shifts too much towards the B2B element rather than the marketing proposition, some companies tend to forget the intrinsic brand and communication value of a sports sponsorship. For instance, some clothing and forex brands are very much commercially driven and tend to invest only as much as they can make from the B2B relationship.
This can be a challenge because not all B2B relationships have a consistent and adequate cash flow and, also, the rights holder can't always guarantee that a deal can be done.
Conclusively, it is important to have a B2B element in a sports sponsorship as it makes it easier to start a conversation and gets both parties motivated to make the relationship work. But one should never forget the brand and communication value of a sports sponsorship which, in most cases, already justifies the investment.
Up until the late 1980s, CEO Syndrome (when a company sponsors horse racing simply because the CEO is passionate about it) was the main cause of why sports sponsorships fail.
While sports sponsorship decision-making will always have a level of subjectivity, growing accountability to stockholders and stakeholders have resulted in a more professional approach to sports sponsorship.
However, even if more complex than in the past, there are still a number of recurring reasons why sports sponsorships fail.
Greenwashing: whether it is an environmental tie or sports tie unless the sponsor is genuinely seen as integrated and aligned to the sponsored property, the power of that relationship can easily backfire. Don't sponsor green, unless you are green.
Signing the check and dropping the ball: some companies, particularly the ones that are sponsoring for the first time, tend to think very short-term. They spend pretty much all the budget on buying the marketing rights and hope that some brand visibility and a couple of social media posts will dramatically increase sales or brand preference.
Property hopping: one-year commitments are generally of dubious benefit. The learning curve in sponsorship is longer than in other media and sponsors usually don't know in the first year how to maximise the assets they have got. The relationship with the property also takes time to develop and only after a certain period there is a mutual understanding of each other needs.
Failure to sell internally: leveraging a sports sponsorship, from the brand side, requires coordination and collaboration amongst several departments: marketing, brand, communication, digital and creative. It is crucial that before signing a sports sponsorship deal, everyone inside the company is aligned and willing to put in the effort required.
Too many little sponsorships: it is generally much more effective to build brand equity by concentrating sponsorship funds than spreading them around. Many times companies are so eager to enter into many sports to buy very limited marketing rights in each sport that they will struggle to leverage.
Avoiding these mistakes is not as straightforward as it seems, which is why there are experts who support brands navigating the sports sponsorship ecosystem.
When planning your sports sponsorship strategy, you generally have several alternatives even within the same sport.
However, they offer different benefits and assets and require different levels of investment. In this article, we are going to explain the differences between sponsoring a championship, team or driver.
Whether you are sponsoring the championship itself, a team taking part in it or a driver racing in that series, you will speak to the same audience but you will be utilising different tools.
Sponsoring the championship means that you will be given huge branding assets and premium hospitality at races. Moreover, if you are a brand that wants to put its product and services within the "broadcast" then that's probably what you should go for. Think about how AWS integrates its insights technology to enhance the F1 fans' experience before, during and after the race.
On the other side, sponsoring a team will give you more intimate access to the sport with the opportunity to have your guests meet the drivers and be inside the garage during the race. But also, you can utilise the team HQ for corporate and experiential events.
Associating yourself with a driver is another way to go and it can be very powerful if you are looking to create unique content and utilise him/her as a brand ambassador. Moreover, a driver sponsorship can help to penetrate a particular market and to develop licensing opportunities.
Last but not least the financial aspect: sponsoring a championship is generally the most expensive option, followed by a team sponsorship (which can vary a lot based on the chosen team). Sponsoring a driver is, instead, probably the least expensive way to get into top-level motorsport.
So, how can you decide on sponsoring a championship, team or driver? How can you decide on sponsoring a championship, team or driver? Simple, rely on experts that can guide you towards the best opportunities.
Let's start with that, you want to have a nice dinner and decide to cook pasta alla carbonara. You carefully write down a list of the ingredients, go to the grocery store and buy them, perhaps you have also reviewed the cooking process and, thanks to that, you and your family will have a superb dinner.
Or you decide that you want to cook pasta alla carbonara and quickly search the internet for the ingredients while you are at the grocery store. You end up buying ham and standard parmesan instead of guanciale and pecorino. On top of that, you will also mess up a bit the cooking process and you will have a miserable dinner.
How does that compare to sports sponsorship, here we go: before signing a sports sponsorship deal, a brand needs to have already in mind the key pillars of its plan and also the timing and of the activations. If not, they will end up buying useless marketing rights and leaving on the table crucial ones. That's why sponsorship activation planning is crucial and you should always think ahead when structuring your marketing rights package.
For instance, if your ambition as a brand is to drive traffic to your website is pretty much pointless to spend money on a large number of hospitality passes. It would be much more effective to ask for additional access to the drivers to create content. And, perhaps, just a few passes for the winners of the competitions that you will organise on your website to generate online reach and engagement .
In our previous article, we have already touched base on the importance of selecting the right championship and the right team but this is not enough when a sponsorship package is being negotiated without a clear idea of the activation.
Senior marketing executives receive dozens of sponsorship proposals every day. Some of them are very targeted and well-structured, and others are very general and pretty much irrelevant.
So, the question is: how to select what to sponsor when you have several opportunities but a limited budget?
As we mentioned in our previous article, sports sponsorship is very effective because it speaks to the audience in a deeper way, but to do that you need a relevant story. This is exactly where you should start when evaluating several sports properties: the story.
DHL is one the longest-standing global partner of Formula 1 and guesses what their story is: since 2004, DHL has ensured the smooth delivery of up to 2,000 metric tons of race cars, fuel and equipment to Formula 1 venues around the world. An authentic and powerful story that helps the brand to build credibility in the eyes of companies and consumers around the world.
Now that you have the story, you need to look at insights. We are not talking about the 500M unique viewers that watch the sport, but you have to understand how many of them are actually interested in your products and services.
More than half of F1 fans are business decision-makers and they are more likely to work in an IT role than average, do you understand now why technology brands are so involved in the sport? They speak right to their target audience, those who decide which IT services to buy for their company and a Formula 1 sponsorship is one of the best tools to build brand preference.
It is now time to look at more specific aspects which are connected to the people and the culture within properties: some have a highly engaged digital fanbase and produce very creative content thanks to highly specialised professionals, while others have the best hospitality unit and technical integration opportunities. Some have a very flexible and proactive approach to sponsors' requests, whilst others are more protective of their brand identity and reluctant to think outside the box.
This last point is the trickiest one because for a brand is almost impossible to know the ins and outs of that team unless they rely on experts that have been involved in the sport for years and know how teams operate very well.
Many say that banners and TV ads were the first forms of marketing, but is that true? We can’t give a definitive answer. One thing that is clear instead, is that consumer purchasing habits have changed and positive sentiment towards brands is what is driving consumer preference. That's why there is a growing relevance of sports sponsorship.
As a consumer, is a TV ad in the middle of a tense football match going to generate a positive sentiment? Not really.
Is a banner at the airport going to capture your attention and make you understand what that brand stands for? Not really.
And conversely, as a brand, are these actions bringing your customers into a journey towards buying your products and building loyalty? Can you track who they are? Do you know how engaged they are? Not really.
That’s why, as a brand, you need a tool that speaks to the customers in different ways and at a deeper level. And when engagement becomes much more relevant than plan viewership, sports sponsorship is the tool you need to use.
Nowadays, assuming that sports sponsorship is just about branding is like thinking that the internet is just something that was used during the Cold War to send secret messages.
Sports sponsorship is much more than that.
Of course, some sports like Formula 1 or the Olympics offer billions in media value to their partners but this is just a part of it. The opportunity to produce behind-the-scenes content is very powerful considering that we are a society hungrier for content than for pizza.
Differently, you could use privileged access to the sports events to reward your best-performing employees or to strengthen relationships with key clients. Interesting, right?
Moreover, let’s say you are a technology brand and you want to find an engaging way to talk about the complexities of your solutions and how they bring competitive advantage to organisations, what do you do? Well, you could perhaps integrate your products into a Formula 1 team and have their top engineers and drivers talking about how you make their cars faster via a geo-targeted digital campaign reaching your target audience.
As you can see, there is a growing relevance of sports sponsorship and motorsport is probably where you can find the most diverse and compelling opportunities.
