Making the marketing case for sport sponsorship
As traditional marketing limps, I have been thinking a lot about the challenges facing marketing directors in these times of economic downturn. As a marketing communications (marcomm) practitioner, my thoughts centre mostly around the impact of marketing spend on consumer behaviour and attitude in the marketplace. Especially, what’s going on in the consumer channel and what mix is working in the pursuit of marketing objectives and how is this being driven from the C-Suite and corporate strategy?
But more importantly, how are marketing directors responding to the apparent changes in how consumers congregate and relate with themselves and the brands they consume? From a marcomm perspective, are traditional principles, methods and strategies working as they used to? What kinds of narratives are applicable today as compared to what we have become used to? Have people really changed in the ways they “consume” brands and media for the purpose of making choices?
We see (and feel) a lot of the effects of the economic downturn and I daresay that many may not be mindful that the possible solutions would emanate from understanding first, the root causes and then charting a pathway to success that requires a serious inquiry into the prevailing situation and taking the steps necessary to forge ahead successfully.
Most businesses face new challenges characterised by major cutbacks in spending and yet shareholders still have expectations of profits and growth as evidence of corporate performance. In the marketplace, more customers are manifesting the kind of inertia that impacts negatively on revenues. So, where will survival come from, not to talk of growth?
In charting a pathway to survival, one thing is certain and it’s staring us all in the face: traditional marketing strategies are proving to be not as effective in reaching customers, putting question marks on not just the viability of the marketing effort but also its justification. Brands have never had to work so hard for consumers’ attention. There are more messages, across more channels, more often than ever before. Yet fewer and fewer advertisements are reaching customers, as traditional media viewership shrinks by an estimated 5% each year. Despite this scenario, the opportunity to bring a brand’s narrative consistently to life through partnerships has never been stronger.
What is needed is a marketing strategy that doesn’t rely on interrupting consumers; that builds rapport, trust and authority; that creates irresistible experiences, one that overcomes consumer inertia, and one that can improve consumer sentiment towards your brand.
In today’s marketing mix, the only platform that guarantees each of these 5 outcomes is ‘sponsorship’, because it involves the coming together of brands and property owners in the pursuit of promoting and sustaining the demonstrated passions of a highly defined audience of persons called fans. Best-practice sponsorship is great for business. It allows a trusted influencer to tell your story to fans. It provides laser targeted marketing and promotional opportunities that other channels simply can’t match. Traditional marketing and advertising rely on interrupting people to get their attention. Sponsorship, on the other hand, is all about creating positive experiences, weaving your brand into an interactive, memorable and natural exchange with fans. It’s about demonstrating shared values and connecting with a like-minded community.
Although the recipient of sponsorship may be non-profit, sponsorship should not be confused with philanthropy or CSR. Philanthropy is support of a cause without any commercial incentive. Sponsorship is undertaken for the purpose of achieving commercial objectives. And, although a sponsored property may include media extensions such as a TV broadcast, sponsorship is not advertising. Advertising is the direct promotion of a company through space or air time bought for that specific purpose. Advertising is a quantitative medium, sold and evaluated in terms of cost per thousand. Sponsorship on the other hand is a qualitative medium; it promotes a company (sponsor) in association with the property owner (sponsee). Some of the benefits sponsorship typically offers that advertising does not are access to a live audience, on-site sampling and opportunities for client engagement and entertainment. And companies can tie sponsorship directly into usage or sales so they can quantify not only how many people were reached, but how many were motivated to buy.(Output versus Outcomes)
This brings us to sports—the jewel of contemporay sponsorship. In the words of Erica Terpstra, President, Netherlands Olympic Committee and Netherland Sports Confederation, “Sport has become the platform where parties are increasingly working together to reach the consumer, and where innovation and tradition meet. This results in growth for both the sport and the business world.”
The foundation for a successful integration of sport and business, all over the world, is a public that is passionate about sports and we see this in the USA, Europe, Asia, South America etc.
Global sponsorship spending continues to trend upwards. In 2017 it was $62.7bn and the forecast for 2018 was a growth of 4.9% to $65.8bn with sport accounting for $47.7bn or 73% of the total. Africa shows the lowest spend but also was trending up from $2.8bn in 2017 to $2.94bn in 2018. Of course, one can immediately conclude that Africa is still way below its potential considering the huge sports passion on the continent.
While the jury is still out on why Africa (and Nigeria) is performing lower than expected in sport sponsorship, I personally believe that the reason(s) are centred round the underdevelopment of the business of sports. On the one hand are the Federations who are the statutory owners/managers of various sports. In my opinion, they have not demonstrated the knowledge that sport is a business with brands that have consumers (fans) whose needs must be met or else the brand dies.
Even where technical skills have been acquired, there is an evident lack of capacity to manage and promote sports. But the consumer (fan) remains passionate albeit channelling his/her consumption habits offshore (the Nigerian fans of Enyimba in Nigeria are passive while Nigerian fans of Manchester United are avid) where their passions are demonstrated to the benefit of the offshore brands.
On the other hand, is the business community who have been very slow to grasp the opportunities inherent in sponsorship (especially sports) as a key platform for marketing their brands. You can only ignite the passions of fans towards your brand if you have an understanding (beyond ‘awareness’) of the strategic application of sports sponsorship in your quest for business success. In my experience (since 2007) with marketing professionals, sports sponsorship is usually a tactical activation designed to ‘increase awareness’ and what usually drives participation is the number of opportunities to display a logo in situ and on print and electronic media without ‘leveraging’ the platform for the achievement of strategic business goals. Indeed, the sponsorship is not seen in terms of operational business and so is absent from strategic planning that goes into the formulation and execution of corporate strategy.
Also in underdevelopment is the service industry of sponsorship marketing professionals who should be the midwives of the partnership (between the federations and business community) that will ensure the delivery of mutual benefits to both sponsor and sponsee. Some brands who have tried to establish associations with sport have come away with their fingers (and purses) burnt by so-called agencies who represent federations and rights owners in what can only be described as a ‘fundraising’ masquerading as sponsorship. The sports sponsorship agency is a skilled professional just like its counterparts in media buying, advertising, experiential marketing, public relations etc. (To be continued).
Written by Olusola J. Lawson, CEO UB40 Sports Marketing
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