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The Game Has Changed

When it comes to evaluating the sports sponsorship market in Ireland, despite the country’s recent and much-publicised economic meltdown, the sector is still very much open for business.

Currently sponsorship spend in Ireland is hitting in the region of €125 million and despite some recent decline looks like the healthiest member of the marketing mix. Good news if you’re in sports marketing, even better news if you’re a brand seeking value from a sponsorship – it’s a buyer’s market out there.

The game has changed. Sports governing bodies are now under more pressure than ever to deliver a value proposition and need to take these new market conditions very seriously if they are to continue to reap the benefits of commercial investment in their games.

The new world order is all about ‘partnership’. Brands are no longer sponsors or benefactors; they’re partners and need to be treated as such.

Unless some insight is being offered as to how the sponsor can create affinity between the brand and its designated target audience and generate revenue streams from the agreement or meet very specific business goals then the sponsorship is no longer attractive and destined to fail. That means more effort is required from a rights holder to set parameters to evaluate their properties so that success or otherwise can be clearly determined. It might sound obvious but the fact is that the rights holders for the most part have evaded this responsibility in the past – the burden of revenue generation and evaluation rested with the sponsor in the majority of cases.

Some partnerships are already in the new groove. O2’s ‘Be The Difference’ campaign in support of its sponsorship of the Ireland rugby team has been held up as a best practice example. The core idea of the sponsor being the conduit to bring the fans closer to our International team has proved a huge success, not just in terms of driving brand affinity but also being commercially smart in generating brand loyalty in a highly competitive sector.

Since the turn of the century, the big three – GAA, Rugby and Soccer – were the biggest beneficiaries of double digit growth in the sponsorship sector. Marketers in Ireland snapped up opportunities to leverage their brands off the back of our sporting prowess with many achieving this to great effect during the last decade.

In the new market conditions, if you examine each sporting code individually it becomes obvious quite quickly that the change is already happening.

Irish rugby has been the big success story in realising and leveraging its commercial sponsorship potential in recent years. The IRFU’s unique approach to nurturing home grown talent in the professional era brought with it unprecedented success at International and provincial level. Everyone loves a winner and success at the highest level in the game opened up a raft of commercial opportunities to the point that Irish rugby’s commercial programme was valued at €8.1 million for season 2009-10.

Following the 2009 season the RBS 6 Nations, Triple Crown, Heineken Cup and Magners League trophies all sat in Irish cabinets and a year either side of that we witnessed the opening of two world class stadia in the re-developed Thomond Park and the Aviva Stadium. Top-class teams and infrastructure combined with a well honed commercial savvy to maxmise commercial investment in the sport – happy days?

Yes, but recent events showed us that even the best in the class is not immune to being disciplined by the new economic climate. The misfiring ticketing strategy for the 2010 Guinness Series was a timely reminder to Irish rugby that the rules have changed. In fairness to the IRFU they reacted positively and earned kudos by re-scaling their prices for the upcoming RBS 6 Nations championship. After all, a sponsor investing at elite level will always expect the closest possible to a capacity crowd.

Across the city at GAA headquarters in Croke Park we saw a similar story play out. The GAA launched its new “Champions League” style sponsorship model to much fanfare in 2008. Now instead of a title sponsor for each of its flagship Hurling and Football Championships, the GAA managed to attract three associate sponsors for each of the tournaments. So a total of six sponsors signed up to Gaelic Games at an estimated €1.2m average fee per sponsor per annum – Etihad Airways, Toyota, Ulster Bank, RTE Sport, Guinness and Vodafone.

Fantastic news for our national games and for the future of grass roots GAA then?

Vodafone’s exit as a Championship partner in 2010 is an interesting twist! The brand chose a shirt deal with Dublin GAA as an alternative. Is it due to the competitive mobile market in the capital? Is it because there is less clutter and more brand exposure in the shirt sponsorship space? These reasons and more but a simpler explanation is that they were most likely presented with a better value option that demonstrated a clear route to converting fans of Dublin GAA into Vodafone subscribers.

On the plus side for the GAA, Musgrave group has committed not one but two brands to the GAA Championships in recent times. They have set about using those sponsorships to drive football to its national network of Centra and Super Valu retail outlets – that’s sponsorship directly generating revenue for the sponsor – the best reason in the world to get involved in the first place.

Irish soccer has seen its fair share of blue skies and turbulence in equal measure over the course of the economic crisis and its aftermath. National team sponsor Eircom headed for the exit door last year citing the “absence of a value proposition” as the reason (there’s that term again!). As they passed through the exit they were met on the way out by mobile and broadband operator 3 on the way in with a cheque for €7.5 million and a four year contract much to the delight of all stakeholders in Irish soccer.

At the launch of the new sponsorship, 3’s CEO, Robert Finnegan spelled it out "This announcement officially confirms 3 as Irish football’s biggest fan and the number one network for all supporters. We hope football fans will not only cheer on our boys in green but will support their new sponsor by switching to 3.” I can only hope that the FAI has this comment written above their boardroom table as there-in lies the key to keeping 3 on board as sponsor for the foreseeable future. The FAI can partner with 3 to help them to leverage Irish soccer to convert customers – it could not be simpler as a strategy but a huge challenge in the execution.

The challenge is exacerbated by the knock on effect that economic strife can have for the network of volunteers within a sporting organisation.

In the bad times a portion of the pressure is shouldered by the one million or more volunteers who make Ireland the fantastic sporting nation that it is. Lack of time and money is a side effect of Ireland’s current ailments and this means that volunteers can begin to relinquish their valuable commitment to sport.

The issue is that if you begin to lose volunteers your sport will lose out at elite level, it’s that simple. You will not have the sufficient grassroots games administration or development to produce the elite players on which you sell your games in the future. It’s a spiral that Irish sport needs to avoid at all costs. That means that commercial investment is more vital than ever and engagement with the grassroots to nurture our sport is now of the utmost importance.

While this may be the single biggest threat to our sporting organisations it can also be turned to an opportunity.

If the access doors are opened for sponsors to the network of volunteers within an organisation then it might just be that a rights holder can find a way to deliver value and willing customers to its sponsors. It also provides heightened engagement with volunteers which makes them much more inclined to keep their commitment to the sport alive.

This might not be the silver bullet solution in these times but it’s a great place to start!

 

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