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Leaders: Five Things We Learned

Storytelling, digital engagement and private equity’s relationship with sport were some of the important themes covered at the recent Leaders Sport Business Summit in New York. Ben Cronin picks out five highlights from the event.

1. NFL's short-term deals allow for digital experimentation

Speaking in the first session of the conference, Sean McManus, president of Super Bowl 50 broadcaster CBS Sports, revealed that American football’s NFL was deliberately only offering short-term deals for its Thursday Night Football package of games. He said that this allowed it to experiment with digital programming.

“People have said that most deals in sports today are known for their longevity – eight, 10, 12-year deals – but the NFL has purposely only done short-term deals for Thursday Night Football,” he said. “If you want to experiment in any type of digital programming, it makes sense for the NFL to keep the deals shorter.”

He explained how the NFL has shared the rights to Thursday night games between CBS and NBC, but also negotiated a deal for the games to be streamed live simultaneously on the NFL Network. Having at first felt threatened by the deal, however, McManus had come to see the additional coverage as an opportunity.

“We at first would prefer to have more exclusivity but once it became apparent that the league wanted to do a streaming deal, our No.1 priority was to make sure our commercials ran in that stream. Why do we want commercials to run? Because when commercials run, you get credit for the rating.”

2. Olympic back story provides sponsor platform 

How does a non-sports company get the most out of sponsoring the Olympics and how do you sustain a marketing campaign during the Olympic ‘off season’? In the fourth session of the first day, marketers for BMW, P&G and Bridgestone were joined by Lisa Baird, chief marketing officer of the US Olympic Committee (USOC), to answer these questions and to share their marketing plans for the Rio Olympics.

Baird admitted that the winter and summer Olympics provide a challenging environment for sponsors because, unlike other sports events, they do not have a regular season to keep them foremost in the minds of their audience. However, she said that the USOC worked with its broadcast partners to produce compelling documentaries to increase engagement during the periods between events.

“With NBC we create the appetite and the demand for the stories of the Olympic movement,” Baird told the audience. “We want to create a desire in Americans to know the stories of athletes and engage in some way.”

Brands like BMW and P&G were then able to integrate themselves into these back stories and promote themselves as the ‘team behind the team’. A good example was a documentary on NBC that focused on how BMW developed technology to help the US bobsleigh team. Similarly, P&G’s ‘Thank You Mum’ campaign celebrated the unsung mothers behind every Olympic athlete.

“P&G is in the business of supporting mums,” said Janet Fletcher, brand director, Olympics and sports marketing, P&G. “We don’t make sports equipment, but we do support mums.”

Phil Pasci, vice-president of consumer marketing for Bridgestone North America, acknowledged that his company was less experienced at creating a marketing strategy around the Olympics and would use the Rio Games as a testing ground before making a bigger splash later.

“Rio is our learning lab,” he said. “We’re going to start small, activate in four countries – in the US, Brazil, Korea and Japan – and we’re going to take the learnings from Rio and then expand them out to the rest of the world.”

3. Advertisers have to be more authentic and nimble in fragmented digital world 

“People invent technology to avoid the content I produce,” said David Droga, founder of Droga5,an independent advertising agency. “That’s why people have to be more nimble and lateral about [the marketing] they do and that’s why advertising has morphed so much.”

Droga and fellow panellist Mark Shapiro, chief content officer of WME|IMG, both agreed that the only way for brands to capture the attention of an audience and trigger impulses in this new ‘bite-sized world’ was by striving for authenticity. “We do it with talent and storytelling,” Shapiro said. “Ultimately, no matter what it is, storytelling is what the consumer wants.”

WME|IMG has a minority stake in Droga5 and its founder felt that the reach and access of the two newly-merged companies in the entertainment, sports and events industries allowed for much easier collaborations with major sports and entertainment stars.

“So much time in the advertising industry is spent chasing things that are never going to happen,” Droga said.

He cited the example of Under Armour’s recent campaign with Matt Damon, which portrayed the star as an athlete in training for his fictional mission to Mars in the recent Ridley Scott film, The Martian. Droga said that the campaign was mutually beneficial for Under Armour and for Damon, a star represented by WME|IMG.

“Every time it runs, it is drawing attention to the film, but every time it runs, it is [also] drawing attention to the brand,” Droga said. “There’s no rate card for that, but doors open when people see there are new avenues to explore. The integration has to be seamless.”

4. National TV coverage will bring narrative to esports 

Storytelling was also the theme as a panel of esports experts discussed the implications of WME|IMG’s deal with Turner to show a new esports league on US national TV this summer.

“I think that flag that they’ve planted together makes it easier for everyone else in the industry to do something similar or along the same vein,” said Craig Levine, chief executive of Turtle Entertainment, operator of the ESL league.

The panel agreed that this deal, combined with sports broadcaster ESPN’s decision to launch a dedicated new esports verticle (ESPN. com/esports) would help to legitimise esports and broaden its fan base.

“I think the exciting thing about what ESPN brings to the table is narrative,” said Andy Swanson, vice-president of esports and events with gaming platform Twitch. “What’s lacking in esports right now is those stories that are told between players and teams and rivalries, and the arc of a player coming from nowhere and becoming the most famous person or winning a prize of several million dollars.”

However, Levine warned the esports industry not to alienate its core following while trying to appeal to a more mainstream audience.

“Esports has really been a bottom-up movement about community and players and people, and that is in some ways counter-intuitive to a sort of top-down, big mandate,” he said.

5. Investors look for sports properties that can be digitally transformed

When asked what appeals to private equity investors when purchasing sports properties, David Verklin, operating partner of Calera Capital, said that he was most interested in businesses where digital technology had the greatest potential to transform.

Verklin’s company has invested in the Rock ‘n’ Roll Marathon Series in Las Vegas and appreciated the way that the online registration platforms for this type of event gave access to substantial amounts of data. “We’re fascinated with the data side of sports,” he said. “You think about the competitor group and the data we get on participation, and the ability to use highly targeted digital media follow-up to stay in touch with our customers.”

Speaking about sports technology companies, co-panellist Zachary Kaplan, vice-president of private equity investor General Atlantic, said that he was most inclined to invest in businesses with a proven market fit.

“If they had a technology and they wanted to bring it to market, that’s probably too early for us, but if they’d already brought it to market and they wanted to bring it to 30 more markets, that might be very compelling.”

Kaplan added that sport was one of the few types of content that might be immune to the rise of on-demand streaming.

“As consumer behaviour shifts from appointment, linear TV viewing to on-demand streaming and the Netflix of the world, then the concept of anything that is truly appointment and live content [like sport] will only appreciate and accrue value,” he added.

 

For more coverage of day 1 of the Leaders summit, go to: http://bit.ly/1SSt6xP

For more coverage of day 2, go to: http://bit.ly/1PbDZ7h

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