Sport is resting on its laurels if it thinks that brands will simply continue to sign up for expensive rights deals. Misha Sher, VP Entertainment and Sports at MediaCom Worldwide, says brands now have other options.
Sport has it all. Passion, engagement and reach. It’s live, global and social. The ability to connect with consumers through their biggest passion points has underpinned a sponsorship industry that is now worth $60bn per annum and growing at 4.5%.
Sport’s must-watch-live nature has made it a pillar of the communications for many brands. Combine that with the earned benefits of the discussion around the event and it’s been a win-win for everyone involved. Money has flowed to rights holders and their media partners.
Last year the average price of a 30-second spot in the Super Bowl was in the region of $5m.
But even sport must now ponder whether its existing business model is good enough in the digital age. Rights holders need to think carefully about whether brand owners will continue to come back time and again (and pay more for) the same old package.
Even a behemoth like the NFL has seen the viewing numbers decrease while McDonald’s has just pulled the plug on the Olympics. While we shouldn’t draw any conclusions from these specific examples, which aren’t related, it is worthwhile re-examining how sport is addressing its value proposition.
Sport is entertainment as much as a physical contest and just as entertainment has had to upgrade for the 21st century, so too must sports.
The reality is that consumers have far more choice when it comes to entertainment than ever before and never had there been such an intense competition for their attention. Brands, websites, on-demand TV shows are all trying to gain their attention. Sport faces more and better quality competition than ever before.
This is one of the main reasons why 'content' has become such a buzzword for brands in recent years. On average, consumers see 5,000 advertising messages per day so grabbing and retaining their attention is no easy task.
Compelling stories, integrated partnerships, inside information combined with high quality video are often the only things that can connect.
Many rights holders have not grasped the importance of this and have not evolved what they're offering. They are still selling reach and impressions and failing to understand that advertisers are increasingly interested in building genuine connections with consumers. Chief marketing officers and brand managers don’t set aside sponsorship budgets. They allocate budget where they feel a partnership can provide an effective connection with their consumers.
And therein lies the biggest challenge for sports right holders. They’re not competing with each other, they are competing with all other genres and channels to demonstrate they have the ability to address business challenges.
How many are fit for purpose in an age where consumers crave different formats, across all digital and social platform at a time of their choosing? When the temptation is to find something more entertaining is just a swipe away, what are sports right holders offering brands that will keep their audiences attention?
Earlier this summer I was on a jury at Cannes Lions judging the best in branded content and brand partnerships in the Entertainment Lions category. What struck me was relative lack of entries related to sport on a shortlist or amongst the winners. Channel 4’s ‘We’re the Superhumans’ campaign to promote the 2016 Paralympics was a notable exception.
If sport has some of the most compelling stories, which is one of the arguments for the high sponsorship fees, then why are brands having more success through other channels?
It would appear that right now brands (and their agencies) aren’t able to creatively leverage sport partnerships into award winners and while it’s not all about awards, it would be wise to understand why this is the case.
Of course, none of this would matter if the person who signed off sports deals was different from the person who signs off on other forms of marketing. Unfortunately, that’s not the case, and with brand budgets tight and accountable, the same CMO will often be comparing and deciding between an entertainment proposal and a sports idea.
The sooner rights holders in sport realize that traditional sponsorship assets aimed at reach are increasingly less valuable, the sooner they can adapt to the ever-changing habits of their fans and expectations of their commercial partners.
Brands are looking for solutions, for ways, not just to reach, but to connect and build affinity with consumers. Sport needs to evolve to address this or it won’t be long before marketing dollars start flowing elsewhere.
