Phil Stephan | Digital delivering for brands

Phil Stephan, director at sports marketing agency Two Circles, dispels some myths about the hottest sponsorship topic of the year.

Phil Stephan

“But what about our sponsors? Won’t it impact the value of our sponsorship business?”

Outside of whether I think Southampton are finally safe from Premier League relegation, this is by far the most common question I’ve been asked this year.

At the start of January – before signing Three as its new shirt sponsor – Premier League club Chelsea was in the news for being the first major sports rights-owner in a long time to take a genuinely new brand proposition to market.

In short, not only is it able to offer hugely attractive sponsorship opportunities to brands – such as it has done with Three – it’s now also able to offer new digital media opportunities that can be optimised for a brand’s specific campaign needs. It is the first time a Premier League club has formally taken such an approach to the market, and for major sports properties looking to sign deals with a wider number of brands from a wider range of brand sectors, it was a welcome market development. Chelsea are deservedly getting the kudos they deserve.

Over the last decade, sports properties have invested in digital platforms and built large digital audiences, creating valuable digital inventory as a result. But this digital inventory has typically been thrown into larger partnership packages with little thought of the value it delivers, meaning few rights-holders have managed to package them effectively for brands and therefore realise the true commercial value.

Anyone who is media-savvy understands that the under-utilisation of digital is a key reason sport has struggled to attract and deliver impact for brands spending little-to-nothing on sport, but significantly on channels such as digital advertising and influencer marketing. And the recurrence of the questions from the start of this article is one of the reasons this approach hasn’t been taken to market sooner.

So it’s time to answer these questions head-on – in the hope that more major sports properties take the steps to explore this opportunity.

Distinctive Propositions

The first thing to point out is multi-year sponsorships and campaign-based brand collaborations are completely different and complementary propositions.

The former is suited to a brand looking to shift the needle on a range of objectives using a range of assets and rights – incorporating digital, but typically encompassing a lot more – and over the course of several years. As a marketing platform to reach at-scale audiences in real-time, sports sponsorship is unrivalled; if you’re a brand that wants to change brand perception or grow awareness, there’s nothing more powerful.

But the latter is suited to brands looking to maximise a peak sales moment, product launch or larger-scale advertising campaign over the course of days, weeks or months. As a result they don’t have access to anywhere near the amount of rights or assets a long-term partner has (and pays for), nor the benefit of having a long-term association with the rights-holder.

The activity of one therefore doesn’t negatively impact the other – in the same way a regional partner activating on the ground in an international market has completely different objectives and uses different marketing collateral than a partner hosting suppliers at a matchday, or seeking to grow global awareness through LED boards.

Targeting New Brands

Secondly, campaign-based collaborations enable rights-holders to offer something different to brands for whom a long-term, seven-figure sponsorship proposition just isn’t appropriate – often start-ups or consumer brands looking to sell directly to their customers without the financial power, or need, to run a large-scale TV campaign or multi-year sponsorship.

Given most rights-holders have a number of open categories at any given time – and under-utilised digital inventory – that means these campaign-based collaborations are made with brands which are non-competitive to long-term partners, and therefore any revenue received is incremental.

For those brands that might do a series of short-term activations, there’ll be a tipping point where scaling up to a long-term partnership will make both financial and strategic sense. These different approaches open up a wider brand ecosystem and give sports properties the ability to have more conversations with more brands about how they can help them solve their business challenges.

If structured right and with the right go-to-market strategy, this is a win-win – and demonstrates the future of sports sponsorship, one where rights-holders and brands use digital to create new commercial models rather than undermine existing ones. And yes that means, in answer to the question, it will impact the value of your sponsorship business – positively.