Quantifying the impact partnerships deliver across key
marketing KPIs vs industry benchmarks
/ November 8, 2021 by Ryan Skeggs
It is no secret that sports rights holders are facing financial challenges brought on by a combination of the pandemic, ever-increasing athlete costs and the cost of putting on major events.
It is telling that even a major traditional powerhouses like FC Barcelona has been brought to the brink of financial ruin.
With fans back in attendance at stadiums, concerts and major events, the industry has been reminded of the strength of their impact. The passion, connection and rituals that have always been so critical to our community are returning. With that comes a renewed interest from brands trying to leverage the enthusiasm.
We have reached a point where we need to rethink how sport and entertainment can be commercialised. With so many brands already invested in partnerships – globally and locally – why, as an industry, are we so slow in producing impactful partnerships that tap into an opportunity four times larger than seen in traditional sponsorship budgets?
The sports industry should be positioned as the powerful performance marketing platform it is. To do that, however, there needs to be a much deeper understanding of audiences – and not just what they do on Facebook or Instagram. The meltdown we saw recently occurred after these platforms were down for just 24 hours.
Sports rights holders have not adapted as quickly as they should have over the past 18 months to be in a position to capitalise on the interest from new types of brands in crypto, fintech, technology, delivery services, cyber security and mobile gaming that are now looking to launch themselves into partnerships. As a result the industry is leaving a lot of commercial opportunities on the table.
These brands are still only offered linear partnerships that are focused on the valuation of media equivalency from eyeballs, number of inflated social media followers, standard benefits and often vague digital metrics. These type of deals, for the most part, do not stack up with those brands’ existing marketing strategies.
There are huge benefits from a brand aligning with a property, and brand awareness is an incredibly important element of any marketing strategy, but brands want and need more to be delivered from partnerships as budgets are under more scrutiny than ever before.
There is an opportunity for sports rights holders to evolve their approach to partnerships to add in a genuine capacity for scalable revenue based on the direct impact they can deliver to brands. The broader digital marketing industry is currently going through major changes and sporting organisations are actually very well placed to offer a more effective way to engage, grow and connect with audiences for brands.
With US$378 billion currently being spent on digital advertising by brands every year, this represents the opportunity we should be targeting as an industry.
If we take Lionel Messi’s deal with Paris Saint-Germain as an example. That transfer has reportedly increased the club’s social following by 26 per cent at time of writing. Undoubtedly there will also have been a spike in revenue for PSG from the traditional sources, but it’s unlikely that their partners have benefited from anything more measurable than an uptick in exposure.
It’s also highly unlikely that the millions of new followers for PSG are ‘owned’ by the club via their own database – which is the challenge for every single organisation in the sport and entertainment space. It is going to be absolutely essential to shift focus from followers to first party data growth, and the path to accelerated first party data acquisition can lie with partnership involvement.
Talking to an audience through the lens of a partnership can deliver brands an uplift of 2.27 times (on average) in performance across paid media, content engagement, data acquisition and direct response advertising. Sporting organisations who present brands with a genuine solution for the activation of digital and data assets will create a flywheel for their own growth, partnership success and enhanced fan experience.
Using Greenroom Digital’s recently released Fanalysis tool, even a ten per cent increase in database size from the average ‘big six’ Premier League team, would unlock approximately UK£20.1 million in commercial value via internal sources (merchandise, ticketing, events, membership, subscriptions), marketing exposure for partners (ability to communicate directly) and partnership performance (ability to measure direct commercial impact).
LaLiga recognised the potential commercial benefits of this approach through the launch of LaLiga Tech, but it is perhaps half a season too late to capitalise on the ‘Messi Effect’.
There are steps that any sports rights holder can take to quickly unlock more value for you and your partners, and help accelerate your own growth.
1. Value all assets: Stop throwing some of your most impactful assets in like the streak knives of a deal. Have all your digital, content, social and media placements valued, then create digital activation strategies for your partners that deliver a defined outcome.
2. Think like an agency: Show your partners how to leverage all assets and how you solve a business challenge for them through the partnership. This will also speed up your own data acquisition and audience insight, which you can then provide to your partners in real time to demonstrate immediate impact.
3. Performance incentives: Exceeding a defined objective or an agreement for sharing in direct commercial success on top of partnership fee can de-risk any partnership for a brand, reward proactivity for rights holders and create scalable long-term revenue for all parties.
Almost any rights holder can make these changes now, irrespective of their digital maturity or internal resources.
It is a mindset shift our industry needs to make quickly to create a point of difference and become a viable option for brands to continually invest at all levels.