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Performance Partnerships – Lifting the Ceiling for Sponsorship

/ September 18, 2023 by Greenroom Digital

The days of standard sponsorship deals have given way to a new era where innovation thrives and demands are more nuanced than ever.

At Greenroom Digital, a global digital sports marketing agency, we’ve seen the landscape shift post-COVID, witnessed brands seeking greater value without raising investment, and observed the digital revolution challenging traditional paradigms. It’s evident now, more than ever, a performance-focused approach is not just an option – it’s a necessity due to the size of the opportunity.

In 2023, brands will spend over $1tn on digital marketing. $262b of that will be wasted on ineffective advertising (ad fraud, ineffective targeting, ad blocking etc.). Meaning, brands spend 3 times more on wastage than the entire sports sponsorship industry ($96b). The rapid growth of digital marketing has been on the back of measurable performance outcomes. However, sport partnerships can deliver a significantly better digital performance. There is a 127% increase in digital marketing benchmarks when brands correctly leverage partnership IP. 

Recent years have revealed vulnerabilities in traditional sponsorship models. Brands, faced with tighter budgets, sought more meaningful returns from their partnerships to help justify investments. This desire for more goes beyond exposure and brand success. The days of simply attaching logos to signage and jerseys are long past. Today’s sponsors are asking for a deeper connection – one that translates into tangible results. More and more sponsors want to know what ROI/ROO they can expect from their investment, in the form of views, engagement, leads, or sales; and they expect the rights holder to actively help them achieve results. Results that can be optimised and predicted by using data from previous campaigns (such as the 2,000+ campaigns across 12 years housed and analysed for clients via our proprietary predictive data platform, Greenroom IQ). 

Greenroom Digital have partnered with MG Motor Australia to activate their sport sponsorships. An engaged fan database of over 230,000 leads has been built. Greenroom has then nurtured these leads via partnership related communications, and tracked vehicle sales to this database, attributing direct ROI to each partnership. The most recent results showed a compelling $23m in annualised sales.

As the global stage shifts, a vocal brand community is demanding quantifiable and predictable ROI/ROO from their partners. According to Greenroom’s London-based co-founder Tom Huggins, “We’re seeing a major shift in thinking and priorities globally – be it F1, Premier League, NFL, cricket or anything in-between. Our industry creates rituals, communities and connections better than anything else and that translates to a quicker path to audiences. With many brands facing economic headwinds, being able to demonstrate how partnership assets can be used to drive financial returns is critical in raising the ceiling for investment. The more rights holders can deliver and measure, the more brands will invest and a performance led approach enables a no-risk opportunity to share the upside and keep more in the sporting ecosystem”.

Greenroom Digital’s General Manager (Australia), Steve Whately, highlights that “demonstrating ROI/ROO is also the path for rights holders to get new brands interested in sports partnerships. Many brands have sat on the sidelines, believing they aren’t able to deliver, or measure, performance outcomes through a partnership.” Instead they invest large budgets into marketing channels which provide seemingly clear performance outcomes. Suddenly, with the case studies and benchmarks available to demonstrate what’s possible through sports partnerships, leading rights holders are opening new doors in the brand world. 

The era of Performance Partnerships has commenced. What we now see is a sponsorship landscape where the traditional rights fee model is also evolving into something richer. Instead of the brand assuming the risk and the rights holder accepting a fixed rights fee, a hybrid model is emerging for the benefit of both parties. A partnership begins with a foundational fee, and then scales up based on performance milestones. This approach not only safeguards brands but also lifts the current ceiling for rights holders who demonstrate their commitment to success. Success they know they can deliver because they’ve got the data to prove it. “What we’re doing is providing an opportunity for rights holders to deliver more value to partners and, as a result, share in the upside so everyone wins”, explains Greenroom CEO, Nick Biggin. 

Andrew Clarke from Super-Sub agrees that positive change is upon us. “Traditional partnership agencies have told clients for years that ‘sponsorship doesn’t drive bottom funnel activity’; preferring to focus their attention on top of funnel awareness. Reality is, bringing brand partnerships into the retail environment is one of the most persuasive strategies to consider. We’ve always believed people care more for their passions than they ever will consumer brands. Difference is, we’ve not really had the quality of marketing capability in the partnerships space to deliver on this in the way we can now through tech like Greenroom Digital”.

This is where the brilliance of a performance driven activation strategy comes to the forefront. We provide the strategic roadmap to deliver those leads and conversions for partners across the industry. As a seasoned player in the digital marketing realm, we recognise that true growth hinges on delivering a clear return on investment. With a deep understanding of what we can deliver, we stand firm in our commitment to drive success for both brands and rights holders alike.

In the world of sponsorship, the formula for success demands a blend of innovation, transparency, and shared goals. The days of counting exposures are yielding to the era of delivering quality leads and conversions. Brands are seeking meaningful engagement and real returns. The era of performance partnerships is upon us, and it’s a future where everyone wins if you know how to play the game. Let’s seize this moment, embrace change, and watch as the sponsorship industry transforms into something far more reflective of modern, tech-driven marketing techniques. An industry greater than we ever imagined.

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