Sports sponsorship today is characterised by high levels of competition for rights holders and brands, a rapidly expanding set of products for consumers, and increasing sophistication within sports businesses. The need for greater understanding and relevance of sports sponsorship performance is now driving global brands to use data-driven decision-making to uncover and prepare for what’s next.
The concept of data-driven decision-making has received a lot of hype and attention in recent years, arguably giving the impression of rapid, revolutionary change. In reality, however, the pace of change has been more akin to a marathon, not a sprint. It takes time for organisations to build infrastructure, hire expert staff, and integrate different data sets into their operations.
The below image illustrates the scale of such a big organisational change. It’s based on a real example of a project undertaken by a rights holder – a national governing body of a major sport in a developed market. It gives a sense of the work involved in putting in place the infrastructure required to become a data-driven organisation. It also sets out some of the typical milestones and benefits that a rights holders might achieve along the way.
When it comes to sponsorship, brands are becoming more demanding, requiring tailored partnerships that align to their business strategies; and a more flexible, educated approach by rights holders.
These changes present challenges for rights holders in terms of cost, staff resources and management capability. They need leaders that are able to understand and manage a broader range of departments. They require more sophisticated technical infrastructure and staff that are better trained and educated.
We have seen examples where right holders’ investment in technology to improve entertainment value can produce additional benefits. By positioning themselves as innovators in areas such as new entertainment concepts, hackathons, start-up competitions and events; the investment has paid off in the form of new, compelling experiences for fans, and a way to grow interest and start a conversation among the media and sponsors.
HOW BRANDS CAN WIN
Smart use of data: This is the key lever to increase sponsorship efficiency and effectiveness. This information can help brands better understand how to engage their customers, identify who the fans of the asset they sponsor are and how they need to connect with them to activate.
Know your fans: Deepen your understanding of what sports and entertainment properties your customers or your addressable audience are fans of.
Engagement strategy: Understand who the fans of potential sponsorship assets are and how you need to engage with them to activate, e.g. what channels and content to use.
Return-on-investment: Collect data points on sponsorship impact across different sets – own, partner, research, social, sales, retail, etc.
‘Getting Smarter with Data’ was one of Nielsen Sports 2019 Commercial Trends:
- Clutter & Complexity: increasing competition, fragmenting audiences, proliferating products and greater business sophistication
- Getting Smarter with Data: Data is becoming the driving force behind the smartest decision-making in sports
- Entertainment Value: The industry is innovating and evolving to enhance entertainment value
- Enhancing the Live Experience: Rights holders and brands are innovating to deliver improved experiences for fans
- Athlete Influencers: Powered by social media, athletes have become powerful sports properties in themselves
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