Sponsorship has been increasing in popularity as a marketing tool for brands to create awareness, drive sales or new business, and increase customer loyalty or employee engagement.  With added interest and investment in Sponsorship, brands are now beginning to tread very carefully around the marketing tool and here are some of the reasons why. 

Mismatched brands and rights

Brands spend a lot of time and money carefully planning and deciding on the right property to sponsor (either this or its Chairman’s choice).  Despite this, there are brands that have spent huge sums of money on the wrong rights, which have not paid dividends and certainly haven’t offered much return on investment.  In some cases sponsorship has had negative effects in terms of ROI and a bad fit between brand and property has led to damaged reputations for the former and reduced commercial value for the latter.  However, today, brands have become much savvier about what they attach their name to because of the huge cost of sponsorship and with the global recession this has never been as crucial as it is now. 

Financial Services

During the recession’s worst moments any financial services company about to spend money on sponsorship was met with harsh criticism and serious public backlash.  Even now, as we begin coming out of the worst of it there are still strong opinions on the practice.  Bank of America ended any talks with the New York Yankees due to huge financial difficulties and UBS cancelled its sponsorship of the Hong Kong Open after it received a $59.2 billion bailout from the Swiss government.  Both did so for fear of major public backlash.   RBS on the other hand announced $41 billion in losses just after extending its sponsorship of the Six Nations – a decision which was met with outcry, especially as it is 70% owned by the government. 

The effects of digital

With digital, bad news can travel extremely fast.  This has meant that companies have had to rethink marketing strategies.  Bad press around a property can cause devastating effects for any company that has created a strong association through heavy marketing activity.  To illustrate the enormous implications of a scandal, combined with the power of digital, just look at Tiger Woods.  As soon as the story broke about his behaviour it spread across the world in seconds.  Shareholders of Nike, Gatorade, and other sponsors consequently lost a collective of $5 to $12 billion due to a significant drop in their stock’s values. 

Embarrassment 

Poorly performing teams, embarrassing scandals, politically damaging stories.  These are all reasons for brands (or in some cases properties) to cut-off associations with partners.  Famous and very recent examples of this are Accenture dropping Tiger Woods, Nationwide dropping the FA, and only last week, two Indian state-run firms – NTPC and Power Grid Corp of India – have decided to scrap their multi-million dollar sponsorships of the Delhi Commonwealth Games due to negative publicity around allegations of corruption, mismanagement and malpractice. 

In addition, the BP oil fiasco that has engulfed the Gulf of Mexico has severely damaged the reputations of many of the arts properties it sponsors, primarily The Royal Opera House, Tate Galleries, and British Museum.

Brands are now very cautious about what they attach their name to.  Understanding sponsorship and the effect that it has on consumers is key to understanding the possible risks of association, as well as the benefits.

Will Carling famously referred to the game in England as being run by ’57 old farts’ back in 1995 when he was national captain. However, English rugby (union) has come a long way since then. Admittedly results haven’t been entirely awe inspiring following the 2003 World Cup triumph – but in commercial terms the future looks rosy.

According to SportsPro magazine, in 2009 “games at Twickenham generated £29.2 million for the RFU, accounting for a quarter of their £118 million turnover. The union’s gate receipts have actually increased by £4.1 million since the 2006-2007 season.” Last season in the 6 nations “England could have sold out its 82,000 capacity Twickenham stadium twice over for each of its two home games”.  Additionally, “England received the largest economic boost from the tournament, with a total of US $132.82 million spent by fans on match tickets, transport, food and beverage sales, accommodation, merchandising, and at city attractions, and by sponsors on marketing”.

Hospitality and marketing have been important aspects of the increased commercialisation of rugby in the country where Webb Ellis first picked up the ball. In terms of sponsorship, England’s involvement with O2, its principal sponsor since 1995 when it was known as BT Cellnet, has been both beneficial and lucrative for rugby. England’s mixed broadcasting package, unique to the home unions, with both Sky and the BBC ensures strong annual TV revenue. The BBC covers home games in the 6 nations while Sky covers the autumn internationals and much more – from U20 internationals to the Army and Navy game. Looking to the future, England will also host the 8^th Rugby World Cup in 2015. The Rugby World Cup is the third largest sporting event after the football world cup and the Olympics. When staged in France, in 2007, it delivered “a total economic impact estimated at up to £2.1 billion” for the host nation.

Domestically the picture looks bright too. Aviva, the fifth largest insurer in the world, has recently replaced Guinness as the official title sponsor of England’s premier club rugby competition. In a 4 year deal, Aviva will pump £20 million into the renamed Aviva Premiership. In another exciting move, JP Morgan Asset Management earlier this year launched a Sevens tournament for the 12 premiership clubs. This is a bold move which aims to build on the momentum that entry into the 2016 Olympics has given the shortened version of the rugby game.

There are, however, some small dark clouds for rugby in England. The so-called ‘Bloodgate’ scandal has left a bad taste in the mouth (quite literally). The affair has tarnished the image and reputation of both Harlequins (one of the oldest clubs in the game) and the sport in general. It would certainly have been scrutinised by sponsors even though Etihad Airways has signed a one year extension to its sponsorship with the Harlequins club.

The relationship between the Premiership clubs and the national squad is not always a comfortable one. Like in football, there are arguably too many overseas stars in the domestic game. If selection of these players curtails the long-term playing development of home grown talent the results of the national side may suffer in years to come. Some players in the national side are also plying their trade overseas and this has led to friction between their respective clubs and Martin Johnson’s national squad. This was notably the case when the French club Toulon refused to release Jonny Wilkinson for a recent England squad summer camp. To keep revenues coming in, the RFU needs to carefully manage these issues to ensure that its strongest side runs out at Twickenham in order to attract sponsors, broadcasters and keep fans streaming through the turnstiles.

The upcoming season promises to be an exciting one as the rugby community looks forward to the 2011 Rugby World Cup in New Zealand. Whether Martin Johnson and his England team will get their hands on the Webb Ellis Trophy again remains to be seen.

One thing we do know for sure – on the commercial front English rugby is in great health.

The recent Tiger Woods crisis showed the world how brands and athletes are tightly linked. While Accenture, Gatorade, AT&T dropped the golfer, other brands such as Gillette and Procter and Gamble, have significantly dimmed down their use of Tiger in advertising campaigns. EA Sports played differently as  Tiger shared his PGA Tour 2011 video game cover for the first time in 13 years. On the other hand, Nike stood by his athlete and aired an interesting, yet controversial advertsing campaign.

Athletes are the icons of sports brands. The Tiger Woods case showed  us that it can be a double edged sword.  I reckon the most famous football marketing icons would be David Beckham, Zinedine Zidane & Lionel Messi  among others for adidas, Cristiano Ronaldo, Wayne Rooney & Didier Drogba (among others) for Nike. Eto’o being the Puma icon for some years now. 

It’s not an easy task to link a player to a brand. It is a long way process. Brands have a very well thought scouting system, and know talented young players before they get under mediatic spotlights. Sponsorship deals are being made, with parents agreement, and the kid grows up with the brand throughout his career. For those who saw the U-19 final where France deafeated Spain 2-1, all these youngsters were (already) wearing either adidas, Nike or Puma footwear. Obviously, these brands did not come up yesterday to add these players to their portfolio.

Gael Kakuta, the Chelsea player, Alexandre Lacazette the Olympique Lyonnais striker and Cédric Bakambu are the perfect examples. Three upcoming french stars, the first one wears the Superfly Vapour II, the OL player strikes with the adidas adizero F50 and Bakambu scored 2 goals against The Netherlands with his Pumas.

The “big three” are in constant look for the next Lionel Messi or Cristiano Ronaldo. Once players are contracted by either one the three (adidas, Nike, Puma) it is difficult for the other two to step in. In other words, I don’t see Nike approaching Xavi nor adidas willing to sign Didier Drogba. Not only the Spaniard and the Ivory Coast player are already strongly “stamped” by their current sponsor but it will be a very costly deal if it gets through. Secondly I would like to think that the sponsors would rather invest in signing new young players with this amount of cash.

Brands link their image (and vice versa) to footballers from a very early age and this is a long term investment which will pay off when these talented players will lift a World Cup or Champions League trophy. In the meantime, they would have encapsulated their sponsors brand image and values. They would have represented the brand throughout their career. For instance, Zidane & Beckham will always be associated with the adidas brand and ultimately with the Predator boot. Recently, we have seen Nike’s effort to market Cristiano Ronaldo with the Mercurial Vapor Superfly II and Rooney with the T90 Laser III.

Happy to hear your thoughts!

Even in the sports industry where results on the field typically speak for themselves, communication is becoming increasingly more important and valuable.

Take Arsenal FC for example. The North London club is adopting a more sophisticated sports marketing model and central to this is a shift to a US-influenced corporate communication policy. The first step towards the new business model began in January 2009 when the club appointed Ivan Gazidis, then deputy commissioner of Major League Soccer in the USA, as its new chief executive. The club’s publicized recent search for a new head of communications, to replace Amanda Docherty after 12 years in the post, is further evidence of the club’s new approach to communication.

Arsenal is seeking an authentic voice which can articulate the brand values that the club represents. On a daily basis, Arsenal FC, like any other business, has to share meaningful and relevant information with customers (fans), sponsors, partners and investors – increasingly on a global scale.

The chosen person for the open head of communications position will have to answer to and work with the great Arsene Wenger who has had a colossal presence and influence at the club since his arrival in 1996. Wenger himself is a great communicator who can converse in six languages, has a master’s degree in Economics from the University of Strasbourg and is somebody who has real confidence in statistical analysis. In other words, Wenger and his coaching staff, who manage the club’s assets on the pitch, also understand the importance of information and communication.

The Gunners were valued by Forbes in 2010 as the 3rd most valuable soccer team in the world after Manchester United and Real Madrid, with an expected value of £837 million ($1.2 billion). The club was ranked 8^th most valuable sporting franchise overall. Arsenal’s shares are still traded on the Plus market, an exchange for smaller companies, meaning that anyone can buy shares.  So anyone could potentially have a vested interest in the regular statements from Avenell Road, Highbury N5.

If the club can successfully embed the new corporate communication policy, it should find it easier to develop and communicate brand values domestically and globally – and that means generating more revenue for the club.

Bit of bad news…Social Media doesn’t scale. If you are successful company then you will have more customers than staff. Social media in its purest form should facilitate people to people communications and that means talking to your customers on a regular basis, so you don’t need a degree in mathematics to work out the disparity!

Jeremiah Owyang writes an excellent post on the process to create a customer advocacy program which can extend the available resources for companies active in social media. Coca Cola’s Facebook Fan Page is still run by two fans, BMW have just taken control of a Fan page set up by a fan (now with over 1m fans) and will now use it for customer engagement, so there is evidence of customers taking on the role of brand ambassador and organizing like minded individuals around consumer brands.

This applies to all organizations but I think is particularly apt for sports and entertainment brands, as for them the volume of interest and interaction is magnified. For example, Man Utd have about 600m fans worldwide…even smaller sports brands will have hundreds of thousands fans who are all potential customers and active participants on the official social channels.

What is their biggest asset can also be their undoing in social media. They have armies of people gagging to talk to them and wanting their content. This is great news but creates a massive issue if you are going to engage with them on a regular basis. The answer is…use them. Empower them. Consumer brands would pay a King’s ransom to have such loyal customers and sports brands can create advocacy programs much easier than their counterparts. Here are some simple steps to go about it

Find the influential voices in the community

They will already be active on the forums, unofficial networks and supporters’ club groups. Spend some time in these communities and see who looks like a good ‘signing’!

Bring them into the organization

Empower them. You won’t need to remunerate them…they love your brand and the value they will get is not a financial one. The ‘badge value’ they will attribute will, in most cases, be all the reward they need.

Let go of control

To make social communications scale, brands have to comfortable with customers doing their job for them. Make sure you have vetted them and they have signed up to the clubs’ social media policy (create one if you haven’t already) but the more freedom you give them, and others in the community to take the brand message and spread it in their own way…the better.

Run competitions

Once the brand advocacy program has got some legs, you can increase the activity and look for the next club Facebook admin, team tweeter, message board admin. By making this a competition you will be increasing engagement with the community.

Let the community self support

Apple’s support community is almost entirely self-supported. No one gets paid for moderating Wikipedia. People on the web like to contribute to projects which mean something to them. Sports fans will be up for this, so with regular content from the official sources coupled with an army of brand ambassadors…all of sudden you can have a social media ‘team’. Sure, they will need to be managed, but it is going to be a far more efficient use of your available resources.

What examples do you have of brand advocacy programs being successful. What do you think some barriers to this working might be? Would love to hear from you….

www.spearfishlabs.com

This morning I was thinking about some of the conversations I’ve had with businesses and National Governing Bodies about their thoughts on social media.  One of the problems they face is why would people want to follow or like their brand or organisation?

It is a good point and one that many fail to think about.  If you are the FA for example why would people want to follow you?  Yes there may be some useful info on coaching or the England team for example but what else?

When someone follows or likes something it is an emotional decision.  They are happy to like a band or celebrity or club or player because they have an emotional connection to them.   For an organisation this is a tough hurdle to get over.  You will get a certain amount of hardcore people connecting with you but you will hit your max pretty quickly.

How can you overcome this?

The idea that I have trying to press home is that you have to give people something that can bring about that tie.  As an NGB you are the guardian for that sport in the country, you have massive amounts of content and thousands of people who enjoy that sport so why not design a campaign around that sport?

A recent example of a business taking this point to heart is adidas’s move to create a mobile app called MiCoach that “allows smartphone users to turn their phone into a personal coach with GPS pace-triggered voice coaching to colour-keyed pace zones, personalised and sports-specific training plans, workout calendar, navigator and workout feedback,” according to the sportswear firm.

This not only gives them the chance to interact with their key audience and show of their products but also utilise their key sports ambassadors such as David Villa, Andy Murray, Jonny Wilkinson, Reggie Bush, Derrick Rose, Jessica Ennis and Rebecca Pembleton as the App allows players of all sports to personalise their training.

Outside of Sport

Similar ideas for non-sports companies would be a toothpaste manufacturer setting up an oral hygiene awareness campaign rather than just setting it up as their brand name on Facebook or Twitter.  I think they call it ‘thinking outside the box’?

One company who did this very well recently was Proctor & Gamble who had the uphill task of marketing tampons to 12/13 year old girls.  Take a moment to think about how would you go about this…. 

Well they went several steps further and set up a social networking community called ‘Being Girl’ that encompassed all aspects of being a 13 year old girl.  It included chat on music, health info, parents and much more.  They have increased sales significantly, released the concept in 21 countries and found it to be 4 times more effective per dollar spend than traditional advertising.

The lesson to take from these examples is not to talk about what you sell but to listen to other people’s problems and find the subtle opportunities within them to talk about your product/services.

Back to Sport

Sports bodies need to take a leaf out of the private businesses world and seriously think about campaigns.  Nike and adidas have set up communities and campaigns around running but have UK Athletics done anything?  The same companies have worked this concept around football but has the FA contemplated the idea?

What we see are websites and social media pages that are titles ‘The FA’ or ‘UK Athletics’ without thinking about why anyone would be interested in what they have to say.

Create a campaign that can evoke passion within those who play or are interested in your sport and you open the door to a much wider audience who will be more than happy to engage and learn.  You do have to plan carefully, give a large amount of content and commit the time to make it work but why would you not want it to be successful?

For smaller organisations you can run campaigns based on your resources or why not team up with suppliers from your sport?  There are plenty of opportunities to make this work and come up with something truly special.

Coca-Cola showcased appealling marketing activations to leverage its partnership with the 2010 FIFA World Cup. The Trophy tour and the Celebrations ad are good examples. With the Coca-Cola celebration award recently given to Tshabalala, the Atlanta firm is capitalizing on the World Cup momentum, by adding a strong CSR component and engaging football fans. Another benchmark of how global football brands display their CSR initiatives by leveraging their products and simulteneously activating their marketing rights in the smartest possible way.

The first goal scored in the 2010 FIFA World Cup by Tshabalala against Mexico was chosen by millions fans worldwide as the most iconic celebration of the World Cup. Siphiwe Tshabalala earned the first ever “Coca-Cola Celebration award”. Coca-Cola engaged football fans to decide on the winner through an online vote. 

For every goal scored at the 2010 FIFA World Cup, Coca-Cola donated $1,500 contribution to the Company’s “Water for Schools”. It’s an initiative to provide clean water access to schools across the African continent. With 145 goals scored, $217,500 was raised to fund the project and an additional $50,000 was donated on behalf of Tshabalala bringing the total amount raised to $267,500. By participating in the voting, football fans have had a hand in supporting clean water initiatives that will leave a lasting legacy of water sustainability in Africa and beyond.The “Water for Schools” program is just one part of the $30 million “Replenish Africa Initiative” (RAIN) by Coca-Cola to provide at least 2 million people in Africa with clean water and improved sanitation by 2015.

Emmanuel Seuge, group Director, worldwide sports and entertainment marketing, commented on this initiative: “Fans from around the world have voted for their favorite goal celebrations”. Throughout our 2010 FIFA World Cup campaign, we’ve encouraged them to let go of their inhibitions and celebrate. The Coca-Cola Celebration Award was another way we brought fans closer to the celebration of the FIFA World Cup while also leaving an important legacy for the host continent.” [Source: The Coca-Cola Company.com].

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Hello everyone,

On June 18, I wrote an article on how non World Cup sponsors are linking their brand to the biggest football event. Consumer’s awareness on Nike as a World Cup partner significantly increased. I based my sources on a survey The Nielsen Company carried out from May 7th to June 6th 2010, therefore before World Cup starts.

NM Incite, Nielsen Mc Kinsey Company, issued a follow up survey from June 11-25th*, and the results is worth looking at. In fact, the World Cup sponsors are now trusting the VIP seats of having their brands associated to the FIFA World Cup.

In the “Nike wrote its future” article, I pointed out that although not being a FIFA Sponsor, Nike managed to link its brand to the World Cup. This achievement is strongly due to many elements. The “write the future” marketing campaign contributed to a huge online buzz. On field, Nike sponsored 9 Federations during the World Cup** with key players such as Rooney, Cristiano Ronaldo, Drogba regardless of their  performances (which were poor). Another element to consider is Nike positioning itself as the football brand caring for the environment.

However, since World Cup started on June 11, adidas recovered and positioned itself at the top of the World Cup brand recognition. Indeed a follow up survey from The Nielsen Company (from June 11th-25th) points out that in the first two weeks of the tournament adidas overtook Nike as the top brand. “Adidas buzz accounted for 25.1% share of World Cup buzz online compared to 14.4% before the event. Nike, meanwhile, dropped from 30.2% to 19.4%.”

Ironically, the Jabulani controverse strongly contributed to this recovering.  The first week of the World Cup, 8% of all english World Cup related messages were about the matchball. This said, adidas sponsored 12 Federations in South Africa,  is the official matchball supplier, launched a very well received UMU campaign about unity and diversity, benefits from ad boards exposure, and sponsors  world class players Lionel Messi, Villa and Robben to name a few. Those elements did play a key role.

Pepsi also did some great efforts to associate its brand to the World Cup. The Pepsi ad launched before World Cup starring Henry, Messi, Kaka, Lampard and Drogba was a big success. However, the official World Cup beverage brand, Coca-Cola received more football apraisal than its competitor. Not only Coca-Cola did launch a cool ad celebrating……football celebrations, but Coke also executed a fantastic World Cup  Trophy Tour worldwide.

The survey also emphasised on the fact that other official sponsors managed, with smart marketing activations, to link their brand and image to the FIFA World Cup. Hyundai/Kia for instance (from 2.4% to 4.7%) and McDonald’s (2.8% to 4.2%).  The overall share of buzz for the 10 official World Cup partners/sponsors increased from 52% to 66% since the start of the tournament.

Bottom line is that sponsorship is vital for big sporting events. However, being a sponsor of the FIFA  World Cup or the Olympics is NOT a guarantee for marketing success and significant return on investment. I would even say that creativity, inovation and smartness must be a priority for sponsors, as it is proven that their competitors are not asleep!

** Although Umbro belongs to the Nike Group, I do not count the Umbro brand within the Nike ones.

* The NM Incite follow-up study compared the share of online buzz between World Cup sponsors and their major competitors in relation to the World Cup in the run up to the event (month-long period ending June 6th) and during the first two weeks of the tournament (11th -25th June). English language World Cup-related messages on blogs, message boards, groups, video and image sites – including Flickr, YouTube, Facebook, and Twitter – were monitored for the study.

Whether it be on or off the field in sports, we’re all trying to out do one another. Let’s face it, we wouldn’t be in business if we weren’t, we’re here to compete and to win.

One of the most competitive parts of sports is the marketing behind the teams. How can fans be reached, without feeling like they’re being put under a full court press of advertising? “Selling your ideas, not your tickets” is a blog post that tries to encourage those in the business of sports, and in particular ticket sales, to focus on events or trends in the greater community, and less on the ticket you are selling. In the article Josh talks about how we can sell ideas first, and then tickets. I’m going to take it one step further, I’m going to try and tell you can we can sell trends first, and then tickets.

Ask around the general populous of the web, and what do people want? Multimedia. Whether it’s a podcast, a video or a flickr stream, people want to interact with things, they’re done with words. Aside from Google, YouTube is the world’s largest search engine and data taken from March of this year shows that there is now 24 hours of video uploaded to YouTube every minute.

The tribe has spoken, they want video.

So, getting back to sports, can we now sell our tickets via video? The video below is about Australian rugby player James O’Connor. James is an up and coming star in the game of rugby, so much so I highlighted him as Rugby’s player to watch this decade. The video is essentially a two minute profile video, but whenever you interact with the video and click within it you are able to choose from either A) A bio of James or B) Purchase tickets to an upcoming series of games the Australian team is playing in.

To start, click the video below. Some ad blocking services such as AdBlock Plus will block the following video, you may need to open Internet Explorer to view it

We’ve long tried to figure out the most effective way to sell tickets to fans. In the early 2000’s, StubHub completely changed the way the US sports fan purchased tickets, as it gave them the power to fans to sell their own tickets to other fans. StubHub were so popular, eBay quickly swooped in and snapped up the company. With their success, StubHub quickly saw copy-cats enter the industry and now the fan has a wide variety of options where they can buy their tickets from.

For James O’Connor and rugby fans alike, this video could certainly go viral, leading to further sales. I wrote an earlier post on viral video as this seems to be another trend for businesses in raising awareness of their brand, whilst allowing consumers not feel like they’re constantly being pitched.

As we look to new ways to innovate the industry, and try and outdo one another, could in-video ticket sales be the new answer?