Sport sponsorships: A whole new ballgame
Covid-19 will force the global sports industry to rethink sponsorship – a shift is expected from multiyear sponsorship deals linked to sports events, to purpose-built campaigns that are digital in nature
As sports events start to make a slow return, team and match sponsors are retooling their strategies after massive revenue losses.
The UK-based sports marketing agency Two Circles estimates the global sports industry is set to miss out on over R1-trillion in revenue this year as almost half of all sports events are scrapped due to the Covid-19 pandemic.
With events like the Premier Soccer League and Super Rugby postponed, the local sector has also been hit hard. Bronson Mokabela, founder and MD of Digigage Sports & Entertainment, says: "The sports industry is made up of a number of role-players and stakeholders, beyond just teams and players. It may be difficult to quantify the actual impact, but it certainly runs into the tens of millions."
Others echo that concern. Clinton Paterson, head of the M&C Saatchi Abel-aligned sports marketing agency, Levergy, says: "Every part of the sporting value chain, including athletes, organisations and the many thousands of people who work in the sporting industry, has been severely affected and we’re slowly starting to see some really scary numbers come through in terms of what that means across the industry both from a professional and amateur point of view."
Felicia Ntisa of M-Sports Marketing says the sector’s entire value chain has been affected: "Think about vendors who sell at stadiums, security that is hired for matches. The economy is going to take time to recover and this means brands may have to relook at their investments in sport."
If that’s the case, what new strategies need to emerge? Mokabela says: "My hope is that sporting bodies realise they need to be exploring how else they can provide value to sponsors beyond just a match day or event day. Digital engagement provides so many opportunities and I do not think our industry has fully exploited these."
Errol Madlala, MD of Pitch Sports Entertainment & Media, says: "Sports federations will have to meet fans where they are digitally, and the truth is the industry is not really ready. The result will be a shift of the digital rights in most contract negotiations from the bottom of the list to the top."
Paterson says: "Many brands and rights holders will have to pivot to digital much quicker than they ever thought possible. Digital assets will become an increasingly valuable part of a sponsorship package, rather than add-ons, which is largely what we see now. Fan data will become extremely important to sponsors. Rights holders will need to invest in initiatives that allow them to get much deeper insights into their fan bases. The growth of digital channels and new immersive technologies will accelerate, giving brands opportunities to engage with fans in new ways."
Ntisa concurs and believes brands will need to start considering different ways to host activations. "Digitalisation will also play a huge role in their strategies — that, and broadcast, as you need to look at ways of offering consumers an experience even when they are not there physically. Virtual and/or intimate interactions will probably play a huge role in defining sports strategies in the near future."
Madlala believes brands will need to customise their sponsorship deals aligned to campaigns rather than standard three-to five-year deals. This, he says, will drive purpose-built sponsorship rather than "wallpaper relationships".