Redefining “Value”? How we believe the COVID crisis will force “Sponsorship” finally to be become “Partnership”

Ben Wells
Redefining “Value”? How we believe the COVID crisis will force “Sponsorship” finally to be become “Partnership”

In times of crisis, necessity becomes the mother of invention. All around us, business is reflecting on the impact of the COVID crisis and considering how to best to respond. Whilst everything feels challenging at the moment, good times will return but the devastation wrought by the pandemic will undoubtedly also force us to find creative solutions which actually improve on the pre-COVID world.

We have commented previously on the positive impact that new ways of thinking could have on sport’s approach to the digital age. The potential for a year-round commercial model that reduces reliance on match/event day and instead, through a strategic approach to understanding what a “customer” is – underpinned by a smart digital and data ecosystem – enables a diversification of revenue streams. A post COVID world will demand creative thinking and an understanding of what constitutes “value” to your target audiences.

One area where we think this will impact strongly is Sponsorship. For too long, Sponsorship has been approached too rigidly by brands, agencies and rightsholders alike: the simple exchange of cash or services in return for marketing rights. For those sponsorships predicated on media value, the traditional customer conversion funnel of awareness – perception – consideration – purchase appears to be an anachronism in an agile, measurable and hyper-targeted digital age.

Many sports still sell sponsorships using outdated and discredited reach statistics and incredibly some brands still buy them on that basis. However with the ever-accelerating shift of global brand spend into those agile, measurable and hyper-targeted digital platforms we are seeing fewer and fewer blue chip brands associating with sport below an ever-rising bar of premium quality.

Sponsorship, when conceived and executed strategically can be a marketing platform par excellence. The best sponsorships have served as a unifying platform for all brand marcomms, also bringing benefits internally and through the supply chain. However, when it is just seen as a proxy for advertising by brands (as it still too often is) and is viewed by rightsholders as a simple revenue vertical, that power is lost.

The consequence is that there is very little value creation over and above the transactional basis of the deal and both parties move on as soon as is practical. The customer or supporter’s needs or aspirations are rarely taken into account at any point and as a consequence they don’t care whether Brand A or B sponsors their favourite team: there is simply no emotional connection there because there is no value for them.

We believe that the post COVID world – as with everything else – is going to force a realignment of thinking about Sponsorship, as brands survey the long tail impact of the crisis on their revenues and adjust their outgoings accordingly. As we all know, marketing spend – rightly or wrongly – is usually firstly and most-deeply impacted in such times and we expect there to be a flight to quality, with everyone else experiencing deflationary pressures as there is less money to go around.

In our view this represents a golden opportunity to reassess sponsorship’s role in the context of sport’s wider strategic need. For too often sponsorship – over and above the revenue it brings – has brought little value-add at best and at worst actually works against a strategic requirement (e.g. need to engage younger audiences; main sponsor is a betting brand). If we were able to take a step back and understand the role sponsorship could play in a post-COVID sports organisation, it could be transformational.

It all comes back to defining “value”. Sponsors could and should bring so much more than just cash. Smart brands bring content, experiences, reach, data, products & services and much more. Sponsors should fulfil the parts of your strategy you can’t fulfil yourself. Added together, it creates a more powerful customer proposition, broader audience appeal, more data, more commercial opportunity on an ongoing basis. What we are talking about here is genuine partnership where – rather than an inelastic binary value exchange – both parties are incentivised to continue to invest in building – and benefitting from – the whole.

We can see a world where sponsorship goes cashless and finally moves in more than just name to being all about partnership. It’s something that should have been developed before now but necessity will in this case invent it. It will be a bold organisation that goes first but we believe fortune favours the brave and the rewards will be ample.

Ben Wells

Ben Wells – Chief Commercial Officer at PTI Digital

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