The New Rules of Sponsorship
More than 2,000 years ago, when our classical ancestors enjoyed gladiator fights or the Olympics, the figure of patronage, with a wealthy class that wanted to show off the prestige or power of a city, it was already common. In fact, the noun comes from the Latin patronium, which in turn derives from the term patronus, meaning defender or protector. It is curious – or not so much, because “History never repeats itself, but it rhymes”, as Mark Twain would say – that, at present, this defensive denotation has enormous relevance.
The cultural revolution in which the world of sport finds itself places sponsorship in the foreground as a crucial activity for its professional survival. The annual financial reports of large clubs or competitions reflect the notable percentage that activities of this type represent in their total income; in approximate figures: 40% in Real Madrid and 22% in Juventus. The NBA, on the other hand, in 2019 received more than 1,000 million dollars for this concept.
The digitization of recent times did not seem to have had a negative impact on investment, which in Europe had several years of continuous growth. However, the COVID-19 crisis crippled this upward trend, causing a -23% drop last year, according to the European Sponsorship Association (ES).
Regardless of how these figures evolve, the biggest obstacle facing traditional sports clubs and competitions are audiences, especially of young people (Generation Z and Generation Alpha). Their interest in sports such as soccer is shockingly declining in Europe and this is reflected in a recent Toluna study: 40% say that soccer is increasingly boring them. In the US, only 53% of Generation Z consider themselves sports fans when among millennials this percentage rises to 67%. In Asia-Pacific the trend is not so clear, although the current crisis situation has caused the fall and disappearance of local clubs as important as Jiangsu FC in China, unable to survive with a high debt and without an audience in the stadiums.
The general disinterest of young people has to do with a market that is no longer classified into industries or sectors, but into arenas, that is, competitive areas established around consumer needs; in this case: entertaining, disconnecting, getting excited… expectations that we encompass in the PLAY arena, where companies of all kinds participate: OTTs, sports brands, games of all kinds, cinema, music, video games, events… All of them looking for attention and people’s time, a bipedal “holy grail” that, in the case of the youngest, hides behind the desire for emotion and freedom: “I want to do what I want when and where I want”. Long games, with prolonged periods without tension, are discarded by these generations, who prefer to watch other types of content (behind the scenes, documentaries such as The Last Dance), share a game of Among Us with their friends or enjoy fast-paced stories in streaming platforms.
If we add to this trend that the main objective of brands to invest in sports sponsorship is visibility before a global and massive audience, we can deduce the silver age (the golden age is yet to come) that esports lives. Although these are still not capable of mobilizing the figures collected by television, during the first quarter of 2021 more than 110 million hours of sponsored online games were viewed, which represents a year-on-year growth of 137%, according to WARC, whose forecast is that the global audience for video game streams exceeds 700 million people this year.
The panorama, in short, resembles an earthquake that relocates the tectonic plates, in this case, the bases of sports sponsorship, whose traditional approach is obsolete. Therefore, there is a need to think of new models and ways of seeing and understanding it. Undoubtedly, the brand and the customer as an asset will have a fundamental importance when it comes to building new strategies and methodologies, which, added to a series of key learnings, will unleash the potential of sponsorship in the Age of You:
The great secret of brand building and, therefore, of sponsorship possibilities, are customer communities, spaces to actively listen to them and obtain quality insights that allow them to translate their needs into strategies and brand and business experiences through decisions with low risk. A Human Truths angle on demand is a must. The construction of ecosystems of hyperconnected communities between them and with the brands also facilitates, thanks to a deep and authentic knowledge of the consumer, the definition of a clear sponsorship strategy that resonates in the minds of people and that is aligned with the essence of the brand.
SDG as inspiration
It is not only visibility that companies are looking for with their investment; they also aim to associate their own brand with values and behaviors that can easily be found in sports. This link, added to the social and environmental commitment that is an essential matter for younger consumers as main activists and now expanded to the rest of the audiences, promotes the so-called social sponsorship, a branch with great potential for development in the era of purpose and ambition.
As we all know, the concept of purpose in a business context has evolved to encompass as a priority the highest interest not only of shareholders, but of consumers, employees, suppliers and, very importantly, communities. While the purpose can be defined as the objective of a brand in the short-medium term whose progress can be measured, we believe that ambition, the ultimate reason for the existence of a brand, is the long-range parameter that should guide the actions of sponsorship. An ambition that must be translated into powerful storytelling, capable of attracting attention in a short time, and that reflects that tangible social commitment that works for relevance, reputation and association with concrete long-term values. Perhaps the most powerful case that we can refer to is that of Nike, a brand that has been betting for years on its links with athletes who embody values such as equality and anti-racism (Lebron James, Serena Williams, Colin Kaepernick …), building a solid and consistent history. Their actions have not only given them visibility, but also reputation, identification and, finally, extraordinary results in times of crisis linked to a greater purpose that makes Nike personal and real.
Disruption: the role of technology
Capturing the attention of the follower is the first step, but in the present that we live, the value lies in retention and engagement, ingredients that derive from unique and authentic experiences. Offshoring and globalization allow sports brands, with the help of technological innovations (AR, VR, AI, blockchain, IoT, etc.) to dream and make new online and offline activations tangible, inside and outside their facilities, that, in the line of trajectory towards the defined ambition, be able to add followers to that banner that the brand has put up in the future. The renovations that are being carried out in different stadiums around the world lead us to imagine and define disruptive, fluid and enriched experiences that change the fan experience forever. New technologies, on the other hand, make it easier to put data at the service of followers and the brand itself, opening the way to hyper-personalization and a much more solid ROI analysis.
A new language
But, in addition, the technology that sustains the virtual universe of esports, gaming or streamers, further expands the range of initiatives to connect with users to infinity: H&M has just launched a new island in Animal Crossing, Louis Vuitton collaborates with League of Legends, streamer Ibai Llanos (named Streamer of the Year by the Esports Awards 2020) announces his sponsors as if they were star signings, Fortnite will sponsor the final of the Copa Libertadores in Latin America… Brand strength models will be key in order to nail the message and the deployment strategies applied in the new sponsorship model to ensure it is equally engaging and successful.
Ultimately, the possibilities have not disappeared, they simply have new rules. Adapting to them can only be done from the brand and customers perspective, being clear about the destination you want to reach, nurturing the connection with the followers and with a value proposition that responds to their wishes, thus protecting the wonderful spectacle that is sport; asserting that patronus that the Roman civilization bequeathed to us.