Sports Sponsorship Spending

We are fast approaching the end of the year, and the projection data for total worldwide sponsorship spending in 2017 reached a stunning $62.8 billion, with an increase of 4.45% year on year.

This data is impressive if compared with what is happening with traditional advertising. 

Image by Statista

2017 registered for the various media a stagnation or little decrease with the exception of digital in general (that overtook TV ads) and mobile advertising that registered a sound increase. The sector at large showed, thanks to digital, a robust growth.

Image by Zenith

Why Sports Sponsorship?

Why? This is the question that anyone in charge of a marketing and communication budget should ask themselves. Why are the most famous companies in the world, the ones that do not need brand awareness, the ones that are synonymous with a category of products (e.g., Coca-Cola, McDonald’s, P&G, Budweiser, Heineken, Telefónica, Yokohama, Pirelli, Rolex, Mastercard, PlayStation, Verizon, UniCredit, Gazprom, Qatar Airways, Turkish Airways, and DHL, to name a few), heavily involved in the sector? Why are companies that are so different, and with different targets, investing in sponsorship?

Do they know something that the majority of the other companies don’t? Is it a form of Maecenatism? Do these companies have such large communication budgets that they can afford to scatter them around at will?

The answer, as you can imagine, is no. Sports sponsorship and the value of sports sponsorship are so effective that it is becoming increasingly more and more popular by the day. And there is a very simple and quick explanation: these companies decided to be more efficient.

THE NEW SCENARIO, just some hints

1) Extreme fragmentation

In the last few years we witnessed a huge increase in thematic TV channels: just in Europe in 2017 we had, according to the MAVISE (the database on TV and on-demand audiovisual services and companies in Europe, set up by the European Audiovisual Observatory), a total number of 5370 TV channels. They were 3615 in 2009, with an increase of 49% (excluding local channels and windows).

mavise.obs.coe.int/welcome

Does the same trend apply to print magazines? Yes, it does. In the last few years we witnessed a big increase in specific paper publications. Just to give you an example, let’s look at the USA (USA +35% between 2002 and 2016)

Sports Sponsorship Statistics

So, if once it was relatively simple to get one’s target using a few channels and publications, now with this huge fragmentation and with budgets that have not grown consequently, it is very complicated to be heard and seen by our target.

Where is your target?

The real question, as of today, is where is your target? How many of the over 5000 European channels does your target watch? Or is it reading that cool new magazine that prints 5000 copies? The risk a marketer runs is to stream his resources in thousands of drops that do not hit anybody

2) The digital explosion

The explosion of digital has further complicated the job of any CMO.

Plenty of information can now be consumed digitally, and at the same time, we saw an enormous increase in smartphones. According to this research, over 60% of adults in the USA get news via social media

www.journalism.org/2016/05/26/news-use-across-social-media-platforms-2016/

At the same time, companies have followed the trend with their own presence on social media, so now people can interact directly with them. But now the target has direct access to shops located all over the world; they can look at the best offers, discover products, and exchange information about them… or about the winning customer service that, what bad luck, bounced them back like a rubber wall.

In 2017 there are over a billion of active websites, and more than 2 trillion is the turnover generated by e-commerce around the world. www.atom.com/blog/internet-statistics/

3) CREDIBILITY

The other simple point is credibility. We do not trust someone who is trying to sell us their products (spending a lot of money in the process) telling us that their products are the best… People are disillusioned and more aware of the advertising processes.

So now you have to face an extreme fragmentation and a more aware and disillusioned target

On top of it, people are submerged by commercials…and they do not like to be constantly interrupted. People would rather look at their personal screens (hence the sharp growth in advertising expenditure on mobile advertising) than watch or consume any other form of advertising. They are interested in a product or service only when they need it, and we have to admit that there are more interesting things in life than a new shampoo or a cheaper energy tariff. At least until we need it. And when we need it, we Google it.

SO YOU NEED A WAY TO OPTIMIZE YOUR BUDGET WITHOUT FRAGMENTING IT INTO TOO MANY DROPS; YOU NEED SOMETHING THAT DOESN’T INTERRUPT YOUR TARGET; YOU NEED SOMETHING THAT THE TARGET DECIDES TO WATCH WITH PASSION AND INTEREST.

So, see why all these big companies are using sports sponsorship?

Their brands are embedded in the event, while the target made the decision to watch the show. They become part of something that the target loves; the target starts to appreciate the support that the brand gives to their favorite sport. THE BRAND IS ENRICHED BY THE POSITIVE VALUES OF THE SPONSORED SPORT DISCIPLINE, TEAM, OR ATHLETE. After a while the attitude of the target towards the brands is positive, and a positive attitude leads to purchase intention.

link.springer.com/chapter/10.1007/978-3-319-10951-0_214

www.thebalance.com/sponsorship-a-key-to-powerful-marketing-2295276

So the brand now doesn’t try to impose its presence by pushing commercials or ads in any other form in front of the target; the brand is part of the group, loved and appreciated for its contribution, embedded in the show, and owner of the hearts of the fans.

The brand can concentrate on a single program without wasting its resources… the media will show its presence automatically and without further cost WITH A HUGE INCREASE IN BRAND AWARENESS. And if the brand would like to use other media…there is a story to tell. There is also plenty of material for the social platforms, insights, behind-the-scenes opportunities, and opportunities that are only for partners.

Do you still think that the big companies we nominated at the beginning are in sports sponsorship just because they love a good game??

Sports Sponsorship Companies. Why?

If you ever want to have a chat about sponsorship and sports marketing, do not hesitate to contact RTR Sports Marketing at info@rtrsports.com

In the next feature, we will talk about fan engagement and monetization of the social media reach

Keep visiting RTR Sports.