Global sponsorship spending has bucked the trend of most advertising over the past few years, bringing in over $60 billion in 2017 alone – no mean feat, when you consider how much traditional marketing budgets have fallen in recent times.
So, why is sponsorship so attractive to brands? And why is sports sponsorship, in particular, so lucrative?
Whilst traditional (some might say outdated) advertising models are suffering, and even stagnating, certain parts of the digital world are thriving – mobile advertising, for example, is showing a healthy increase in growth. Digital marketing, as a whole, is now more lucrative than TV – and if there’s any growth in the sector, this is where it’s found.
The below breakdown shows the difference in predicted ad spend between 2016 and 2019, with the amount that brands are spending in mobile almost doubling:
So, where does sponsorship play into all of this?
Why – this is the question that anyone in charge of a brand’s marketing and communication strategy should ask themselves. That and, how can I utilise this industry shift to benefit my own brand?
For answers, it might be beneficial to look at some of the world’s biggest companies – the ones that are synonymous with a category of products, and who don’t need to increase their brand awareness to remain at the top of their field.
So, why are brands like Coca-Cola, McDonalds, P&G, Budweiser, Heineken, Telefonica, Yokohama, Pirelli, Rolex, Mastercard, Playstation, Verizon, Unicredit, Gazprom, Qatar Airways, Turkish Airways and DHL investing in sponsorship – and what are the benefits for them?
The answer is: efficiency. Top brands don’t have the time to waste on outdated methods or campaigns that won’t work – that’s not how they became leaders, after all.
Instead, they’ve looked at the facts – and found that sponsorship (and particularly sports sponsorship) provides the answers they need.
Here are just a few reasons why sports sponsorship is working for brands…
Extreme fragmentation
How often do you switch on the TV and scroll through hundreds of channels without finding anything that you want to watch?
If you’re anything like us, the answer is: far too often.
The past few years have seen a boom in niche TV channels – last year there were 5,370 just operating in Europe. That’s up from 3,615 in 2009.
The same trend applies to print magazines, where the market for special interest publications is booming.
To give you an example, let’s look at the USA between 2002 and 2016:
You might think that leveraging these niche audiences could be beneficial for brands – but it hasn’t worked out that way.
Now, instead of finding your audience because they have to be on the channel you’re advertising on, you need to put far more work into finding out what they like, where they are, and how they’d like to be targeted – and of course, budgets haven’t risen to allow marketing managers to do that. Consequently, it’s much harder to be heard and seen by your target audience.
The risk for a marketer here is that they’ll put their resources into various different channels, which will each be too small to positively target anybody.
The digital explosion
The explosion of digital e-commerce has further complicated the job of anyone making big marketing decisions.
With over 60% of US adults getting their news from social media and companies using social platforms to promote their brands and make sales, suddenly there’s a whole lot of noise that brands need to cut through to be in with a chance of competing. The ability of consumers to a locate shops or companies all over the world, to uncover the best offers, to discover new products and to exchange information instantly means that brands have to work much harder to succeed online than they did a decade ago – and one bad review or negative customer service experience could be fatal.
Credibility and increasingly savvy consumers
As consumers have woken up to when they are being sold to and when they aren’t, they have also come to quickly decide whether a brand is credible and worthy of their time or money.
There is also the saturation of advertising, with everything from breaks in TV shows to the sides of buses trying to sell us something. In this landscape, it’s hardly surprising that mobile advertising has soared – we’re spending more time than ever on our phones, rather than consuming other forms of media. Many products we don’t even want to see until we really need to think about or replace them. And when we do need a new energy tariff, vacuum cleaner of hair dryer we’ll probably just Google it – on our phones.
Awareness and over-saturation of the advertising industry, plus a fragmented media landscape and an easy platform (social media) for dissatisfied consumers to call out your brand, predictably, will lead to a headache for marketers.
So, you need a way to optimise your budget without spreading it too thinly, you need something that blends into your target’s day without interrupting it, and you need something that ignites passion and interest.
Here’s why the biggest companies have decided that sports sponsorship is the way to do this…
- Their brands are embedded in the event
- The target has made a conscious decision to watch the show
- It allows the brand to become part of something that the target loves
- The brand has the positive association of being associated with an athlete, sports team or event
- The associations of the brand with something that the market is overwhelmingly positive about increases loyalty, which leads to purchase intention
Deciding to invest in sports sponsorship means a brand isn’t trying to impose its presence by pushing out forgettable commercials – instead it becomes part of something bigger, and is appreciated for its contribution.
Of course, the fact that the media are likely to be covering the sports team or tournament heavily gives a huge boost to brand awareness. There is also a big possibility to utilise material for social platforms, create insights, get behind the scenes and provide unique sports hospitality opportunities that are only for partners or clients.
So, do you still think that the big companies we mentioned earlier are invested in sports sponsorship just because they love a good game? Thought not!
If you wish to have more information about sponsorships read Sponsorship Activation.
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
