What do the Olympics mean for sport sponsorship in the digital age?
The Rio 2016 Olympics offers brands and agencies the opportunity to draw large audiences and capture the public mood
In an era where people try to block and avoid ads, look for experiences, and trust their peers more than advertising messages, sponsorship plays an increasingly important role in allowing brands to get among those conversations. That’s why the Olympics – which brings the spotlight to sports and event sponsorship – is the ideal time to reflect on sponsorship in the digital age.
Sport commands 70% of global sponsorship revenues, according to IEG, with entertainment a very distant second at 10%. The biggest events like the World Cup and the Olympics have the power not only to draw large audiences – more than 50 million people in the UK watched London 2012 for more than 15 minutes – but also to capture the public mood. Rio 2016 will offer far more ways to view events through rising access to TV and digital connectivity.
While there is an increased demand for sponsorship of the top events – for example from Asian companies like Huawei and Tata expanding to global markets – the number of big ticket events remains flat. The answer to meet this demand has been to increase supply through allowing more sponsors per event by adding categories; for example, restaurant, IT, timing systems, and audio visual equipment.
With the growing demand and increased sponsorship categories, sponsors risk disappearing into the noise. To take football as an example, Manchester United now has 21 official sponsors, including an official paint partner, an official tyre partner, and even an official noodle partner. While sponsorship is a good opportunity to associate a brand with an event and an ethos, it does not automatically bring share of voice.
Sponsorship spend will grow to $60bn (£46bn) this year, according to IEG, a rise of 4.7% on 2015. However, according to eMarketer, this is a lower growth than advertising, which is expected to rise 5.7% to $543bn (£413bn). When assessed in light of the fewer opportunities to sponsor rather than just advertise, this spend increase demonstrates the popular and crowded nature of sponsorship of audience-drawing events. Marketers should not take this as a sign that sponsorship is a cheap option, though. Sponsorship is a fantastic opportunity to align with an audience’s interests and passions, but works best when combined with other parts of the marketing mix, most notably advertising, to drive cut-through and engagement.
An IPA study in 2011 showed that the combination of sponsorship with advertising was one of the most effective in driving both hard and soft business effects for brands. This was backed up by research by Havas Sport and Entertainment after the London Olympics, which showed that those aware of a brand’s Olympic sponsorship were on average 50% more likely to view a sponsor as “world-class” or “admired” – but note that it depends on people being aware of the sponsorship.
There are lots of examples of this necessary amplification being done well:
Budweiser’s sponsorship of the Fifa World Cup gives it the right to choose the man of the match. In 2014 they boosted their engagement by allowing their fans to vote to decide this via Twitter, ten minutes before the end of each game. Stella Artois has also used experiential marketing and outdoor activations at places likeWaterloo station to make people feel part of the event.
Digital and technology now allow brands to do so much more, to bring the experience, emotion and interaction to audiences. New capabilities in virtual and augmented reality give brands the opportunity to create experiences that will help people be there rather than just be spectators. Travel brands are already using virtual reality to good effect – Thomas Cook had great success selling special excursions to people who had booked holidays in New York by letting them get a flavour of what to expect via virtual-reality headsets, allowing them to virtually visit before they book.
Imagine being able to put yourself in the Games, slow down the action, see the angles, tap for stats. Link this through to other digital elements such as social, driving conversation, or click-to-buy or book, and you have a very powerful marketing mix.
Brands that enhance their sponsorships with such engaging and enriching experiences, leveraging the data and tech world, have a much greater opportunity to cut through and drive a deeper connection with an audience.
Published in: The Guardian