What's Trending In The Sponsorship Industry

In the midst of the recent corruption crisis that engulfed global football federation FIFA, it was fascinating to note that none of the sponsors showed any urgent desire to quit their affiliation with the sport. While most expressed their relief when FIFA’s beleaguered president Sepp Blatter finally resigned, the fact is that football’s pre-eminent role in inspiring and engaging sports fans is too important for brands to turn their back on. There’s no question that any sponsor electing to end its partnership with FIFA would quickly have found its berth filled by a rival.

This love affair between brands and football is one of the biggest reasons for sponsorship’s continued commercial health. Aside from the huge sums paid by brands to partner FIFA, the likes of UEFA and European league football are also still doing great business. Sony recently renewed its partnership with the UEFA Champions League, paying an estimated £45m a year over three years. Nissan, which took over from Ford last year, is reckoned to be paying something similar. As for the English Premier League, Manchester City is close to signing a monster deal with Etihad, worth around £80 million a year. This is even bigger than the £50m a year deal Chelsea has with Yokohama Rubber and the £47m a year deal Manchester Utd has with Chevrolet.

Also on the horizon is a deal between England’s Football Association and Emirates for title rights to the FA Cup. Despite a widespread feeling that the event has lost some of its glamour in recent years, this is still expected to result in a £30m, three year deal - with the FA’s commercial team then likely to negotiate a series of secondary sponsorship partnerships.

The downside to deals like these is that, as with TV rights, the vast majority of football money has become concentrated around a few premium properties. But this hasn’t had an obvious detrimental effect on sponsorship for three reasons.

Firstly, because these headline sponsorships inspire such a broad range of innovative activation programmes. Rights holders and brands have a shared ambition to reach as many audiences as possible via a multitude of platforms. So it is typical to see men, women, children and special interest groups such as the disabled, employees and students all targeted via digital media, in-store promotions, community-based campaigns, celebrity endorsements and more. There has never been a time when sponsorship has been so all-encompassing in the way it targets people, or so inclusive in the audiences it addresses. And all of this is great for sponsorship creativity.

Secondly, because brands that can’t get a foothold in football (or don’t want to because of their target audience) have built similarly sophisticated sponsorship platforms in other spheres of activity, including rugby, cricket, tennis, motor sports, the Olympics, NFL, NBA, MLB baseball, music, TV and the arts. Rugby is a good case in point. In addition to RBS’s long-standing relationship with the Six Nations Championship and O2’s partnership with the England rugby team, brands like Toshiba, Heineken, Land Rover, Société Générale, DHL, Emirates and MasterCard are all partners of the upcoming Rugby World Cup. Over and above this, Land Rover and energy supplier SSE have signed up as the official sponsors for ITV’s televised coverage of the RWC, paying an estimated £7 million between them.

Thirdly, because there is hardly a brand on the planet that doesn’t acknowledge the pivotal role that sponsorship plays in the marketing mix, and this is inspiring a golden age for the medium. While sponsorship continues to be attractive to categories such as finance, alcohol, fast food, soft drinks, confectionary, sportswear, automotive and consumer electronics, recent years have seen sectors like telecoms, mobile, gaming, retail and internet increase demand for rights.

And this process hasn’t stopped. IEG recently ran a story on its website naming 15 categories where it anticipated growth in sponsorship expenditure. Among these are eyewear, wearable technologies, cruise lines and jewellery – underlining the diversification in the kinds of companies exploring the sector. In addition to this expansion, we should also note the number of Chinese and Indian companies entering the global sponsorship market, emphasising the fact that sponsorship is benefiting from both industry sector and geographic diversification.

Numerous recent deals illustrate the medium’s success in reaching out to a wider pool of brands. One is supermarket chain Aldi’s decision to sponsor the British Olympic team. The significance of this deal is that Aldi entered the UK market as a discount brand but is now keen to establish itself as a quality alternative to existing players. Clearly it sees sponsorship as a platform to achieve this. In doing so, it joins brands like Tesco, Sainsbury and Morrisons, also big players in the medium.

Similarly significant was Comparethemarket’s decision to sign a £30m, three-year deal to sponsor ITV soap Coronation Street. Here was an example of a new category of sponsor seeking to use an established brand to achieve new levels of engagement with audiences. It did this despite the fact it had already built a strong advertising platform with its meerkats commercials.

It’s not just new additions to the sponsorship market that are important, however. We’re also seeing established brands doubling up on their sponsorship investment. McDonald’s, for example, is a well-established sports sponsor. But this didn’t prevent it from forming a high-profile partnership with MTV’s live music events in order to promote its McFlurry brand. Likewise Barclays, which is headline sponsor of the LGBT festival Pride – as well as a high-profile sports sponsor.

At the same time, we are seeing blue-chip brand owners such as P&G, Pepsi and Sony form partnerships that allow them to promote multiple brands. Pepsi, for example, recently signed a deal with the NBA which will allow it to promote Mountain Dew, Aquafina, Brisk, Doritos and Ruffles brands during NBA games and events. P&G did the same around the Olympics while Sony has similar plans for the UEFA Champions League.

Such is the competition for rights that recent years have seen a drive to develop new sponsorship platforms. One of the best known is O2’s groundbreaking naming rights deal with the Millennium Dome (naming rights has been one of the most exciting growth areas in recent years). Another excellent example of this is TFL’s cycle hire scheme in London, which recently saw Santander pay £44m to take over as sponsor from Barclays, making it the world’s biggest ever public sector sponsorship deal. TFL has been particularly innovative in recent years, allowing brands to develop some excellent activations in and around London’s transport infrastructure. One classic recent example was when the Canada Water tube station was renamed Buxton Water during the London Marathon.

So much sponsorship activity creates the risk of message clutter. But rather than kill off interest in the medium this has inspired the industry to ever greater heights of innovation and creativity – largely made possible by developments in digital media. We are for example in the era of content-based marketing, where no sponsorship is complete without elements like branded content, product placement, celebrity endorsements, social media, games, mobile apps and immersive experiences. Brands recognise they must dress their communications in an entertaining way if they want to capture people’s attention. This has given rise to brands as storytellers.

The impact of digital and the reinvention of brands as storytellers are probably the two biggest trends of note in the 21st century sponsorship business. But other themes include the growing importance of data. At the recent IEG conference in the US, a key discussion point was the way customer data can be used to can be used to identify the best sponsorships for a brand and then activate them effectively. The better the data on both the brand and rights holder sides of the partnership, the easier it is to target people in the way they are receptive to.

Inevitably, this emphasis on content and data has necessitated closer collaboration between brands and rights holders. To really have the kind of impact that audiences expect, brands need to co-create sponsorship ideas with rights holders. Brands that don’t develop a creative, organic ongoing dialogue with rights holders find it harder than ever to achieve objectives. Rights holder that focus too much on box ticking and off-the-shelf packages will find that they fall out of favour with brands.

Alongside all of the above, the industry has also been placing great emphasis on cause-related and community activations. This is evident through so many schemes in different parts of the world. But one that really stands out right now is Unilever’s recently-announced partnership with Global Citizen and Live Earth: Road to Paris. Explaining the rationale, Keith Weed, chief marketing & communications officer, Unilever said: “Our partnerships with Live Earth: Road to Paris and Global Citizen reflect our commitment to help tackle social and environmental issues wherever we do business. To us, climate and development issues are intertwined. We cannot have a healthy business in an unhealthy world - these are issues that business must play a part to help solve. Unilever reaches two billion consumers every day through our brands which gives us a real opportunity to encourage action, empowering people to be part of the positive change they wish to see.”

As for untapped sponsorship opportunities, these often don’t become apparent until some bright spark identifies them. But one area that perhaps deserves closer attention is women’s sport, which still tends to attract very modest levels of funding. In a recent opinion piece for Campaign, Mediacom chief strategy officer Sue Unerman addressed this point, stating that: “The sponsorship market for women’s sport is wide open. UK sports sponsorship is valued at an estimated £2 billion annually. The total value of women’s sports deals spiked at London 2012 at about £5 million and has dropped since then.” For more on this, visit: http://www.campaignlive.co.uk/opinion/1350005/.

A lot of the above trends are apparent in the kind of campaigns that appear on the UK Sponsorship Awards shortlists. Why not take a look at the 2015 book of the night here.

Further Reading: For recent data on the size of the global sponsorship market, why not take a look at this link:

http://sponsorship.org/wp-content/uploads/2014/07/ESA-Sponsorship-Fact-Sheet-2014.pdf