This article is from SponsorScope the worlds 1st transactional sponsorship marketplace for sport where brands and sports media rights holders come together to transact sponsorship deals 24-7-365 at www.SponsorScope.com. Here is an informative article for anyone involve in sports sponsorship marketing.
The A-Z of Sports Sponsorship
The media value of sports sponsorship properties has been increasing every year in recent decades, as sports fans continually find evermore ways to consume media content about their favourite sports teams, athletes and sporting events online and mobile. 20 years ago many households had one TV to watch live sport on TV from 1-2 channels, not 20 devices to watch sport on demand from 10,000's of channels – allowing modern-day sports fans to consume a lot more content on a regular basis and bond with the clubs/athletes they are fans of. Covid then created an unexpected, financially catastrophic crisis for the sports marketing industry as a stack of games and events got cancelled, and also fans were no longer allowed in stadiums. Many sponsors were understanding, others not so much. Whilst people were not going out so much during the pandemic, conversely TV audiences began to increase and hence media value for the same sports sponsorships immediately quickly rose to an all-time-high level; more people than ever were now watching live sport. Although the sports sponsorship industry has rebounded somewhat since the pandemic, and TV viewing figures are now largely higher than ever, with this year's World Cup in Qatar expected to break all viewing records; the gulf in the finances of those cancelled events/matches are still reflected on their bank balances with many clubs under never-seen-before financial pressure. The opportunity for brand sponsorships in the sports betting gambling niche continues to offer excellent value where regulations allow – especially for sports betting affiliate brands, where there is surprisingly little or no competition just now, So is now the perfect time for sponsors to pounce, and hoover up long-term sponsorship deals whilst the sports industry is still recovering, and other vertical markets that would usually compete with gambling for sponsorship contracts are also weakened financially?
Many sports organisations work with tight deadlines focussed around a whole season, game or event - which sponsors need to be aware of. Missing these deadlines can prove costly, as pro-rata refunds for sponsorship space booked, but not filled due to sponsors missing marketing creative deadlines, are very rarely given. It is advised to book sponsorship contracts in suitable advance time where possible, however on the same hand waiting until deadline day to make an offer can bep prove to be a shrewd buying technique. Sponsorship campaigns should generally be activated with compelling fan-specific promotions that are tailored and co-branded for launch in multiple marketing channels.
When buying sports sponsorship packages it usually involves a Bidding Process – which can involve a number of Sales Methodologies including straightforward deals with a Sales Price in a 'first past the post' type bidding scenario; traditional Auctions where the highest bidder on a set date wins; Dutch Auctions where the price keeps coming down until someone buys it and Sealed Bid Auctions where all bids are kept confidential rather than public, again submitted by a certain date. The bidding process can sometimes be precarious for buyers, which can be a problem for sponsors from unpopular industry sectors who may get charged higher prices for the negative brand association. Clever sales tactics and middlemen are often employed to drive up bidding prices for all buyers of sports sponsorship media.
Most smaller to medium-sized sports teams / athletes do not have much legal resources, hence business is often done in the old-fashioned way and agreed through F2F meetings, phone calls and concise emails vs. big contracts with complicated Terms And Conditions. Fast-moving and larger sports sponsorship contracts are usually agreed initially via a short email, Heads Of Agreement or Purchase Order – followed by with a full contract signed by both parties shortly thereafter to conclude the contractual side of the deal. It is fair to state that contractual disputes in the sports sponsorship space are rare – as the transaction is fairly basic i.e. the sponsor pays upfront to position their logo/ads in various places with the club/athlete/event organiser, and 99.9% of the time this is exactly what is delivered, from Day 1 of each contract.
Sponsors tend to already know exactly what demographic of sports fan they would like their brand/s to target and engage with. For most sportsbooks this centres around matters like license restrictions, the sports they have available to bet on, and their operational resources like having localised marketing and CRM. Casino and crypto sponsors do not need to be so fussy about the exact sports wish their brand to sponsor – they are more interested in the highest net worth audience (player value), at the lowest acquisition (CPA) cost possible, at the biggest volume possible (most ROI) – which is a reliable working metric. All gaming affiliates are used to negotiating directly against this with their 'sponsors' on a regular basis. Sponsors' target demographic data can be easily transposed with the corresponding fan demographic data for each of the various sports available – to establish exactly which sports fit your brand marketing objectives best. Virtually all sports teams, athletes and event organisers have detailed demographic data on their fanbase for buyers to analyse, thanks to the likes of social media and Google software tools.
Most fans now engage with their favourite sports teams and athletes on a regular basis using multiple devices online. Pro-active sponsors that engage fans regularly with compelling co-branded offers using multiple marketing channels will always see a lot more Return On Investment than those sponsors' who simply send over their brands' logo and hope for the best. The best fan engagement campaigns will focus on co-branded acquisition promotions e.g. “Fans of Club X Get Free Bets On Club X” that are presented to fans regularly through a range of digital marketing channels including Social, SMS and Email, along with more traditional marketing channels like Direct Mail. Profitable fan engagement campaigns will always include co-branded social media marketing campaigns, with videos that can potentially go viral frequently being an excellent investment to boost acquisitions and customer loyalty. Most professional sports clubs and athletes already have enough fans on social media to make their sponsors content go viral within 24 hours if it is entertaining. Once a sponsors brand has bought the loyalty of a teams' fanbase, which happens immediately when that sponsorship campaign is announced in the press or begins – it subsequently costs a fraction of that same budget to convert those fans into loyal customers of your own.
Every sports team, sporting event and athlete has a highly loyal following, arguably the most loyal customers in any line of business – and its important for sponsors to tap into then transfer this loyalty to their own brand. There is much data openly available about fans of specific sports - by ages, earnings, countries, interests etc – standard marketing demographics that sponsors can analyse and utilise to improve ROI by targetting sponsorship marketing spend better. Marketing creatives and brand ambassadors can also be made to fit a sponsors target audience – with a strong emphasis on 'fan-specific' co-branded offers and promotions working best. It is important for sponsors to engage fans regularly throughout any sponsorship campaign with these promotions, using as many marketing channels as possible. One also has to be aware that rival fans can often be alienated – for instance if you sponsor a big team in Manchester, you will alienate fans from their long-standing rivals Liverpool. For this reason some brands decide to sponsor only national teams, leagues and events – where the sponsor does not alienate so many rival fans potentially. Mobile technology targeting fans whilst in the stadium has become a really powerful way of converting fans into customers – whereby sending targeted SMS and Push Notification adverts to fans who almost always have their mobile devices with them at the match works fantastically well.
With an abundance of readily available digital technology it is now relatively easy for sponsors to measure the growth each sponsorship campaign delivers in terms of additional brand awareness, account reactivation, and of course new business acquired. New sponsors usually see a substantial spike in traffic when sponsorship campaigns are announced, as a rush of fans come to check out the new sponsor of the team/athlete that they support. This is always followed by a massive influx of traffic when any new sponsorship campaign first starts – particularly when matched with pro-active direct marketing using channels like mobile and email. Sponsors will of course see traffic spikes when live games take place, and usually for 24-48 hours afterwards whilst fans watch repeats and highlight shows of each game/match/event. Repeats and highlight shows can often be shown years later - particularly top quality goals/shots/performances which can still be shown regularly on TV worldwide decades later e.g. Maradona's 'Hand Of God' goal – giving sponsors years of additional value, brand exposure and further ROI. Smaller sports teams and local events tend to have a local fanbase, so ROI can easily be tracked through basic ZIP Code / address searches of the sponsors customer database – to measure that local customer base both before and after a sponsorship campaign. Furthermore much value from sports sponsorships is derived from exposure on TV, where most conversions come through brand term searches on Google, so this is another way that the growth can be measured from offline to online conversions – with the eventual aim being able to accurately calculate such metrics as the Cost Per Impression, Cost Per Click, and Cost Per Acquisition and Net Gaming Revenue of any sponsorship campaign.
- Heads of Agreement
Often a Heads Of Agreement will be signed by both parties, to secure sponsorship deals, before a contract is signed afterwards. This is because many in-demand sponsorship properties often have multiple bidders competing for the same property, and so a short agreement that can be generated and signed by both parties to secure a sponsorship contract quickly, is often preferable to waiting days for lawyers to trawl through lengthy contracts, especially when the sponsorship campaign starts soon after the deal has been initially agreed. Heads Of Agreement are usually short, and usually agreed via email.
All sports teams have their own unique list of sponsorship inventory - ranging from sponsor branding on player equipment and clothes; pitch/court perimeter advertising; Official Product Partnerships; game/match/player sponsorships and stadium naming rights. Some large sports teams now have 50+ separate sponsors, and 100+ separate bits of sponsorship inventory to sell. It is a tough science to value each item precisely against eachother, however as a general rule of thumb the most desirable sponsorship inventory is that which gains most TV exposure – which mostly includes player clothing and equipment; TV interview background branding and branded signage in/around the sports play area/pitch/court etc. Stadium naming rights deals get a huge amount of coverage online and offline across all media. With global sporting powerbrands, it can often prove a shrewd strategy to purchase a small sponsorship package merely for the value of co-branded promotions, which can then be used on the sponsors website and adverts to improve conversion rates and brand credibility.
There is tons of jargon relating to each sport specifically, with many sports having literally 100's of words and phrases that are only used in the context of that sport. In regards to sports sponsorship and the gambling sector“Ambush Marketing” can be hugely effective in the sports sponsorship sphere for bookmakers and casinos. Paddy Power's marketing stunts around major global sporting events attracting billions of views on a shoestring budget are perhaps the industry's best example of ambush marketing, followed closely by Golden Palace whose branded streaker gatecrashed a bunch of major televised global sports events for awhile. In the gambling sector “ambush marketing” can also be an effective method of targeting grey markets, although on the same note many sports rights holders are willing to take the risk of supporting gambling sponsors in these same grey markets anyway, negating the need for ambush techniques.
Most sponsors marketing teams are aware of their brands generic current marketing performance KPIs in terms of converting ad views (CPM) into new customer acquisitions (CPA). Using this basic formula most sponsors will have a clear idea of what estimated CPA costs might be, based on the size of each fanbase of each sponsorship property, the number of people the property on offer will reach across the course of the campaign, along with how targeted and valuable the target audience is to their brand (e.g. football gamblers may be worth more than tennis gamblers to Sponsor Brand A, but tennis gamblers are worth more than football gamblers for Sponsor Brand B). These CPA costs can then be measured, using modern tracking online like all affiliate systems have, along with various social media and SEO tools that can measure brand traffic searches and referral traffic acquired. When regular appealling direct marketing promotions are made to fans, to compliment the brand exposure from the sponsorship campaign, most often sponsors are pleasantly surprised at how low new customer acquisition costs are. The loyalty of sports fans to their favourite teams and athletes cannot be underestimated, with some fans entire families supporting teams going back generations – a commodity of high brand loyalty that simply cannot be bought elsewhere.
Licensing gives sponsors the right to use copyrighted trademarks such as sports team brand logos, and images/videos of celebrity athletes on all of their marketing materials both online and offline. This includes the sponsor advertising their sponsorship partnerships on their website, within some of their marketing communications strategy, and also within customer acquisition campaigns both online and offline. These partnerships are crucial for the growth of any global brand whose target audience is sports fans – with global powerbrands like Adidas, Coca-Cola, Heineken and Playstation having sports sponsorship as their main tool for growing brand awareness, credibility and acquiring new customers internationally in a targetted cost-effective manner. Player/athlete talent agencies present an excellent opportunity for licensing deals, particularly with retired international players whom have the most credibility, yet much lower fees than active players/athletes. Sports sponsorship deals with top-tier teams in any sport always work well for any brands credibility in the gambling vertical. Sponsors should be aware that licensing deals be bought locally from global brands – so deals can be negotiated whereby sponsors an Official Partner in selected target markets only, really useful for international brands that want to partner with global sports brands but only in a few markets they are active in.
In the 2000's sports sponsorship deals were negotiated face-to-face and by phone, then closed by fax. Shifting into the 2020s video calls using the likes of Skype, Zoom, Whatsapp and MS Teams are popular routes of negotiation; along with the emergence of 'The Sports Sponsorship Marketplace', a business similar to popular marketplaces such as eBay, Amazon and Alibaba, however designed and programmed specifically for buyers and sellers of sports sponsorship properties. An online community where all sports organisations can safely sell their sponsorship properties – to a range of trustworthy sponsors. Both buyers and sellers alike appreciate the transparency of using sports sponsorship marketplaces and this is a fast-growing industry in the sponsorship landscape in most verticals with established brands like Open Sponsorship, and new brands like SponsorScope entering the market with high expectations.
The negotiation process between sponsors and sports organisations ranges from a deal happening within hours, upto a few years of negotiating. Major global sponsorship properties with the biggest sports teams, athletes and event organisers in any particular sport can often take a long time, as the bigger the deal the bigger the negotiations generally speaking. Most sponsorship properties are sold annually, running season to season in most sports. Some sports right holder sales departments have an operating policy of “all inventory is always on sale for the right price”, similar to how most gaming affiliates operate their own media inventory online. For new sponsors it is sometimes advised to sample some inventory on a 1-year deal, then conducting regular ROI analysis to calculate important metrics such as an estimated CPA cost for the sponsorship campaign, along with some prediction of the lifetime values of those players already acquired. Once the sponsorship properly business case has been proven over 3-6 months, it can be more easily be upscaled and the contract term lengthened. Now being an incumbent supplier who has developed a working relationship with the club, usually makes negotiating a longer deal easier also. With many well-trained extremely loyal sales staff in this business, it is advised that all negotiations are recorded electronically especially anything related to potential deal terms and prices. Many buyers and sellers have been opting to use online marketplaces which offer completely transparent deal terms, negotiations and escrow payments.
Sports media rights holders tend to sell their sponsorship inventory in a set series of offers which include the sales methodologies such as Auction; Buy Now; Guide Price; Sealed Bid and Special Offers. With the Auction sales method, sponsors are invited to make their offers in the form of bids, with a set deadline always in place for each auction. Sometimes sponsors are not aware an auction is taking place when they submit their offer, which makes the buying process difficult by all accounts. A transparent public auction is arguably the best solution for this With a Buy Now sales method, sponsors are invited to make offers that are immediately accepted, with the price and deal terms having already been agreed. Most buyers are comfortable working with the Buy Now sales method, as the buying process is transparent and quick. High profile global sponsorship properties have the luxury where demand exceeds supply, and will often therefore employ a Sealed Bid sales method, where sponsors are invited to submit their best offer on a certain date – with all bids being confidential like a silent auction. The value of such global sports properties has been increasing massively in the last two decades, hence a Sealed Bid sales method is often considered the best way to establish the fairest price between buyer and seller. Most sponsorship salespeople will have some kind of Special Offer for new sponsors in their inventory, as all buyers love a discount and a deal.
Sponsors marketing their brand to the professional players of a sports team that they sponsor, is an often under-estimated way of boosting ROI from any sports sponsorship campaign. With the sponsors brand so clearly in cooperation with the company they themselves are already committed to, naturally some players cannot refuse a tantilising offer from one of 'their indirect' sponsors. To give you one of the best examples of 'Player Marketing' in practice, allegedly one of the big UK sports bookmakers sponsored a football team in the UK, and the bookies VIP team generated more in Net Gaming Revenue directly from the players than the cost of the sponsorship itself – meaning the clubs players essentially paid for the bookies logo to be plastered all over the club for a few years completely free of charge. Obviously 1,000s of fans signed up as loyal new players on top, to really sweeten that deal up and further earn someone a nice payrise.
How much brand awarenes, and how many new players does a sponsor expect from their sponsorship campaign? To answer the first part of that question, that amount of brand awareness a sponsors brand will get is very clearly outlined before any deals are done in the sales process. The exact level of media exposure delivered will of course fluctuate depending on the success of the team/athlete sponsored, throughout the duration of the campaign. If a sports team wins their league and a few cups in the new sponsors first season, the amount of media attention they receive will be a lot greater than expected and furthermore the following season this sports team will have been promoted hence will naturally get a lot more media coverage and deliver even more value the following season. Many sports sponsorship contracts therefore include bonus structures to account for flucations in performance. In terms of new customer aquistions forecasts pre-campaig, most sponsors should be able to estimate how many new players they would acquire, based on the size of the fanbase and overall media coverage of the sponsorship property in question using current online conversion data in similar channels. This estimate can then easily fluctuate by as much as 3X – depending how effective the sponsors co-branded promotional strategy is i.e. a sponsor that engages a fanbase properly throughout their sponsorship campaign can likely expect 3X vs. that sponsor that just sends over their brand logo and then dormantly hopes for the best.
Every sports marketing department has set ROI targets with marketing budget scaled against set customer acquisition targets commonly based on CPA costs, volumes of acquisitions, and then corresponding customer lifetime values achieved by the sponsor. Often this process takes months to calculate, as most fans need to see a sponsors brand more than a few times, before they convert. Consumers also need to engage and transact with sponsors multiple times, before they decide whether or not to become permanent customers. Once an established profitable marketing communications strategy has been established by sponsors, its easy to achieve most ROI by scaling your current campaigns with similar sports rights holders – and importantly comparing like-for-like to buy the best value sponsorship properties available. There is no fixed pricing or 'advertising rate cards' in the sports sponsorship space, every single athlete and team decides their own prices ad-hoc, and these prices tend to change on a regular basis largely depending on recent sporting performance and achievements. For most sports sponsorship campaigns ROI can easily be measured using a range of software tools including Search, Social and online/mobile tracking technology.
Certain sports like horse racing attract a high concentration of sportsbook gamblers, whilst other sports like football attract a wide variety of fan demographics globally across all industries, including an attractive % of gamblers. Some sports naturally attract high net worth customers like F1 and the price for such sponsorships reflects this. Most sports have fans in lots of countries, and there are certainly economies of scale to be achieved by sponsors securing sponsorships with sports teams/athletes/events that have global reach. As with a lot of media, the more you buy, the lower the rate becomes – therefore its sometimes more cost-effective to buy a smaller number of larger properties vs. a large number of smaller properties.
TV media exposure is one of the main ways that sponsors reap ROI from sports media rights holders however there is still a huge amount of complimentary print media dedicated to sport, along with masses of video coverage shared on sports news and social media sites everyday. Many sponsors realise amazing ROI from employing brand ambassadors from the world of sport – and often when watching sport live, you will watch a TV ad featuring an international sports star endorsing something like sporting clothes, alcohol or sportsbooks. Other verticals with credibility issues like fast food, and financial services also do well from 'Official Partner of National Team' campaigns to boost their credibility; a relatively unexplored niche by the gambling industry currently where the leading brands usually strive for more brand credibility. Gambling brands have historically used sports sponsorships as a way of penetrating grey markets by using a 'free to play' domain such as .net instead of .com on TV – which authorities allow as the .net site does not accept revenue. Although it is anticipated that the .net site is merely used for brand awareness in said grey market, along with being the perfect lead generation tool to convert free customers from .net into depositing players on the .com money site – this way of generating new players is perfectly valid in some grey markets still.
Sponsors can easily engage with users (fans) through the sports media rights holders existing digital reach with their fans. User-generated viral content is hugely popular among all sports fans these days – everyone loves to see their favourite players and teams score goals/runs/baskets/wins, broadcast interviews, and take part in fun engaging tasks especially where fans are involved directly. Much success has been seen when sponsors invite 'their fans' to participate in challenges whereby the users submit photo's and videos about themselves, or are encouraged to engage with Likes/Follows/Comments for prizes relating to the club/athlete they sponsor for example “Win A Ball Signed By Players”.
Sports media is mostly consumed by video, it therefore follows suit that video marketing is a highly powerful channel for all sponsors. In sports marketing the creation of videos that go viral is 100 times easier than making viral videos about sportsbooks/online casinos/crypto exchanges – with a constant stream of fresh news for fans on a daily basis throughout the season. Sports sponsorship therefore represents an excellent opportunity for brands in the gambling space to extend their reach and brand credibility through co-branded video marketing efforts, generating compelling viral content that their brand simply could not produce without the help of sports media right holders. It is relatively inexpensive for sponsors to produce TV-quality videos, given the support of a credible sports team/athlete to help produce and distribute that content.
- X Factor
When any brand becomes a new sponsor of a sports team, athlete or event organiser – that brand immediately buys X factor approval from their fans. Once fans see a sponsors branding on 'their' club/team/event for the very first time, that special bond has now been created for life. Millions of fans may proudly parade logos for sponsors, working as free brand ambassadors for many years to come, as they bought their favourite shirt with the sponsors brands logo on. Sponsors essentially purchase instant brand awareness, trust and credibility which inherently turns into a loyal new customer base. Resultantly some fans will only ever buy products from a brand that sponsors teams/players they are fans of i.e. if Playstation sponsored their team, they would not buy an Xbox.
Sponsorship contracts in sport are frequently sold on a yearly basis, as all sports have seasons or events that run annually. Most sponsors opt for brand partnerships that last several years, to get the best annual price through buying multiple years at once, and to spend a few years nurturing a loyal customer base with the fans. Other sponsors prefer high frequency campaigns in short bursts, such as sponsoring a single match or event rather than a yearly sponsorship campaign.
Sports fans have the most loyalty between consumer and brand, with some fans being completely fanatical about their favourite teams and athletes, and any brands they choose to endorse as their sponsors. When this loyalty is matched with equally zealous co-branded promotions, community engagement and special offers for these fans from sponsors; truly incredible marketing results can be achieved in terms of a sponsors ROI.