This week saw Bernie Ecclestone replaced as the head of Formula One, after essentially running the sport for 40 years. It is no understatement to say that Ecclestone built Formula 1 from a disparate collection of races into an extravaganza that ranks as the third most watched sports event in the world, behind the Olympics and football World Cup. The fact that Liberty Media paid $8 billion for the sport is a further demonstration of the value of the F1 brand.
However, at the same time, Ecclestone has been a controversial figure. Tried for blackmail in Germany over previous sales of F1’s TV rights and accused by some teams of pocketing a fortune while leaving them struggling financially, he also cosied up to autocratic regimes in countries such as Russia, Bahrain and Azerbaijan and was fond of provocative utterances such as praising Hitler and calling women ‘domestic appliances’. In many ways he echoed the power and dubious practices of other sports leaders such as Sepp Blatter at FIFA and Lamine Diack at the International Association of Athletics Federations (IAAF), meaning his removal marks the end of an era.
So how do you turn a squabbling series of teams and races into a polished product that is worth $8 billion and is known across the world? There are four communications lessons – good and bad:
Ecclestone was continually coming up with new ideas – whether it was changing the qualifying format or awarding double points for the final race of the 2015 season. These didn’t always work in terms of spicing up the spectacle, but they generated discussion and hence interest in the sport.
2.Be approachable and open
By all accounts Ecclestone was always visible in the F1 paddock and accessible to journalists. He may not have necessarily answered their questions, but always gave good quotes, meaning his own profile (and that of F1) moved beyond the sports pages to reach the general public.
3.Don’t forget new audiences
Every sport or brand needs to attract new fans, otherwise it will eventually become irrelevant. Yet Ecclestone seemed disinterested in investing in younger generations – due to the hosting fees he charged circuits to hold grand prix, ticket prices were enormous, pricing many families out of the market. The main focus appeared to be corporate guests and sponsors – he famously asked why F1 should appeal to 15 year olds as they were unlikely to buy Rolexes or bank with sponsors UBS, ignoring the fact that they are undoubtedly buying Red Bull. At the same time more and more TV rights have been sold to pay TV channels, limiting the available audience by shutting out the casual viewer.
4. Don’t forget the internet
One of the big areas that Liberty Media has promised to address is the internet and social media. F1’s presence and use of these channels has been pretty woeful, taking years to even come up with a Twitter hashtag for races. Again, this stems directly from Ecclestone who said he didn’t see any value in “tweeting, Facebook and whatever this nonsense is”. While it may not directly lead to money coming in, fan engagement is crucial to every sport today, and is an area where F1 as a brand (unlike teams and drivers) has been lacking.
And before his detractors see Ecclestone’s departure as the end of the era of fast-talking, slightly dubious, deal-making dinosaurs take a look at the new resident of the White House. Perhaps if Ecclestone was on Twitter, he’d still be leading F1……………
Photo Habeed Hameed [CC BY-SA 2.0 (http://creativecommons.org/licenses/by-sa/2.0)%5D, via Wikimedia Commons
For anyone like myself who was around during the dotcom boom, it is hard not to feel that you are suffering from déjà vu. Many of the exotic ideas and concepts that spectacularly flopped at the time have been reborn and are now thriving. Take ecommerce. Clothes retailer Boo.com was one of the biggest disasters of the period, burning through $135 million of venture capital in just 18 months, while online currency beenz aimed to provide a way of collecting virtual money that could be spent at participating merchants.
Offline, we were continuously promised/threatened with smart bins that would scan the barcodes of product packaging as we threw it away, and automatically order more of the same. And goods might arrive from a virtual supermarket, run as a separate business from your local Tesco or Sainsbury’s. You could pay for low value goods and services with a Mondex card instead of cash (though initially only if you lived in the trial town of Swindon). The first Personal Digital Assistants (PDAs) were launched, providing computing power in the palm of your hand. We’d already laughed out of the court the ridiculous concept of electric cars, as typified by the Sinclair C5.
Fast forward to now, and versions of all of these failed ventures are thriving. There are any number of highly graphical, video based clothes retailers, while you can take your pick of online currencies from Bitcoin to Ethereum. We’re still threatened with smart appliances that can re-order groceries (fridges being the latest culprit), but Amazon’s Dash buttons are a neater and simpler way of getting more washing powder delivered that put the consumer in control. And Dash bypasses the supermarket itself, with goods dispatched direct from Amazon. I can pay for small items by tapping my debit card on a card reader – even in my local village shop. More and more cars are hybrids, if not fully electric, while handheld computing power comes from our smartphones.
What has driven this change? First off, the dotcom boom was over 15 years ago, so there’s been a lot of progress in tech. We have faster internet speeds (one of the reasons for Boo’s demise was its graphics were too large for most dial-up modems to download), better battery life for digital devices and vehicles (iPhones excepted), hardware and sensors are much smaller and more powerful, and network technologies such as Bluetooth and ZigBee are omnipresent.
However, at the same time, the real change has been in the general public. Using technology has become part of everyone’s daily lives, and those that are not online are the exception, rather than the rule. It is a classic example of the move from early adopters to the majority, as set out in Geoffrey Moore’s Crossing the Chasm. And it has happened bit by bit, with false starts and cul de sacs on the way.
So what does this mean for marketers? It really brings home the importance of knowing your audience and targeting your product accordingly. Don’t expect raw tech to be instantly adopted by the majority, but build up to it, gain consumer trust (perhaps by embedding your new tech in something that already exists), and prepare to fail first time round. And the other lesson is to look at today’s big failures, and be prepared to resurrect them when the market has changed in the future……
The success of Pokémon GO has been unprecedented. Around the world people of all ages are playing the game, in many cases spending more time on it per day than on Facebook. When the game’s servers go down players feel lost and distraught and there have been countless warnings to people to be careful when hunting Pokémon – the latest about wandering into minefields in Bosnia.
The business impact has been equally huge. Nintendo’s share price has doubled since the launch of the game, while spending on in-app purchases is estimated to be running at $1.6 million every day. Bear in mind that a substantial chunk of that goes to either Apple or Google as owners of the respective iOS and Android app stores and you can see there are a large number of beneficiaries of the craze.
However, you don’t need to be a big business to benefit – one of the beauties of the game is that there are opportunities for organisations of all sizes to market themselves. Here are five to begin with:
1 Exploit your location
Pokéstops, where players collect items, can be any sort of prominent building, including pubs, leisure centres and churches. If your premises have been designated a Pokéstop it means you are likely to have more visitors. This is the perfect opportunity to boost your business – welcome Pokémon hunters into your shop, restaurant or bar with special offers. The same goes for gyms, where Pokémon are trained and fight. Also, be smart about it – if you deploy a Lure, which attracts local Pokémon for half an hour, you are likely to also receive more visitors. Activate these when you are less busy and you can bring in visitors in quiet times as well.
2 Get people walking/cycling
To hatch eggs, players need to walk or cycle for a set distance between 2 and 10km. And you can’t cheat by driving as your speed needs to be below 10 mph (slow for many cyclists). This is the perfect opportunity to get people exercising – towns and organisations such as the National Trust should look at setting up trails that players can follow, while the NHS and the Department for Health can try and incorporate Pokémon GO playing into people getting healthier.
3 Be Pokémon friendly
One of the biggest issues to playing the game in the countryside is the lack of a reliable 3G/4G signal. I’ve been close to catching numerous Pokémon, only for the critters to escape when the signal vanishes. Again, this is an opportunity for businesses – if you offer free wifi, make it available to players and you’ll gain their goodwill and custom. Given that people are focused on their screen when playing set up a safe area, away from traffic, where they can hunt, particularly if you have a Pokéstop in your location.
4 Bear in mind this is just the start
Pokémon GO isn’t the first augmented reality (AR) game, and it certainly won’t be the last. In fact, it isn’t really that complex or advanced in terms of technology. So even if this is just a craze, there will be many more AR apps coming on the market seeking to replicate the game’s success. So anything you set up to cash in on Pokémon GO’s success is likely to be equally applicable to other apps down the line. Be AR ready.
5 Use your brand
For bigger brands, particularly those creating their own apps, there are two lessons to learn from the game’s success. Firstly, it is built on being incredibly simple to use, setting a benchmark for user experience that everyone should aim to follow. Secondly, think about how AR can benefit your brand. If you are a visitor attraction such as a castle or historic ruins, you could bring the past to life with an AR app that shows people what your building looked like in its heyday. For consumer brands or retailers, can you create compelling AR experiences that help engage shoppers – or even guide them to specific locations in your shop to find what they are looking for.
Pokémon GO’s combination of usability, nostalgia and clever technology is driving huge success around the world. Whatever size of business you are, make sure you are exploiting the opportunities it offers to your brand.
With thanks to Lucas Measures for additional ideas for this post!
Sponsoring a successful sportsperson or team should be a no-brainer for brands. Provided they pick one that appeals to their key demographic, they can benefit from their success, use them as a spokesperson, boost their brand and generally engage more deeply with potential and actual customers.
However, if this is true why are many of the biggest companies in the world conspicuous by their absence from sports sponsorship? I may have missed it, but I don’t see the logos of Google, Apple or Facebook on footballer’s shirts, F1 cars or advertising hoardings in athletics stadiums. They simply don’t see it as a good use of their marketing budgets it seems.
Looking deeper, this is part of a retrenchment over the past few years, with commercial sponsors replaced by trade suppliers in many sports. In Formula One, the biggest sponsor of Lewis Hamilton’s Mercedes is, err, Mercedes, while Red Bull is a hybrid owner/sponsor. In cycling a large number of teams are sponsored by bike manufacturers and equipment suppliers and in athletics the likes of Nike and Adidas have a huge profile. In football seven of the 20 Premiership teams were sponsored by online bookmakers over the 2015/6 season, and a further two (including champions Leicester) by their owner’s companies.
So, why are consumer brands less visible when it comes to sports sponsorship – and what can clubs, teams and sportspeople do about it? I think it boils down to four factors:
1. The threat of scandal
There’s always been a chance that your brand’s chosen ambassador will go off the rails and get you publicity for the wrong reasons. But in an age of constant scrutiny the slightest indiscretion is now plastered over the front pages before your brand has the chance to react – look at Tiger Woods as a good example. As testing technology improves, more and more drugs cheats are being caught, even if, as in the case of Lance Armstrong, it is years after their offences actually took place. And that’s before you start on the impact of corruption within governing bodies on public and business perceptions of a sport. Many brands simply don’t want to take the risk of involving themselves in a crisis down the line.
2. Value for money
Sports sponsorship obviously covers a huge range of budgets and opportunities, but generally is becoming more expensive. Global competitions, such as the Premiership and F1 have a worldwide reach, meaning that only the largest brands have the budgets to spend on sponsorship. And to get any value from your sponsorship you need to make sure people know about it, using other marketing activities to make sure that your target audience feels involved and included, and that you maximise the impact through advertising, corporate hospitality and other add-ons.
We’re coming up to Euro 2016 and the Rio Olympics, meaning sports fans will see a procession of sponsor logos over the next couple of months. By the end of it all, will people really remember who sponsored what? Was it Nike or Adidas that provided the match balls for Euro 2016, or had pride of place on the stadium hoardings? I’m sure, if asked, many fans would claim to have seen adverts for brands that weren’t even there, such is the level of advertising saturation we are subjected to thanks to wall-to-wall TV and internet coverage. Demonstrating this, over half of the brands that consumers associated with Euro 2016 in a poll were not even sponsors of the tournament.
4. Other opportunities
Put simply, brands have a growing number of places where they can spend their marketing budgets. From online advertising to supporting good causes, they are all opportunities to boost a brand and engage with audiences. In many cases these channels weren’t there 10 years ago – and equally some sports have been hit by what you can and can’t advertise. One of the reasons for the growth of F1 for example was the enormous sponsorship from tobacco companies – they had nowhere else they could advertise in most countries, so could focus their budgets on one sport. F1 is in many ways still coping with the hangover, with high costs and a cultural desire to outspend rivals – but not the budgets to support it.
Digital channels in particular make it much easier to measure the results of marketing in terms of click throughs, visits and sales, whereas measuring the impact of sports sponsorship can be more difficult.
So, is sports sponsorship doomed? Not completely, not while we are still able to be moved by amazing feats of sporting prowess on the field or track. However, brands need to be more careful on what they spend their money on, and activate sponsorship more cleverly if they are to stand out from the crowd. And teams, players and governing bodies need to focus on getting their own houses in order, removing cheats and corruption and remember that the reason that brands sponsor them is to reach the fans – put them first and you’ll build loyalty that will deliver return on marketing investment, whatever sport you are in.