Revolutionary Measures

Is sports sponsorship worth the money?

 

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.

The Parc des Princes, which was hosting the fi...

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.

3. Saturation
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.

May 25, 2016 Posted by | Creative, Marketing, PR | , , , , , , , , , , , , , , , , , | Leave a comment

Algorithms versus spontaneity – striking the happy medium

There’s been a number of recent pieces about the rise of self-learning technology that uses artificial intelligence (AI) to carry out tasks that would previously have been too complex for a machine. From stock trading to automated translations and even playing Frogger, computers will increasingly take on roles that used to rely on people’s skills.

English: NEW YORK (May 31, 2010) Visitors inte...

Netflix used an algorithm to analyse the most watched content on its service, and found that it included three key ingredients – Kevin Spacey, director David Fincher and BBC political dramas. So when it commissioned original content, it began with House of Cards, a remake of a BBC drama, starring Spacey and directed by (you’ve guessed it) Fincher.

This rise of artificial intelligence is worrying a lot of people – and not just Luddites. The likes of Stephen Hawking, Bill Gates and Elon Musk have all described it as a threat to the existence of humanity. They worry that we’ll see the development of autonomous machines with brains many thousands of times larger than our own, and whose interests (and logic) may not square with our own. Essentially the concern is that we’re building a future generation of Terminators without realising it.

They are right to be wary, but a couple of recent stories made me think that human beings actually have several big advantages – we’re not logical, we don’t follow the facts and we don’t give up. Psychologist Daniel Kahneman won a Nobel Prize for uncovering the fact that the human mind is made up of two systems, one intuitive and one rational. The emotional, intuitive brain is the default for decision making – without people realising it. So in many ways AI-powered computers do the things we don’t want to do, leaving us free to be more creative (or lazy, dependent on your point of view).

Going back to the advantages that humans have over systems, the first example I’d pick is the UK general election. All the polls predicted a close contest, and an inevitable hung parliament – but voters didn’t behave logically or according to the research and the Tories trounced the opposition. While you might disagree with the result, it shows that you can’t predict the future with the clarity that some expect.

Humans also have an in-built ability to try and game a system and find ways round it, often with unintended consequences. This has been dubbed the Cobra effect after events in colonial India. Alarmed by the number of cobras on the loose, the authorities in Delhi offered a bounty for every dead cobra handed in. People began to play the system, breeding snakes specifically to kill and claim their reward. When the authorities cottoned on and abandoned the programme, the breeders released the now worthless snakes, dramatically increasing the wild cobra population. You can see the same attempt to rig the system in the case of Navinder Singh Sarao, the day trader who is accused of causing the 2010 ‘flash crash’ by spoofing – sending sell orders that he intended to cancel but that tricked trading computers into thinking the market was moving downwards. Despite their intelligence, trading systems cannot spot this sort of behaviour – until it is obviously too late.

The final example is when humans simply ignore the odds and upset the form book. Take Leicester City. Rock bottom of the English Premiership, the Foxes looked odds-on to be relegated. Yet the players believed otherwise, kept confident and continued to plug away. The tide now looks as if it has turned, and the team is just a couple of points away from safety. A robot would have long since given up……..

So artificial intelligence isn’t everything. Giving computers the ability to learn and process huge amounts of data in fractions of a second does threaten the jobs of workers in the knowledge economy. However it also frees up humans to do what they do best – be bloody minded and subversive, think their way around problems, and use their intuition rather than the rational side of their brain. And of course, computers still do have an off switch………….

May 13, 2015 Posted by | Creative, Marketing, Startup | , , , , , , , , , , , , | 1 Comment