There's a cold chill blowing through the sports marketing industry these days. . Major buyers are shifting dollars around or just totally dropping out of the market, as did the National Guard. With a judges ruling deciding the NCAA could no longer stop athletes from trying  to make money,  smart marketers now see the opportunity to go direct....this opens the door to huge new marketing opportunities we can't even imagine.

I haven't seen it in pro's but definitely in college and that's often the canary in the coal mine. The receiver of those brand dollars is now the one who can command even the tiniest slice of the fans attention. As life speeds up, the pieces become more valuable. Display as a revenue model is dead. We are about to enter a transactional  period that will blow the doors off display revenue.  

Disrupting the sports sponsorship industry thru Gamification

Disrupting the sports sponsorship industry thru Gamification

The sports sponsorship market is a nearly $20 Billion market.

Over the past 30 years sports sponsorships have been sold primarily the same way: sales teams scour the local landscape to identify companies with marketing budgets large enough to justify a six-figure investment.  With no real means of measurement available, these potential sponsors are pitched on the value of having their brand appear alongside that of the team’s brand to create an emotional attachment with fans and consumers.  In today’s world of virtually unlimited leisure-time options, consumer brands have now recognized that simply paying for their logo to appear next to that of a professional sports team, or purchasing television advertising or in-stadium advertising during games no longer provides the same return on investment. Consequentially, the cost of advertising has escalated; competition for advertising space has increased, all in a limited market of potential consumers.  Finding ways to stand out is no longer an academic option, but a marketing necessity.

The prices and other terms for these sponsorships rarely contain performance clauses and instead are based on the geographic market size and how well the team is performing (which directly dictates how many fans might be following the team).  In the simplest terms, these sponsorships consist of multi-year contracts providing multiple forms of display advertising.  With the advent of digital marketing, sponsors have gained tools that provide a much broader and deeper connection with the fan, but the revenue generated by teams has not grown proportionately.

So while the potential for fan interaction has increased dramatically for marketers, team revenues have stayed basically the same.  In order to meet an annual increase in revenue, sales teams are tasked with finding new big-ticket advertising clients from  an ever shrinking pool of candidates.   

We believe the reason that sponsorship revenue has remained basically flat compared to the value teams offer the marketer lies in the fact that the business model for monetizing sponsorships hasn’t changed in 30 years. Currently:

1. The fan is treated as prospect to sell instead of a resource to be groomed and harvested. 

2. Team sales departments are looking upmarket for bigger clients with bigger budgets.  The evolution of the sports industry means these bigger ad deals are getting done mainly at the league level – leaving the individual teams fighting for the smaller clients and budgets.  

We foresee the future of sports sponsorship that will depend on creating dynamic and engaging campaigns that allow sponsoring brands to become closely integrated with the team being used as the channel.  Our strategy is to intertwine the team, the fan and the sponsoring brand with interactive online gaming to yield increased benefits to all parties.

We believe the Gamefication of Sports Sponsorships is fundamentally disruptive technology.  As is true of other disruptive technologies we believe the solution to increasing sponsorship revenues lies in expanding the market opportunities by looking downmarket.  Starting with the fan as our focus, we propose to apply technology to team resources that have been underutilized and undervalued.  Our goal is to bring small businesses (that cannot afford a six-figure sponsorship) into sports sponsorships. This market, when aggregated, provides teams a larger source of potential revenue than all the big targets marketers combined. 

The future of sports marketing is ?

As a member of the sports marketing industry, we've been talking about teams as publishers for several years now. However, with the barriers of distribution and audience acquisition taken care of at the platform level, what's holding any team back from executing on an always-on content strategy for their sponsors?

The economics of teams allow them to play the social game by entirely different rules and even more interesting, the rules teams have in competing for an audience on these channels. Teams have metrics that allow them to sell tickets and a broader vision no matter what channel it is on, while sponsors need to drive you back to their .com to sell you something or sell an ad against your impression.

Whatever new formats evolve to serve the social space, they're going to need to be simple enough that advertisers can just buy them without too much thought.

When will teams learn that users will not endlessly stand for the archaic ad models built around print, Radio and TV? The line between entertainment and marketing no longer exists and we must embrace a system that rewards brands and technologies that empower users and deliver a superior experience while still effectively monetizing their content and increasing their revenues.

I think the future of display is going to be difficult for sports teams because as the total available inventory increases exponentially through social media channels, CPMs across networks and even premium sites are going to drop, forcing their sponsors to go even more cross-platform with their marketing executions in order to win the display business.

But instead of getting creative many teams are going in the opposite direction. A recent study conducted by the independent agency trading desk Accordant’s  found that only 29% of the biddable sports inventory made available during the second quarter disclosed whether the ads were viewable, down from 32% in the first quarter, and down from about 40% in prior quarters.

The finding, that comes as media buyers are pushing to make “viewability” –-- the industry standard for online advertising, indicates that at least for the short run, some teams are actually making that harder to discern by not making data about the viewability of their ads available when they are bought.

In simple terms the trend data shows that teams are actually moving in the opposite direction introducing so-called “attribution models” that advertisers and agencies use to determine what parts of their online campaigns actually generated results from users.

If sponsors stop buying inventory from teams who fail to disclose the effectiveness of their sports buy, and the average performance of the ads they do buy declines, where does that leave us? 

To the Victor goes the spoils

While I was learning how to green sports events I came across two fascinating but opposite occurrences in the world of sports.

First , Fauja Singh, at 100 the oldest man to complete a marathon. Now I’ve run my share of marathons and I can attest that @ 100, Fauja is a freak of human nature. Even though he finished last overall in this race . Singh holds the world records for his age group for the 100 meters, 200 meters, 400 meters, 800 meters, 1500 meters, the mile, the 3000 meters and the 5000 meters. That’s 8 current world records. And remember he came in last in his most recent race. And to make it even crazier he didn’t start marathoning until he was 89. It blows my mind.

The other event was the violent and quick death of Dan Wheldon at Las Vegas yesterday. Only 33 years old and gone in an instant.

All I can think about is hearing my grandfather’s voice when he told me “the race is not always to the swift, nor the battle to the strong , but that’s the way to bet.” He’s wink at me and then say “Never give up and never surrender.” Heres to Fauja http://www.youtube.com/watch?v=mAGcDfkJscI

Lets see how long it is before he gets his 1^st sports marketing endorsement. If I were Zappo’s I’d been looking for his agent right now.