How Clubs Should Approach Commercialising Digital Inventory
With the emergence of digital in sports we have seen professional teams invest significantly to build credible worldwide audiences over the past decade.
A team’s followers (or fans) across Facebook, Twitter, Instagram and China’s microblogging platform Weibo are recognised as badges of honour. But as we hit the end of this decade a trend is emerging with many teams now seeking a direct financial return against the communities they developed. Now teams are asking ‘what’s my ROI on that digital?’
This presents an obvious juncture where the club can explore packaging exclusive digital inventory for sponsors, to be sold locally or across the globe to regional markets (ie. China or Indonesia). There is a thought that with this new inventory will come a flurry of new money into the team’s cash flow statement. But does it really create new money? Does it protect old money? Where is the value?
On some occasions I believe a ‘digital first’ sponsorship package can work, mostly in regional markets like a mainland China, where it is an entirely different ecosystem, or Thailand - particularly on soccer - with more niche categories. But the reality is, there is not an army of brands waiting to invest across digital inventory, and if the packages are exclusively digital you risk cannibalising your core brand proposition and long term sponsorship revenue.
By offering a more affordable sponsorship option, you open your team up to less ambitious brands, less global brands and often less trusted brands, which can have a detrimental impact on your existing or potential global partners. Those global partners are with you because you say something about them no one else can - that is ‘you can trust them’. Partners have bought into the relationship and trust you have with your fans and the halo effect it delivers. They wear your team badge with pride and look for any opportunity to demonstrate that partnership.
You could see existing partners pull back investment, or worse switch to digital only partnerships if they feel their value has already materialised. At times you may hinder global opportunities in bigger categories by selling a regional digital sponsorship or advertising package. Whilst you may find yourselves successfully closing digital inventory to brands, this could hurt your business in the long term.
Long and short, selling digital inventory exclusive of broader rights and association is cheap and will very likely damage your long term business forecast. Instead it is best to focus on investing in digital to help sell partnerships, amplify value and drive better retention.
Let us take a look at how.
Digital delivers sales
Having a well-connected, highly engaged global fan base is fast becoming central to global brands who are investing in sponsorship and marketing. Your community is considered a key asset, that relationship is considered sacred, it is desired by brands who cannot get that same affinity with their consumers. Your owned channels should be a major part of your storytelling and a major part of the sponsorship proposition. The strength of your community across social and other digital platforms will give confidence to brands wishing for the love and trust from that audience.
There are tools now that allow you to attribute hard values on your digital activation and exposure. With the right experience and creativity you can confidently assure sponsors of the media value and associated reach they will see working with you and this should be priced into the partnership.
Approaching a sponsor with a clear model for how they may activate across your network, showing visuals to illustrate the value and enthusiasm for the engagement they can expect to realise will boost the sale exponentially.
Digital amplifies value
When a partner invests millions of dollars to become a global partner, they are assuming a degree of love will roll over to them as this partnership develops. The stronger your community is, the more receptive they are to authentic digital activation. The more your followers believe it, the more they willl buy it. Your channels are a platform for brands to be creative, to express themselves and communicate something meaningful to a passionate group of people receptive to the sender (you the team). It is time for your digital and commercial teams to work together to create and build brand activation which resonates with the community, this is your unique value. This is what sets you apart from the 1,000 alternatives the brand has to consider its investment.
Fig. 1.0 Vivo
For example, each day during the 2018 FIFA World Cup in Russia there was a cartoon graphic released on social, featuring the Vivo logo. The materials were high volume, highly social and perfect for a younger audience in China.
Fig 1.1 Vivo
Towards the end of the tournament fans were asked to choose a Chinese pop song to be played at a game in Moscow. The graphic and subsequent engagement was the most engaged social post for the tournament, generating over 2,000,000 engagement and again featuring the Vivo logo.
Digital helps retention
Brands find it hard to depart when they are across multiple touch points across the business. The patch on the shirt, the signage at the box, website, court side seats, products used and digital engagement. All of this is readily up for grabs and commercial teams do a great job at ensuring it is scarce. Yet when it is all sold, how does a brand realise value and then continue to feel they see more value as the term of the partnership matures? In regional markets where the brand may not have the full breadth of branded assets; the digital campaigns can deliver strong retention with sponsors.
If a brand continues to see itself across your team’s marks, part of a program which engages the fans, delivers value and appreciated by all they will find it hard not to renew. A great example of this is the Drive for More campaign with Yokohama and Chelsea. The partnership is now in its fourth year and still going strong. Since partnering with Chelsea in 2015, Yokohama Rubber has seen its brand awareness rise to 95 per cent among the club’s supporters.
Remember, digital is your glue
It is the very connection between your team and your fan, the pipes that keep the communication flowing and the community that best represents your fandom. Commercially your digital communities offer a genuine (and modern) platform for sponsors to communicate their value proposition. It is on your creative heads, your digital teams and the sponsors to consider the best way to deliver that message.
This idea that digital must drive ROI in isolation is ambitious, to put it diplomatically. Digital is a key part of a team’s overall communication strategy - the best and most engaged communities are those that are bound by a common purpose (ie. win the title). It is a medium you house and foster better relationships with your fans and is not to be mistaken for signage at the stadium.
My key position is that digital is not simply a media to commercialise, even if you can see a clear path towards that. However, bundled in with the broader ‘halo’ proposition of the club or team digital offers powerful resources to sell, amplify and retain sponsors, not to mention just a great platform to engage your fans. That must not be forgotten.