2020 was a hell-of-a year for the sports industry. One that we’d like to forget. But as we look back at it, there are some shifts that will help shape the future of the industry.
We were exposed in many ways. But 2021 brings opportunities to thrive in the advertising industry.
We could all make predictions for the upcoming year…but really predictions mean nothing if you don’t take action on them.
This week on The Inches Podcast, Rich & I dove into the top opportunities we see in sports sponsorship for 2021.
Click HERE to hear the whole episode, but as always I’ve broken down the keys below.
Teams & leagues need to be fanatical about Gen Z attention
Some of you are probably sitting there reading this saying “duh”… but it will be more vital than ever to crack this generation, grab their attention, and be able to successfully connect them with your sponsors.
I think the biggest misconception here is the answer usually comes to “Well we need to be on Tik Tok”
That honestly is not enough. To really hit this target demo, we have to deeply understand what they need, how they consume, and how we can stand out to them in order to earn their attention.
Sometimes…it is as easy as asking.
For example, last year before the pandemic we had a 17-year-old come onto The Inches podcast and we asked him questions about how he consumes and engages with his favorite sports team.
A couple of keys came across:
Changing our business model to fit their needs
Tyler, the 17-year-old we chatted with, brought up a dilemma with the structure of ticketing prices.
He currently buys 10-game packs, a prime customer for the usual upgrade to a season ticket holder.
One key tactic we spoke about was a loyalty program, like a frequent flyer program, where Tyler could earn better deals as he purchased more 10-game packs.
His 10 game package would have earned him credit for this season and kept him in the system. A call or email to let him know that despite the increase in the ticket price… he could buy the same package and earn points.
As we look to attract these fans into our buildings, we have to start rethinking the way we structure our business models. In the same way Netflix disrupted Blockbuster with streaming and Amazon big retailers with 2-day shipping…we need to look for ways to stay relevant with this new type of fans.
Where they consume: Missing the boat on Snapchat & YouTube
We are pretty ass-backward on where we post our content to reach this generation of fans. And if we don’t go where they consume, someone else will steal our influence.
When chatting with Tyler, we asked where he consumes highlights the most, and his immediate answer was YouTube. It’s what he grew up with on consuming sports videos and is used to.
In sports, for the most part, we don’t have a great presence on YouTube. There are people who report on our sport in basements that have more subscribers than our teams.
We have to post our content to the places they consume. Many teams are missing the boat on this one and it costs us a ton of money.
Another key question we asked was “where do you consume your favorite team the most?” His answer was Twitter.
But in this, I immediately found a bias in my question. I followed up with “What platform do you consume the most on?”
His answer was Snapchat. If his favorite team put more effort into this platform, he said he would consume a lot more.
By changing the way we ask this question, we can open up so much more vital information that can point us in the right direction.
I can’t emphasize this enough. We are guessing way too much on how to reach this fan and are stubborn to change to fit their habits. The result is we will lose them to other forms of entertainment (think esports and other entertainment platforms).
This year, have conversations with your young fans. Understand where they consume and how they consume so you can adapt your channels to grab them.
The teams that do this over the next year will have a HUGE foothold going into the next decade.
1st Party Data & Fan Segmentation will be more important than ever
New advertising (digital) has a few big advantages over our legacy assets in sports sponsorship…targeting.
There is no more guessing if you reached your target demographic, with these platforms you can segment down to your perfect customer and test ad copy on them.
Even more, you can target different segments with different messaging. This means I can run an ad for 20–30-year-olds with one ad and a whole different message for 45+-year-olds.
For us in sponsorship, we usually have one segment. Our fans. You’ve all done it. Shown the buying power, age reach, and gender demographic break down on your presentation for your entire fan base.
This though won’t cut it moving into 2021. Any team that can segment their data into niches in their fanbase will win the dollars.
And it really is not so hard. If we can segment our fans into groups we can bring context to why the sponsor should pay for our packages.
Let’s say an apparel company is looking to reach families of youth players in the area. If we can segment out our fan base to the ones that have are a part of youth sports…we can build a package to target them.
This could be as easy as running a contest for youth families where they enter their email and which team they play for to win. Now you have segmented lists of fans you can batch together and send extremely targeted messaging, even to each individual team.
The package would have the overall messaging assets (signs, overall social media posts, and others) but without targeting we miss the opportunity to create messaging that really speaks to the fan.
With the above package, the sponsor feels better about the return they will receive. The assets show a clear path to their goals (reaching youth players and their families), you can prove the reach, and it is an asset that the sponsor can build a long-lasting plan with.
In addition, having 1st party data will be more important than ever with the recent changes in Apple’s privacy settings. Overall, brands will have access to fewer data points through ad targeting platforms.
This means they will rely on the audiences you have built more than ever to help reach their goals. Check out more info HERE on the change and what it means to sponsorship.
As my good friend Amir at Zoomph always says…the riches are in the niches. This unequivocally is true with your fan base. The packages that will win in 2021 bring context, segmented messaging brings context.
This will be another foundational piece to start building for your team. Start building your database and segment them. If you can create a menu for reaching your fans that is better than the overall demographics of your fans…you will win. Especially if other teams aren’t doing this.
Year-round fan engagement & sponsorship assets
Rich and I have talked a lot about this over the past 2 years on the podcast and I think 2021 will be the year it really takes hold.
What the pandemic did to us was expose our inability to reach our sponsor’s goals without the live game. So much of our assets were based upon having live-action and fans in the stands.
With this, it also brought out our creativity on how we can reach our fans without games. We saw cooking shows, throwback game streams, and countless other assets to keep our sponsors happy & paying.
And this is coming at a perfect time. I’ve talked about this before, but as we compete with digital ads the one item that really stands out is the seasonality of our assets.
With digital ads, they reach us while we are on our phones…which is all the time. The number of at-bats we have to reach the customer is every day.
With our assets, we have the length of the season….and sometimes only on game day. This limits our reach and the value we can reach our fans with.
As we look at 2021, your sponsorship department should absolutely be looking for ways to reach your fans in the off-season. What are ways we can keep in touch with them every day with content and pull them in?
What this will do by nature is double your revenue. More assets, more reach, more inventory to sell. This simple tweak can help your sponsorship department break records simply by adding more inventory.
I honestly believe this is the easiest way to take the North American Sponsorship industry from a $24Bn market to $50Bn and above. If we as a collective industry push forward with making inventory that works year-round…we will massively grow the revenue we can bring in.
Sponsors will make trackability mandatory. Your reporting should follow
I talked about this a bit in talking about segmenting, but brands more than ever will demand that we answer the question “How many sales did this lead to?”
Why? Digital ads do this in one swoop.
With a digital ad you can see how many views the ad got, how many clicks, if the person purchased, and then re-target those people to get them to purchase again.
You can even segment by customers that purchased and customers who didn’t to ensure that the messaging is correct when you retarget them.
In other words, they are efficient.
In sponsorship, many times we show how many fans saw the sign or tweet…and maybe who swiped up.
There is a missing piece to our assets to compete with digital ads. Marketing departments today are under pressure to spend money efficiently. The reporting is in real-time and they can say “We spent $X on this ad and got back $Y in sales.”
Today if your assets don’t have those metrics built in, it will be hard for the sponsor to buy them.
And if you are too late with adding this in, it will be hard to regain.
Humans are creatures of habit. The first company to build a stronghold on that habit usually takes a ton of the market share.
Think Netflix and Blockbuster. Eventually Blockbuster adapted, but by that time it was too late. Too many people had shifted their habits to home delivery and then streaming for Blockbuster to adapt.
This item is honestly the thing that scares me the most about our industry. As brands get more used to digital ads that show the results in real-time…they will pour more money into it. When they do, it takes away the budget normally spent with our team.
This though is also a huge opportunity for your department. If you can prove traceability to your packages, you can win those deals. More importantly, you can win by building a habit with your marketing managers.
When ensuring a package has traceability, I always turn to the sponsorship levels.
These are the levels we need to get our fans through in order to compete with digital ads. The more fans we get to the bottom, the more value it brings.
In addition, each level should be trackable.
We should be able to say to a sponsor:
“With this package, we reached X players who say your logo, Y of that X engaged with the content, Z of that Y took action and made a purchase, and of the Z that purchased we can retarget them with more authentic messaging.
You spent $A with us and it turned into $B in value.”
If you can offer that kind of traceability in your packages, your sponsors will have a reason to keep buying from you. Because you make them money and can prove it.
As you build these packages in 2021, you have to be able to prove the value further than views. If you don’t, with the slimmed-down marketing budgets we will see this year, you will lose dollars.
If you can prove this, you can build a habit with your brands for decades to come. In 2021, the teams that build in traceability win.
Live streams will see a BOOM in demand
The broadcast has long been the #1 revenue driver for sports. These huge deals will bring in Billions for leagues and Millions for teams.
In the past, we had to rely on local and national TV deals to get air time. There was no other alternative to reach our fans in a way that would make money sense.
Today, that has all changed with live streaming on social media platforms. You can add live broadcasts to your feed and reach your most avid fans and beyond.
I know what you are thinking. “I can’t stream my games, I don’t have the rights to that…my league does.”
This is true, but your league doesn’t own the rights outside of that time.
In 2021 every team should be streaming your:
Fans crave this inside access. It is why we watch programs like Hard Knocks and All or Nothing in sports. We want to see the behind the scenes, we want to engage locally for pregame, we want to consume far more than just during the game.
The best part is…it has never been easier for us as teams to set this up and run it. In all honesty, an iPad, microphone, and a person can achieve amazing results.
You don’t need to be a huge team with a studio. You don’t need to spend thousands on the setup. You absolutely can…but it is not necessary.
The amazing thing is sometimes a simple live stream can outperform entire legacy media casts.
This year we saw proof in many areas, but the above is one of the biggest representations of what is shifting in attention.
Verzuz set up a ‘battle” between Jeezy and Gucci Mane (both rappers) that launched on Instagram Live. The production quality was decent (nothing crazy like say an MTV Video Music Awards would be) and probably cost 1/10th of what a full-scale TV production would be.
They got 9.1M viewers compared to 6.4M that the MTV Video Music Awards got.
A small company had more reach at 1/10th of the cost by understanding where attention currently is. We can absolutely do the same within sports.
No matter what size your team is, this is an asset that will be worth a ton of money to sponsors in 2021.
Any time that you have rights to, whether it is pre-game or post-game, you should be filling with live shows. This will be an asset in 2021 that sponsors will want to be a part of and purchase.
The industry is a few tweaks away from reaching our potential. I hope that 2021 is the year we do.
When I played football in college, my coach constantly harped on our team reaching their full potential. His speeches focused on the fact that being good is not enough. Your goal should always be to reach your full potential.
Sometimes that means adding one thing to their game. Better blocking for a wide receiver that can make the deep catch. Perfecting the read on a zone run play for a linebacker.
We spend the time in practice to reach our full potential. And a team that can reach their potential can grow to heights they didn’t think were possible.
I believe that we in the sponsorship industry are a few tweaks from reaching our potential. We have perfected content and pulling emotion out of our fans…usually the hardest part for most industries. Where we are missing the mark is shifting with attention, traceability to prove sales, and offering 24/7/365 value.
We all have huge communities (fans) that have allowed us to build this industry. But we cannot be complacent with where we are. We are far from where we could be.
We are a $64Bn industry. We just got kicked in the teeth. But the path to our full potential is close. When we reach that potential, it will take the world by storm.
No digital ad platform can compete with us when we reach it. But we have to have the conviction, courage, and drive to get there.
Make sure your team is putting itself into the position to reach its full potential.