Apple will significantly affect your sponsors and how they run digital ads.

I’ve said it here time & time again that our biggest “competitor” for sponsorship dollars are digital ads.

The efficiency and traceability of these ad platforms really make them attractive to brands to dump their money into.

Most valuable though is these platform’s ability to hyper-target AND retarget their customers. You can hyper-segment the exact customer you want to reach, and when they visit your site or interact with your ad you can serve it back to them for another at-bat.

In sponsorship, it is vital to understand these systems & platforms and why brands are shifting their dollars there. If we can understand them, we can find opportunities where our value and assets fit and flow to maximize value.

Welp, there is a MAJOR shift in how these platforms distribute ads…and with this shift, there is a major way we can instantly add value.

Below I’m going to dive into why Apple’s iOS 14 update has a new privacy feature that will significantly drop the amount of value they can receive from ads on platforms like Snapchat, Facebook, and Instagram…AND how you can help them overcome it with your sponsorship assets.

The foundations of why your sponsors rely on data for digital ads

Let me start with a bit of a foundation of how your sponsors utilize data in apps like Facebook & Instagram. Within these apps, brands can set pixels that collect information on each user. Some of this may be interests, age, and how they engage with other users.

With this information, brands can create extremely focused marketing ads. For example, if you wanted to sell dog collars, Facebook will know which users either own a dog or are interested in dogs based on what they post and the

I watch a lot of sports videos…so the ads I receive come with a lot of training equipment ads. Someone is making the bet with their ad targeting that if I watch sports videos…I probably work out or train so I need an agility ladder or new workout shorts.

On Facebook ad tools you can build audiences based on actions and interests from the collected data and choose whom you send ads to.

Yup, that means that brands can choose to target your fans…in your city…who like a certain player and run ads to them. They can even use your colors in the copy to build that connection and play off the affinity they have for your team.

Yes, yes I know…they can’t use your logo, and “you have so much more power over your fans, this campaign will fail.”

But this is a real possibility that without “earning” a single piece of first-party data (email, phone number, etc.) they can serve ads to hyper-targeted audiences that they think will respond well to their ads.

Sorry if this is a recap, but it is important to understand the basics and why this move by Apple affects your sponsors.

Apple boosts privacy in iOS 14 that affects targeted ads

Recently Apple has been on a push to increase the privacy on their phones…you may have noticed the increase of questions about allowing apps to use your location in the last few updates.

Well with iOS 14 has added a question to opt-out of any type of tracking on an app when you open it. It will ask you if you would like the app to be able to gather information on the user as most pixels do for apps.

Here’s what Apple is saying:

“Users should know when their data is being collected and shared across other apps and websites — and they should have the choice to allow that or not, App Tracking Transparency in iOS 14 does not require Facebook to change its approach to tracking users and creating targeted advertising, it simply requires they give users a choice.”

For apps like Facebook, Instagram, and others that are ads based, this means the information collected to help companies strategically target advertising will be limited. If users opt-out of this collection, your sponsors won’t be able to hyper-target them with ads.

With fewer data points collected, the audiences brands can create will be massively limited depending on the level that users opt-out of having their data collected.

Facebook, and the businesses who use it for marketing, rely on data tracking to target users with personalized advertising. If your sponsor was running digital ads…this means the ads that worked in the past will be limited. The game plan and bread & butter tactics will be affected.

*Let me caveat this with however you feel about data collection…I am analyzing this from an aspect of what is happening. I think that it has been the wild west with our data for far too long…but regardless of how you feel about it, we need to understand what is happening and adjust.*

What does this mean for your sponsors running digital ads?

It means that the audiences that brands once relied on Facebook to create using data collected from interacting on the app will now be extremely limited. As more people opt-out of data collection Facebook won’t be able to help you reach as many of those users.

If they can’t collect data on you…they won’t know if you like dogs or not. Therefore your ads won’t reach as many dog owners.

Here is what Facebook is saying about the change:

“As more people opt-out of tracking on iOS 14 devices, the size of your app connections, app activity Custom Audiences, and website Custom Audiences may decrease.”

You may be thinking “well how many people use Facebook solely on their apps?” It’s pretty high:

96% of Facebook visits are made on smartphones.

So this will affect a large number of their users. Even though the majority of Facebook app users access through Android, most of their overall traffic comes from the mobile app that will be limited.

Your next question might be “Ok how many people will opt-out of data tracking?”. First with the recent developments in abuse of our data on social platforms…A first guess will be this will be very high.

But again, let’s hear what Facebook predicts. In a recent statement, they are saying that it could affect as much as 50% of their Audience Network.

Yes…half.

Again bringing this back to your sponsors…but if they are running targeted ads based on the data that Facebook collects (demographic, interests, etc.) they could see half of the results they previously saw before this update.

Imagine running an ad that has a 4X return on ad spend and overnight you say it cut to half the reach.

Now, will this be an instant shift? We don’t know. Will Facebook and other apps find a way around it? Probably. They make $67Bn a year from ads…they have a lot of incentives to.

But we do know that in the near term, your sponsors will see less reach on the targeted ads they run. It should be a red flag for them.

What will this lead to and how can I help as a sponsorship department?

As marketers our job is not to complain about situations…it is to adapt. If we can adapt to the environment and obstacles faster than our competitors…we can win in a big way.

The same goes for this situation. If Apple takes something away, we in sponsorship can offer an alternative to fill the void.

So how do we do this…with our audience.

If this holds, and Facebook is affected on the reach as much as they expect, access to a targeted audience will become a premium to keep the momentum going.

Here are the two items that will trend:

  • Influencers: Instead of relying on Facebook to find those perfect customers, brands will shift dollars to the accounts that have sway over that same demographic audience. It won’t be as targeted…but it will be better than blanketed reach
  • 1st Party Data: In FB ads you don’t own the data that you target and re-target. Facebook owns it, you pay for the pleasure. This is 3rd Party Data…meaning you don’t own it and most of the time can’t see individually who they are. If you have 1st Party Data, you own the ability to build audiences and reach out directly.

Well, in sports we have both….all mixed into one.

As teams we are influencers. We can tell brands the demographics of our fans, understand they have a high affinity for the products we introduce to them, and send out messages that are going to be way more effective than a blanketed ad buys on other platforms.

As teams, we also have great data on our fans that we can segment and build audiences with. Sometimes brands pay us to collect some of that first-party data through contests (enter an email, win a jersey).

Both of these are adequate solutions to replace the lost reach on these social ad platforms. For a brand marketer that is scrambling to replace something that was probably the backbone of their strategy, if you can offer these as a solution you will win their business.

So what does this look like in a sponsorship package?

Some people may be looking at this and thinking “Perfect, let’s run a contest…collect emails…hand them over to the sponsor and let them reach out. We’ll throw some branded tweets in there too.”

We could do this…but it would only scratch the surface of results and honestly wouldn’t be recreating the value lost.

We have to dig deeper into what we offer. We are replacing one of the most powerful advertising platforms we’ve ever seen. If we go about it lazily…we will lose.

I always go back to a campaign we ran with an automotive sponsor and a team we helped run. Their goal was to connect car buyers with dealers to obviously lead eventually to a car sale.

Sponsored tweets and cold leads won’t do this. It will look good at the beginning…but the bottom results won’t be the same as if they ran Facebook ads.

We had to deconstruct the path of a fan to the dealer and lay the groundwork. So here’s what we did:

First, fans played Trivia to connect with the brand while collecting an email

It was a branded pull for the fan and something more engaging than just a logo on the side of a tweet. Fans answered a question about the team…and if correct they won a prize from the car dealer.

A great first touchpoint that conditioned them to further branding, but the most important part…it collected their email (1st Party Data).

Second, add those emails into a custom Facebook audience and re-target

I know what you’re thinking…I thought you said Facebook was losing its ability to reach customers. Why would we add them back to Facebook?

This is the key to 1st Party Data. You don’t have to rely on Facebook to find your customers. You know who they are and that they will most likely engage with your ads if you run them.

We know these fans have engaged with the car partner. We know they are fans of the team. And by asking for Zip Code, we can even segment by where they live.

We don’t have to rely on Facebook to find these people. We know who they are.

We created audiences based on Zip Code and had the dealers offer free tickets to the branded corner right on the rink. The ad came from the Winterhawks account…but tagged the local dealer. It was a gift from the dealer to build reciprocity.

We knew they would stop for the ad because of the team logo. We knew they would take the tickets because they were a fan, and we knew it would be more powerful coming from the local dealer as it was the one from their neighborhood.

We knew all this from 1st Party Data. We didn’t need to rely on Facebook.

Last, the connection came in the corner. The dealers hung out with fans and built a relationship in a non-sales environment.

Fans that said yes and took the tickets came to the corner and engaged with the dealers. They put a face to a name. When that fan was ready to buy a car, that would be the first one they go to.

As you can see, we not only recreated the power of digital ads…but we built in the power of the team’s brand to help drive results. We made it a better option than just running ads.

We took the value of a $67 Billion advertising powerhouse and made it even more beneficial for the brand. We superpowered their ads and results all without relying on the 3rd party data Facebook provided.

Ok, quick promo. At SQWAD our activations like our trivia, scratch & win, and others are built to help collect 1st Party Data and run campaigns like this. They are killer at closing more sponsorship revenue in your packages with assets that drive ROI for the sponsor. Click HERE to see more info.

If we can understand the dynamics of digital ads, we can build our value into them.

The best coaches look at their personnel’s strengths and adapt their gameplan to put them in the best place to succeed on the field. But in order to do so, we must understand the fundamentals of the game.

If you understand how these digital ads work, their dynamics, and the shifts in the industry…you can put your players (sponsorship inventory and strengths) in the best position to succeed.

I guarantee you the sponsors you work with who run digital ads are worried about their reach with this privacy change. They are probably scrambling to make adjustments.

If they aren’t…they will be when it is a bit too late.

In either situation, if you can come in with a solution that solves this problem for them, you can win their business.

No matter the size of your team. No matter the size of the company you are going after. No matter if you never thought you could close them.

If you can solve their problem, they will buy from you.

Again, I don’t know the full fallout that will come from this. No one does. But if you understand the possible consequences, you can offer assets that help no matter what happens. If there is a crisis, you will be uniquely positioned to succeed.

In sponsorship, our job is to anticipate the needs of our clients and build solutions to help them reach their goals. How can we know the struggles they will hit if we don’t understand where how they spend their money.

This is an opportunity every sports team can take advantage of today. If this truly shifts the industry the way I think it will…the teams that have solutions for it will win.

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