There are two graphs that unequivocally scare the SH*T out of me in sports sponsorship.
(Click the image above for the source article — eMarketer.com)
The first is the fact that 54% of all advertising dollars in 2019 will be spent on digital campaigns and platforms.
When we look at what sponsorship really is…it is advertising.
Our customer is literally showing us what they want. Where they spend their money is the greatest indication of what they want in sponsorship assets from us.
They want digital assets.
But if you weren’t convinced…let’s see what happens when we actually ask them what they find most valuable about our sponsorships.
In 2017 IEG sent a survey to some of the top sponsorship decision-makers for brands and asked what the most valuable benefit of sponsorship are.
That’s right… the #2 most valuable benefit to our partnership is the presence of digital, social, and mobile media…
AKA digital assets.
This is above #6 on-site signage and #10 broadcast ads. The things that I’m sure you are trying to push through to your clients hard at a high price.
This would be like trying to sell me Beets to make dinner with…I fu¢*&ng hate beets (sorry if you like beets…despise them).
But really this is frightening. In fact, only 1/3 ranked on-site site signage as extremely valuable.
If you haven’t gotten the picture of why it scares me….here’s why.
90% of the assets we push in sponsorship are what our customers don’t see as valuable. At least AS valuable as other items, mainly digital assets.
There is a massive mismatch between what we expect our customers to want and what they really want in our arenas.
We put high prices on assets they don’t want and then push them to our partners to try and increase our revenue to hit our goals.
We aren’t setting them up with assets that they want, what they need to be successful.
Why are digital assets wanted? Well, they are trackable.
The biggest advantage that digital assets have on “traditional” is they are trackable.
Take out the fact that they grab attention. Their superpower is they can successfully answer the question that ultimately will get asked of us “How many (insert brand product here) did this sell for us?”
With digital, we have those numbers. With a rink board, we don’t.
Did they sell something? Probably. Can we report how many they did? Rarely.
Facebook ads on the other hand can. And that’s why they are winning.
So what will happen? How much is this not offering what our customers want costing us?
It’s costing us a lot already. I’ve seen a partner pull out of a $1M partnership already from this.
Was it only because they didn’t offer digital assets? Absolutely not. There were other factors.
But the question they ask is this “Why are we spending all this money here when we can see the results on digital ads?”
So the brand pulled their money…and most (not all) of it went to digital ads.
So here’s how I see this going down:
- Brands start pulling dollars slowly to put on digital as it becomes easier and easier to run them and brands see the power they have.
- There will be an economic downturn and budgets will be cut on advertising.
- Brands will re-evaluate where they can SEE the ROI (trackability) and pour the money into those assets.
- Sponsorship, if it doesn’t change, takes a HUGE financial hit at all levels.
The worst part of all of this is the numbers are right in front of us.
We have been told how we need to adjust and we won’t do it.
Maybe there is too much revenue on the line for our rink boards, in-stadium signage, and broadcast ads.
Maybe we feel that we can’t adjust quick enough and feel like we can’t get enough digital assets in time.
Maybe we’ve told ourselves that our customers (brands) don’t know what they really want.
No matter what the excuse. They are telling us what they want and we are failing to adjust. And in the history of business… it doesn’t work out well for those who don’t adjust to their client needs.
The punchline: Those teams who listen to their customers and add digital assets NOW to their packages will WIN.
We’ll look back in 5 years and the writing will be on the wall pretty clearly.
Those teams that truly adjusted their offerings to have a strong base around digital offerings will win.
At SQWAD, we help teams add these assets so they aren’t left in the wind when brands make the shift in what they want.
More importantly, our goal is to help them win this money back by providing easy-to-implement assets. We saw the shift coming and want to help teams be the winners on the other side of this thing.
What baffles me about this is some see it as so hard to see. We have seen and talk about all the time how the newspaper industry, Toys R’ Us, and Blockbuster have failed to adjust and are now either dead or on their last life.
We’ve seen it happen. We applaud the revolutionary companies that change. Yet when the data is right in front of us we do nothing.
The way this ends is the teams that offer digital will win.
Even bigger they will win the money lost by other teams (sometimes bigger) in their market.
How do I know this? Well, that $1M that was lost by one team is being snagged up by another team that is offering digital. All because they saw the stats and adjusted on the attention and needs of their customers.
My ask is simple, can we please look at these stats.
Please see overall how advertising is changing, how attention is changing. Please adjust to what you offer. The consequences for sports teams if we don’t are devastating.
It is something that our industry can’t afford.