This is a debate that comes up constantly if you are in the sponsorship industry.
Sports teams will share how sponsorship is more than advertising. They will push the fanatical fans that the brand should want to get in front of and how the environment of their stadium on game day is unbeatable.
But I think there is a misunderstanding in how we think about each. We tend to separate them.
We try our hardest in sponsorship to push away from being labeled as an “advertising platform”. Many times it is because we feel like we are competing with the others out there like Google or Facebook ads.
But in reality, both have the same goal. To help our partners reach their goals (usually to sell more products or earn more customers).
Today, I want to dive into both and show you how your team can take a different approach to close more deals with your brand sponsors.
To do that, let’s look at the superpowers of each platform.
Sponsorship, or partnerships, has a superpower of Goodwill.
As I mentioned before, the big advantage we have in sports is the excitement we create through our games and the loyalty it builds with fans.
There are some fanbases that have a following that rivals religions. The wins (and losses) affect most fans’ moods the next day. It affects the type of week we have as diehard fans.
This is taken all the way to the point of detriment to our society. A study showed that in Philadelphia judges gave out harsher sentences on the days after the local sports team loses.
Could you imagine getting an extra 2 years on your sentence because the Eagles lost?
This fanaticism is our superpower. It is our unique selling point. When you compare it to other ways of reaching customers, it is what makes our assets so popular with brands.
As the CEO of IPG360 Matt Wiener so beautifully put it “The essence of a partnership is that you are able to borrow equity, awareness, or the power of a brand to attach to your brand”
This is what we are selling. The ability to put a partner’s brand next to ours and let them borrow some of that goodwill. That excitement.
Many times, though, it can also be our downfall. If we live and die with the goodwill of the team, we can watch it fall as losing seasons come upon us. Sometimes in sponsorship, I think we rely too heavily on this goodwill.
It also causes us to be lazy in our creativity of assets. Many times because we push the goodwill point so much, we actually end up selling signage to a local pizza joint that has a goal of driving traffic.
That sign is not the best use of their advertising dollars, but we are good at convincing them that just the presence of that sign with our fans will help sell more pizzas.
And maybe it will, but most of the time we don’t back that with efficiency & ROI.
We lean so heavily into the sales pitch of goodwill we have many times forgotten that the real goal of any partnership is to help them drive sales in the most efficient way possible.
This is where advertising has an edge on us.
Advertising puts a focus on efficiency
Advertising over the last 200 years really has focused on one thing; efficiency.
Think back to newspaper advertising. The ability to reach everyone in the community with your message on a Sunday morning.
Then, there were national newspapers. You as a brand could more efficiently reach millions of people across the country.
Then came the radio. No need to print something out, you could now actually talk to your audience. They couldn’t really gloss over it any longer…it was a part of the radio broadcast.
Then TV, we could visually show our products. More efficiently telling our product story in between our favorite movies & shows.
Last, the internet came. Through Google ads, we could reach a person as they were searching for a product. On social media, you could reach specific people based on their interests and actions.
What advertising has a leg up on sponsorship is efficiency. The majority of our most expensive assets are signage. Literally, a sign in our stadium is no more efficient than what you see on the side of the highway and ignore.
Signage is a massively inefficient form of advertising. We can’t track it. Our only hope is that the fan remembers the brand sign when they are at the supermarket and pick that product. We can maybe track that a few years later…but in today’s age of real-time analytics that won’t fly.
To make things worse, we litter our game day with these signs and inefficient messages. In fact, a study we did last year found that on average fans will see over 3,000 sponsor messages from the time they walk into the building to the time they walk out.
So even if that sign did grab their attention, it is competing with 3,000 other messages in the fan’s brain. The efficiency here is close to nothing.
When I used to sell sponsorships, this drove me absolutely crazy. I was being met with the objection that a sponsor could reach the same fans I was pushing with a $50,000 sign with just $5,000 in Facebook ad spending.
To a point, they weren’t wrong. The argument back was they couldn’t use our IP. I’ll dive in more on this later, but what they were really asking for was an efficiency that rivaled the other options they had.
The winning hybrid: Influencers
I’ve written before on this, but influencers are where we want to be as a team. They have mastered goodwill and efficiency in advertising.
Yup, I said it. We should look to 15-year-olds on Tik Tok for inspiration.
If you look at influencers they have built up a lot of the same goodwill we have. Maybe not on the same scale we have…but they have built up a large following of people passionate about their lives or content in their audience.
The difference, they have figured out a way to efficiently prove ROI for brands that spend on them.
For example, many times they add an affiliate link into their posting about buying a product that they promote. Instantly brands can see the sales come in, at the very least they can track the traffic it drives to their store.
And as we talk about efficiency, think about the path to purchase compared to our signs. With an affiliate link, it’s one click right on the phones that they are viewing the content on.
With a sign, we are banking on the fan remembering a brand message sometimes days after they see it when they walk into the store.
There are many more ways for a fan to drop off before they buy with our signs. There is little chance with a link click that takes you right to the product’s page.
The value of this efficiency has never been clearer to me than when I created our Sponsorship Price Calculator and shared it with teams.
On the calculator, you can type in your social media following as a team and it will show you how much you should be charging per post. I’ve based the rate on what current influencers make per post on average (an average from micro-influencers to major ones).
Teams would see the number the calculator generated and hit me with the same response, “There is no way I can charge this much for a Facebook post. No brand would pay that much.”
This response startled me for one major reason. The calculator isn’t spitting out a number for what brands SHOULD be paying you…it shows what brands, on average, ARE paying influencers for the same following.
So why won’t brands pay this much to teams and they will for influencers? We have a history of being inefficient with our assets.
When a brand looks at $5,000 per Facebook post on your package, they think back to how efficient it could be and think back to how efficient the sign they bought last season was.
Those numbers were probably low…so they equate that efficiency with your Facebook post. You have set a low anchor that you won’t be able to dig out of unless you can show some real efficiency numbers to counteract the results with your signs.
This is the moment that I realized we in sponsorship do not have the problem of living and dying by the value that goodwill brings.
We have an efficiency problem.
No matter the goodwill we’ve built up, we’ve sold inefficient advertising products for so long that the stench of it was bleeding into the assets that actually would bring efficiency to the plate.
So, here is how we break through this.
Today, we must fuse the goodwill of sponsorship with the efficiency of advertising.
I mentioned above my struggle when I sold sponsorships. I was asked many times how the $50,000 sign would ever outperform a $5,000 Facebook ad targeted at my fans.
As I mentioned, my response always came back to IP. Without our team logo, you wouldn’t be able to reach that fan as well as we could.
This point was true, but the desired outcome was off. My desired outcome was to sell the $50,000 despite the objection. Sometimes I did…many times I couldn’t.
But what I missed, and what I think many of us miss in sponsorships, is I wasn’t listening to what my customer wanted.
Of course, they believed in the goodwill the team had. They wouldn’t have taken the call or met otherwise. What I failed to deliver was convincing them that my sponsorship package would help them reach their goals the most efficiently.
The sign was not the most efficient way to drive traffic to their store. Despite the big draw we had with our IP & logo, they still felt they had a better shot at reaching customers without it.
What they were really asking for was an option that melded the draw of our IP with the efficiency of Facebook ads.
The holy grail in sponsorship today is fusing the goodwill that our teams have built WITH the efficiency of modern-day advertising.
The conversation that I had almost 8 years ago trying to sell that package still goes on today in sponsorship.
We want to sell a rink board-based package for $250K, but we don’t have the rest of the story for how that asset will efficiently be better than them running social media ads.
We have failed on the efficiency side of sponsorship, but we can make a change now. We can restructure our assets
I am not saying get rid of signs. I still think you can add them to your packages and they will bring value. I always think back to the Duke’s Mayo campaigns in college football. I had never heard of the mayo until I saw the bowl and other college football signs.
But, there has to be a large part of the package where you will prove that you can help reach a fan more efficiently than a social media or Google ad will. If you cannot prove this, you will see a lot of dollars walk out the door.
15-year-olds on Tik Tok have figured this out and are printing money with 1/10th of the resources we have as sports teams.
Our goodwill in this industry has allowed us to innovate slowly. We’ve used it as a crutch to delay the work it takes to stand toe to toe with social media ads and influencers.
At SQWAD, our activations have brought a lot of efficiency and ROI to sponsor packages. Activations like our Portillo’s 4Q Franks with the Chicago Bulls help send over 70,000 hot dog coupons a night to fans via email.
The results from our activations prove this. Our digital activations have sent over 2.8M sponsor offers in the past year alone, with a 74% open rate on offer emails and an average 56% in-store redemption rate.
When you mix the above with a strong signage package, you are bringing the efficiency that the brand will see if they had taken the money and put it solely into Facebook ads.
You are giving them a package that is ultimately better than any social media ad campaign they could run because it fuses your team’s goodwill with efficiency.
Over the next decade, it will be the teams that dive fully into fusing their goodwill with efficiency that will win. It is how the sponsorship industry goes from a $56Bn one to double that over that same time period.
I’m excited about where our industry can go once we do this.