SPORTS MARKETING

ISBN: 978-1-905685-01-1
Price: 
£295
To purchase this report as a pdf or print issue
To purchase this report as a pdf or print issue
Subscribe To IMR To access all IMR reports and journals for one year, price: $795
To access all IMR reports and journals for one year, price: $795

Driving Business Through Sport

Executive Summary

MARKET GROWTH

The use of sport in corporate and brand development in Europe has grown enormously in the 90’s. The Continent now accounts for 36.4% of global sponsorship spending, with around $5.6 billion spent on the rights to sports related programmes each year, a four-fold increase in little over a decade.

The budgets now committed to European or global event sponsorships can run into tens of millions of pounds, simply to acquire the commercial rights. With the acquisition of rights being merely the start of the process of exploitation, the true scale of major sponsorships becomes apparent.

The growth of the sponsorship market is partly the result of a more professional attitude to the use of the medium, although this still has a long way to go. It is also because the sports industry itself has begun to realise the value of its properties and has developed its infrastructure accordingly.

IMMATURE MARKET

And yet despite the vast investment in sponsorship, most experts agree that the industry is still immature, that many sponsorships at best fail to maximise their potential, and at worst waste a lot of money and in the process send confusing messages to consumers. 

Most major organisations have sophisticated marketing departments with an ability to develop consistent messages across a range of above and below-the-line marketing disciplines. The difference with sponsorship is that it is too often seen as a solitary discipline, designed simply to put a logo in the face of a viewer, with a good day in the directors box for the chairman and a few friends thrown in.

There is rarely a carefully thought out objective for the project, it is not researched properly and the potential is not maximised. In virtually every other marketing and corporate discipline the executives responsible for handling advertising, promotions, database marketing, sales or personnel, are trained and experienced.

In sponsorship this is rarely the case, and the industry needs to improve its communication procedures. Clients and potential clients are frequently unaware of the power of the medium or how it can be exploited. There are brands that have achieved exceptional results using sponsorship, and agencies that have developed a very sophisticated approach to the subject. However, these are the exception, and it is important that the industry learns from such cases as these.

POTENTIAL

For those who take a professional approach to the medium, the use of sport can be very rewarding and the entry costs do not need to be high. The potential to generate image transfer is greater than with most forms of marketing and, unlike advertising, it is easier for an official relationship with a sport to deliver credibility. What is more, the marketing objectives delivered through sport range from mass exposure for brand development, to one-to-one relationship building with key contacts.

The use of sponsorship also provides a platform for a range of marketing activities, including PR, sales promotion, merchandising, hospitality and special events. No other marketing activity allows such a comprehensive and flexible exploitation opportunity.

One of the biggest changes to the European sponsorship industry in recent years is the growth in objectives it can deliver. No longer is sponsorship the preserve of brand managers. Some of the best examples of the use of sponsorship programmes have included organisations leveraging hospitality rights to enhance business-to-business relationships and many companies have used the medium effectively to develop internal employee communications programmes.

THE RISKS

Powerful though sponsorship can be, it is arguably the riskiest weapon in the marketers’ armoury. There is risk in the possibility of a backlash from fans who feel that their sports are becoming over-commercialised. Similarly, the success, behaviour and popularity of individuals, teams and sports cannot be guaranteed. 

Aside from these risks are the increasingly ferocious marketing battles in which ambush marketing of sports events is increasingly being seen as a valid tactic. However, as the industry matures, companies, sponsorship agencies and sports federations are developing increasingly sophisticated techniques to protect their investments. They are using contracts, PR and crisis management to either avoid risk or minimise the effects.

THE FUTURE

The money being pumped into sport is set to grow at an even greater pace as a result of commercialisation. At the heart of the change is television. The medium has realised the value of sport and is willing to pay accordingly to help to drive market share and subscriptions.

For sponsors, however, this is a double-edged sword. The new interactive technologies that television is starting to deliver will present opportunities for brands. But the increasing unpredictability of television contracts and the switch from free-to-air mass-market broadcasts to subscription services, means that mass exposure for major events is no longer guaranteed. To achieve sponsorship objectives, sponsors have to be aware of changes in the television industry to maximise opportunities and avoid overpaying for properties.

Changes to technology have also resulted in new types of sponsor wishing to capitalise on the popularity of sport. The telecommunications/technology industry is the fastest growing investor in sponsorship, partly because the industry is growing and, in consequence, it now has much larger marketing budgets. But it is also an industry that is seeking a vehicle through which it can communicate directly to its market, either the end user via traditional media and the Internet, or key business contacts who can see its systems in operation in the sports environment.

But it is not simply sponsorship that can deliver business objectives through sport. The use of special events, created specifically to deliver business objectives, looks set to grow because the corporate backers have more control over the medium.

Direct marketing techniques are also being used increasingly. The requirement for official rights is no longer necessary if database marketing specialists know who the sports fans are, how they behave and how to communicate with them. This powerful medium has been overlooked so far by the sports marketing industry, yet it combines the two most powerful marketing ingredients available – knowledge of the fans’ preferences/buying habits, and the passion that fans have for the favourite sport.

The future of sport in Europe is also changing and this has major implications for those organisations wishing to use it as a communication medium. On the one hand the sports teams and federations are beginning to understand how to market themselves and what corporate sponsors are seeking from them. On the other hand, there is still a long way to go before the sports industry reaches the level of business maturity seen in other industries. So far, its revenues have been driven by television and by simply charging high admission rates to spectators. There has been a distinct lack of communication between the sports industry and its customers – the sports fans. Unless this changes, the sports industry is in danger of alienating fans and sponsors alike.

bottom_left_corner
bottom_right_corner
0 item(s)

SEARCH

Register or Login to read free content from more than 19 publications
Email

Password
CONSULTANCY
IMR specialises in bespoke research reports and commercial advice to rights holders
world_pay
Official Supplier


European Sponsorship Association
Media Partner
INTERNATIONAL MARKETING REPORTS