Sports sponsorship was once a surefire way to raise awareness of the brand, create unique fan experiences and mount a guaranteed wave of passion. That playbook was broken when the pandemic threatened events, however, and conversations between organizers and sponsors now reflect that. As part of The Drum’s Experiential Marketing Deep Dive, we catch up with Kevin Wittner, Octagon’s vice president of strategy for sports and entertainment, to understand the concerns brands have when they enter the world of sports.
De Magners, who chose not to renew sponsorship of the Cheltenham Festival for 2022 and then retire from the 2021 Gold Cup in 2020 shortly before (was, after all, considered by many to be a widespread event in the British wave) brands in Japan that show a lack of will to activate around the home Olympics, for fear of actively helping to spread the Covid-19, has been unusual to see how brands distance themselves from the same events they helped deliver.
As such, the world of sports sponsorship has faced numerous hurdles in the last two years. Will it ever be the same?
The common belief is that sporting events were supposedly isolated from crises and recessions. Anecdotally, strong sports fans would continue to watch the match even if the house was on fire, as there are weirder fandom stories that testify to the power of these properties. Shy that the stadiums will be closed or the teams will be canceled, the fans will be there.
Kevin Wittner of the Octagon admits that in recent conversations “it remains an element of the unknown,” but that, at least in the United States, locals are starting to fill up again. “We also see rights holders investing in measures to keep participants safe or prevent any kind of spread.”
He believes the brands are starting to get back on track with their sponsorships after a dull year in which experience and hospitality were stifled. “From a hosting standpoint, many of the brands that kept quiet over the last year are starting to come back, but with a more limited capacity to ensure everyone is comfortable and has a little more space.”
Many sponsorship discussions have delved into the dreaded terms and conditions that the average human being would probably shine through, with phrases such as force majeure and goodwill coming into play.
Event organizers must retain sponsors (many of whom have signed multi-year agreements). Those with a long-term vision, anyway. Meanwhile, sponsors may be successful, aware that if they give up their place, a rival could sweep and reap the benefits of an industry almost standing.
Wittner acknowledges that there has been a shift in who he is spending, with a flood of technology brands (like Airbnb at the Olympics) and B2B (like Zoom’s F1 partnership) entering the space, often at the expense of travel and the hospitality industry, which were severely affected and often could not justify additional expenses.
What is the virtuality of the return?
During the years of social distancing, the experience focused on home and virtual activations, such as meetings and greetings and some strange virtual reality activity. Wittner wonders if they will last.
“It’s safe to say that brands are always looking for ways to innovate in terms of how they relate to consumers, and in the long run, it hasn’t been seen yet.”
He’s not the first salesman to tell The Drum that the Covid-19 accelerated the trends we were already seeing. Many of the technologies we talked about in 2019 matured in the last two years, for example, a huge augmented reality panther that filled the Carolina Panthers stadium, enhancing the arena experience and driving millions of views on the press and social media.
Check out our new mixed reality panther that debuted today pic.twitter.com/8DwEvam9KM
– Carolina Panthers (@Panthers) September 12, 2021
Could these lessons be reproduced more broadly and how could sponsors participate in the action?
Wittner says the first talks about sports sponsorship were about whether organizers could deliver and distribute the event, and by 2020 the answer was often “no.” On the other side of the coin, brands had to assess whether they had a business case to continue sponsoring.
There were a number of different ways in which brands and rights holders engaged, including the “lift and shift” in which a contract had just been extended for a year to offset lost profits.
Some organizers thought about their feet and developed assets “to make good”. Wittner says this often translated into hospitality benefits being simulated virtually or replaced by signage. Premier League football fans will have noticed a good signage in the covered stadiums about unused seats. He worries that this has caused a “mess” and has made existing locations at the stadium less effective: marketers like Wittner wonder how this saturation increases background noise and therefore reduces the value of the locations.
There were also cases of reduced tariffs in cases where a clear sub-shipment was measured. “We spent a good deal of time, especially over the past year, understanding the value of what was affected or underserved, and what those good assets were like and their value.”
Now the whole industry is in a better position to negotiate as it has seen well the effectiveness of the branded products on offer.
The negotiating table
You could imagine harsh words being exchanged during the disruption, with tens of millions of dollars sometimes tied to these agreements. But unpleasantness was really uncommon, Wittner says.
Sports, even with their permutation turned off, remained one of the best ways for brands to communicate with the public. “Rights holders have been willing to open up and think more creatively about what they are willing to offer partners that was not an option before.”
But the organizers still have power despite the difficulties. “The opportunity to offer brands and customers invaluable events and money-buying experiences is something that makes partnerships truly unique in relation to the broader media and marketing landscape.”
In the fallow years, hybrid or virtual experiences intervened as substitute resources; they were useful, but “maybe that’s not why they started collaborating.”
Any drop in the marketing analytics boards can weigh heavily on the missing element that makes sports special: fans. “He is really critical in an industry based on passion such as sport. It is the social test that provides the game with additional meaning for you, as a spectator. It shows you that this is an important event to watch out for. “
What has changed, then? For Wittner, “eyes are open” and most major sponsorships will be planned with additional contingencies now that we know how fragile the whole system really is.
From festivals to commercial installations to inescapable activations, we examine the avenues open to marketers to reach consumers who enjoy their new freedom at The Drum’s Experimental Deep Dive.