Our area of focus in the sports business world might come off pretty specific to most, and that's how we like it. We were poking around some broader trends in the sponsorship world and what we found was pretty remarkable. 2018 saw $24.2 billion worth of property investments in North America alone, with 70% of that directed at sports. The next bucket of sponsorship investment? 10% on entertainment properties such as the Academy Awards and Grammys. These figures point to the idea that an investment in sponsorship is rich with opportunities for brands to showcase their story authentically.
What was also remarkable is that the entire article went on to share how much brands were investing in sponsorship properties, but didn't mention the most critical aspect of the sponsorship equation - activation. So with that, we decided to send out a little memo to the world about why we do what we do and why you should focus on it.
So…what does sponsorship activation actually mean?
Sponsorship activation is what you do with what you own. Simple as that.
This can take many forms, but it is bringing your brand to life from things as simple as booth spaces at an event to more sophisticated programs like employee engagement initiatives, sales contests, once-in-a-lifetime experiences, and customer celebrations. The what you have portion is defined by the rights you acquired when you became the "official brand of the best event ever." When your brand sponsors something, what you bought is access to assets that exist on a particular platform, but that's it. Whoever sold you that sponsorship more than likely isn't going to continue knocking on your door making sure you use what you bought. It will be up to you to maximize value out of the platform you gained access to and to make sure the assets are continually developed over time.
Let’s have a small story to illustrate the difference between sponsorship rights and activation. Think about buying yourself a new Rolex. For now, you can equate this new Rolex to sponsorship rights. If you buy that Rolex and just let it sit on your desk, not wound and not keeping time, it doesn't do anything for you. It is nice to have in your possession, but it won't be generating future value for you. It won't even be starting new conversations like it could be doing if you were to wind it up and wear it.
Letting a new Rolex sit on your desk is a bit like buying sponsorship rights and not activating them. New rights to access certain things don't do much for you without proper programs strategically designed to take advantage of what you have bought. If you have a set budget you are looking to use most effectively, then the activation bucket is what you want to prioritize for the highest ROI possible.
Dialing in your size and scope
You don’t need to enter into a sponsorship position on the attack and on a massive scale with all of your budget. In fact, please don’t do that. We have seen far too many wonderful brands focus too much on the property and not give a look to the activation strategy. We promise if you reverse those and focus on the activation first, you will extract far more value out of any given property. We aren’t saying to avoid growing into a large position because when you do have a significant position, you will have many unique opportunities as well. We are suggesting you start small and through your activation, grow toward where you see results. You can gain ROI on big stages and small but only with the right strategy.
Your brand can start small by sponsoring up-and-coming talent through grassroots programs or personal deals with established drivers. This approach gives you access to a platform at the most efficient cost. Your support can start in grassroots programs, costing you as little as $5,000/year and go up to personal service agreements with professional drivers beginning at around $100,000/year depending on what you need. The brand building kicks in with creative content and storytelling leveraging what you have just invested in. Capturing content from your driver that resonates with your audience can be woven across different campaigns and different mediums. With a relatively low spend on the property, your focus can be to understand the right dynamics of how to extract value.
However, if money isn't what is holding you up, your brand can certainly go above and beyond an ordinary sponsorship. How about owning and operating a top-tier Formula 1 team? If you want to make a splash in the world, follow in the footsteps of titans like Red Bull and Haas Automation by controlling nearly every aspect of their experience in motorsports. The cost to compete in this mega-sport can soar over $300 million per year when you go all in.
While the investment here is significant, the opportunities available for you to activate are limitless. Your marketing department will have unique opportunities to leverage the excitement of a global sport, just like they have done here in Monaco. The world will quickly become your playground, with brand exposure that can only be rivaled by FIFA and UEFA on a yearly basis. You are among sports sponsorship royalty, nestled next to other top F1 title sponsors like DHL, Emirates, and Heineken. Your brand also has complete control over how your team is displayed, how you integrate your assets such as drivers, content and signage rights, plus a whole lot more left to explore.
Sponsorship is the best platform for marketing to make a difference in your business
Marketing your product or service through sports is a full alternative to traditional media marketing and a platform where consumers are receptive to hearing your message. When looking more specifically, the data points to how motorsports, and also emerging sports, score much higher than the average messaging engagement figures captured by SportsBusiness Journal in their annual online survey. Much of traditional media (think TV ads, print, social media ads) is “interruptive” by nature. It is unnatural, forcing you to view their pitch while you’d rather be watching/listening to something else. In sports, especially motorsports, sponsorship is enthusiastically accepted and intrinsically linked to a team/driver’s ability to compete.
The SportsBusiness Journal online survey of 18 to 64-year-olds, taken in June and July 2017, found 23 percent of fans are “receptive,” or responsive to sponsor messaging. Much higher than the traditional engagement figures.
With an integrated sponsorship program focusing on activation, you can engage the most important stakeholders of your business. You will leverage the right mix of assets to do this differently across audiences. First up is one of the most popular KPIs marketers need to show and that is how to connect sponsorship to sales growth. In this case, your employees, partners, and customers all have some level of impact on growing your business. Instead of isolating each one, challenge your team to engage all three parties through your sponsorship platform.
Who buys your stuff? Your customers. Within that subset, you have different kinds of customers. Your highly engaged group could experience the full VIP package, with behind-the-scenes access, celebrity meet and greet’s, unique opportunities to engage with your sponsorship and other treats that only your best customers deserve. This is some of the most effective marketing you can do because of the way it makes your customers feel.
For those customers who are not very engaged, or maybe have been slipping away as of late, you can leverage your sponsorship assets to reach out to them. Going to the very basic levels of inviting them to an event you are a primary supporter of can showcase your commitment to them. Hook these customers up with a pair of good tickets to the race, some lunch and maybe a little memento of their time. Then, leverage the event as a follow-up opportunity and a discussion starter for future business opportunities.
Who sells your stuff? Your employees. Right in line of importance with your customers are of course your employees. The people on the front lines. The people who bring your brand to life. This second group of stakeholders is ripe to activate your sponsorship with. You can leverage your sponsorship in ways that show you love your employees and are looking out for them. Your employees are the group of stakeholders that can most directly lead to an increase in sales. If you want to set up something super straight-forward to track this, build a sales contest. Set an ambitious goal for your team to hit and when they do, reward them with a once-in-a-lifetime experience that ties into your sports property. The satisfaction they will feel will be euphoric.
Because not every company can offer such amazing experiences, employee loyalty will no doubt increase. This approach can be attributed to lower turnover, more productive working culture, happier employees and ultimately…higher sales figures.
Activation case studies
We have partnered with some of the best brands in the world to develop and activate sponsorship programs that reach much deeper than placing a logo on a car. Because the sports business world offers such a wide range of opportunities to capitalize on, we picked a couple that might fit some upcoming projects of yours.
- Does your brand have physical locations like retail sites or events? Learn how to freshen those up with an asset appearance.
- Are there passionate people coming together to celebrate as a convention, club or any other kind of tribe? There are organic ways for your brand to upgrade that experience.
- Do you have property rights in more than one series, location or market? Connecting those opportunities can enhance your audience engagement many times over.
Get after it
In the end, we think you and your marketing team have been sold enough, so we set out to offer the service of using what you already own to generate sustainable ROI for your sports business program. The tighter things get around the business world, the more you need a dependable partner and not pitch after pitch. We also believe the best way to operate in this world is to start small, test and learn, and grow toward the results you are seeing. This approach will help you understand the difference between sponsorship rights and sponsorship activation so that you can be better equipped to identify when you are being sold and when you are building value.
Learn more about the other pillars sponsorship value for brands with this interactive ebook.