I have been thinking a lot about the challenges facing marketing directors in these times of economic downturn. As a marketing communications (marcomm) practitioner, my thoughts centre mostly around the impact of marketing spends on consumer behaviour and attitudes in the marketplace. Especially, what’s going on in the consumer channel, what mix is working in the pursuit of marketing objectives and how this is being driven from the C-Suite from the standpoint of corporate strategy.
But more importantly, how are marketing directors responding to the apparent chan ges in how consumers congregate and relate with themselves and the brands they consume? From a marcomm perspective, are traditional principles, methods and strategies working as they used to? What kinds of narratives are applicable today as compared to what we have become used to? Have people really changed in the ways they “consume” brands and media for the purpose of making choices?
We see (and feel) a lot of the effects of the economic downturn and I daresay that many may not be mindful that the possible solutions would emanate from understanding first, the root causes and then charting a pathway to success that requires a serious inquiry into the prevailing situation and taking the steps necessary to forge ahead successfully.
Most businesses face new challenges characterised by major cutbacks in spending and yet shareholders still have expectations of profits and growth as evidence of corporate performance. In the marketplace, more customers are manifesting the kind of inertia that impacts negatively on revenues. So where will survival come from, not to talk of growth?
In charting a pathway to survival, one thing is certain and staring us all in the face: traditional marketing strategies are proving to be not as effective in reaching customers, putting question marks on not just the viability of the marketing effort but also its justification. Brands have never had to work so hard for consumers’ attention. There are more messages, across more channels, more often than ever before. Yet fewer and fewer advertisements are reaching customers, as traditional media viewership shrinks by 5% each year. Despite this scenario, the opportunity to bring a brand’s narrative consistently to life through partnerships has never been stronger.
What is needed is a marketing strategy that doesn’t rely on interrupting consumers; that builds rapport, trust and authority; that creates irresistible experiences, one that overcomes consumer inertia, and one that can improve consumer sentiment towards your brand.
In today’s marketing mix, the only platform that guarantees each of these 5 outcomes is SPONSORSHIP, because it involves the coming together of brands and property owners in the pursuit of promoting and sustaining the demonstrated passions of a highly defined audience of persons called fans.
Best-practice sponsorship is great for business. It allows a trusted influencer to tell your story to fans. It provides laser targeted marketing and promotional opportunities that other channels simply can’t match. Traditional marketing and advertising rely on interrupting people to get their attention. Sponsorship, on the other hand, is all about creating positive experiences, weaving your brand into an interactive, memorable and natural exchange with fans. It’s about demonstrating shared values and connecting with a like-minded community.
Although the recipient of sponsorship may be non-profit, sponsorship should not be confused with philanthropy or Corporate Social Responsibility (CSR). Philanthropy is support of a cause without any commercial incentive. Sponsorship is undertaken for the purpose of achieving commercial objectives. And, although a sponsored property may include media extensions such as a TV broadcast, sponsorship is not advertising. Advertising is the direct promotion of a company through space or air time bought for that specific purpose. Advertising is a quantitative medium, sold and evaluated in terms of cost per thousand. Sponsorship on the other hand is a qualitative medium; it promotes a company (brand) in association with the sponsee. Some of the benefits sponsorship typically offers that advertising does not are access to a live audience, on-site sampling and opportunities for client entertainment. And, companies can tie sponsorship directly into usage or sales so they can quantify not only how many people were reached, but how many were motivated to buy.
This brings us to sports—the jewel of today’s sponsorships. In the words of Erica Terpstra, President, Netherlands Olympic Committee and Netherland Sports Confederation, “Sport has become the platform where parties are increasingly working together to reach the consumer, and where innovation and tradition meet. This results in growth for both the sport and the business world.”
The foundation for a successful integration of sport and business, all over the world, is a public that is passionate about sports and we see this in the USA, Europe, Asia, South America etc.
Global sponsorship spending continues trending upwards. In 2017 it was $62.7bn and the forecast for 2018 is a growth of 4.9% to $65.8bn with sport accounting for $47.7bn or 73% of the total. Africa shows the lowest spend but also is trending up from $2.8bn in 2017 to $2.94bn in 2018. Of course, one can immediately conclude that Africa is still way below its potential considering the huge sports passion on the continent.
While the jury is still out on why Africa (and Nigeria) is performing lower than expected in sport sponsorship, I personally believe that the reason(s) are centred round the underdevelopment of the business of sports. On the one hand are the Federations who are the statutory owners/managers of various sports. In my opinion, they have not demonstrated the knowledge that sport is a business with brands that have consumers (fans) whose needs must be met or else the brand dies. Even where technical skills have been acquired, there is an evident lack of capacity to manage and promote the sport. But the consumer (fan) remains passionate albeit channelling his/her consumption habits offshore (the Nigerian fans of Enyimba in Nigeria are passive while Nigerian fans of Manchester United are avid) where their passions are demonstrated to the benefit of the offshore brands.
On the other hand is the business community who have been very slow to grasp the opportunities inherent in sponsorship (especially sports) as a key platform for marketing their brands. You can only ignite the passions of fans towards your brands if you have an understanding (beyond “awareness”) of the strategic application of sports sponsorship in your quest for business success. In my experience (since 2007) with marketing professionals, sports sponsorship is usually a tactical activation designed to “increase awareness” and what usually drives participation is the number of opportunities to display a logo in situ and on print and electronic media without “leveraging” the platform for the achievement of strategic business goals. Indeed, the sponsorship is not seen in terms of operational business and so is absent from strategic planning that goes into the formulation and execution of corporate strategy.
Also in underdevelopment is the service industry of sponsorship marketing professionals who should be the midwives of the partnership (between the federations and business community) that will ensure the delivery of mutual benefits to both sponsor and sponsee. Some brands who have tried to establish associations with sport have come away with their fingers (and purses) burnt by so-called agencies who represent federations and rights owners in what can only be described as a “fundraising” masquerading as sponsorship. The sports sponsorship agency is a skilled professional just like its counterparts in media buying, advertising, experiential marketing, public relations etc.
How sports sponsorship can be a key market
Sports sponsorship wields transformative power that can drive exponential growth in brand awareness and affinity. However, driving awareness and affinity are not objectives in themselves; they must be part of deliberate and well thought out strategy in pursuit of business drivers. The brand owner must therefore have clear cut objectives for his sponsorship of a sport asset and he must set aside the leveraging investment that enables the brand to maximize the benefits from the sponsorship. The brand owner is therefore in the sponsorship for the long haul seeking a partnership with the sport that enables fans accept the brand as theirs because the brand is identified with their passion point.
When sports fans become your customers, your brand rises to a level of patronage and loyalty that ‘customers’ are not known for. Marketing Directors change jobs switching allegiance and consumption as their jobs change but with every job change, they bring with them their allegiance and loyalty to a team/athlete and wear this badge proudly, in their hearts and minds.
Sponsorship offers the possibility of achieving several goals at once and I will briefly discuss some that I find most appropriate.
a. Enhancing Image and Shaping Consumer Attitudes
Companies are often looking for ways to improve how they’re perceived by their target audience. Sponsoring sports events that appeal to their market are likely to shape buying attitudes and help generate a positive reaction.
b. Building Brand Awareness
You can spend a lot of naira on print advertising or on radio and television commercials, but you’ll spend a lot less and perhaps achieve a better result if you can simply put your brand in the hands of potential consumers.
c. Driving Sales
Driving sales goes together with brand awareness. Sponsorship that’s geared toward driving sales can be an extremely potent promotional tool.
d. Increasing Reach
A good sponsorship not only allows you to contact potential buyers and customers, but it can also promote that priceless marketing tool: word of mouth. Ideally, people who attend an event will continue to talk about your service or product, particularly if they had a good experience at the time.
e. Creating Positive Publicity, Heightening Visibility and Engagement
Every sponsor seeks wide exposure in both electronic and print media, and positive publicity helps create heightened visibility of products and services. These days, leveraging digital media enables your brand to engage millions of prospects.
f. Differentiating from Competitors
The mere act of sponsoring an event, especially an exclusive sponsorship, is a significant way to create competitor differentiation. Your company name can stand out head and shoulders above the rest. This tactic is particularly helpful if your company wants to combat a competitor that has a larger ad budget. Sponsorship allows smaller companies to compete with industry giants.
In these climes, I am aware that the presentation of these time-tested goals may not be enough to persuade brand owners of the viability of sports sponsorship due to the corporate governance issues that they face with some (certainly not all) of our federations. But times are changing very fast and federations are now seeking working relationships with Sports Marketing consultants in order to “shore up their game”, so to speak. Brand owners should toe the same line in order to extract the highest possible ROIs and ROOs.
I meet an increasing number of marketing directors who identify with the potential of a sports loving country like ours but are frustrated by the fact that there are barriers to entry into the local sports scene and so prefer to leverage on Nigerians’ penchant for offshore sports, athletes and teams. And they commit a huge amount of naira that should have been deployed locally that would really help in developing local sports. Despite this, I still see the greatest opportunity for brands in the local sports industry.
The greatest opportunities can be found in that category of sports referred to in Nigeria as “Other Sports”. Ironically, this is where Nigeria records a sustained trend in international participation and recognition from the efforts of individual and team sports like Boxing, Table Tennis, Cricket, Taekwondo, Athletics, Basket Ball, Volley Ball, Golf, Squash, Wrestling. I can also confirm that these “other sports” have the best organised youth development programs especially at the grassroots which is why they haven’t died due to underfunding and a lack of sustained development initiatives by those saddled with the responsibility. And they have a large following of spectators and fans who are passionate about these sports.
GoTV Boxing Night, for example, steadily records spectator counts of 6,000 screaming fans and TV viewership of 5 million persons in Nigeria alone and another 10 million in West, Central, East and Southern Africa. These are audiences just waiting to be mined. And what a future Nigeria has in boxing due to the successes of AJ (Anthony Oluwafemi Olaseni Joshua) who is already an Ambassador of Nigeria’s leading brand supporter of sports.
With these sports, brand owners will find that these federations are welcoming, cooperative and willing to collaborate. Most of the boards comprise men and women of proven integrity in the corporate world who are driven by a passion to contribute to the development of the sport.
What level of accountability and corporate governance do you imagine you will encounter when discussing your sponsorship plans with the Country CEO of one of the world’s largest financial consulting firms who happens to be Vice-President of a federation? Or an Engineer of repute and Olympian who is the Technical Director of a federation?
It’s the dawn of a new era and I can safely invite brand owners to hook up now. The investment required is low, but the benefits are huge. And there is now a high sensitivity to those issues that are paramount in the minds of brand managers – M&E! ROI! ROO! Accountability! Sustainability! Marketing Opportunities!
There are several federations, athletes and teams in Nigeria worth investing in. By themselves they are performing well, and they have a large enough following of fans who demonstrate the kind of passion brands can explore for mutual benefits. They can only do better with partnerships with brands who are ready to unleash the confirmed passion for sports for accelerated business growth.
(Olusola J. Lawson, CEO UB40 Sports Marketing; [email protected])