Football Sponsorship in the changing climate

Is the backdrop for sponsorship changing?

There is a lot of talk in both the marketing and sports arenas that the climate for sponsorship is changing.  Sponsorship in football isn’t new.  During the 1920s Lillywhites negotiated exclusive rights to publish FA fixture lists.  In the 30s the top players of the time such as Sir Stanley Matthews, were seen to endorse and advertise a range of products from cigarettes to mens cosmetics.  So David Beckham was beaten in his endorsements by some 70 years.

In the 70s football was in the midst of a mini economic crisis, crowds were falling and players’ wages increasing.  The Football League decided to create some (short-lived) tournaments such as the Texaco Cup and the Watney Cup (won by Bristol Rovers).  However it was the Football League Cup that secured the first major sponsorship deal in 1982, the Milk Cup was formed.  Most of the major tournaments have since secured sponsorship deals, either associate or title sponsorship.

The combined factors of the economic downturn and the rise of online for more than just purely acquisitional methods of promoting your brand, has helped to create this perception.  Examples of the changing commercial climate in football were cited, when the likes of Setanta failed to make their rights to major football pay.  The collapse of Setanta in the UK despite rights to Premier League football and Scottish Premiership and several other high profile sporting occassions could be perceived as the end of the commercial euphoria that has changed the English game.

Never has the English game been under this kinf of pressure since ITV Digital collapse put a number of English clubs at risk.  The increase of clubs entering administration in the game at the lower levels also adds fuel to the fire.  The current decline of the pound against  the Euro (combined with 50% tax rate) is also resulting in some top players such as Ronaldo moving abroad or considering the move.

All doom and gloom?

However, there is still an influx of cash from (in the main) overseas backers, meaning football at all levels is still getting investment.  This isn’t just top flight any more, the likes of Southampton and Notts County are also being pushed.  The fact that Setanta had their rights replaced so promptly by the likes of ESPN also helped ease some of the concerns.

There are also some key sponsorship deals that have been signed recently including Chelsea‘s deal with Samsung.

A new approach

Obviously it isn’t always possible to rely on investment from overseas billionaires.  For every Chelsea and Abrahmovic there are 50 not so fortunate clubs.  So how do they survive?  Well frankly, some don’t, however others have discovered more creative approaches to their sponsorship.

Some of the clubs have benefited from giving away naming rights.  For example when Arsenal moved from their long-term Highbury home to their new stadium, Emirates Airways secured a reported 10 year muli-million pound deal to create the Emirates Stadium.   A number of traditional supporters think this is a step too far, however most accept that this is the current trend and the only way to stay competitive.  So stadiums have been sponsored, shirts don logos, individual players have become commodities, the only thing left is the club itself, steeped in tradition and part of the community.  Not for too long.  Whilst accepted overseas with the likes of Eindhoven being name PSV (Philips) and Salzburg (FC Red Bull Salzburg) bringing corporate life to the centre of their existence.  Now financially troubled Stirling Albion are looking to go the same route and offer naming rights on a five year deal.  Whilst it will undoubtedly annoy the real traditional football followers it is better to keep the club going.

Whilst other lower league clubs continue to grapple with the current climate not all are going down the extreme route of auctioning their identity.  Bristol Rovers took the creative route to gain revenue by raffling its shirt sponsorship.  The club claim to have come up with the idea as they feared their sponsorship revenue would decrease if they managed to secure one at all.  The raffle is estimated to have generated double the revenue that they would have expected for sponsorship in a growing economy.  It also created a lot of buzz around the community and generated some good PR.

Whatever happens to the economy overall, the British game will continue and will without a shadow of doubt continue to generate revenue, either from wealthy investors, major sponsorship tie-ups or the inventive methods shown by smaller clubs such as Stirling Albion and Bristol Rovers.

What about the sponsors?

Never has the need for sponsors to connect to the recipients of their sponsorships been so great.  With the growing consumpion of alternative media, people are now driving the news and owning the media agenda.  With the likes of Twitter or Facebook, users can endorse or undemine a sponsorship within mintues of its announcement or perhaps more importantly within minutes of being exposed to it.

Any organisation that sponsors any property, whether it is a football club, event or a broadcast property such as Big Brother, needs to have a reason to be associated.  When I was at Nationwide we developed a whole campaign that enveloped our sponsorship properties (primarily the England Football Team).  Our “Sponsored by You” campaign put all the perks of being a corporate sponsor back in the hands of our members and the average fan.  Members of Nationwide could win VIP tickets to see England, get a player to a local school or get signed merchandise.  It also encourage winners to post videos or photos of their experience.  This kind of approach allows the organisation a place within the recipients passion, and makes them feel welcomed. 

Sponsors need to move away from thinking about sponsorships as merely a means to get their name out to a mass audience.  They really need to make them work or face a waste of marketing spend that could have been utilised to a far greater degree elsewhere.

Is Online Display Advertising Dead?

Does Online Display Advertising Work?
Online display advertising regularly commands a high degree of concentration from online advertising professionals. It attracts a high proportion of many online advertising professionals time and in certain sectors, commands a high proportion of online advertising budgets.
As I have mentioned elsewhere in this blog, online is sometimes a victim of its own success. Because you can track almost anything, almost everything has to be completely accountable with no room for doubt or vagueness. Whilst this is powerful to help prove effectiveness, it is perhaps not the most effective way to manage integrated campaigns. After all, how long have advertisers spent millions on press and/or outdoor campaigns without being able to track effectiveness with any conviction.   For clarity, I am not saying these traditional channels don’t work, these can be effective but they need to be measured.
With the recession hanging over nearly the entire global economy, advertisers are evaluating all spend. If you are concentrating on purely ROI and not reach or frequency of message, online display often loses out.  There is often the argument that display is used to drive awareness or brand consideration, however how many advertisers actually measure this?  The other argument is that a different type of audience clicks on display ads, compared to other channels such as search or price comparisons. The latter is true, however as a recent study by Starcom, Tacoda and comScore illustrates that isn’t always a good thing.
The trio identified a group of individuals that they labelled “Natural Born Clickers”. Whilst this was a study in the US, it is more than likely similar here in the UK.
The study illustrates that these “Natural Born Clickers” represent c.6% of the online population. Disproportionally they account for 50% of all display ad clicks. This statistic alone illustrates that there is a small (yet not insignificant) proportion of the audience that skew display campaign results, this generally negates CTR and CPC as metrics. These audiences skew towards Internet users between the ages of 25-44 and households with a low to medium combined income. Heavy clickers behave very differently online than the typical Internet user, and while they spend four times more time online than non-clickers, their spending does not proportionately reflect this very heavy Internet usage. Whilst this audience also spends significantly more time online than the average user they are also more likely to visit auctions, gambling, and career sites.
The study obviously highlights that CTR (Click Through Rate) and CPC are not valid measurements for display advertising.  Whilst CPM is much maligned, because the impression does not necessarily mean the ad was seen, it is potentially more valid than CPC as a buying metric. In terms of brand building through display, if you are to buy on a CPM or CPC, I would suggest that you need to measure the impact on brand, awareness, consideration or actual shortlisting of your brand (dependent on your objectives).  If your primary focus is on sales at an efficient ROI, in most cases you should aim for CPA. This isn’t black and white as on a number of  occasions CPM can be more efficient than any other metric.  However, you should test different metrics on different channels.  To minimise risk, CPA is the best option.
Above all, remember anything is possible.  Don’t just think of display as banners or skyscrapers (although don’t ignore them).  Contextual, interactive ads are possible.  Sites like Facebook allow users to select or deselect the ads they show.  A site like MyDeco make the advertiser central to its contents and champions the advertiser.  You also have to be aware of some of the more interactive (intrusive) formats.  These often have high CTR, at times these are driven up by accidental clickers, sometimes trying to click off or close.  Cookies are often stored and your results are skewed to these formats if a sale is made on that PC.  I have always steered away from Pop-unders, subsites etc for this very reason.

The best lesson you can learn from this is, think differently.  Challenge your agency or the media partners you work with.  Above all, ensure you effectively de-dupe across all channels.  CPA can be fraught with issues on both post-impression and post-click sales, if you don’t de-dupe.  You won’t be able to evaluate if incremental sales were achieved as a consequence of your campaign.
Remember, I am not saying online display is dead.  To the contrary, just be careful with your metrics.  Ensure your tracking is robust and be think imaginatively with your placements and how you utilise the online opportunities.  Don’t just be another ME TOO.

Recession Resistant?

Can online marketing escape the recession?

With any economic downturn/credit crunch/recession comes the usual questions at the board rooms of most organisations. 

How effective is our marketing? 

Could we do without our advertising?

Is our strategy a luxury?

It had been thought that in this current recession, online would escape the questions or criticisms.  However as a lot of organisations are facing tougher times, including several high profile victims, online is being asked to be even more accountable than ever.  Is that such a bad thing?

Well that depends.  If you have all the data to hand and have tried every potential opportunity for your brand, then it can only be a good thing.  You should be able to pin-point the exact levers to pull in order to produce the desired results.  Unfortunately, very few organisations have or are in that situation. 

So what is next? 

Well it makes sense if your organisation is able to invest in acquisitional activities it should do so.  And if possible increase that investment.  Channels that offer high levels of transparency, low costs or better still low risk (CPA or Hybrid deals).  Even with these options you still need to understand the customer journey and have an effective method of de-duping (I am amazed at how many organisations still don’t have that cracked).  Are these methods recession proof? I’m not entirely convinced.  Marketeers experienced in working with Google will have noticed bids and ROI change over the past 9-12 months.  Also, Google are experimenting with a number of tools or models to help maintain their revenue.  Including dropping their previous stance of no Gambling advertising.  It all depends on your sector, Finance in the main is seeing a dramatic fall-off – largely driven by sub-prime advertisers pulling back on their investment.  One thing is for sure, Google will probably be making more sales visits than they have in recent years.

What about display?

Display obviously pays a role in most campaign mixes or strategies.  However the traditional CPM model is a risky one, unless your brand can afford the luxury of brand advertising or if you aren’t responsible for a transactional website.  One point that is neglected or overlooked is the multiplier effect.  Most advertisers still look at last click wins.  This is why in a number of sectors display loses out.  Recent investigations by ComScore in the US indicates a genuine effect on search from display.  However is that enough?  The main benefit of display in my opinion is that it can not only drive awareness, it can also put more people in your sales funnel.  This is something search isn’t particularly good at.  Most people in search mode already have an intent, whether latent or active.  Would I start to invest millions of my budget in traditional display advertising?  In short – No.  However, with the market in its current state, new technologies are constantly evolving.  With the growing maturity of behavioural and re-targetting technology, an increasing number of media owners are willing to undertake activity on a CPA activity. 

 

Remember, although CPA presents far fewer risks, it sometimes can be more expensive than CPM or CPC and volumes are likely to be lower.

First Post

I am Richard Clark, a Marketing Professional with a few years experience now (without giving my age away – it is double digits).  So this is my new attempt at creating, maintaining and updating a blog.

I have made a couple of forays in the past, however have lacked the time and inclination to make it work.  Hopefully this time will be different. 

With the current economic climate marketing professionals are faced with new challenges they have never faced.  Marketing is not exempt from feeling the pain, online marketing/advertising was considered the only place to be unaffected due to the transparency and ease of tracking.  Is this exemption a given right or do we have to work for it?  The simple truth is we have to make the medium work harder and generate the results we need for ourselves, our organisations and our customers.

In addition, the internet has become mainstream.  Even new sites or channels that were previously the preserve of internet geeks or early adopters are become mass adoption and available to the masses at a much more accelerated pace than previously.  This is potentially best illustrated by the recent rise of Twitter.

However, internet marketing and/or advertising still faces the same challenges whatever the economic state or evolving media.  We must hit the KPIs set out for us and obey or set best practice.

I hope you find my blog informative and potentially enjoyable.  If there are any topics you would like me to cover, please feel free to let me know.  Alternatively if you would like to post a guest blog, just let me know.