With a headline like that I should first establish my credentials around sports marketing.
I have been working in the media industry in Australia for over 25 years. In that time I have been able to work either with, or for every major Australian sporting code, highlights included seven seasons of cricket as the lead strategist on KFC, three seasons of working with the V8’s as either a sponsor or with them as a client, launching Super League in Australia, then working with the NRL for two seasons, managing NRL and AFL sponsorships for clients across multiple seasons and launching the A-League into this market including the first three seasons.
In that time, there were a few things that struck me about the industry and how it operates, from a client and agency point of view… for all of the positives these sponsorships can deliver to a client, most of the codes can be difficult to deal with, and only the patient brands who are committed to investing money and resources succeed in getting the leverage they want out of their sponsorship.
My question is, are the major sporting codes in Australia focused on the wrong number?
I’ll explain.
Considering the amount of money the codes now command from TV rights and other revenues, their own investment in marketing their sport is somewhat limited. Generally the marketing of the game relies on editorial coverage, the clubs working at a grass roots level, contra from TV or other rights deals, some tactical retail to drive weekly bums on seats and then ultimately it’s the sponsors who do a fair bit of the heavy lifting in the marketing of the code.
Which begs a question… if the sponsors are the biggest investors, then why do the codes make it hard for clients to actually leverage the IP they pay to access?
I fully understand they are protecting their IP, however if they did a poll of client sponsors, they would find the majority say it’s incredibly challenging to get your money’s worth out of sports sponsorship. In most cases these brand sponsors have significant assets that could be used to leverage exposure for the sport (on pack, in-store, retail, advertising dollars, etc), but often lie dormant because every time a brand wants to leverage the IP in any way that’s outside of the box, the sponsorship team is there wanting them to pay more money without seeing the bigger picture.
That leads me to talking about structures, in most cases the sponsorships team is a sales unit that is separate and doesn’t report into marketing. It sounds obvious, however you would be surprised how many of the codes have a separate Sponsorships team with their own KPI’s (which are mostly financial… sell the IP for the highest price) that don’t report into Marketing. The marketing teams are then left to focus on the season launch, perhaps some international or feature games and tactical campaigns around weekly bums on seats. This divide means the marketing teams are not in control of the biggest investments in their sport…. sponsor dollars.
There’s a massive opportunity for codes to change their structures and recognise the assets and value that those sponsors can bring to the table.
I remember one year the V8’s marketing director was an ex-agency chap and he asked me why KFC didn’t spend more money behind promoting and leveraging their sponsorship, I told him it was because their sponsorships team made it too hard to leverage the IP and that they wanted more money for us to access footage or drivers. Understanding the value that a client like KFC could bring, he worked with me to make it easier. The result was we convinced the KFC client to invest about $2 million behind a four week campaign featuring a tailored V8 meal in-store, POS, TVC’s, Radio, all aligned to the launch of the V8 season. The powers that be at the V8’s were blown away with the level of investment into their sport, but the key was that they made it easier for us to access their IP, driven by someone in marketing that understood the value a client could bring to their sport if they worked more closely together on achieving a win/win outcome.
At the end of the day, the governing bodies are there to promote and grow their sports, I understand that, but perhaps they are focused solely on the wrong number. What extra sponsor fees can I extract? Versus, what value could that sponsor bring to the table if I worked with them to invest more in the marketing of our sport?
By Simon Rutherford
CEO at Slingshot