Sports researchers can’t hide behind numbers that don’t make sense anymore

The true analysis of sport

Sport+Markt, Europe’s most respected sports data researcher, is 21 years old. It represents a notable milestone for a research consultancy as it repositions itself as a global player in a rapidly changing sector of sports business. Now Marcel Cordes intends to prove just how useful sports sponsorship is – or isn’t.

Good research that can be trusted is a rare commodity in the sports world, especially when it has become almost a necessity. But commoditising research data has taken the process out of the hands of the few hustlers that used to dominate the sector and given it to a plethora of professionals such as the Germany-based Sport+Markt agency. As one observer who used to pay handsomely for such research in the 1980s said: “The data used to be shit. Now it is sweet. And a lot of it is down to Marcel.” The Marcel he is talking about is Marcel Cordes, who runs Sport+Markt, which this year is celebrating its 21st anniversary. 

The agency was founded by entrepreneurs Torsten Zoega and Hartmut Zastrow in 1987 after they spotted a gap in the consultancy market. Now the agency serves sponsors, sanctioning bodies and all manner of sports properties across the world.

Under Cordes, the company is thriving, with around 100 staffers plus over 400 part-time analysts at its German headquarters and six subsidiary offices. It already spans the globe and now it intends to multiply to compete with the very biggest in sports marketing. Last year, it sold US$20 million worth of research to its clients.

In addition to classical market and media research, a growing number of staffers are now dedicated to in-house consultancy, with a focus on the commercial planning and strategy of sponsors, clubs, events, agencies and media. This development has led to a remarkable growth in turnover. However, instead of resting on its laurels, the agency is in the process of increasingly differentiating itself from its competitors, with an emphasis on its international capabilities, in a bid to end the perception in some circles that it is a purely German research company.

Cordes, now executive director of the agency, says: “The decision to reposition the brand was based on the changing needs of clients and the fact that the company was perceived differently in different markets. In Spain and Italy, for example, we are predominantly viewed as media analysts as we are the most prominent on the market due to the fact that we cooperate with nearly all the [football] clubs. In other markets, we have tended to be seen more as a classical marketing research company with a clear focus on communications research in sponsorship. In further countries, insiders regard us as market intelligence specialists, involved in the planning and strategic phases of their business. Awareness of the individual characteristics and challenges of each market puts us in a very advantageous position when we operate on a more global level.”

Cordes wants to put data and fact-based sponsorship consultancy at the core of his new business strategy, as he says: “Sport+Markt is dedicated to making each of its business areas the best in class in terms of facilities and technology. We still provide market research, market intelligence and media evaluation, which also incorporates a global commercial auditing and rights control unit. However, we then source these areas of business to provide demonstrability to our consultancy practice. The USP of our consultancy practice therefore resides in the ability of our consultants to access what is probably the biggest global database in the sports business.”

He adds: “With our continuous growth in recent years, for 2007, we planned a turnover of 14 million euros. In order to maintain this path, we have integrated our sister companies into the Sport+Markt group to maximise the integrated solutions that are demanded by both global brands and rights holders. One such example is Advernomics, which is dedicated to 360-degree auditing and consultancy in more typical above-the-line brand positioning and communications. Clients are now more interested in the overall communications and marketing package and how they work together rather than as individual activities and as such we are now able to offer solutions to handle these requirements. Our other sister company is Audit.TV, a TV advertising auditing company set up in Singapore for the Asian market.”

The integration of its companies with complementary skills sets is only half the story though, as Sport+Markt has also invested heavily in new facilities and technology, seen as key to generating international success. “With the development of new media facilities, we are now able to monitor and analyse more than 4,000 global television channels, and our digital recording system goes hand in hand with our technology developed in-house for automatic logo recognition,” Cordes explains.

Sport+Markt’s most prestigious client is the governing body of European soccer, Uefa. It works on the Uefa Champions League tournament through a longstanding partnership deal with Uefa’s Team Marketing subsidiary company. Cordes says: “We provide rights protection, campaign and competitor assessment, infringement and ambush control as well as qualitative and quantitative assessment of the tournament broadcasts. Additionally, an extensive market research programme consisting of multiple elements and numerous markets and continents, provide a sophisticated, in-depth insight into the awareness, interests, image values and opinions of the mass audience of the event across the globe.

“This is a good example of how this can work, with Team Marketing providing a media, sponsorship and marketing platform to a very limited number of brands and controlling everything. The turnover in football is a lot higher for us than it is in Formula One. We also do handball, basketball and work for big agencies like Infront and Sportfive to assess different platforms to find the valuable ones for sponsors.”

Cordes explains that his company’s major advantage over its rivals is its neutral status: “We work with a number of major football clubs across the continent but we also work with the brands that sponsor these teams. While we’re helping brands to get into football and advising them how best to leverage their communication strategies, we’re also working with the clubs to say, ‘what’s the value of this, how can we make this work for the sponsor?’. We very much work in between, helping the two parties come together. We’re an independent bystander and have no intention of deliberately increasing or decreasing the price to suit our client.”

Sport+Markt’s research echoes the commonly held view that the Formula One sponsorship sector is booming, but Cordes suggests it does not yet represent the same value for money as football for a global sponsor. His figures indicate that football sponsorship deals are growing by up to 20 per cent every year and Cordes thinks he has the reason why the figures are higher than Formula One, as he says: “A football team has a real authentic link to a region and people, a bigger reach to the country and then they play internationally in the Uefa competitions and that sends a message worldwide. Formula One is completely the other way round. There is a fanbase, but nothing like a football club like Manchester United. Of course McLaren or BMW have a fanbase for the brand or drivers, but this is not comparable with what you buy for a jersey sponsorship of Manchester United. You are not just buying exposure time of the shirt, you are buying merchandising – kids are sleeping in the United kit. There is a much more authentic link to be a club partner, to be an authentic part of the community, which is in a way is difficult in Formula One because it is hard to define the community of Formula One.”

Nevertheless Formula One remains a key avenue of business for research companies, as proved by the sheer number trying to compete in the market. Aside from Uefa, Sport+Markt’s most high-profile client is BMW. Its association with the German car manufacturer dates back to the company’s return to Formula One in 2000. In 2006 it worked on the largest market research project of its kind in order to provide the Bavarian car manufacturer with the most detailed analysis of its involvement in Formula One. It is the type of analysis that more major sponsors in a variety of sports are commissioning as sponsorship decisions become ever more scientific. As Cordes explains: “The brand is doing an international image tracking to really define what Formula One is doing for the BMW brand. They have set up marketing and media research in more than 20 countries together with us to provide an innovative system to show the return on investment and the performance of the sponsorships that companies are carrying out with BMW Sauber.”

In short the agency has been trying to quantify the carmaker’s involvement in the sport. The BMW top brass has continually complained that the company has no real measurement of its involvement in Formula One. Sport+Markt is trying to solve that problem.

As part of the research, Cordes and his team conduct more than 20,000 interviews a year, in over 20 countries, on behalf of BMW, to demonstrate the effectiveness of its Formula One programme and provide data for BMW sponsors to show the value of their deals within their own company. Cordes thinks it has become an essential element of a successful partnership between F1 teams and sponsors: “What we saw in the past was that Formula One works quite differently to other sports. You have different parties like Formula One Management, Allsport, the teams themselves and the media platforms, and there was no consistency in the end for sponsors. In comparison you have other sports, like the Uefa Champions League in football, where you have a centralised marketing agency who deals with media rights, marketing and everything. This differs greatly from Formula One.

“What we are seeing now is that professional teams such as BMW are creating an innovative platform for their sponsors to show, on one hand, a holistic media performance – audience figures, exposure time, on-screen share, CPTs etc, not only on TV but in the press, the internet, and beyond – but also showing what the effect of this media performance is? What impact does it have on awareness, image and ultimately sales?”

He adds: “It’s pretty similar to what other platforms like Fifa and Uefa have created. They have a unique system to give to the sponsors and are not leaving it to the sponsors to measure the return on investment. BMW provide this service to their partners and so have a competitive edge on the other teams by having this unique sales proposition.”

With the expansion of Formula One and indeed other sporting events, such as the 2008 Olympic Games, moving away from their European origins, the company is well positioned to capitalise on new markets such as Asia, especially alongside the new races planned. The agency has a team of consultants based in Singapore and Hong Kong and plans further facilities across the region. As Cordes puts it: “Opening new offices enables us to have access to the local markets. Nevertheless, all services remain 100 per cent Sport+Markt and are cross-linked with our international development strategy.”

Gareth Moore, the UK director based in the company’s office in the City, adds: “As an international company, we’re well positioned to support new companies emerging on the marketplace. We have so much information and expertise concerning Formula One and of course other sports, that we are their perfect team-mate. Our expertise and experience allow us to help them plan and identify the right platforms for their sponsorship engagement. Obviously, if a company is looking for a global sponsorship opportunity, Formula One may appear to be the right platform, but it also comes at a price and therefore it is key to ensure that what the platform can provide helps you deliver against your corporate and brand objectives.”

Cordes says he expects Sport+Markt to “remain on the road to success” over the next two or three years. He adds: “There is no sign of a stalling market. As well as the focus on individual markets, the key is to expand our international consultancy and strategy divisions. One of our biggest challenges is to inform potential clients what Sport+Markt has to offer. We have an extensive pool of knowledge throughout the company in our various fields of business, but to provide true international access, a global overview and always up-to-date regarding matters abroad – that’s a real challenge.”