Whist coronavirus might be rewriting some of the givens about the way society operates sponsorship remains one of most powerful and authentic ways for brands to emotionally connect with consumers.
That is not to say it is a sector that is impermeable to disruption, with the advent of social media transforming how brands use athletes and teams to deliver their messaging.
Any brand in 2020 that is not making social media a core part of its sponsorship strategy is leaving value on the table and watching competitors streak ahead.
But even the chief marketing officers utilising the power of social media are not all making the most of the digital opportunity, with some still shunning analytics considered key in other areas of business.
Here is where San Diego-based data measurement specialists Hookit step in. In order to ensure their clients are getting the most from their sports partnerships, Hookit aggregates billions of data points from social and digital platforms using its machine learning and predictive analytics ‘spontech’ platform to provide real-time insights and valuations.
Ahead of his appearance at the Insider Series digital event, SportsPro spoke to Scott Tilton, Hookit's chief executive and co-founder, to get his thoughts on sponsorship, the impacts of the coronavirus pandemic and how brands should be adapting their strategies.
With the coronavirus pandemic impacting budgets globally, is sponsorship measurement increasingly important?
What we’re seeing right now with this pandemic is that it is almost like a giant reset button for the industry. All of our brand partners are all in pretty heavy evaluation mode – if they weren’t getting pressure to track ROI before, they are now. Every brand is scrutinising their sponsorship strategy, their partnerships and what value they are getting. In most cases they are being extremely flexible and understanding but we’re definitely seeing that brands going into 2021 will be evaluating things much differently than they have in the past.
Now that brands are evaluating all their partnerships they realised that social is such a critical component of the whole thing because, with sports on lockdown and no events, the only outlet to keep the conversations and engagement moving is through social. I don’t think it’s being leveraged as effectively as it could be, but with good reason. In the last two months, the focus has been more in the mode of taking care of their employees or families to get through the pandemic and there hasn’t been as much of a focus on ‘what are our partners doing to add value for us right now?’
What trends are you seeing in the digital sponsorship sector?
Moving forward now as things come back online and we return to normal, whatever that means, I think that what will happen now is that everyone is going to lean into social heavily.
When you compare the month prior to 11th March and the month after that date, the shifts were significant.
Teams, leagues and athletes collectively are posting 32 per cent less than they were pre-lockdown, with total engagement also down 35 per cent.
When it comes to promoting partners, the number of rights holders promoting partners fell off a cliff, down 74 per cent and the total number of branded posts went down 78 per cent. That meant the total value generated for brands was down 61 per cent.
However, consumers were still engaging with those branded posts, driving up their value by 76 per cent. Athletes, as opposed to teams or leagues, are the main drivers of this value, being responsible for 74 per cent more value per athlete than before the lockdown.
There are definitely a few exceptions, a bunch of teams and athletes remained super active and are now hyperactive on driving value for their sponsors through social and really taking control of the narrative with their fans.
That fall off a cliff is something we’re continuing to monitor because brands are really leveraging social right now and are going to have significant expectations of their partners moving forward.
What measurements matter as we return to ‘normal’?
We’ve been saying this for a few years now, but engagement. Some brands do still track impressions, and that is important for them, but it’s really not the right metric to be looking at on social media because it’s all about engagement. So who is engaging? Are those followers and fans relevant to my brand? Do they match my target consumer? Engagement is for sure number one, so we’re looking at likes, comments, shares and video views – when we can get them.
The other thing we focus on with our valuation model – our valuation model is called an adjusted ad value model – is starting with actual executed rates then we down weight it based on quality of the promotion. So promotion quality is something we focus on with brands and their partners to make sure the content being shared is authentic, puts the brand in a good light and its more dedicated. So an example of a bad post is an athlete podium shot where they mention all 20 of their sponsors versus something more relevant and dedicated to one specific sponsor.
Who has been performing well during this period?
McLaren, in Formula One, have been doing a phenomenal job. For the last couple of years they have had this content engine and strategy in place, so they’ve already been [tracking those metrics]. McLaren has done an amazing job of producing top quality content, staying relevant with their partners, keeping fans involved what’s happening with the team, return to racing, what’s happening with the car etc. So there’s folks like that who are doing a really great job to maintain and grow engagement during the pandemic, when everyone else is down.
The interesting part about the engagement numbers are that the actual engagement per post number is actually up. So teams and leagues are just not as active as they were before.
Will this trend continue or all stakeholders revert to type?
Everyone is going to be rethinking their strategy, regardless if they’re a brand, team or league. Firstly esports – if people don’t think that is a big deal, they do now – what might have been a three or four year esports plan is now a six month plan.
The second piece is the importance of social. When we look at how we track and how we built out our platform we’ve essentially mapped out 50 billion connections between brands, athletes, leagues, teams and event properties. That’s a non-unique number but when you think about the power of that as a network of fans throughout the sport ecosystem that could be leveraged in a much more meaningful way.
When we talk to brands and if social media isn’t a core pillar of their sponsorship strategy they’re already being left behind. It’s bigger than television ever was and is so much more fluid or actionable. When it comes to social, all the power is in the hands of the athletes, teams and leagues, so it’s up to brands to work with them to get the value and content that they want.
Is sponsorship analytics still an underutilised tool by all stakeholders?
This isn’t a new concept to brands, the CMOs and marketing departments apply data and analytics across other functions – adtech, marktech or the way they buy display advertising. They haven’t got to it with sponsorship yet because it’s a much more complicated model and a more emotional form of marketing. You’re basically aligning with personalities and brands themselves – athletes can certainly be brands – it’s not as simple as buying a search term. We’ve been pushing spontech for a long time. It has to come as the pressure is mounting when you have US$160 billion being spent on sponsorship and activation but it’s not measured like any other form of marketing and is largely still a black box. That can’t last forever. Sponsorship is a super powerful way for brands to connect with consumers. It’s not going to go away, it has grown every year, it just has to have a more scientific approach to quantifying the return on investment.
What platforms are the most effective at the moment?
Instagram continues to be the primary platform for athletes, especially stories, right now. One of the tricky parts is that they have undergone a number of changes with their API and platform so that now athletes need to have business accounts for brands to be able to monitor them. If you want to get access to stories they need to be authenticated, so there is a lot of new restrictions that didn’t exist a while back.
TikTok has popped up but it’s tough to say whether it is making ground on Instagram. It’s new, exciting and the demographic on their skews a bit younger. Instagram is still the number one and it will be interesting to see how TikTok grows over the next six to eight months.
How is Hookit working with its clients?
We look at it as the evolution of sponsorship or how are we evolving the model. So the majority of times when we starting working with brands there are different quadrants. So, for example, gut feel or ‘execuwhim’ – where the CMO is into golf so they’re now sponsoring golf – is all the way on one side. Then you get into basic measurement where you might be using the likes of Neilsen or tracking traditional media but it’s a still flat or one-dimensional measurement. Then you get into real-time measurement or performance-based sponsorship – that’s where we’re sitting.
So our partners are past that old school mentality of evaluating our sponsorships once a year and then renegotiating for next year. They’re literally looking at dashboards and data on a daily basis now. They’re driving sponsorship decisions off of it: who’s working? Who’s not working, what can we do differently to maximise to get more value?
It’s now moving into ‘how do we structure our deals moving forward?’ In a lot cases brands won’t automatically provide an increase to an athlete any more, they’ll make it incentive based. So if you do X, Y and Z you can earn increases now. We’re helping brands get more organised that way.
We’re now doing valuation forecasts, so looking at how much could this athlete potentially be worth based on their current social. Can they become a Cristiano Ronaldo or stay flat, or fizzle out – what does that valuation look like? We’re doing long-term evaluation in advance of cutting deals now.
Whist coronavirus might be rewriting some of the givens about the way society operates sponsorship remains one of most powerful and authentic ways for brands to emotionally connect with consumers.
That is not to say it is a sector that is impermeable to disruption, with the advent of social media transforming how brands use athletes and teams to deliver their messaging.
Any brand in 2020 that is not making social media a core part of its sponsorship strategy is leaving value on the table and watching competitors streak ahead.
But even the chief marketing officers utilising the power of social media are not all making the most of the digital opportunity, with some still shunning analytics considered key in other areas of business.
Here is where San Diego-based data measurement specialists Hookit step in. In order to ensure their clients are getting the most from their sports partnerships, Hookit aggregates billions of data points from social and digital platforms using its machine learning and predictive analytics ‘spontech’ platform to provide real-time insights and valuations.
With the coronavirus pandemic impacting budgets globally, is sponsorship measurement increasingly important?
What we’re seeing right now with this pandemic is that it is almost like a giant reset button for the industry. All of our brand partners are all in pretty heavy evaluation mode – if they weren’t getting pressure to track ROI before, they are now. Every brand is scrutinising their sponsorship strategy, their partnerships and what value they are getting. In most cases they are being extremely flexible and understanding but we’re definitely seeing that brands going into 2021 will be evaluating things much differently than they have in the past.
Now that brands are evaluating all their partnerships they realised that social is such a critical component of the whole thing because, with sports on lockdown and no events, the only outlet to keep the conversations and engagement moving is through social. I don’t think it’s being leveraged as effectively as it could be, but with good reason. In the last two months, the focus has been more in the mode of taking care of their employees or families to get through the pandemic and there hasn’t been as much of a focus on ‘what are our partners doing to add value for us right now?’
What trends are you seeing in the digital sponsorship sector?
Moving forward now as things come back online and we return to normal, whatever that means, I think that what will happen now is that everyone is going to lean into social heavily.
When you compare the month prior to 11th March and the month after that date, the shifts were significant.
Teams, leagues and athletes collectively are posting 32 per cent less than they were pre-lockdown, with total engagement also down 35 per cent.
When it comes to promoting partners, the number of rights holders promoting partners fell off a cliff, down 74 per cent and the total number of branded posts went down 78 per cent. That meant the total value generated for brands was down 61 per cent.
However, consumers were still engaging with those branded posts, driving up their value by 76 per cent. Athletes, as opposed to teams or leagues, are the main drivers of this value, being responsible for 74 per cent more value per athlete than before the lockdown.
There are definitely a few exceptions, a bunch of teams and athletes remained super active and are now hyperactive on driving value for their sponsors through social and really taking control of the narrative with their fans.
That fall off a cliff is something we’re continuing to monitor because brands are really leveraging social right now and are going to have significant expectations of their partners moving forward.
What measurements matter as we return to ‘normal’?
We’ve been saying this for a few years now, but engagement. Some brands do still track impressions, and that is important for them, but it’s really not the right metric to be looking at on social media because it’s all about engagement. So who is engaging? Are those followers and fans relevant to my brand? Do they match my target consumer? Engagement is for sure number one, so we’re looking at likes, comments, shares and video views – when we can get them.
The other thing we focus on with our valuation model – our valuation model is called an adjusted ad value model – is starting with actual executed rates then we down weight it based on quality of the promotion. So promotion quality is something we focus on with brands and their partners to make sure the content being shared is authentic, puts the brand in a good light and its more dedicated. So an example of a bad post is an athlete podium shot where they mention all 20 of their sponsors versus something more relevant and dedicated to one specific sponsor.
Who has been performing well during this period?
McLaren, in Formula One, have been doing a phenomenal job. For the last couple of years they have had this content engine and strategy in place, so they’ve already been [tracking those metrics]. McLaren has done an amazing job of producing top quality content, staying relevant with their partners, keeping fans involved what’s happening with the team, return to racing, what’s happening with the car etc. So there’s folks like that who are doing a really great job to maintain and grow engagement during the pandemic, when everyone else is down.
The interesting part about the engagement numbers are that the actual engagement per post number is actually up. So teams and leagues are just not as active as they were before.
Will this trend continue or all stakeholders revert to type?
Everyone is going to be rethinking their strategy, regardless if they’re a brand, team or league. Firstly esports – if people don’t think that is a big deal, they do now – what might have been a three or four year esports plan is now a six month plan.
The second piece is the importance of social. When we look at how we track and how we built out our platform we’ve essentially mapped out 50 billion connections between brands, athletes, leagues, teams and event properties. That’s a non-unique number but when you think about the power of that as a network of fans throughout the sport ecosystem that could be leveraged in a much more meaningful way.
When we talk to brands and if social media isn’t a core pillar of their sponsorship strategy they’re already being left behind. It’s bigger than television ever was and is so much more fluid or actionable. When it comes to social, all the power is in the hands of the athletes, teams and leagues, so it’s up to brands to work with them to get the value and content that they want.
Is sponsorship analytics still an underutilised tool by all stakeholders?
This isn’t a new concept to brands, the CMOs and marketing departments apply data and analytics across other functions – adtech, marktech or the way they buy display advertising. They haven’t got to it with sponsorship yet because it’s a much more complicated model and a more emotional form of marketing. You’re basically aligning with personalities and brands themselves – athletes can certainly be brands – it’s not as simple as buying a search term. We’ve been pushing spontech for a long time. It has to come as the pressure is mounting when you have US$160 billion being spent on sponsorship and activation but it’s not measured like any other form of marketing and is largely still a black box. That can’t last forever. Sponsorship is a super powerful way for brands to connect with consumers. It’s not going to go away, it has grown every year, it just has to have a more scientific approach to quantifying the return on investment.
What platforms are the most effective at the moment?
Instagram continues to be the primary platform for athletes, especially stories, right now. One of the tricky parts is that they have undergone a number of changes with their API and platform so that now athletes need to have business accounts for brands to be able to monitor them. If you want to get access to stories they need to be authenticated, so there is a lot of new restrictions that didn’t exist a while back.
TikTok has popped up but it’s tough to say whether it is making ground on Instagram. It’s new, exciting and the demographic on their skews a bit younger. Instagram is still the number one and it will be interesting to see how TikTok grows over the next six to eight months.
How is Hookit working with its clients?
We look at it as the evolution of sponsorship or how are we evolving the model. So the majority of times when we starting working with brands there are different quadrants. So, for example, gut feel or ‘execuwhim’ – where the CMO is into golf so they’re now sponsoring golf – is all the way on one side. Then you get into basic measurement where you might be using the likes of Neilsen or tracking traditional media but it’s a still flat or one-dimensional measurement. Then you get into real-time measurement or performance-based sponsorship – that’s where we’re sitting.
So our partners are past that old school mentality of evaluating our sponsorships once a year and then renegotiating for next year. They’re literally looking at dashboards and data on a daily basis now. They’re driving sponsorship decisions off of it: who’s working? Who’s not working, what can we do differently to maximise to get more value?
It’s now moving into ‘how do we structure our deals moving forward?’ In a lot cases brands won’t automatically provide an increase to an athlete any more, they’ll make it incentive based. So if you do X, Y and Z you can earn increases now. We’re helping brands get more organised that way.
We’re now doing valuation forecasts, so looking at how much could this athlete potentially be worth based on their current social. Can they become a Cristiano Ronaldo or stay flat, or fizzle out – what does that valuation look like? We’re doing long-term evaluation in advance of cutting deals now.
