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It’s hard to believe that it’s already that time of year again.
Michael Bublé songs are playing in every shop, the supermarkets are lined with brie and cranberry sandwiches, and work colleagues can’t look each other in the eye the morning after the Christmas party.
It’s also a time for reflecting on the year gone by. So, in keeping with that festive spirit, I thought I’d turn my last newsletter of 2022 into a list of things we’ve learned about sports sponsorship and marketing over the past 12 months.
1. Crypto isn’t the silver bullet the industry hoped it would be
We’ll start here because it will be fresh in everyone’s mind.
It always felt like a question of when rather than if there would be a reckoning for cryptocurrency sponsorship in sports, with a lack of regulation making it difficult for rights holders to separate the good eggs from the bad actors.
The collapse of FTX may now change everything. The reasons for the demise of the crypto exchange, which famously had deals with the Miami Heat, Golden State Warriors, Mercedes Formula One team and a slew of athlete ambassadors, are undoubtedly nuanced, but it will do little to grow faith in a sector that many already had reservations about.
That isn’t to say this is the end of crypto sponsorship in sport. Other deals seem to be tracking perfectly fine and FTX’s demise may accelerate regulation. But you have to believe rights holders will start to think a little more carefully now that some high-profile organisations have seen millions in committed revenue go up in smoke.
2. Brands aren’t afraid to pivot as new opportunities arise
Gatorade’s decision to call time on its partnership with the National Hockey League (NHL) didn’t seem that significant on the surface, but its reasons for doing so illustrated the need for rights holders to continue to adapt now that brands have an increasing number of options for spending their marketing budgets.
For its part, Gatorade suggested at the time that it was going to shift its sports marketing focus towards college athletics, investments in women’s sports, and the metaverse – all of which you would associate with audiences that skew younger.
That means there will be increased onus on sports organisations to provide their sponsors with data that demonstrates the partnership is helping them to reach their target demographic and deliver against their objectives, otherwise brands may start to look elsewhere.
3. Deal-making is on the rise but cost-of-living crisis looms
2022 marked another step in the sports sponsorship industry’s return towards pre-pandemic levels.
A study from the ESA and Nielsen Sports in March revealed that the value of the European sponsorship market climbed 17.8 per cent last year, while IEG reported increases in partnership revenue across the National Football League (NFL), National Basketball Association (NBA) and Major League Baseball (MLB).
Part of those increases, however, will have been driven by the crypto category, and with a cost-of-living crisis looming there is likely to be some impact on how much brands are prepared to spend on sports sponsorship.
With that being said, some brands, such as Coca-Cola, have signalled that they plan to maintain their marketing spend in the face of the recession and sport will remain one of the best ways for sponsors to reach large audiences irrespective of the economic climate.
But as some marketing budgets are inevitably trimmed, rights holders may have to work even harder to secure those sponsorship dollars.
4. Web 3.0 isn’t going anywhere – but you won’t hear much about NFTs
While crypto might be experiencing a bit of a wobble, there is little to suggest that sports rights holders and brands will be abandoning Web 3.0 anytime soon.
This year has seen a slew of sports teams and leagues launch on platforms like Roblox to engage with younger fans. Meanwhile some of the world’s most recognisable brands have been investing in their own metaverse experiences, with Nike notably launching its .Swoosh platform in November after acquiring virtual sneaker creator RTFKT at the end of last year.
Undeterred by the lukewarm reception from fans, sports teams and leagues have also been collaborating with their sponsors on non-fungible token (NFT) drops, with Manchester United one of the more recent to do so in partnership with training kit sponsor Tezos.
What’s also clear is that sports organisations are learning how to better market these opportunities to fans – not only by outlining their utility but also in the language they use. It’s been noticeable that the term ‘NFT’ has been replaced with ‘digital collectible’ in many press releases I’ve received recently.
5. Sponsorship meets culture war
One thing I realised this year is that selling sponsorship can be hard. At a time when there is greater scrutiny over a brand’s values and their commitment to social and environmental issues, no deal is likely to appease everyone – not least athletes who are increasingly empowered to stand up for causes they believe in.
The deluge of outrage in response to British Cycling’s controversial deal with Shell back in October prompted me to ask whether there are any ‘safe’ sponsorship categories left for rights holders. The answer, as it turned out, was not really. Try hard enough and you’ll be able to poke holes in just about any partnership.
That creates a dilemma. Can rights holders really be expected to regularly turn down large sums of cash on moral grounds alone? Many sports organisations, and especially federations that don’t get as much for their media rights, rely on sponsorship to make their worlds go round. That means everything from investing in grassroots initiatives to paying staff and developing a product that is entertaining for people to watch.
It isn’t a fan’s job to worry about what their preferred sport might look like without a sponsor’s investment. But it’s a fine line to tread for rights holders and there are few signs of it getting any easier.
6. Purpose can pay but it’s also polarising
On a related note, ‘purpose’ was the watchword of 2022 as sports rights holders and their sponsors looked to demonstrate to consumers that they were in tune with the issues impacting society.
In some cases that pays. Julie Uhrman, one of the founders of the Angel City women’s soccer team, told me in September that the franchise has more than US$43 million in committed sponsorship revenue across 27 partnerships, which is testament to the club’s ability to articulate its mission to drive women’s sports and support the LA community.
Having said that, the split reaction to some World Cup marketing campaigns criticising Qatar’s human rights record demonstrated that purpose-driven marketing doesn’t always chime with consumers.
Purpose won’t work for everyone, so sports organisations and brands need to consider if it is authentic to them before making it a core pillar of their marketing strategies.
7. Brands must invest in activation to realise potential of women’s sports
We’re all aware of the advantages of sponsoring women’s sports properties by now, but what’s next?
It turns out that simply sitting on your investment and expecting some consumer goodwill in return isn’t going to cut it. Indeed, a study published in July by the Onside consultancy firm found that only 46 per cent of UK adults can name a brand that sponsors women’s sport.
The solution could be quite simple: activation. Despite the rising interest, women’s sports still don’t benefit from the same visibility as their male equivalents, which can limit exposure for brands.
But if sponsors are prepared to invest in activating their deals on both their own channels and further afield then that visibility is only going to improve, growing the reach of the partnership and increasing the probability of consumers associating that brand with women’s sport.
That way everybody wins.
8. There are more sponsorable assets than ever
This is good news whether you’re a brand or a rights holder.
While there have typically been a finite number of physical assets for sponsorship executives to sell, sports organisations are now sitting on a vast array of digital inventory that can meet the needs of brands who might be shifting away from more traditional advertising strategies.
To that end, it has been no surprise to see the likes of the NFL and Fifa launch their own streaming services over the past year. Those platforms will not only allow them to superserve their fans with large amounts of content, but it should also give them a strong bargaining position when they negotiate sponsorship renewals and enter conversations with potential partners.
Five stories you might have missed in 2022
- Breaking down Barcelona’s Spotify sponsorship deal
- Nike, Lego, SAP, Visa: Why these brands are sector-leaders in sporting impact
- Why Zwift is riding with women’s cycling
- From Ronaldo to Raducanu: Breaking down the world’s 50 most marketable athletes
- How the IPL’s commercial success has changed the business of cricket
Three things I’ve been reading
1. When a company like Patagonia talks about purpose and the power of brand activism, you’d be well advised to listen. My colleague Michael Long recently interviewed with Gina Lovett, the outdoor gear brand’s environmental initiatives manager, about how the company is using political levers and collective action to drive progress.
2. Fascinated by the relationship between sports and fashion? Then this week’s SportsPro Podcast is for you, as Tom Bassam was joined by Simon Trewavas of RTB House to discuss the data solutions firm’s new report on the opportunities for sports brands and the fashion industry.
3. What better way than to end a newsletter headlined by a list than with…a list? Here are AdAge’s best marketers of 2022, and you’ll never guess which sport made the cut.
