Sponsorship is the financial support for a Sport. There was a 13% growth rate in 2018 Asian Sports Sponsorship market helped by multiple events like Olympics, Asian Games, Football World cup in Russia. Major evolution in the way fans work, travel, communicate, spend and socialize, coupled with advancements in technology and connectivity are shaping the sports sponsorship market in 2021 and beyond. New sponsorship entrants, new channels and new fan necessities are key drivers that will impact the value of sponsorship. At the same time, the identification and measurements of these drivers are essential to unlocking growth for the Sports Marketing industry.
Global Sports Sponsorship Landscape
Real Sports Sponsorship revolution came with the TV coverage of Sporting events in the 1940’s and 50’s. Newspapers and Sports brands were the first sporting event sponsors, sports sponsorship now clearly appeals to brands from a diverse range of industries.
$37.9bn was spent on Sports sponsorship in 2007, further 50% rise in 2018 at $65.8bn. Companies based out of North America constituted 36.7%, Europe: 26.7 %, Asia Pacific 25.2%. Digital advancements and social media expansion have brought new possibilities for brands to increase their visibility. It is therefore particularly key to consider measures of failure as well as of success. With the evolution of technology and data analytics, these measures of success have become easier to calculate.
Sports sponsorship can give brands access to a mass audience that is both global and loyal. Engagement rate , promotion quality and reach are important parameters to determine Sponsorship impact. Additionally, with changing scenario, two other measures brands recently started considering are unique authors and content shared by influencers. Sponsoring a team or team sport can be considered less risky as there is a guarantee that a specific number of games will be played and for a specific amount of time. This is not the case when sponsoring an individual athlete or an individual sporting competition. Rio 2016 Olympics were sponsored by over 60 companies, making it challenging for these sponsors to create a distinctive image and connection with the Olympics. If a brand wants to invest in the long-term and build a relationship with a sport or athlete, which will be recognized by fans, brands tend to avoid these crowded markets and focus on new and less congested markets. The 2020 Olympic Games organization decided to mostly enlist Japanese companies to sponsor the event. As a result, US$3.1 bn were raised from the Japanese companies alone. Exclusivity and international exposure is what brands look for when getting associated with Sports events. Food and beverages, Oil & Gas services, Sporting goods, Public safety equipment and software services, Financial services, Real estate development, Dairy Products & Confectionery, Electronics, Media, Business conglomerates are the sectors that have their presence in the upcoming Olympics as Sponsors.
Sports Sponsorship Used in Nation-Branding and Strengthening Soft Power
Starting in the late 2010s, Middle Eastern businesses turned to international football for sponsorships. In July 2011, the City of Manchester Stadium was renamed as Etihad Stadium after the Emirati airline carrier sponsored it for Euro 474mn. In 2014, UAE-based brands had put $163mn on shirt sponsorships deals. By 2015, CNN reported that Middle Eastern businesses had invested more than $1.5 billion in European football stakes. Emirates Airlines is a highly regarded brand in terms of Sports Sponsorships with sponsorships in multiple sports ranging from football, Rugby, Tennis, Cricket to name a few. Saudi Aramco with its sponsorship agreement with Formula1 clearly illustrates the focus of the brands.
In China, Wanda Group is revolutionizing the sporting landscape. Wanda Sports Group objective to bring top-class sporting events to China has yielded great results over the years. Be it spectator sports, Digital solutions, organization of mass participation Sports events, it has made inroads in all. With China regularly hosting mega Sports events, the Group’s sharp focus has made tremendous progress. Nielsen report states that Growth in Sponsorship spend between 2015-2019 for China has been rising at 8.9% CAGR . Hisense sponsoring 2018 FIFA World Cup, Vivo Sponsoring FIFA, UEFA EURO 2020 and EURO 2024 are some of the prominent examples.
In the run up to the 2022 Fifa World Cup in Qatar, Doha based banking group QNB group has been named as the Official Middle East and Africa Supporter. Under this deal, it will be granted various assets and rights across the region as well as branding exposure in host cities. QNB group will also be the sole-provider of onsite ATM’s at all eight stadiums. Qatar based logistics company GWC has already been signed as the regional supporter in September 2020.
Olympics and Airbnb: Unique Collaboration
Airbnb became a worldwide partner on 18th November 2019, beginning a nine year, five games partnership designed to benefit host-cities, Olympic spectators and athletes. Agreement supports the sustainability objectives of the Olympic movement. The innovative nature of the partnership between Airbnb and Olympics saw the launch of hundreds of Olympian and Paralympian Online Experiences on Airbnb’s platform, as well as a five-day virtual festival in July that helped share the spirit of the Olympic and Paralympic Games with fans around the world, following the postponement of Tokyo 2020 due to the COVID-19 pandemic. This will provide valuable income to athlete hosts during the event as well as later. Apart from this, as a way to celebrate Tokyo 2020, local hosts in Japan will offer guests a way to travel and explore the cultures and traditions of the country from their living rooms. This will be done in the form of unique online activities through support from various partners. The IOC will also make at least USD 28 million worth of Airbnb accommodation available over the course of the partnership to athletes competing at the Olympic and Paralympic Games for competition- and training-related travel. Apart from these, IOC’s quest to address the challenges faced by refugees and Airbnb’s “Open Homes Programmes” program for refugees is a great combination to further strengthen the cause.
Asian Football Confederation (AFC) and Football Marketing Asia (FMA) Partner to take Asian Football ahead at a Global Level
Football Marketing Asia (FMA) is the exclusive commercial partner of Asian Football Confederation (AFC), governing body of Asian Football, for the rights cycles 2021-2024 and 2025-2028. FMA has helped AFC partner with media companies worldwide and helped expand the reach of the Asian Football. Within a quick span of time, it has already made good inroads and looks set for the future progress along with AFC. It has also on-boarded and expanded current partnerships such as with:
Konami Digital Entertainment is the core company of Konami Group and develops entertaining content for mobile, console and card games. Konami Sponsorship and Licensing deal renewal with AFC: Four year rights cycle includes global sponsorship and licensing rights for both AFC national team and club competitions.
Sportradar also came onboard as the Official Video and Data distribution partner for major AFC competitions for the entire eight year cycle. Continental Tires expanded partnership for 2021-2024 rights cycle for AFC National team competitions. It will include tailored digital promotional content, innovative advertising formats as well as exclusive activation opportunities to connect with Asia’s 1.8bn national team football fans.
New Trends and Better Evaluations in Sports Sponsorship
Digital content and digital platforms appear as the best solution in current situation to get all the players in the industry connected. Earlier Sponsorships were very aligned to brand presence, but now, sponsorship is something else, and brands now are much more driven by income and success.
The above figure illustrates the TV vs Social Sponsorship share of value among the Top 8 NBA teams. As per recent Nielsen report, the average Social media value for the top 8 NBA teams could overtake TV media value by the 2023/24 season. Increased engagement and further investment in content is resulting in new and enhanced partner assets, all of which can be properly measured and can generate significant return on Sponsorship investment.
China will take an increasingly prominent role in the Sponsorship landscape. Digital channels, ranging from streaming platforms to social media, are increasing their share within the sports media mix, requiring consistent metrics and methodologies to measure sponsorship value across all media types. Media market has become fragmented along with the growth in digital platforms. Also, Covid-19 is driving brands towards sales impact as the most important sponsorship measurement metric. As per recent Nielsen report, measuring sponsorship with the appropriate metrics linked to sales impact and doing so in context with other marketing activities can generate upto 20% increase in ROI. Key metrics like cross-media impressions, brand awareness and familiarity, and actual and predicted sales within sponsorship must be measured consistently across platforms and assets to understand ROI.
References
(2021, February 3). QNB signs as second Middle East and Africa Supporter for 2022 World Cup. Sport Business. Retrieved from https://www.sportbusiness.com/news/qnb-signs-as-second-middle-east-and-africa-supporter-for-2022-world-cup/?registered_metered=1
(The Changing Value of Sponsorship 2021 Global Sports Marketing Trends, 2021)
(2020, November 18). IOC and Airbnb celebrate first year of partnership with Sport Industry Award. Olympics. Retrieved from https://www.olympic.org/news/ioc-and-airbnb-celebrate-first-year-of-partnership-with-sport-industry-award
(2019, April 8). 13% Growth for the Asian Sports Sponsorship Market in 2018. Inside Sport. Retrieved from https://www.insidesport.co/13-growth-for-the-asian-sports-sponsorship-market-in-2018-report/
Commercialisation in Sport.BBC. Retrieved fromhttps://www.bbc.co.uk/bitesize/guides/zp2jxsg/revision/4#:~:text=Sponsorship%20is%20the%20financial%20support,mutual%20benefit%20of%20both%20parties.&text=Sponsorship%20can%20be%20financial%20or,receive%20benefits%20from%20the%20agreement
This information has been compiled by Amey Sankhe.