Give sponsorships a sporting chance

The cancellation of mass gatherings was one of the earliest measures implemented to combat the spread of COVID-19 – and that meant the sport and entertainment industry was one of the first and most severely hit. Corporate sponsors and rights holders were forced to very quickly evaluate their investments. Sponsorship marketing agency CHAMP managing director, Meagan Fester, gives advice to those brands or corporates considering a sponsorship opportunity in the current Covid and economic climate; and also highlights fresh ways of activating sponsorships. Champ forms part of the Duke Group’s specialist agencies.

Do you have an idea of the financial impact on sports sponsorship and rights holders in the South African market?

It is difficult to quantify the exact financial impact but suffice to say it has been massive. According to research agency, Two Circles, total global sports sponsorship rights fees  suffered a 37% year-on-year decrease from 2019 to 2020 and South Africa would have experienced similar, or worse, losses last year. Every part of the sports value chain was affected from athletes, teams and events, to stadiums, sponsors and broadcasters which lead to a heavy recession for all those involved in sport. The positive outcome, after almost 16 months since the pandemic hit South Africa, is that sponsors and rights holders have had to adjust and become more creative in terms of how they negotiate and activate partnerships.

Why do you think it’s still important for corporates and rights holders to maintain their sponsorships? Is there still any benefit?

In challenging times like the present, marketing budgets are often scrutinised, with sponsorship being viewed as a discretionary line item as opposed to an important and meaningful platform to deliver against multiple business objectives. It is important to remember that there are still massive benefits for the sponsor and rights holder relationship to be maintained, however the following needs to be considered:

  • Brands must explore the full potential of their rights packages and look to activate in new ways.
  • Rights holders need to be more proactive in identifying new assets to offer to sponsors.
  • There must be greater collaboration between brands and rights holders to build mutually beneficial partnerships.
Are there any brands that managed to adapt their strategy early enough and thus make a success out of their sponsorship activities despite the pandemic?

There are a number of brands who adapted their strategy and saw great success, despite the pandemic. The adidas #HomeTeam campaign is one that springs to mind. With its planned activations across live sports events cancelled, adidas created #HomeTeam as a way in which to engage consumers and use its network of global athletes. The campaign aimed to keep its community healthy, active and connected during the pandemic by offering free virtual experiences across social and digital channels. Over 3,000 adidas athletes, artists and influencers supported the campaign, making it the biggest-ever adidas campaign in terms of partner activation and involvement. #hometeam content was viewed nearly 400 million times and is one of the most positively received campaigns in the brand’s history.

Formula 1 also adapted quickly when its Grand Prix calendar was postponed and initiated a virtual Grand Prix Series using its drivers, celebrities and other sports stars. The first virtual event attracted an audience of over 3.2 million people across YouTube, Facebook and Twitch.

Have there been any new technologies, platforms or sponsorship tools that have emerged as a result of having to find a new way to reach audiences?

The good news out of the pandemic is that it has accelerated many trends that were underway in the industry and the magic that has been created is incredible. I get excited about the new opportunities that Covid has presented – it forced agencies, rights holders and sponsors to think differently, to accelerate their creative arm, to embrace the evolution of activation in the digital age and to create new ways to connect with fans.

How has Champ managed to adjust from business as usual to business unusual?

It has been an interesting time for Champ. Having launched just a few months ago, we have only ever operated in an unusual time, this in itself has been very unsettling but, at the same time, reassuring and exciting. There are so many opportunities out there and being proactive with an open mind, being agile and maintaining relationships, have been the fundamentals in navigating through our current reality.

How should sponsors maximise their return in the current environment?

It is such an exciting time for brands and/or corporates currently in or considering sponsorship for so many reasons. I would simply say that as a brand considering a sponsorship opportunity, you have the luxury of designing how you show up in different environments by:

  • Outlining clear and measurable objectives.
  • Not accepting rights that you cannot leverage or demonstrate a meaningful return on.
  • Collaborating with rights holders to create tailored packages that will result in you getting more value for your investment.

For brands that are looking to maximise sponsorship, it becomes critical to review and negotiate your rights package against what can be delivered during the current circumstances. Creative activations, utilising innovation through technology, has become an important plug for many brands and using that plug to connect meaningfully with your audience is the key to success.

Will things resume to a post-Covid norm or will there be any lasting changes?

The world we once knew pre-Covid has been massively impacted and, as a result, the way we do business, the way we live, the way we need to connect and engage has changed. I do believe that we will resume some form of normality post-Covid, however, there are a few things that will shape a new approach to commercial sports and entertainment partnerships required in the post pandemic age. These are shifting sponsor status from customer to creator, and building greater flexibility and responsiveness into sponsorship assets.

What are your predicted trends for the recovery of the industry in 2022?
  1. From customer to creator: Now more than ever, brands needs to determine the role sponsorship will play in their greater marketing strategy, and this point of differentiation will become critical to its success. The industry will see a rise in brands becoming content developers by utilising their various creative platforms to leverage their sponsorship assets, and therefore less reliant on rights holders to provide platforms to activate the sponsorship.
  2. No longer a one size fits all approach – rights negotiations will become more flexible: Brands are looking for more bespoke rights packages that are specific in delivering the brands objectives. These negotiations between rights holders and brands will need to be a lot more flexible, aligned and creative with rights holders offering rights that are valuable and removing or replacing those that are not.
  3. Challenge the status quo – be brave and fearless: Our changing times has forced brands to become a little more daring, creative and innovative. The pandemic has forced changes in consumer behaviour and therefore brands will need to think differently and innovatively as to how they connect with consumers in a way that resonates with shared purpose and value.
  4. Accelerating the power of sponsorship through purpose: Brands will have to shift their sponsorship strategies to meaningful interactions that genuinely support the communities they serve. This will assist in building trust amongst the target audience. It’s going to become vitally important for brands to not just provide meaningful engagement, but to make a meaningful difference in a relevant way in the communities they operate in.

In summary, sponsorship remains an effective way to connect with consumer passions and will continue to provide a doorway to their hearts and minds. In the long term, sport as a mass consumer passion point will not change and, for sponsorship to evolve and remain fit for purpose, partnerships between rights holders and brands need to focus on new ways in which their relationship can drive fan engagement and impact sales; and must commit to a shared approach to tracking sponsorship’s effectiveness.

Main image credit: Unsplash.com.

Meagan Fester is a sponsorship specialist who started her career in Sponsorship Marketing in 2010 as an Account Manager. Over the past decade she has worked for some of South Africa’s premium sports marketing agencies, followed by a stint in advertising. During her tenure she has managed blue chip brands on a local and international stage. In 2021 she launched CHAMP, a sports marketing business within the DUKE Group. As Managing Director, her passion for the sponsorship industry runs deep. One of the awards she is most proud of is the Youth Football Development programme – Engen Knockout Challenge – a programme she has been involved with for eight years and which was awarded ‘Best Development Programme’ at the 2018 SA Sports Industry Awards.