As all marketers know, it is becoming increasingly difficult for a brand to find ways to cut through all the noise and communicate with its audience. Sports sponsorship has become one of the most effective ways for brands to reach consumers, with the unique ability to reach a truly global audience and build loyalty by tapping into people's passions. Crucially for advertisers, sport remains something that we enjoy in real time and from start to finish, ensuring (as much as possible) that their advertising messages are consumed, in real time, in full.
It's no surprise, then, that sports marketing remains very attractive to global brands, and is growing at double the pace of overall ad spend. In fact, sports sponsorship levels worldwide have surpassed $30bn for the first time.
While the mega deals and major events such as the World Cup remain the property of the world's largest brands – such as Nike, Pepsi, UPS and HP – there are three interesting trends emerging that provide attractive opportunities for potential sponsors, and at a much lower cost:
1) The new kids on the starting block
The "highest grossing" sports for sponsorship investment include Formula 1, major US leagues such as the NFL, and the Olympics – all of which attract $1bn of sponsorship per year. But sitting behind these behemoths are a series of emerging sports and events that are growing at significantly faster rates. Sky took advantage of this with cycling back in 2008, with a $10m sponsorship of the British cycling team. Since then, the growing popularity of the sport has seen sponsorship of cycling teams rise annually by 11% between 2009 and 2011 to $300m. Cricket is another example, with a 14% increase in sponsorship each year since 2006 up to more than $250m today. This has been driven predominantly by the increased commercialisation of the sport, as the Indian Premier League becomes more established, and the inception of the shorter Twenty20 format which has popularised the game. The rapid growth first seen in triathlon, and now in Ironman, is another example, providing a route to high-end consumers attracted to these kinds of events.
2) There's no "I" in team, but there's money in events
Many brands are moving away from sponsoring individual sports stars, and moving towards events, teams and organisations instead. This has resulted in event sponsorship increasing its share of the sports sponsorship market by 7% between 2006 and 2011 as brands focus on investing in high-impact environments, while reducing the risk of backing a single team or person. It's no longer just about the global events like the Olympics or the World Cup, but more events are being branded as the category increases in popularity with marketeers. The Flora London Marathon is a good example, as are many of Foster's lager's sponsorships. As a result, personality sponsorship has had a 1% fall in its share of the market over the same period.
3) The race to innovate
The days of simply having your name on the local football strip are long gone, with increasing levels of sophistication being shown both from sponsors as well as the sports themselves. There are countless ways to "activate" your sponsorship locally with fans, members and participants including promotions, hospitality, competitions and the use of social media to generate a real, long-term association between your brand and your message.
Looking ahead, it's clear we're going to continue to see an increase in spend in sports sponsorship, and an even greater variety in the sports receiving investment. While finding these opportunities will be financially worthwhile, it's vital that brands make the right decisions about where to invest to get the best cut through and deliver the greatest rewards.
An article from Mostyn Goodwin, partner at OC&C Strategy Consultants. This article is based on OC&C's report 'Sporting Chance: emerging trends in sports sponsorship' which will be published in June. OC&C used contract-level data triangulated with third-party market estimates to build up a detailed historic view of the global sports sponsorship market.