With the Cricket World Cup, Afcon, Netball World Cup and now the Rugby World Cup taking place, Michael Bratt explores this valuable marketing option, and the intricacies involved in it.
This year has been a bumper time for major sporting competitions; with the Cricket World Cup, the Women’s Soccer World Cup, the African Cup of Nations, and now the Rugby World Cup all taking place. Each has not only attracted sports fans in droves, but also brands looking to take advantage of marketing opportunities.
Just like sports broadcast rights, sports sponsorship is a lucrative industry in South Africa, worth an estimated R8.5 billion annually (R6 billion direct spend and R2 – 2.5 billion leverage/activation spend), according to research by BMi Sport Info.
BMi Executive Director and CEO, David Sidenberg, comments, “Worldwide, sports sponsorship is still ticking over, it’s still doing very nicely, it’s growing faster than advertising, and it’s almost the perfect fit with new media, social digital media due to the platforms. Sport thrives on Twitter, on Facebook, on video. We love our heroes and our followers.”
A digital explosion
Indeed, this is one of the major trends in the sports sponsorship arena. Whereas before, traditional activations of sponsorships – such as logos on kits, stadium branding, and in-person activations – dominated, sponsorship activities are now moving into the digital realm at a rapid rate. Vodacom, which used to be the official sponsor of the Springboks and is the current sponsor of the Super Rugby tournament in South Africa (having been so for the past 23 years), has moved away from traditional sports sponsorship. “What’s evolved with where we are is very much around digital content, digital creation and social media platforms,” says the company’s head of sponsorship, Michelle Van Eyden. “We used to do a lot more of the traditional elements, but now it’s about second screen users, people who are constantly on the social media feed. We do not do anything on the ground unless there is a digital and a content angle behind it.”
Vodacom began sponsoring the Springboks back in 1994 as a brand and product awareness exercise. Over time it morphed into integrating the brand into a passion of fans, rugby and the Springboks. Mass brand exposure, with longevity, and audience targeting, which leads to real commercial return on investment, are the benefits.
Passionate, engaged fans
For sports sponsors, this is the main appeal; the ability to connect with consumers in a space where they are passionate and engaged. Telecoms giant, MTN, is the current sponsor of the Springboks. The company’s Consumer Business Unit Executive, Mapula Bodibe, says MTN are “the enablers and connectors of our consumers to their passion points of which the Springboks and rugby are one. The Springbok sponsorship enables us to bring the sport and the team closer to the people, which is very key to us as a telecoms company that always tries to bridge the gap between consumers and the things they love – Springboks! This is proof of our brand position of #WeGotU”.
Bodibe says sponsorship opportunities are “highly visible, offering exposure to millions of consumers”. As a proudly South African brand, it is fitting to back the “pride of the nation”.
Tracking the effectiveness of sports sponsorship
Sidenberg reveals four metrics used to measure the success of a sports sponsorship. They are media exposure (how many times the brand’s logo or messaging was shown and putting the equivalent media value to that), reach (how many people got to see the brand in terms of audience numbers, which can also be segmented in terms of various demographics), awareness of a sponsorship (the number of people who know the brand behind a particular team, league, competition etc.), and qualitative impacts on brand sentiment/brand positioning as a result of that sponsorship.
Local vs global
“The misnomer about World Cup sponsorship is that while it is a great time in terms of national pride to be behind the national team, and it doesn’t necessarily cost a sponsor extra for the competition, in many respects you actually get less rights as the national team sponsor during a World Cup because they are clean stadiums and kits away from home, with no branding, so they actually have to spend additional money to leverage the sponsorship,” explains Sidenberg.
He believes it’s often more efficient to activate locally during an international World Cup, as the costs are far less than being a part of and visible at the event itself. Kelvin Watt, Managing Director for Africa, Middle East and Asia Pacific at Nielsen Sports, estimates that in South Africa there will be between R150-R200 million spent in marketing support of various Rugby World Cup, Springbok and other rugby related sponsorships and investments.
Sports sponsorship and brand building
Sponsors that are activating, leveraging and have done their research see impressive returns on investment. But they also need to be aware of their goals, aims and strategies, ensuring that their sponsorship aligns with their brand’s objectives, and asking themselves ‘why are we here’ and ‘what value do we add to fans’. This is another big trend in sports marketing. Brands scrutinise their sports sponsorship to see how it is driving return on investment in terms of brand growth and business objectives. Van Eyden elaborates: “It’s not just about having the logo on the shirts. We now have business objectives around our sponsorships, which in the past wasn’t necessarily as serious, but now they are measurable, commercial deliverables.”
Watt says the general trend today is towards larger, richer partnerships. “Smart rights holders are moving from selling a fixed menu of rights, towards more flexible, dynamic partnerships that can change during the deal. Smart brands are targeting sponsorships that align with their vision and strategy. You can see brands today are a lot more demanding. They want much clearer links to what they’re trying to achieve as businesses. Essentially, you’ve got to have much clearer objectives and much clearer KPIs and you’ve got to genuinely be delivering against your business growth targets,” he says.
Potential ROI is judged on a case by case basis. Watt elaborates: “It is varied from 2:1 to 5:1 return on investment. Certain properties such as the Absa Premiership are very media heavy and really over index in terms of ROI.”
Looming draft Sports Broadcasting Services Amendment regulations from the Independent Communications Authority of South Africa (ICASA) could drastically alter not only the ownership of sports broadcast rights, but also the sports sponsorship landscape in South Africa. Sidenberg comments that “as long as there remains uncertainty in this realm, some sponsors will be cautious to renew their sponsorships or commit long-term budget without clawback clauses, subscription broadcasters will be more tentative to take on sports rights without exclusivity, and the market is in a hell of a flux”.
It will be interesting to see how these proposed government regulations could impact sports broadcasting, sports sponsorship and the survival of sports federations in the country. Unfortunately, only time will tell.