Sponsors have multiple ways to activate sponsorship, but they should avoid direct sales of the product, resorting to fan engagement and the offer of experiences, according to Richard Denton, academic director of the program ‘Sponsorship 360: International Sport Marketing and Sponsorship’ at Johan Cruyff Institute
After 25 years of sponsorship, nobody is unaware that Heineken is the beer of the UEFA Champions League; that Sony, with its PlayStation, is its technological partner; that Mastercard is its financial services multinational; Santander, its bank of reference; and Nissan, its car brand. Being an official UEFA Champions League sponsor does not exactly come cheap, but ‘playing’ in the most prestigious and coveted competition on the planet guarantees you fan engagement, the most effective and least intrusive formula to reach your consumers. It only takes imagination.
Over the years, in the communication plans of brands that are involved in sport sponsorship the how to communicate has changed much more than the what to communicate. Continuing with the example of the Champions League, all the sponsors pay between 30 and 50 million euros, depending on the category to which they belong. And that is just the beginning: “The activation budget to develop and run a campaign for several years with an international program can be two to four times the cost of the sponsorship,” says Richard Denton, expert in sport sponsorship and academic director of the ‘Sponsorship 360: International Sport Marketing and Sponsorship’ program at Johan Cruyff Institute.
However, the return on investment is what counts and, given the longevity of the sponsorships in the Champions League, it seems that for everyone the numbers add up. “UEFA Champions League sponsorship is the largest activation platform for the Heineken brand,” says Hans Erik Tuijt, global activation director at Heineken. “The data shows us that, during these years of association, Heineken brand awareness has grown by 60% among Champions League fans.”
We continue to analyze with Richard Denton, academic director of the program ‘Sponsorship 360: International Sport Marketing and Sponsorship’ at Johan Cruyff Institute, how sport sponsorship strategies have evolved over the years from the point of view of fan engagement.
How can sponsorship improve sport and fan engagement?
In many ways. Sponsors through their products or services can support events, teams or governing bodies to bring the fans closer to the sports they follow, watch live or play. For some it could be the creation of more content to increase possibilities for fans to engage with their favourite team or event. For others it could be through a fan experience on-site that increases their enjoyment pre or post-match through gamification. For some of the younger fans, esports teams have become an extension of the sponsorship package and this allows fans to increase the connection and engagement with the sports or athletes they follow.
How have the strategies in sponsorship evolved over the years to sell experiences rather than products?
Brands (sponsors) are very aware of the damage they can cause if the main focus is product sales. Sponsors have become much more adept at integrating their products and services into a fan experience without causing irritation. Fans also understand sponsorship is an integral part of the sports business and they will be targeted by brands who have paid to be associated with their sports, teams and athletes. The challenge for brands is to create shared value for all parties such that the product or service enhances the fan experience and results in higher awareness or interest from the fan when they consider purchasing a product offered by one of the sponsors.
“It is not a question of how much a sponsor can afford to invest but what they can achieve with the budget available”
How much a sponsor should budget for sponsorship activation?
There is no ‘one size fits all’ answer to this question as it depends on the situation and objectives for the sponsors. However, if we focus on some of the bigger investments in sports like football, Formula 1 or the Olympics, these are investments that will not generate an acceptable return on investment or objectives without additional activation. For some retail brands, an international program including 50 to 100 territories could require a budget of two to four times the sponsorship fee including all content, media, tickets and hospitality, promotions, product supply and the human resources to develop and execute a campaign over a number of years. Brands in other categories or sectors which are more focused on showcasing their capabilities through the sponsorship but do not need to be active on the ground in multiple territories can find more efficient ways to activate that would cost significantly less investment. To a certain degree, it is not a question of how much a sponsor can afford to invest but what they can achieve with the budget available. A brand always has a range of marketing tools that could also generate a positive effect through advertising, sales promotions, a product endorsement or influencer marketing. In combination with a global sponsorship these activities could become even more effective but there are many factors to be considered before increasing investment in sponsorship simply because a competitor brand is focusing heavily on a specific sport, team or event.
Richard Denton directs this program and will be joined by experts from the sports industry to analyze, on two weekends in Amsterdam and London, the latest in international sponsorship.Access more content about the program:
· The purpose of sponsorship
· New sponsorship scenarios
International Sport Marketing and Sponsorship
The Sponsorship 360: International Sport Marketing and Sponsorship program aims to provide participants with the knowledge to apply sponsorship as a powerful tool in the marketing mix to deliver brand, business and social goals. Define and develop sponsorship activation concepts and strategic plans for sponsors (brands), rights owners, agencies and sporting organisations to increase revenue, satisfaction and loyalty from partners, suppliers, fans and participants.Sign up!