Sponsorship Essentials Part 6: Q&A with Sree Varma, Founder & CEO at iSportconnect, the largest global private network of Sports Business Executives

By: Claire Lingley 

In an industry where communication, networking, and knowledge of the latest trends and practices is essential to success, iSportconnect gives its members exactly that. Today, we chat to the man behind it all: Sree Varma, Founder and CEO of the largest global private network of Sports Business Executives.  If there's one man that may have the inside scoop into where this industry is headed, it's him. 

Q.  How did you get into this industry?

A:  I’ve had 19 years of marketing and sales experience ranging from pharmaceutical and retail to the sports industry. My first step into the sports world was when I worked as publisher at Business F1 & SportsPro and as a consultant for Sport + Markt. I launched iSportconnect in 2010 to bring together the movers and shakers in the sports industry. It’s gone from strength to strength and is now the largest global private network of sports business executives. Last year, iSportconnect Capital got off the ground. It’s a new investor network providing investment opportunities for its members within the sport and leisure sector.

Q:  What are your goals for this platform in the coming years?

A:  We’re expanding steadily. I’d like to increase the number of offerings... the portfolio of the iSportconnect ecosystem. At the moment we have an online platform, events and member services. We’re going to launch the 24/7 OTT platform and are looking to introduce more member services. Meeting the needs of the sports business professional is at the heart of our philosophy. Everything we do has that focus to deliver a good service to all of our members. We’ll also try to increase the summits and masterclasses and to expand into new territories where sport is going to play a major role. Also, we’re looking at creating a private members club... a physical venue or meeting place for the sports industry from 2020. There’s plenty in the pipeline, which is very exciting.

“Learn from others and don’t be afraid to change if something doesn’t work out.”

Q:  What do you believe are the three most valuable skills to have in this industry?

A:  Obviously networking, because sport is such a private network. If you’re not a good networker, I don’t think you can go far. Persistence pays off, too. And a thirst to learn from other industries means you can readily adapt and change.

Q:  What is the one piece of advice you’d give to someone looking to enter this business?  

A:  Learn from others and don’t be afraid to change if something doesn’t work out

Q:  You interact regularly with the leading business executives within the sports industry around the globe.  Can you speak towards three attributes that you see most commonly shared by the top executives?

A:  Again, I would emphasize networking purely because I speak to a lot of top guys in the sport industry on a daily basis – and the most successful are those who have good people skills. They have a desire to learn from others and a willingness to share their experiences. Determination and perseverance are also key if you want to go places in the sports world.

Q:  How has technology transformed your ability to connect people? With the advent of social media and the ability to connect seemingly at your fingertips, has that brought any challenges?

A:  It’s definitely helped our business. In fact, it’s been absolutely vital in a number of areas: to increase our membership and to get more members coming to our events as well as to expand and deliver our services for the sports industry. Social media platforms are huge for us as a way of staying connected with the industry leaders who are part of the iSportconnect family.

“It’s imperative for sponsors to better understand who their customers are, what they are doing, and how they are doing it. ”

Q:  What is the greatest piece of advice you have ever received?

A:  Be prepared to listen if you want to get ahead in business

Q:  Can you give us any inside scoops into where you see the sports industry headed, specifically in terms of sponsorship?  What is the next ‘big thing’ that we will start seeing within sports?

A:  Activated sponsorship through digital and fan engagement platforms. I think AI will play a huge role in that. Sponsors can put their logos on cars, football jerseys and in stadiums but then they need improved analysis. It’s imperative for sponsors to better understand who their customers are, what they are doing, how they are doing it, and other aspects of their behaviour. Sports have to deliver that and move towards that kind of sponsorship offering, including AI. It’s already starting but that’s the way forward. For example, localized content in stadiums with the support of different platforms is where all sports entities are heading. Sponsors have to step up and modernize the offering to keep pace with the times.

 

5 Quick Q’s

Morning or night person?

24/7! Probably morning

Last book you read? 

Business Adventures by John Brooks

What’s the one thing you can’t live without? 

My mobile phone for sure

Scroll through Twitter, or browse the newspaper? 

I scan Twitter for the latest breaking news and top sports business headlines

If you could switch lives with a person for one day, who would it be?

No doubt, Steve Jobs. I’m a massive fan. He’s the man of innovation... He creates wants and converts them into needs. 

Sponsorship Essentials: Q&A w/ Thomas Wills, CEO of BWA

By: Claire Lingley 

Thomas Wills is the President and CEO of Bonham/Wills & Associates.  By 30, he was heading up one of the bigger players in the sponsorship, valuation, and negotiating world.  Today, in part one in our series, "Sponsorship Essentials", he sits down with us and lends us valuable insight into the sponsorship and naming rights industry, (all done in 10 minutes or less).  

Q:  How did you get into this business?

A:  Out of university I had the unique opportunity to work with an industry professional, that being Dean Bonham, who has been a titan in the naming rights world for the last 30 years.   He brought me on to work on 2 projects, one of which being a project in Ottawa and the other with the University of Pittsburgh.  And really, it just grew organically from there.  Although my background was medical sciences, I was able to use a lot of the process information that I learnt during my studies in our valuation and analysis system.

Q:  Any advice for someone trying to enter the business?

A:  Know your market, and understand that it is a business and that it is not just sports.  A lot of people enter the sports industry with the idea they are going to be working in player personnel.  At the end of the day, that is not the case.  This is marketing, this is sales, this is a business.

Q:  BWA specializes in negotiations, any tips for when you’re entering the room?

A:  Listen.

Q:  Anything else?

A:  Keep listening!  Also, it is key to understand from the onset of any negotiation that the most successful negotiation is one in which both parties leave satisfied.  You will not have continued success in this industry if you try to have one over on the opposing party.  Finding the best, fair, and most creative solution is always the goal. 

Q:  Where do you see naming rights going in the next 5 years?

A:  In 2013, we predicted that naming rights were going to spike in 2018 through 2022.  We still believe this.  And now we have a prediction that naming rights are going to continue to move out of the traditional sports and entertainment venues, and into more cultural and municipal properties. Furthermore, collegiate naming rights are going to increase, with brands expanding their reach with full-bodied packages that interact with students, fans, alumni, etc., enhancing fan experience and further assisting corporations in growing their revenue.  The days of just throwing a corporation's name on the side of the building will soon be behind us.  

Q:  Any inside scoops on untapped markets?  You mentioned cultural and municipal properties, what’s one type of property that you think would be great for naming rights and hasn’t been discovered yet?

A:  I think transit systems are going to peak.  People use these systems every day, and there is a lot of room and potential for naming rights within that industry to grow and expand.  I think corporations are going to integrate their technology and enhance the experience of users on a day-to-day basis, which will in turn drive sales and revenue for that corporation.

Q:  What’s the best piece of advice you’ve ever received?

A:  There’s a saying out there, and I’m not sure how it goes, but I’m a true believer that success is 90% about luck.  The more I work, and the harder I work, the more luck I seem to have. 

Q:  Last question, statement tie or statement socks?

A:  Statement socks.

Corporate Sponsorship and School Districts

For years, all across North America, we have seen school district funding fluctuate with the economy.  Loss of programs, overcrowded class rooms and outdated facilities have been just a few of the issues many districts have been facing.  In the early 2000’s, we really stared to see a trend taking off.  The success found for both corporations and school districts through sponsorship has continued to propel like-minded groups to follow suit.  

In the past many have looked at these types of partnerships with skepticism, most worrying about oversaturating our schools with corporate initiatives. As these relationships have become more popular, we have seen a drastic shift in perspective and with this shift has come a rapid increase in benefits for both parties involved and their surrounding communities. 

One of the trendsetting districts to increase revenue through corporate partnerships was a school district in Indiana. “The nonprofit Penn-Harris-Madison Education Foundation has signed deals that will bring the school district, which includes 11 public high schools in Northern Indiana, more than $600,000 in added revenue in the coming years. The district sold off the naming rights to football stadiums, baseball fields and even a music room”. (Chicago Tribune)

There is an undisputable increase in visibility for corporations within this industry and in turn a massive increased local customer base. The ability to tailor involvement and specifically target demographics, corporations are creating new exposure elements implementing more activation, and in turn maximizing brand awareness of products and services. Additionally, the corporation also gets real chance to make a difference by committing much needed funding to help enhance the community in which they serve. 

Back in 2004 Judith Thomas, marketing director for the National Federation of State High School Associations stated: “Corporate involvement at the high school level is about to explode nationwide. It is an unlimited, untapped market and it is in places companies often can’t easily reach (” Pennington”).

 In 2005 When Safeway donated $50,000 to a San Francisco School District after around 200 teachers were laid off, their Public Affairs manager Teena Massingill stated: “Giving back to the community is a pleasure and a responsibility,” (McCollum”).

A lot of times, when partnering with a school district the exposure will extend throughout the high school campus parks and facilities increasing the ability to reach every resident within the district. This creates a real win-win opportunity for quick return on investment.  Beyond the benefits listed above, corporate partners truly get a chance to make a difference by benefiting not only the community but also the students through the creation of scholarships, mentoring programs and increased fundraising efforts/opportunities.  Residence of the community (consumers) will take all of these elements into account when forming opinions about corporate sponsors.

For example, Sweetwater Union High School District, in the San Diego area, has made sponsorship contracts with nearly 300 national and local businesses. This money has gone directly into their sports programs, specifically creating freshman teams and allowed for intramural teams to develop at the middle school level, (“McCollum”).

Moving forward we hope to see this industry trend continue to grow alongside the communities they reside in.

When Sponsors Go Rogue

In our last post, we examined a few instances of brands dealing with the fallout emerging from their sponsored properties falling on the wrong side of law and/or public opinion. This time, let’s take a look at the other side and see what properties do when the brand that’s sponsoring them meets the same fate. 

Northern Rock was the jersey sponsor for Newcastle United from 2003 to 2012. In 2007 the bank had to be bailed out by the UK government after the sub-prime mortgage crisis, the aftermath of which led many to question the ethics of such financial institutions spending public money on sponsorships. The outcry was heightened further when the bank spent £10 million to renew the deal in 2010. The backlash did hurt some of the PR surrounding the club, which at the time was not finding great amounts of success on the pitch. When the bank finally decided to end the deal, the club was left looking for sponsors within a very short time frame considering that jerseys for the new season had to go into manufacturing.

The case with Manchester United was not very different when they had to wear the AIG logo on shirt for an entire season, despite the bank’s reputation suffering massive blows due to the multiple bailouts it was handed by the US government.

Closer to home, NASCAR had to state that they needed more oversight into sponsor selection when the NRA was announced as the naming rights partner for the Sprint Cup event. While the political aspect of this deal is something that we as a sports marketing firm cannot comment on, the fact that the deal was announced mere days after the Sandy Hook massacre was a definite blunder for all parties.

While these incidents demonstrate that sponsor selection can sometimes lead to unhappy fans, sports properties and teams also need to make sure they are financially viable, which thus requires them to often handle situations such as these delicately. The best way to navigate such proverbial minefields is to know and build relationships with their consumers, or in this case, fans. Keeping an active dialogue with the fan community and conducting research are two ways that will help keep fans updated and will give the property enough time to craft their justification for controversial sponsorship decisions.

Surviving a Sports Scandal: Brand Lessons from Past Incidents

Ryan Lochte being dropped by four of his major sponsors makes him the latest in a string of high profile athletes and bodies that have seen premature ends to their sponsorship agreements. Today’s post analyzes some of the incidents from the recent past and looks at some strategies that brands can employ in order to mitigate the damage arising from transgressions from their endorsers.

Starting with the latest story, we at BWA are of the opinion that Speedo’s reaction to the Ryan Lochte controversy was a mastercalss in damage control. Not only did they swiftly drop the swimmer off their roster, they also donated $50,000 of his fee towards the welfare of young children in Brazil. Their quick action helped insulate the brand from any bad PR that might have reached them through the athlete’s off-field antics.

The same can be said about Nike terminating their relationship with Manny Pacquiao for his homophobic comments or for Adidas and Nestle ending their support for the IAAF in response to the doping controversy. By doing this quickly, both brands were able to ensure that consumers all over the world understood what they stood for and how their values do not condone such wrongdoings.

That being said, there have been cases in the past where brands weren’t as trigger happy in breaking up with the endorser in question and in a lot of cases that has had a lot to do with the extent of the offence that was committed. For example, Nike re-signed Michael Vick in 2011 after dropping him when the animal cruelty charges came up. Similarly, Nike has currently suspended, and not ended, its relationship with Maria Sharapova thanks to her suspension with regards to taking performance-enhancing drugs. This demonstrates that the brand does believe that while the tennis player’s actions were unlawful, it also believes in the athlete’s honesty in her statement that her taking the drug was indeed a mistake. Furthermore, brands such as Adidas and Visa put out strong statements with regards to news about the financial irregularities at FIFA. 

When one dives deeper into the reasons by which brands seem to evaluate their damage control strategies, patterns do seem to emerge. For example, Nike dropped Lance Armstrong when he confessed to taking performance-enhancing drugs, however, both Tiger Woods and Wayne Rooney got off easier (with the former experiencing his fee getting halved) when details of their infidelity emerged. This goes to show that the level of offences and whether they are committed on or off the field matters to most brands. 

Another criteria for evaluating a brand’s position in the face of controversy can be looked at by observing the brand’s values. This would explain why Kellog’s did not renew their relationship with Michael Phelps when a picture of him smoking Marijuana emerged back in 2009. However, during that period, Speedo decided to continue their association with Phelps, going to show that a relatively harmless, one time lapse isn’t considered as bad as a one time lapse that almost causes an international incident and tarnishes a country’s reputation.

Perhaps the most the most interesting example comes from Adidas who sponsor FC Barcelona striker Luis Suarez. In last year’s ‘There Will Be Haters’ campaign they referenced the biting incidents that Suarez has had over the years and said that people will always have a dislike for players of his caliber and there will always be some level of name-calling involved. In stark contrast to Adidas’ reaction, one of Suarez’s other sponsors ended his endorsement deal right after his 2014 world cup episode. 

With that, here are some strategies that brands can employ to make sure that they can emerge somewhat unscathed from the situations caused by their endorsers -  

•    Check for brand fit – This means that brands should conduct a thorough examination of the endorser in question, including any past behaviours that might cause backlash with consumers
•    Act Fast – Today’s world is one that requires instant gratification, news travels fast and consumers will look for the brand’s statement as soon as an occurrence is reported. Brands always need to have a say on the matter, even if it means telling consumers “We’re looking into it”.
•    Have an ironclad contract – A contract should be one that includes a moral dilemmas clause, a suspension clause and should not contain front loaded payments. On the other hand, they should have payouts over years and have financial liquidation measures in case the endorser defaults on any commitments.  

San Jose Spartan Stadium Now Named After Credit Union!!!!

http://www.mercurynews.com/bay-area-news/ci_30214706/san-jose-states-spartan-stadium-now-named-after

By Hannah Knowles, hknowles@bayareanewsgroup.com

SAN JOSE -- With its plan to rename Spartan Stadium after a credit union in exchange for $8 million, San Jose State joins a growing number of universities nationwide striking lucrative corporate deals to rebrand athletics facilities.

The partnership, which California State University trustees approved last month, will turn San Jose State University's football and soccer team turf into "CEFCU Stadium — Home of the Spartans," or just "CEFCU Stadium." That's short for Citizens Equity First Credit Union.

While other California schools have entered similar deals for smaller sports centers like basketball arenas, SJSU will be the first NCAA Division I school in the state to sell naming rights for its stadium to a company. San Diego State's football team plays in a stadium named for the tech company Qualcomm, but the school does not own the venue and shares it with a pro team, the San Diego Chargers.

Traditionally, universities name arenas and stadiums after big donors, notable staff or simply after the institution itself, but corporate naming -- ubiquitous among professional sports facilities -- is on the rise among colleges.

"We're constantly looking for corporate partners and sponsorship opportunities, and that's an expanding area only limited by one's imagination," said Gene Bleymaier, SJSU's director of athletics.

CEFCU will give the university $8.6 million to support the SJSU athletics department through scholarships, improvements to facilities and other programs. The payment is spread out over the 15-year agreement, starting this school year with $450,000 and rising annually to adjust for inflation.

SJSU's stadium partnership is part of the school's broader push to find new sources of revenue, both philanthropic and corporate -- not just in athletics but for the university as a whole, said Paul Lanning, vice president of university advancement.

"Universities and colleges are seeking ways to continue to augment constrained budgets," Lanning said. "Public-private partnerships like this one -- they're going to be a very important element of our strategy going forward."

The strategy extends beyond athletics. Recently, SJSU entered a five-year agreement with Cisco Systems worth $1,050,000 to name a laboratory and professorship in the College of Engineering.

Lanning said that the university's budget is in "good shape," having stabilized since a last-minute scramble for budget cuts in 2013. But state funding can't cover all of SJSU's needs, he said, especially as the CSU system grapples with growing demand.

The CEFCU deal, SJSU's largest corporate sponsorship to date, will help restore an aging stadium to top shape with improved concessions and amenities for spectators. It will also help cover new costs in the athletics department caused by a change in NCAA rules last year that meant the university needed to contribute about $1.6 million more per year toward sports scholarships. The NCAA expanded the definition of an athletic scholarship to include travel expenses and other miscellaneous items, which effectively raised the amount of money that schools are allowed to provide their players. Currently, SJSU is tapping general university resources to provide those extra dollars.

SJSU found CEFCU through a third party, a sports consulting company called Bonham/Wills & Associates that specializes in naming deals. CEFCU has been a lower-level Spartan Stadium sponsor since 2011, one of over 100 sponsors at various levels throughout the entire SJSU athletics department.

While some cash-strapped colleges have embraced brand names from AT&T to Papa Johns for their stadiums, other universities have shied away from the corporate trend and turned down millions of dollars. In 2007, shortly after University of Minnesota debuted TCF Bank Stadium in return for $35 million, officials at Notre Dame University and Michigan State University told Sports Business Daily that they would not follow suit and wanted to maintain a strictly collegiate image.

Other schools in Bay Area feel similarly. Stanford avoids corporate signage for its sports venues. Santa Clara University has none either. UC Berkeley has no plans to sell naming rights to Memorial Stadium, even as it struggles with debt after spending $321 million to upgrade the venue, which a study deemed unfit to weather earthquakes. A school spokesperson said that the Memorial Stadium name is "essential to the history and traditions of the university."

However, UC Berkeley welcomed a corporate sponsorship similar to SJSU's in 2013, a year after completing the stadium renovation. The school made a 15-year, $18 million deal to rename the playing field inside the stadium after Kabam, a video game company with three UC Berkeley alumni among its cofounders.

SJSU will debut the new name at its first home football game Sept. 10 against Portland State.

Some worry that SJSU's stadium name change will undermine the Spartan tradition.

"We take pride in where we went to school, and when you start seeing names that really do not go with the university, I think it takes away from the teams," said Judy Najero ,who graduated from SJSU in 2004 and works in San Jose. "I think you're going more toward the dollars than the education or what makes up the Spartan community, which is the alumni, the students and the staff."

Bleymaier said that the athletics department weighed these concerns but believes the sponsorship will only enhance the sports program And, as Lanning pointed out, the stadium's official title still includes "Home of the Spartans."

"We understood that change can be difficult," Bleymaier said. "But looking at the environment and the need to generate new money is not something that's new to colleges."

Value of Big Data Analytics

The first companies to experiment with Big Data are household names within the e-com world. Initially small scale projects were developed by the likes of Google, LinkedIn and E-Bay to improve analytic models on a trial basis. They used these trials to identify how and if they could make improvements based on introducing new data sources. Since the beginning, there has been backlash questioning ethics, but over the last decade this type of data collecting has become increasingly popular and gained mainstream acceptance among all sorts of companies and organisations worldwide. 

Data collection, whether it be during a sporting event at a venue, at a train station, a local Wifi spot, coffee shop, convention, airport, museum… ( the list can truly go on) there are markets that can benefit from this data. Anywhere a consumer is using a Wifi system, there is an underlying opportunity. Because of the massive growth within this industry we have followed the success of Big Data companies such as Hadoop.  This is an extension of Apache Software, it was launched only 4 years ago but is a clear front runner within the Big Data world.  Hadoop splits files into large blocks and distributes them across nodes in a cluster. To process data, Hadoop transfers package code for nodes to process in parallel based on the data that needs to be processed. Packages are then processed efficiently and the appropriate data distributed to their customers. Cost reduction is a large benefit across the board for companies that choose to align with this type of large software and data distribution. Some examples of popular companies who have partnered with the Hadoop are Wells Fargo and Citi Bank, to name a few.

Another benefit these companies have seen through Hadoop, is that decision making has become more accurate and efficient. Tom Davenport the llA Director of Research, Harvard professor and Senior Adviser to Deloitte Analytics has conducted many studies in the field. Case study below.
“Caesars, a leading gaming company that has long embraced analytics, is now embracing big data analytics for faster decisions. The company has data about its customers from its Total Rewards loyalty program, web click-streams, and real-time play in slot machines. It has traditionally used all those data sources to understand customers, but it has been difficult to integrate and act on them in real time, while the customer is still playing at a slot machine or in the resort.
Caesars has found that if a new customer to its loyalty program has a run of bad luck at the slots, it’s likely that customer will never come back. But if it can present, say, a free meal coupon to that customer while he’s still at the slot machine, he is much more likely to return to the casino later. The key, however, is to do the necessary analysis in real time and present the offer before the customer turns away in disgust with his luck and the machines at which he’s been playing.
In pursuit of this objective, Caesars has acquired Hadoop clusters and commercial analytics software. It has also added some data scientists to its analytics group.” – Tom Davenport Study
This type of data use and results can vary according to the type of organisation, business model and general needs of the company collecting the data.

Another proven benefit of Big Data collecting is that it helps organisations come up with new products and services for consumers.  Companies like Horizon communications who provide high end Wifi systems for stadiums and large venues around the world, now additionally provide customers with a new offering called Captivate. This system offers a way to utilise mobile device data at any location it is installed. To partner with a company like this at a venue you gain multiple levels of data. Even advertisement through the Wifi/Captivate system provides a huge opportunity to corporations and venues alike. 

Companies all around the world have now been utilising this Big Data opportunity to their advantage and this movement continues to build momentum.  As we adjust our focus to this wave of new information, there is no doubt that the potential will only continue to rise. This will continue to effect business on a multitude of levels and speed up the pace in which many have been trying to keep up with for years. We look forward to the continued rise and evolution of Big Data and the innovative ways we can all grow with this trend.

Technology Game Changers

We have seen many new industry trends based on rapid technological advances over the last few years. One of the trends the team at BWA has been following through 2015 has been wearable technologies and real- time alalytics.  Over the last few years, leagues have really committed to being a part of the growing trend.   

NBA has partnered with Sport VU.  SVU is a high tech camera system, most commonly hung from above the court, that collects data.  The unique twist to this cutting edge camera system is that it collects data at a rate of 25 times per second, simultaneously following the ball and every player on the court. Sport VU has been installing their system in all NBA arenas since 2013. 

A front runner within the wearable side of technologies is Catapult.  It has been a breakthrough company with major investors like Mark Cuban, and multinational brands Adidas, Reebok and Nike. This micro-sensor (essentially) is currently utilised by over 300 teams around the globe and it provides a more analytical perspective in “real-time”.  When partnered with the visual assistance such as Sport VU. This allows sports scientists access to a full breakdown of the game,  player performance, coordination and a series of algorithms quantifying player interactions generated by the raw data. 

Another company to watch for is Cityzen., who develop smart sportswear such as the sensor-embedded “D-Shirt”.  This phenomenal “Smart Sensing Technology” has been utilised during practice, and has proven to be one of the pioneering garments within this new wave of technology.  This shirt contains textile embedded sensors measuring activity, heart rate respiration posture and more, truly living up to its reputation of being the “textile of the future”.

In 2016 we have a keen eye on whether this rapid data collecting and wearable's  will translate smoothly from training purposes and move toward other subsidiaries of the industry that may benefit from this type of “real time” data.  

Looking heavily at the stats for TV/sports coverage as well as more accurate data for the betting fans, it will surely be a matter of time before the correct deals and agreements are in place allowing extended outlets to capitalise on this new trend.  The benefit from having these stats on hand every second of the game would surely foster more accurate predictions for betters and sports casters alike. Alternative media as well as sponsors may also make a bid for selective data collection that will enhance exposure and fan experience.

Usually, we watch new technologies utilised by a team or league to enhance productivity and conduct sports science studies first. Commonly after this phase, the trend will trickle down to sub categories within the industry. We are looking forward to watching the direction the sports and entertainment world will embrace this cutting edge technology readily available today.

Meeting in the Middle

In sponsorship, no great partnership comes full circle without a very important contract. How do corporations and properties come to the terms of agreement?  

Negotiation

The Negotiation phase is one of the most critical stages when forming a successful partnership.  When you think of the meaning behind Negotiation, some may tend to lean towards the idea of a “win/loose” outcome.  This idea may indeed be relevant in the real estate market, automotive sales or company buyouts/takeovers. But when it comes to creating a long term partnership within the sponsorship realm, no matter what side of the table you are sitting on, it is imperative that the “negotiation process” is a discussion utilized to build the strong foundation needed to support the relationship for years to come.  Unlike buying a car, once the deal is made, in order for both parties to benefit, everyone needs to be moving in the same direction.  Each party is trying to gain and add value symbiotically and simultaneously.

What is so appealing about creating these long standing partnerships, especially within the Sports and Entertainment world, is that the negotiation process can become very creative.  BWA, alongside our partners and clients alike, are consistently pushing the boundaries through innovative offerings strategically specified to the brand/property/deal at hand. We know what is going to benefit not only our clients but the potential partnership as a whole.

Before entering into negotiations you must identify the needs assets and benefits of each individual party.  Contracts can be very long and complicated but the negotiation process should be fairly painless if the partnership is a good fit. Both groups should enter with realistic goals for pricing, planning and lead times. It is also imperative to have a strong understanding of contra vs. cash and what benefits, rewards or downfalls each method/offering may present itself to the corporation or property.

As a sponsor, don’t see the property or opportunity as an original offer or nothing at all.  Seek out opportunities or even create your own, utilizing the information you have. Target markets always come first! What type of impressions are relevant to your target markets?  Are there any additions would you like to make to the offerings that will align with your marketing goals? Do you see any unidentified assets that will add value for your brand?

As a sponsor seeker, It is in best practice to have all assets valued before entering into sales and especially negotiations. Only offer what is relevant to your potential sponsor.  Impressions/assets on properties or during events, if not executed smartly, can cross the line of over kill exposure, the last thing you or your sponsor wants to do is to put off fans/attendees and potential consumers with a bombardment of advertising.  Essentially this type of overexposure at a venue can devaluing both the property and brand.  Get to know your potential partner, identify those specific assets that will apply to their business model/directives and start from there.

The way we see it, is that if you can provide an offering that will help your potential partner achieve a goal, and there is no expense/downfall to you, than in good faith provide every opportunity you can, and expect the same in return. This negotiation and should also leave room for updates and allow the partnership to evolve and grow through the length of the term. Moving and shaking with the rapidly changing industry and environment is essential for long term success. If you develop the right relationship with your partner through the initial negotiation phase, your groups should have no problem moving forward successfully in this ever advancing industry, creating increased brand awareness through sponsorship. 

Using Data To Create Effective Sponsorship Activation

Data from Superbowl 50 indicates that fans used over 9.5 TB of data during the game, which is a 63% increase over last year’s usage. During this time, the most popular uses were video and web browsing (each garnering a share of 20% each) followed by social media sharing which garnered an 18% share.

The above statistic is a testament to the fact that modern day sports fans aren’t always concentrating on the action that’s taking place on the field and appealing to these fans requires marketers to include digital initiatives taking place within the stadium a lot more seriously. As a naming rights holder, this becomes even more important so as to increase the effectiveness of one’s sponsorship activation.

This in itself presents a range of complications. First of all, there are more than enough brands that are vying for a sports fan’s attention within the environment of the property. Add to this services provided by the venue such as seat upgrades and in-seat meal ordering. And then of course there is the time spent by the fan on his/her social media pages. To capture the attention of the consumer, a brand needs to send the right message to the right consumer at the right time. And in today’s world, it can be made a lot easier by gathering the right data.

How would data gathering help sport marketers and naming rights holders? Firstly, it would help in seamlessly matching the audience to the right consumer segments. For example, if a basketball arena attracts both first time and luxury car buyers, the right data can help in determining who’s who and help the brand create targeted initiatives for each segment.

Secondly, it would help in pinpointing potential customers. For example, if a fan orders a drink on his/her seat through the online ordering portal, one could determine if the fan is a beer or a wine drinker and then create targeted promotions for each one.

Lastly, it would help brands create precise, in the moment promotions. Many sports bars have promotions wherein if a goal is scored; special offers on the menu are unlocked. Imagine doing that, but at a stadium-wide level. It could be a way to increase volumes at concession stands.

In order to help sponsors and rights holders gather this data, properties have to make sure that their technology foundation is up to date. One way of doing that is to partner with the right infrastructure providers. An example of this is Captivate by Horizon Communications, a platform that can help brands aggregate over 2500 data points on fans and then help create and deploy customized, localized real time campaigns across the mobile platform. Captivate’s Engage is a tool that utilizes the network, location, event timeline and fan data to trigger automated real time promotions.

The NFL has already created and deployed a set of Wi-Fi standards that need to be deployed across all participating properties and other leagues are following suit and sport marketers need to utilize this to maximize the ROI on their sponsorships.

Disclaimer: Horizon Communications is a technology partner of Bonham/Wills and Associates. For more information on the captivate platform please visit: http://www.horizon-com.com/fan-engagement

The Case for Emotional Sports Marketing

Last week, we talked about how sponsors can successfully appeal to the modern sports fan. This week, we’ll look at creative approach that has become popular amongst advertisers across the globe and how adopting it has created real results for sport marketers.

The World Advertising Research Center (WARC) recently released its warc100 list of the world’s best marketing campaigns for 2015 and within this list, they reported that close to 30% of the campaigns utilized emotion.  In fact, there has been a steady increase in the number of brands employing this approach.

A deeper investigation into the research surrounding this phenomenon gives insight into this trend. By exposing the fickle nature of world occurrences, the post-financial crisis world has fundamentally redefined what human beings want. Yes we still want to move up in life, get a bigger car and a bigger house, but we do not want it by working in a job that makes us unhappy. As human beings, we are no longer willing to sacrifice our sense of self and our values and we have become more comfortable with ourselves and are proud of our passions, which is why statements such as “geeky is the new sexy” are increasingly resonating with consumers. Thus, at the end of the day, consumers will choose brands that appeal to their value and belief systems.

This paradigm shift requires sponsors and sport marketers to rethink their approach to consumer engagement. Gone are the days that just slapping a logo onto a jersey or on the sidewalls, brands now need to go beyond to appeal to a consumer’s deeper need states. Passion for a sport or a team may not translate into passion for a brand unless there is an overlap between the consumer’s values and the brand’s values.

Some marketers have understood this better than others and have made a connection that has translated into real results and given that 2016 is an Olympic year, we’ll have a look at two campaigns that were the stars of the 2012 Olympics. A noteworthy fact is that none of these brands were directly related to the Olympics, yet the connection the reason why they were so successful was because they aligned themselves to consumer values and need states

The first is from P&G. Consumers may have known some of its brands, but they might not have known about P&G as a corporate brand. How did they do it? By connecting their brand to mothers. The campaign celebrated the fact that a mother empowering her child to participate in the Olympics is a feat that is almost as impressive as being an Olympic athlete. It did so by thanking mom.

According to Unruly Media, this particular commercial was the 7th most shared ad of all time (2013 figures). More than engagement, it also translated into $200 million in increased sales.

The second one is for a brand that was getting a fairly bad reputation amongst consumers. In fact, before the Olympics, only 1 in 5 people thought that this brand’s sponsorship of the Olympics was appropriate and the twitter brand sentiment for this brand was the lowest among all 25 sponsors of the Olympic games. Because of their sponsorship, The Children’s Food Bank nicknamed the 2012 Olympics as ‘The Obesity Games’. That brand is McDonald’s.

But that was before the games, after the debut of the ‘We All Make The Games’ campaign, showed consumers that the Olympics were an inclusive event and the extension of the campaign into the Paralympics went a long way to reduce the negative conversation about the brand. Furthermore this campaign increased brand affinity, trust and relatability. All in all this campaign went on to deliver a Return on Marketing Investment of £5.60. By utilizing emotion as a creative approach, McDonald’s was able to move from the negative to the positive.

This year will see big ticket events such as the European Football Championships and the Olympics and consumers can expect big ticket campaigns that will utilize emotion as a creative approach.

Playoffs & Exposure

What happens with our favorite teams and their sponsorship contracts when they hit play offs???

As the world of sponsorship in sports has evolved, so have the terms of negotiation when signing deals involving teams, properties and corporations. Traditional formulas once used have now been broken down and personalized creating an exciting window of creativity when drawing up contracts.  This gives the freedom to develop standards for negotiation on a case by case basis when getting down to Playoffs.

Methods of Negotiating Playoff Deals with Sponsors vary.  It is up to the negotiation team to use their own hypothesis to determine the extended value regarding the property/team when/if playoff games are held on the property or involved teams are headed for an extended season (playoff run). 

Drilling for Oil….

Rolling the Dice in 2006, Lucas Oil purchased the naming rights to Colts Stadium in Indianapolis, Illinois.  The Naming rights cost Lucas $122 million over a 20 year span.  Six years into this contract Lucas Oil “struck oil” as the Colts had made it to Super Bowl, to top it off Illinois won the bid the same year to host the event that then in turn catapulted Lucas Oil onto an invaluable yet unexpected Global Marketing platform.  Lucas estimates this single event alone has increased revenue by $10 million and Lucas Oil hasn’t looked back since.

Bonus Structures….

Considering there are no guarantees a team’s annual performance. Putting a monetary value on extended seasons have known to be structured in different ways.  In some cases an “exceptional performance revenue” will be included in the contract.  Stating a specific royalty to be exchanged from the corporation to the team/property, usually multi-level bonus structure.  Value based upon number of playoff games, final fours, championships and wins.  Due to extensive exposure during these time periods teams/properties can negotiate based on enhanced marketing exposure frequencies. 

Playoff Packages….

In some cases, additional packages are set to sell if playoffs become a reality.  This is a high risk and high reward method that is used to maximize sponsorship revenue.   This method consists of a fast paced negotiation process, utilizing sales teams attempting to maximize complicated short term contracts.  Evaluation on the team/property/event and exposure, may prove the dependant variables included in this process are well worth the fuss!

Long Term Commitment….

In this case most commonly linked to Naming Rights or Exclusivity Deals the commitment of a sponsor will remain through playoffs with a pre negotiated plan of action.  A per-game calculation is determined due to the undetermined amount of games.  In these relationships it is most common for benefits of regular season contracting stay static, additional promotions may be optional.

Tactics and Strategies….

We all know the amount of impressions significantly increases if a team makes it to playoffs.  For a hosting property and all brands involved during this time, promotional communication has potential increase revenue far above the original projection value.

The characteristics of negotiation allow both Team/Property and Corporation to determine the most symbiotic and profitable approach for their specific contract when approaching the topic of Playoffs. 

Category Exclusivity: what it means & the industry categories that are more likely to pay for it

When entering into a sponsorship partnership, category exclusivity is often an essential consideration for sponsors. Category exclusivity dictates that the sponsor is the only company within its product or service category that has a relationship with the property or event. A guarantee of exclusivity is very appealing for potential sponsors because it serves to limit their competitors’ access to the consumer group affiliated with a certain property or event.

Sponsorship typically exists on a continuum however, from high level Naming Rights partnerships where the sponsor gains exclusivity that runs throughout a property or an event, to small scale sponsorship where the sponsor competes for consumer impressions alongside other sponsors that are from the same industry category such as is often the case with sporting events featuring multiple beverage and performance products. In practice, categorical exclusivity often exists on a middle plane that might include categorical exclusivity to a certain area, but not the entirety, of a property, for example the “Lexus Lounge” in Amalie Arena in Tampa, FL.

The ultimate value that a property or event can garner from a sponsorship partnership is often directly related to the level of categorical exclusivity offered. In most cases, a lack of categorical exclusivity can significantly lower the value of a sponsorship deal. An exception to this general rule is in the case of sponsorship deals for charities or non-profit organizations where a company may relinquish its requirements for exclusivity in the interest of boosting their Corporate Social Responsibility portfolio.

So the question is, when seeking high level sponsorship such as a Naming Rights partner, what industry category is more likely to pay for the privilege of being the exclusive category partner? While a company’s willingness to pay for category exclusivity is influenced by a number of market variables, there are two primary characteristics that are thematic of industry categories that most often purchase category exclusivity: 1) The product experiences high competition in the marketplace, meaning that there is high cross elasticity of demand between their product and a competitors’ as consumers are more prone to substitution, and 2) They exhibit a strong command of their product supply chain that allows the company in the industry category to keep production costs low and profits high.

According to the 2015 IEG Property Sponsorship Category Survey, these two characteristics are present in the top three Industry categories most likely to purchase exclusivity, starting with non-alcoholic beverages in first at 55%, the automotive industry coming second at 54%, and alcoholic beverages third at 53%.  Rounding out the lower end of the scale is retail with 14% and restaurants at a low 13%, which both exhibit a lower elasticity of demand due to consumer’s diminished proclivity towards substitution, longer supply chains and, generally, lowered profit margins.

While these numbers are indicative of sponsorship trends overall, the tried and true method when searching for a sponsorship partnership that exhibits high categorical exclusivity such as naming rights is to look at the community where the property or event is based. Most often, high level sponsorship is derived from companies that have their headquarters or a large consumer base in the area and are interested in securing and growing that consumer base through an integrated community presence.  

See the full table of industry categories that are most likely to purchase exclusivity here.

-----------------------------------------

-Erin Beaudoin