8. What is next for sponsorship?

The world of sports has been through all the eras of sponsorship. From newspapers, billboards and in-stadium advertising, we have seen it all. But what will the next step be? How will digitalisation impact sports sponsorship and will the Covid-19 crisis have a word to say as well?

Sponsorship in sports and the entertainment industry has been around for centuries. What started as simply paying or donating money to be associated with an athlete, artist or event, quickly turned into a billion-dollar industry. Consumers are blasted with adverts on TV, radio and even now on social media. Sponsorship has shifted between different channels in the past, as the interests of consumers changed from newspaper to radio to live TV and now to social media. The current CoronaVirus pandemic will cause another shift in sponsorship, the important question is: where to?

With fans being locked out from stadiums and live sports only slowly starting to pick back up, one thing is clear: in-stadium sponsorship may soon be a thing of the past. With less exposure to potential customers, brands will reconsider how to spend their sponsorship budget. On top of that, the impact of the CoronaVirus pandemic has been felt across many industries, resulting in a 37% decrease in sponsorship spending; from $46.1bn in 2019 to $28.9bn in 2020, according to projections by TwoCircle.

But what does that mean for the future of sponsorship in the sports industry? Well, organisations and brands may be less reluctant to spend money on sponsorship if they are unsure of the return on investment they will receive. This means that there is an increased demand for evidence of ROI, as Nielsen explains. Data tracking too will play an even more vital role.

The basic KPIs such as reach and engagement no longer fulfil the desires of sponsors. They want to know more. They want to know exactly how many people are purchasing their product and/or service, based on an advertisement they saw when watching their favourite sports team.

The cost per view, cost per click or even cost per conversion are more important than ever before. With traditional sponsorship, it is hard to measure these metrics. There is no effective software or way available to measure how many people in a stadium will see an advertisement. This is why many companies and organisations have decided to invest more in digital marketing than in traditional sponsorship. With digital marketing, one can measure the ROI.

The switch to digital marketing needs to be noted by sports clubs as these need to find out ways in which they can provide sponsors with better measurability of the ROI. The clubs need to re-imagine their sponsorship packages into digital opportunities that allow the sponsors to receive and track the data they need.

Fan engagement apps, which will be discussed in greater detail in next week’s article, provide a perfect opportunity to provide sponsors with the data they desire and enable successful sponsorship despite lack of fans in the stadiums due to Covid-19 for example. Social media also provides a platform to sponsors of clubs where data can be derived and a lot of people are reached. The other benefit of digital sponsorship, if one may call it that, is that a greater variety of media can be used than for example in stadiums and personal touches can be added. The benefits of personalised messages, advertisements etc. are immense and help strengthen the bond between clubs, sponsors and the fans of said club.

Whilst we may be unable to predict the exact future, one thing is sure: digitalisation, the coronavirus pandemic and the desire for data has already drastically changed the face of the sports sponsorship industry and will continue to do so in the near future. It is now up to clubs and sponsors to explore ways in which they can both benefit from the digital shift.