Brands Need to Dig Deeper When Deciding Between Investing in a Mass Media of Sports Sponsorship vs a Niche Sports Opportunity. The Key Question is: Can You Afford to Activate Effectively?”
Many brands these days profess that they are in the sponsorship game. Many properties say that they offer sponsorship opportunities. But, what are brands buying and exactly what are properties selling? Impressions or purpose or both? Ultimately, how are brands activating against their partnership and are properties paving the way for a successful sponsorship story?
I get concerned because, It seems these days, the line between a media buy and a sponsorship investment is getting a little fuzzy. Quite often, media and sponsorship investments come out of the same line-item in a brand’s marketing budget. A traditional media budget is typically scrutinized by reach and frequency – how many ads did we buy, how often and finally and how many (insert demo here) saw those ads. And, even if there is a separate sponsorship investment budget, it is still scrutinized the old fashioned way – reach x frequency = impressions.
There is no question that a good sponsorship will generate a meaningful amount of impressions against a desired demographic. However, sponsorship is more than just impressions. We have a tendency to look towards the obvious when it comes to sponsorship: major league properties. The mass media of sponsorships reach a lot of people but can also be a sea of floating logos that, unless a brand is spending like crazy, it’s hard to get noticed. With that large reach, mass media sport sponsorships but can be expensive and may not provide meaningful engagement with customers. In addition, mass media sport sponsorships can be impersonal and may not be effective for companies looking to build a closer relationship with their customers.
The results of the research conducted by the the Sponsorship Landscape Study shows that Canadian brands are investing only .59 cents on the dollar in activating their sponsorships when our US counterparts are investing more than three times that ratio. Why is this? There are many theories, here’s one. In the mass media of sports in Canada, we pay our athletes in USD – the property’s biggest expense line, but most of our revenues (outside of central league revenues) are in CAD. We compete for players primarily against US-based teams who are getting their sponsorship money from US companies who also have ten times the sponsorship budget than most brands north of the border. US brands can not only afford the rights fee but can also afford to activate accordingly. As Canadian teams compete for players with US based teams, they need to generate additional dollars. Ultimately, Canadian brands are paying US-sized rights fees out of a Canadian marketing budget which further erodes a Canadian brand’s ability to activate effectively. Outside of a few categories, not many brands in Canada can emerge from the clutter and make their sponsorship sing.
So the questions now for some brands are, do I just give up on sponsorship and do a media buy or do I dig a little deeper and look into a niche property?
One of the key advantages of niche-based sponsorships is their cost-effectiveness. Sponsoring a local running race, for example, is typically much less expensive than sponsoring a professional sports team. This means that companies can reach a targeted group of consumers at a much lower cost than they would with mass media sports sponsorships.
Another advantage of niche-based sponsorships is that they allow companies to build a closer relationship with their customers. By sponsoring a local running race, for example, a company can create a sense of community among runners and can use this community to build awareness and interest in its products and services. This is in contrast to mass media sports sponsorships, which can sometimes feel impersonal and may not provide the same level of engagement with customers.
Niche -based properties also have much less clutter and can become ownable or synonymous with a brand with minimal investment. Channeling some of the rights fees savings into a more sophisticated approach at communicating with the desired demographics can pay significant dividends. Looking at these properties through a new lens offers marketers an opportunity to create a sponsorship campaign that is fresh, relevant, esteem building and very different from their competitors.
Other advantages to niche-based properties include entertaining your customer in the back country vs another box night for your sales team, being brand present where your customers are playing and actually incorporating your brand into their passionate choice of lifestyle: running, cycling, skiing, etc. Enveloping your brand with a wrap of purpose that is inherent within the property: health & fitness, sustainability, DE&I, etc. Creating a relationship with your customer through their journey into something (like Running a Half-Marathon) around which they are truly passionate - which then gives your brand permission to continue the dialogue long after the medal is around their neck; your brand was there with them at the beginning, middle and the euphoric end of the journey and trust has been built.
So, all this to say that Brands and Properties have to dig a little deeper when they are considering a sponsorship investment and offering. Both niche-based sponsorships and mass media sport sponsorships have their advantages and challenges, and the choice between the two depends on the specific needs and goals of a company. Companies looking to reach a specific, highly engaged audience may find that niche-based sponsorships are the best option, while those looking to reach a broad audience may find that mass media sports sponsorships are the better choice. It ultimately comes down to, can you activate effectively against your rights fee investment to achieve the desired goals set out at the outset of your sponsorship dig!
Peter Cosentino
DEC Sports & Entertainment
February 3, 2023
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