MKTG Insights: Our Favourite Things of 2014 - Sponsorship Trends
2014 was a landmark year for sponsorship marketers. Globally, large-scale events like the Sochi Winter Olympics and the FIFA World Cup contributed to record investment and brand activity. Here at home, Canadian sponsors continue to raise the bar with greater sophistication and increasingly creative programming. 2014 taught us that while the health of our industry is strong, the landscape is becoming increasingly competitive and complex. Rights fees are rising, technology is enabling brands to push the envelope on activations and more than ever before sponsors are being cast as the moral arbiter in moments of scandal, facing pressure to leverage their financial influence into action. As the year draws to a close, MKTG will be using our weekly Friday Insights blog to provide analysis on the year that was in sponsorship. We will be writing a variety of Year in Review columns that showcase our favorite things in sponsorship from 2014. Over the next three weeks, you will see us highlight our favorite trends, activations, and deals of the year. We hope that you not only find these collections informative and educational but that you engage with us. Was there something we missed? Disagree with one of our picks. Let us know by emailing us firstname.lastname@example.org or tweeting us @SESponsorship! The first installment of our "Favorite Things " blog series will look at 2014 Trends in Sponsorship.
The dynamic marketing landscape that sponsorship professionals operate in requires a deep understanding of trends. The ability to complement an intimate knowledge of one's brand, products and industry with a macro-level understanding of the forces that are impacting sponsorship and society as a whole is a crucial skill in strategy development. In order to design strategies and programs that connect with the passion points of consumers, industry professionals must make a commitment to understand how those passion points change over time and what forces in our environment cause them to change in the first place. MKTG breaks down what's #trending in sponsorship.
Trend #1 - Sponsors As Moral Arbiters
2014 provided the sponsorship community with numerous examples of sponsors entangled in moral dilemmas related to the properties they sponsor. From the Sochi Olympics, where IOC partners were called upon by consumer advocates and media members to take a position on Russia's anti-LGBT legislation, to major beer sponsors pulling out of the New York City St. Patrick's Day parade after gay and lesbian groups were not allowed to march openly, to April's firestorm created in the wake of Los Angeles Clippers owner Donald Sterling's racist remarks, where nearly 20 sponsors either suspended or cancelled their marketing agreements with the NBA franchise, to the pressure on sponsors to respond to the NFL's handling of domestic abuse scandals this fall. Sponsors, through their financial contribution and marketing clout, have a legitimate influence over the properties they sponsor. Specifically in sport, where ticket prices have arguably reached a ceiling and have limited elasticity remaining, properties have become increasingly reliant on sponsorship dollars as a driver of revenue growth. Further, as rights fees increase, sponsors perhaps have greater claim to demanding a seat at the table in matters related to property governance and oversight. 2014 reinforced that sponsors must be prepared to either take a position related to the scandals in their sponsorship portfolio, or face scrutiny for their silence
Trend #2- Competitors as #Frenemies
Traditionally, sponsors viewed co-sponsors (sponsors with shared properties) as competition for attribution and obstacles in the way of achieving breakthrough. The sentiment by many brands was that in order to win at sponsorship, they must "beat" their co-sponsors. However, in 2014, a shifting mindset over how brands engage with their competitors is emerging. A fundamental usage of sponsorship is to tangibly communicate company and brand values to the marketplace. Brands investing in similar properties are organizations likely to have a shared set of values. Strategic partnerships amongst co-sponsors can, when successfully executed, yield greater value for corporate sponsors, and can be leveraged to drive increased community betterment (a 1 + 1 = 3 effect). 2014 initiatives like the #IceBucketChallenge and other prominent real-time marketing stunts showcased brands putting more effort behind how they not just acknowledge each other, but engage with each other. More sponsors are beginning to see the potential benefits of sponsor cross-programming: from shared resources and cost-savings to B2B integration opportunities that can emerge from collaboration. Two MKTG clients - Scotiabank and Canadian Tire - have demonstrated this in 2014. As brands that are both heavily invested in hockey and Canadian communities, they joined forces for a number of strategic initiatives; all stemming from an alignment in values due to shared properties.
Trend #3- The Rise of the Female Fan
The composition of viewing audiences in sport is changing. As we head towards 2015, it is becoming increasingly apparent that fans are no longer who we once thought they were. Today, women make up nearly 40% of the fan base in all major North American professional sports leagues. The notion that sports are a male-centric passion point in which women exist on the peripheral is a myth being dispelled - and it is forcing sponsors of sport to recalibrate how they speak to (and showcase) the female fan. In 2014, the brands that are shaping best practice around their female marketing strategy are doing so by depicting women the same way we would expect to traditionally see males cast in sports-themed creative (in the role of the athlete and not just in stereotypical roles like cheerleader, spouse, mom, etc.). By moving away from highly sexualized gender roles, it will allow marketers will be able to drive a deeper connection with female fans. An often cited example of a brand who has succeeded in the vein is Under Armour. In 2014, the apparel brand has placed significant resources against building out their endorsement portfolio, particularly through partnerships with high-profile female athletes and female influencers. UA's most recent brand campaign features Lindsey Vonn (skiing), Sloane Stephens (tennis), Misty Copeland (ballet / dance), and supermodel Gisele Bundchen, among others. The era of female empowerment in sponsorship and sports marketing is becoming increasingly apparent - and not just because women are consuming sport in greater factions. Women are now credited with making 70% of purchase decisions and are over-indexing their decision-making on purchases in some of the most prominent and lucrative sponsor categories. Even if a female is not the primary or even secondary target of a sponsorship or sponsorship activation, both her presence in viewing audiences and influence on purchase decision warrants brands adopting a more inclusive, empowering tone. According to the 2013 Canadian Sponsorship Landscape Study, only 4.8% of sponsorships have women as a primary target market, while just 17.2% of sponsorship investments target women at all. MKTG expects that number to steadily increase in reaction to market forces.
Trend #4 - Sponsors Driving Venue Innovation
Live replay and HD television have made watching from the couch more attractive than ever before and weak Wi-Fi signals in venues across North America have resulted in waves of underserved consumers who demand a second-screen experience while watching live sport. In order to close the venue vs. couch debate, properties are increasingly leaning on sponsors to become solutions providers and enhance the live fan experience. Telecom sponsors like AT&T and Verizon are being tapped to provide wireless solutions in venues where teams they sponsor are tenants. B2B technology companies like IBM and SAP are creating consumer-facing activations that demonstrate thought-leadership in the area of analytics and statistical insights. Technology sponsors who can actually enhance the fan experience (rather than just secure branding in arenas) have the opportunity to authenticate the partnership while turning fans into advocates for their products and services. The modernization of venues in 2014 and beyond will have the corporate sponsor at the heart of the initiative.
Trend #5 - Brands Are Becoming Institutions of Public Trust
The cross-pollination of a sponsorship property and a cause or CSR platform is not a new phenomenon in the world of sponsorship. However, the market forces that are driving this trend are becoming increasingly apparent as the fundamental role of the brand in our society is changing. For the first generation in history, private sector brands are trusted more than government to tackle complex social problems. Increasingly, government is associated with mistrust due to the prevalence of scandal and corruption by those who hold elected office. Conversely, brands inspire us everyday and are earning more permission from consumers to advocate for certain positions or societal interests. According to results from the 2014 Edelman Trust Barometer, there is an 11% trust gap between how many Canadians trust business and how many Canadians trust government. Further, 89% of Canadian consumers believe that business should place at least equal weight on society's interests and business interests, while only 21% believe that business is performing well. Therein lies the opportunity for corporate sponsors to invest in causes that improves the lives of consumers. The integration of cause and purpose into sponsorship programs will continue to be prevalent in 2015 and beyond. Brands will continue to leverage sponsorship properties as not just a platform to gain attribution but as a platform to amplify their cause efforts. This shift is evident in best-in-class programming across the industry from Purolator's Tackle Hunger to Bell Let's Talk.
Overall, the forces that define best-practice in sponsorship strategy development are relatively constant from year-to-year. However, as sponsorship professionals look towards 2015, they must do so with a firm commitment to understand "what's next?" They must understand what's next in their category, what's next in the hearts and minds of consumers, and what's next in the territories they align with and invest in. In the answer to the "what's next?" question, sponsors will find the area of opportunity to drive increased value in their commitment to sponsorship.