Sponsorship trends updates

Verdict

While virtual (VR) and augmented reality (AR) are trending, we see a lot more value in AR, because consumers are not removed from the environment, and it can add value to the overall social experience. Pokémon Go was a great proof of concept.

Digital gizmos are still not a substitute to sound sponsorship activation strategies and, in isolation, they remain a tactic. But there are still far too many generic and traditional activations on site. Pop-up tents and beach flags anyone?

What brands are doing instead is creating their own platforms where they can control everything. Great examples of this are the Chipotle Cultivate Festival or Project Pabst, both of which are extensions of the model made popular by Red Bull.

Some artists have crowdfunded their new albums and sports teams have invited fans to become “sponsors”, but this remains a fringe activity. There may be a tipping point down the road.

The most potential comes from online gaming platform where the audience can offer support to a player in order to receive additional or premium content.

Cause sponsorship still remains a very small category compared to sports sponsorship. But we have to put this number in perspective, as associating with causes is less expensive than partnering with sports teams, where brands must pay for broadcast visibility.

We need to go deeper in our segmenting and understanding audiences to craft tailored activations.

Lots of properties are lagging behind, not even providing partners with basic demographics.

A lot of people don’t truly understand the value of sponsorship and, yes, it needs to be measured to show return. But, another possible explanation for fewer alliances is the high turnover in upper management. It requires a lot of time and commitment to build a strong alliance.

Spontaneous activations require more agility and less red tape. For live events, the use of war rooms and streamlined approval processes has become popular, where the brand and the agency sit together and post things on the go.

Some argue that stars or individual players are more valuable than teams, but using them in conjunction with each other can help prevent competitors from entering the space and can tackle different sponsorship objectives.

Properties have been working hard to add value to partners with turnkey services and, in some instances, they are replacing agencies when it comes to ideation and production.

This allows them to generate extra revenue where, in some categories, the rights fees are already maxed out.

That said, there is a steady flow of new entrants looking for extra revenues out of sponsorship, whether it be small events or non-profits.

Verdict

As outlined in our trend on technology changing the revenue landscape, properties are taking notice and are teaming up directly with social networks to offer alternatives to traditional broadcast and remain relevant to younger demographics and emerging markets.

However, as influencer marketing becomes more structured, some superstars, like PewDiePie, are becoming brands in themselves, and garnering attention at events and in traditional media. The possible downside of this is that they could end up overshadowing the partnering brand.

Finally, amounts awarded to influencers and some popular content platforms for one-offs are completely disconnected from reality and don’t reflect the final outcome. There are ways to measure value and impact. Sponsorship is one of them.

Brands are also teaming up for sponsorship initiatives, like in the retail environment where a retailer will enter a sponsorship and use pass-through rights for some of the brands that they sell.

Finally, properties are getting more involved in bringing their partners together, which can foster great collaboration on co-activation programs.

Inflation and increased budgets on the property side aren’t valid arguments to ask for more money from sponsors. In many sectors, the rights fees are already as high as the market can support.

Properties are adopting a cut-and-dice approach to increase revenues: when you’re down to dry and fresh pasta as a category, we say it’s a red flag.

Another more interesting avenue for properties to bring in extra revenue is to offer brands added-value services, like an in-house agency with account management, creative and production capabilities.