Attracting sponsorship becomes more and more difficult for English Premier League football clubs. At least for the financial value they demand. It’s the broadcast marketing dilemma – in the digital, engagement marketing world, talking about media values and boasting about the amount of TV coverage comes across as outdated. EPL clubs need to talk about the experience and the engagement factor instead of media values. Otherwise, it’ll be just a matter of time before even EPL clubs will need to embrace lead generation deals that are purely based on pay per performance.
Anyway, let’s move away from the usual, traditional sponsorship agreement, whereby the “brand owner” (sponsor) pays the “rights owner” (club) towards a more radical approach with a smaller financial upside in the short term, but a significant positive impact on future commercial opportuntities through improved and attractive positioning for the football clubs itself.
And that’s how we do it: Instead of selling advertising space on the front of the shirt, the club pays a brand to be the partner and as such also on the shirts. Not just any brand, but elite brands such as Apple or Google, or up and coming movers and shakers such as Foursquare. In other words, the club really cares about their choice of partner, not who brings in most cash.
Here are the reasons why the club wants to pay for these relationships:
1 – Halo effect
Any club using this approach would benefit from the transfer of the brand values and brand exposures. Suddenly, instead of being commercially behind the curve, the club creates the perception of being at the forefront of developments.
2 – Consistent brand experience
Obviously perception is not enough and will be discovered soon enough; for it to become reality the club needs to integrate the partner fully and will benefit commercially. For example:
With Foursquare as partner, the club could use it as their dynamics CRM system, simultaneously reducing costs and increasing engagement. Man City and Foursquare have given a first example of other initiatives, but the club could reach out to other Fousquare users and become a hothouse for Foursquare in the UK. For more info on integrating social media, please read “How football clubs can use mobile and social media to their advantage”
3 – Tapping into a world wide audience
There are more staunch Apple supporters in the world than there are Spurs supporters. The club would tap into a massive audience and would come to global prominence even outside of the football family. Engaging with brand supporters and employees will be very rewarding and will create a network of ambassadors for the club around the world.
This is also true with Foursquare – it’s not yet as well known as Apple or Google – but it’s being embraced by the early adopters and will be as powerful as Twitter in the near future. At the same time it’s slightly edgier. I’d have the mayor logo on my shirt.
4 – Commercial benefits
Let’s add it up: bigger international fan base and higher international standing, greater awareness and attractiveness within England, greater reputation for innovation and intelligent marketing, greater engagement levels whilst bringing the infrastructure and cost levels to that of a modern organisation. All in all, I think that sounds pretty good, don’t you?
What brands to choose?
The club obviously needs to choose with consideration against the vision and envisioned future positioning. I’d personally look first at consumer focused tech brands as it’ll create more traction quicker in the external environment and can be integrated easier to a higher impact internally; brands such as Foursquare, Google, Apple or from categories such as social gaming, micro-blogging, IPTV. The edgier the brand and the steeper the ascendency, the greater the possibilties.
This approach requires a longer term commercial vision, a change in culture and most likely a different skill set – but it’s worth a shot, isn’t it? With the current model being unsustainable, EPL clubs would benefit from focusing on the unique experience only they can deliver, combining it with an engagement marketing approach and – as Brett Yormack, CEO of NJ Nets said – experiment more aggressively.
You got me really excited with that headline. Doh!
And what did you think about the post?
An intersting post with alot of perceieved benefits, however i personally could’nt see this becoming a recognised commercial model. The problem is that for smaller club “cash is king” and the attraction to a major brand. Would a major brand who could deliver the stated benefit really want to align with a championship club? On the reverse scale the like of Manchester United, Liverpool, Arsenal, Chelsea, Barceloana would agree that it is their brand which offers the above benefits and not that of the Sponsor. e.g. Manchester United and AIG…
Chris, thanks for your comment.
I agree with you on the following:
This structure doesnt work for a club that needs the sponsorship income for cash flow purposes or short term finance.
I agree with you that it would be much harder for Championship clubs but not impossible and certainly better than no sponsor.
I also agree with you that the big clubs will perceive their brands as more powerful, whereby that can be disputed as Google and Apple are much bigger than even ManU and might help to break into the US.
However, I believe their are some clubs just outside the top clubs you’ve mentioned that could benefit from deals like this as it increases their brand strenght and brand value over the midterm, as well as any club with strong financial backing. Just imagine Man City, but also smaller clubs like Wolfsburg, Hoffenheim, etc…
Completely agree i think there is a limited number of clubs, which would benefit. Having said that i also believe that the culture of paid for sponsorship is the biggest hurdle in the sports industry as a whole.
Great post Felix. Very thought provoking. Also great comments by Chris Hayler. I agree with both of you.
As a salesperson of sports sponsorships for the AVP Beach Volleyball Tour, Ironman Triathlon series, LPGA, and more, this article is particularly interesting to me. I believe in the synergy that is created by aligning brands (teams, leagues, players and companies) with parallel goals and visions through sponsorships. If executed properly, when a brand sponsors a league, integrates into the leagues marketing platform, and creates multiple engagements and experiences, it leverages the the passion and loyalty of the league’s fans, and in turn, the league fans grow an affinity for the sponsor brand.
I can’t think of a reason why this couldn’t work Vice-Versa!
Thanks for your comment, David. If you know of any club or any sport that uses a different approach, please share it with me.
Twitter: KarlLusbec
says
Great post Felix!
I agree with Chris’ comment and do believe the current sponsorship model is not likely to change. However a smarter approach could be considered in order to have both parties benefiting FULLY from the sponsorship ie Man Utd vs Google.
Karl, thanks for your comment. Yes, I can see that clubs might not want to change, but their current business models are not working, so I think there’s a lot of scope of testing some new approaches. Even if we just see a change in sponsorship, instead of taking the next betting company, find a sponsor that benefits the club/brand and therefore increase the chance of higher value the next time.
Felix, another very interesting approach. However, I believe that all clubs are still absolutely driven by purely commercial goals, even the big guys Man U, Liverpool, Chelsea etc are driven by ££££’s. They need to service their debts you know!!!!
It is a nice theoretical discussion that brand followers would switch allegiance through a massive sponsor linking with a Club. Would Scunthorpe become instantly popular with Apples fanbase should they choose to sponsor with them? No, I think not.
The clever part of the partnership would be how the club could harness the leading edge technology to best advantage and work as innovators – aggressive experimentation – that’s where I see the big connection, thats the benefit. Imagine if Apple were to Partner with Spurs? If I were CEO I would give Apple a clean slate to empower the new stadium with every bit of Apple technology to make the experience truly interactive, stimulating and different. The experience could then be continues after the stadium through clever engagement.
There are also many case studies of sposorships that have significant business related targets and related bonus payments, this is not new. It is interesting that even in the current climate big clubs can still command multi million pound deals. This is driven by exposure and fan base – Man U estimate that they have 330 million fans world wide, thats who AON want, particularly the millions in Asia. Carlsberg sponsored Liverpool purely for Asia (China in particular).
Sponsorship is typically driven by eye balls and fans base…I do not see that changing..however the rights holder has to show the sponsor a deep understanding of who it’s fans are and how they can be turned into business. Bland, generic terms will no longer be tolerated in an increasingly competitive sponsorship landscape, only the smarter thinking rights holders will continue to survive. Those rights holders without a commercial sponsor, who continue to hide behind local hospitals, charities and centenary anniversaries need to have a good look at themselves and their processes.