How healthy is sports sponsorship marketing?

Last year the London newspaper City A.M. ran an article about sports sponsorships during the FIFA World Cup. The article, like many others published before, during and after most major sporting events, questioned the wisdom of brands that agree to official sponsorship deals. The author’s conclusion was that sponsorship marketing may be under pressure, but it wasn’t about to disappear. The marketers quoted in the article pointed to the channels, particularly social media, as the cause of the pressure being exerted.

Digital campaigns allow brands that aren’t in a partnership more opportunity to associate themselves with events than ever before. But for the brands prepared to pay for an official partnership there is still plenty of upside. Heineken has been involved in rugby sponsorships since 1995. In twenty years, covering five Rugby World Cups, they have spent $138 million. The last World Cup had a combined audience of over 4 billion viewers, while this year’s event will attract 2.6 million fans to the matches. With around 50% of Heineken’s beer sales volumes sold in the twenty participating countries, the Rugby World Cup is an ideal fit for them.

On the other hand, Pepsi had the highest brand awareness of any sponsor among US consumers during the 2014 FIFA World Cup. All fine, except Pepsi was not a sponsor. They simply  conducted  a lot of football-related marketing activity around the time of the tournament. However, that didn’t seem to have a negative impact on the actual official soft drink partner Coca-Cola. Two-thirds of UK and US respondents to the GlobalWebIndex research picked Coke out as an official partner.

Nike is often cited as the brand that gets it right at big sporting events without sponsoring many of them. But in order to get that level of exposure without a partnership agreement, an intense level of marketing activity needs to take place. It also often requires a huge investment in individual athlete sponsorship. For example, footballers with the profile of Cristiano Ronaldo don’t come cheap. And at $25 million per year, over 10 years, Rory McIlroy’s deal is an expensive way for the brand to get exposure in the world of golf. Brands also need to factor in that these deals require a maintained high-level of performance from the athlete involved. When McIlroy’s form dropped after signing with Nike some commentators blamed his new clubs..

By becoming an official sponsor you always win. By partnering with the NFL, Nike is guaranteed to have its famous logo on the league’s best players and teams every year.

At last year’s World Cup Adidas scored the hat trick of sponsoring the tournament, winning team and winning captain. Adidas likely saw  an increase in revenue at the end of the successful tournament. This clearly represents a sweet spot for brands. Get involved with some governing bodies and their events, while also mixing in sponsorships with teams and individuals.

Outside of the obvious sponsors such as sports apparel companies there is space for other brands to get involved in a similar way. Land Rover will get a huge amount of exposure from its association with rugby thanks to this year’s Rugby World Cup. But the brand is also associated with the British and Irish Lions, meaning they are in front of rugby fans during high profile Lions tours. Sponsorship of Wasps, one of England’s most successful rugby clubs, and an endorsement deal with Lawrence Dallaglio, one of the game’s most decorated players and now a respected pundit, adds to their standing with rugby supporters.

Once a sponsorship is in place brands need an integrated marketing strategy across channels to make the most of their investments. For example in 2012, US insurance provider State Farm ran an ad campaign featuring NBA star Chris Paul and his fictional brother Cliff. They set up a Cliff Paul Twitter account and gained 33,000 followers. In 2013 MLS fans were given the opportunity to vote one player into that year’s All-Star game by scoring goals with him in sponsor EA Sports’ FIFA 2013 video game. Each goal scored with someone from a 26-player shortlist was counted as one vote in his favour. The campaign not only encouraged fans to engage with an EA Sports product directly, it also generated significant buzz online.

Even after all that, it might just come down to a moment of inspiration. When the lights went out at Super Bowl 47 Oreos tweeted a darkened image of a cookie with the line ‘You can still dunk in the dark’. It was retweeted over 15,000 times and got 20,000 likes when it was posted on Facebook. If you Google “Super Bowl 47 Oreos” more than 300,000 results are returned. Had the company paid a player to endorse their product it’s unlikely they would have gained anywhere near the same exposure.

However, for long-term benefits, nothing beats direct involvement, whether that’s tournament partnerships, or by sponsoring individual teams and athletes. After all, Heineken for many years had one of the biggest sports tournaments in the world named after them when they sponsored European rugby’s top club competition.

And for all the talk of sports marketing being under pressure, do the figures actually bear that out? Not really. For the privilege of being an official partner of the World Cup in Brazil, FIFA charged 20 companies $1.4 billion. That represented a 10% increase from the 2010 tournament. In 2013 US brands paid $20 billion to be associated with various professional  sporting leagues. That figure represents about a third of the total spent on television advertising for the year, or around half of what was spent on digital.

Clearly sponsorship marketing isn’t under that much pressure just yet.