The Importance of Sponsor and Rights Holder Brand Fit
With my experience as a Brand Manager in the fast-moving consumer goods industry, I find it unusual that in the sports industry there are so many rights holders who accept sponsorships from brands purely because of the money. This of course sounds like a naive statement because “it’s all about the money!”, right? I believe that a big weakness of the sports industry is that the majority of sports organisations, realising that they need money to function, make finding funding the primary goal of the business side of the organisation and therefore get locked into a short-term mindset. In this post, I will explore the importance of brand fit between sponsors and rights holders.
Marketing vs Sales in the Sports Industry
When looking at most consumer based industries globally, you will notice that they are largely marketing led as opposed to being sales led. Consider that any new product launched into the market was usually initiated by the marketing department due to their consumer research or that the decision to purchase a product is more often than not as a result of its marketing, rather than the salesperson. Think about an iPhone. Are you buying it because the salesperson is telling you how great it is? Or because the Apple brand is trusted due to the great connection they have built with their consumers over the years?
In sports on the other hand, this focus on building a powerful brand largely becomes an afterthought once a big sponsorship contract is waved at you from across the meeting room. On-field results are the most important thing in sports and to win you need money, so as a result, sports is largely sales led with tiny marketing budgets. This behaviour means that there is generally a short-term mindset amongst sports organisations and athletes as they manage their finances.
The trouble with doing things in this way is that sports fans can be fickle, and once the sporting results are no longer there, usually the sponsorship revenues will dry up. Then add to this the other sports stereotype of a short-term mindset where clubs are overambitious with their player signings and their revenues cannot cover their expenses. This is the difference between the management teams at Leeds United, Glasgow Rangers and Portsmouth to name but a few, and clubs that are really run as businesses and who have built their clubs into major brands, and who are therefore impervious to a run of poor sporting results such as the New York Knicks or Manchester United. These teams have had a rather poor run of form over the last 3 seasons and are not going to win the championship this season either, yet they each have brands that are worth over USD $500m and their revenues are forecasted to keep growing.
Long-term Strategy and Brand Building
Marketing is all about building up your brand so that you provide meaning to your consumers/fans. This is a long-term process of developing a relationship with your fans and helping them understand what you stand for and what you do for them, which cannot be fully accomplished in a short period of time and it is a continual process.
By structuring a sports organisation so that it is sales led, you are buying time within your sport and this may last for years on end, but if there is no further connection with your fans, this will eventually evaporate and you are missing an opportunity. Instead, by focusing on the long-term relationship with your fans and how you can nurture and strengthen this relationship, you will see the benefits of fans packing into your stadium even in tough times and due to the strong connection sponsors will most likely be knocking on your door as well.
I have worked in the marketing teams for two companies that are sponsor brands and began working on partnerships with major events while I was there:
- Kellogg’s who sponsored TEAM GB and TEAM USA at the Rio Olympics in 2016
- Johnson & Johnson sponsored the FIFA World Cup in 2014
Many people look at FMCG companies as having best practice when it comes to processes for marketing and especially when it comes to data analytics. The way these companies approach a sponsorship internally, is that there will be an overall ‘Masterbrand’ program but then for each brand within their portfolio, the Brand Manager will look at the partnership and see what they can leverage to build their own brand. I can tell you from experience that this thinking extends to much smaller partnerships as well, so it is not just relevant to mega-brands. The major questions that I would ask myself are:
- What is my brand objective?
- Depending on whether the objective is in the field of brand awareness or brand perception:
- Is this partner brand relevant to my consumers? i.e. Will I be reaching the right target audience?
- Is there strong alignment with this brand in terms of brand equity or brand story?
Any serious partner will come to the table with a proposal that incorporates well thought out responses to these questions with relevant data to back it up.
Rights Holder Brands
My question is, why do rights holders not always apply the same logic in choosing a partner that is a good brand fit? If we set aside kit sponsors which have an obvious brand fit as they are also sports brands and are more or less about striving to win, many other decisions by rights holders are startling at best. A member of your marketing team should be the first person you talk to when filtering out partners that are unlikely to provide you long-term brand benefits. This should not be a siloed approach, and of course, the money component of the sponsorship deal should be a key factor, but brands are fragile and so above all else, the effect on the brand should be taken into account.
As an extreme historic example, consider a tobacco company partner. By sponsoring a team, the tobacco company could have had endorsement by the team to a set of consumers that they share with the team, but what effect would that likely have on the team’s brand? Having the team logo next to the tobacco company’s logo on the many communications that were allowed in the past may have seemed like an easy way to get more reach, however, what are the people receiving that communication thinking? Granted at the time people were less aware of the harmful effects of smoking, but what would you think of a sports team that promoted a tobacco company? What would the person who had a family member pass away from the negative effects of smoking think? Although it is extreme, this example shows that the underlying reasons for the sponsorship need to be right for both sides of the table.
Looking at it from a more positive and proactive approach, how can a rights holder benefit by choosing the right partner? The way to do this is firstly to be very clear on what the Rights Holder wants its own brand to stand for and to have a clear strategy of how it wants to get there. Once it has this, then the rights holder needs to ensure that any partner brands have the relevant brand associations that it is looking to build.
Examples of Brand Fit Between Sponsors and Rights Holders
An example of this was FC Barcelona’s shirt deal with UNICEF, which although it didn’t bring in any money and actually cost the club money, it did a great job for FC Barcelona’s brand which is centred on the tagline “Més que un club” (English: “More than a club”). The ability for a potential fan to make an emotional connection with FC Barcelona through this partnership is instant as it transcends sport and it immediately gives people a ‘warm fuzzy’ feeling. Their very next deal was seen by many people as a ‘sell out’ and although it would have been financially very favourable, I would question whether it had a positive impact on the brand globally.
Another example that is likely driven by the sponsor rather than the rights holders are the relationships between Arsenal FC and Borussia Dortmund as rights holders and Puma as a sponsor. Although it is possibly not on their brand equity wheel, Puma has a brand association that it plays third fiddle behind the big player – Nike and Adidas. Rather than trying to take the biggest brands head on, they have partnered with teams that are also perennial underdogs in their respective leagues (disclosure: I am an Arsenal FC fan and it does hurt to say that), and they even got lucky with possibly the best underdog story ever and their sponsorship of Leicester City FC. This is a perfect brand link for both the clubs and the sponsor as it builds this brand association for both partners and it provides juicy creative territory for all sorts of partnership activations. Having said that, I would question why Atlético Madrid haven’t followed suit as they have built their brand around this ‘underdog’ territory more so than either Arsenal or Borussia Dortmund.
I don’t know enough about Chevrolet, AON or JP Morgan Chase as the major sponsors of Manchester United and the New York Knicks to understand what effects they have on their respective brands, but I believe that the necessary analysis regarding the brand fit was done by the rights holders prior to entering into these agreements. This is why these brands are worth over half a billion dollars despite going through rough periods from a sporting perspective. That is not to say that large sums of money and winning the league doesn’t provide a boost in building your team’s brand, but there needs to be a coherent strategy and a good brand fit if the fans and sponsors are to continue supporting you in the future.
What do you think about the relationship between sponsor brands and rights holder brands and their brand fit? Can you think of any particularly good or bad examples?
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