Sponsorships have become a "buyers’ market" for brands, while the burgeoning youth market should be a strong focus for sports disciplines seeking to grow a fan base. That’s the top line from a new commercial trends study by research company Nielsen Sports.
Its report refers specifically to five important trends that will affect the sports industry in 2019 and beyond, and makes some recommendations:
• Increasing competition, fragmenting audiences, greater business sophistication and a proliferation of products are producing a variety of challenges and opportunities for rights holders and brands
• Rights holders and sponsors should be looking at better data to make sense of sponsorship. This includes understanding fan behaviour to build lasting relationships with fans and consumers
• Sports properties and media should be innovating, with rule changes in core formats, incorporating e-sports (video games and competitions), and making tech advances to foster fan engagement
• Multidimensional entertainment experiences at sports events, designed to cater for a variety of audiences, are increasingly being offered. This is closely linked to the necessity of providing greater entertainment value
• Athletes, powered by social media and athlete-owned media platforms, have become powerful sports properties, as technology has connected them directly with fans and turbocharged their personal brands
"The increasing complexity and clutter of the sponsorship landscape places greater onus on rights holders to provide unique and compelling content to remain relevant," says Kelvin Watt, Nielsen Sports Business Unit MD for Africa, Middle East & Asia-Pacific.
Watt says sponsorships have become a buyers’ market for brands, so there’s a lot of pressure on rights holders.
"At the same time, brands must have a clear strategy and measurement plans behind their sponsorship activity, to choose the best partnership and investment areas based on return on investment."
After SA’s horrific performance at the ICC Cricket World Cup, it’s being asked whether there is a direct correlation between team performance and sponsorship interest.
This is an issue that must be occupying the collective mind of Standard Bank, the Proteas’ principal backer.
"Team performance, and indeed league and event performance, always add to excitement and general interest from fans,” says Watt. "Most sponsors like to be on the side of winning teams, for this reason. But that does not mean sponsors are interested only in sponsoring teams that win."
A great recent example of this is Sasol’s sponsorship of Banyana Banyana, who, though they did not win a game at the Fifa Women’s World Cup, delivered very positively for Sasol, which is likely to continue to support them.
"There is a larger correlation where there is an expectation of winning from fans and other interested parties," says Watt.
He goes on to say that as a rule of thumb, most successful sponsorships take at least three years to reach optimum return levels.
So, what is the next big thing beyond the big three — cricket, football and rugby? Says Watt: "In SA right now I am particularly interested in community-based sponsorships and mass participation opportunities. Some of the most vibrant sponsorship opportunities are at school festival and national level, so [we are] looking at events like netball nationals, (under-12 to under-19) water polo schools nationals and hockey nationals, as well as many others."
This piece was written by Jeremy Maggs and first appeared on the FM Redzone, South Africa's largest community of media and marketing professionals based in South Africa.