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Innovators in Sponsorship
Synergy Sponsorship Outlook 2014
Now, New & Next
Foreword The future of sponsorship is more exciting than ever. With every year, brands get better at using sponsorship and measuring its impact – seeing it not as a marketing channel in itself but as an accelerator that makes all of their marketing channels more effective. With every year, technological innovations open up new possibilities that brands use to add value to their audience’s experience of the things they love. With every year, the highly-connected, mega-social, time-critical and passion-driven behaviour of Millennials becomes less of an exception and more of the rule. With every year, new sponsorship properties and rights are created by rightsholders and individuals that change the game for sponsors and allow them to tell more compelling stories. And with every year, we get better at understanding how to make sense of all these new opportunities.
Synergy’s Now, New & Next report looks more deeply at the major technological innovations, shifts in consumer trends and new ways of thinking (from brands, rightsholders and individuals) that are on the horizon. More importantly, it also takes a practical look at what this all means for sponsors. We hope you find it insightful and thought-provoking. But above all, we hope that brands, rightsholders and agencies make sure that 2014 is the best year yet for sponsorship.
CARSTEN THODE Director of Consulting, Synergy & Engine Partner
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Millennials & social media:
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YOU ARE WHAT YOU SHARE
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The internet of things:
Real-time & social marketing: THE YEAR LIVE CONTENT GROWS UP
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Rightsholders getting it right:
A NEW PATHWAY TO PASSIONS
A NEW APPROACH TO THE BIG SELL
Wearable technology:
Gearing up for Formula E:
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PERSONALISING OUR PASSIONS
SUSTAINABILITY GETS SEXY
Making live events unmissable:
Individuals as rightsholders:
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KEEPING IT REAL
MAKING THEIR MARQUE
Smarter experiential:
Meaningful measurement:
TRANSFORMATIONAL TECHNOLOGY TRENDS
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DECISIONS, DECISIONS, DECISIONS
1 Millennials & social media: YOU ARE WHAT YOU SHARE The rise of the Interest Graph as a playground for Millennials reminds us that the opportunity for brands through social sponsorship activation is huge. IDENTITY AND OPENNESS Albie Hecht, former Nickelodeon President and current CEO of ‘must-see must-share’ digital TV station HLN, hits the nail on the head when he says, “to capture an audience you have to capture the way they behave.” Millennials lead highly social lives punctuated by fast-paced consumption of short-lifetime content and hugely open relationships with others, be they friends or strangers. Recent interrogation of people’s feelings about data and privacy has highlighted how younger people are less concerned with who knows what about them and what they might do with it than they are about the power of social content to help them define who they are and shape their relationships. Millennials are life-hungry, exploring new territories and making new connections with people and interests. Thanks to the social web this happens at a relentless pace and on a far larger and often more superficial scale than it did for pre-Millennials. You only need to look at how
SnapChat is influencing the dating game to see how social technology can shape fundamental human behaviour. For teens, ‘disposable’ selfies are a digital short-cut to a date (and more), removing the need for painful ‘live’ flirting and – God forbid – face-to-face conversation.
INTEREST GRAPH & TEENS
CONTENT & CREATIVITY
For a generation that cares little about privacy and a lot about public image, the Interest Graph – those social networks, like Twitter, that are built around interests rather than friendships – is huge. These networks see huge crowds of teens gather and interact around passions ranging from celebrity gossip to sport to shoot ‘em ups. Perhaps the most defining characteristic of the United Kingdom’s Twitter demographic is its age.Two-thirds of our Twitter users are aged 34 or under, with 40% of them below the age of 25, and an even gender split. This Millennial-leaning is supported across single-passion networks. 18-24s are by far the biggest part of Spotify’s user base, accounting for about 1.8 million users, with 25-29s and 35-44s basically tied for second, boasting about 900,000 each.
In order to make the most of the Interest Graph opportunity, sponsorship needs to understand and exploit the intricacies of why the Interest Graph has Millennials gripped. Fundamental to this is an appreciation of the difference between content that an audience ‘wants to consume’ and content an audience ‘wants to share’. Subject, tone and format are crucial components of the formula. Celebrity and exclusivity delivered with an extreme angle or humour in quick-impact, highly visual packages that celebrate the sharer’s interests perform well. On top of this, there is a whole arsenal of viral content tricks of the trade. For a generation more concerned with how they come across than where content has come from, brands are the perfect source of premium, identity-defining content. Brands need to help a teen shout, “I know this stuff,” “This is who I am” and “This is where I belong.” Just as today’s flirting teen needs to make those all-important selfies work as hard as dinner and a movie, so brands need to supply rapid-fire content that is impossible for a teen to resist sharing and for their network to ignore. So the social opportunity for sponsorship to reach Millennials is not rocket science. But to really crack it, sponsorship needs to not only get social, but learn the true craft of shareable content creativity.
The rise of the Interest Graph as an important social playground for Millennials is of massive value to brands. The sweet spot of publicly promoted personal identity, driven by an individual’s passions, offers a huge opportunity for sponsorship to help brands embed themselves in the important social exchanges of this generation.
2 The internet of things: A NEW PATHWAY TO PASSIONS
The Internet of Things (IoT) is a term that will undoubtedly be familiar, even if the precise definition is somewhat hazier. The IoT is the concept that, one day, all objects will not only be uniquely identifiable but also wirelessly interconnected in a wider network. These objects will be able to talk to each other, their manufacturers and their owners through a range of Wi-Fi connections and RFID sensors (the same technology that’s in your Oyster card), sending a continuous stream of data back and forth. The IoT will propel us into a world previously only seen in science-fiction. It will provide your belongings with pre-programmed intelligence and the ability to communicate. Your thermostat will tell you when your house is getting cold, your smoke alarm (via a connection to your toaster) that your flatmate burnt their breakfast, your washing machine that it has ordered itself a new part and your toothbrush that you missed brushing your upper left molar this morning. All of these hard-working devices will be obediently reporting to one central point, whether that be your smartphone, smartwatch or another wearable device. Electrical products will inherently be the first to join this network, but there is no reason why any object can’t be added. Tennis rackets can already record your swing technique and guitars your playing accuracy. Sounds ridiculous?
Don’t forget that trainers have been analysing your running for years. Offline objects can be loaded with RFID sensors, QR codes, microchips and AR tags so that any device can join this network, even if it doesn’t have an electrical socket. The benefits to consumers and manufacturers are obvious, but it’s harder to see how marketers and, in particular, the world of sponsorship, can benefit from this new landscape. As objects get smarter, we need to get smarter still. The key change for marketing is that, by giving every mass-produced object a unique identity, we are entering a new era of ultrapersonalisation, where a brand’s products and physical touchpoints not only seamlessly enhance their customers’ lives, but their relationships with that brand. These
interactions will provide a level of consumer insight beyond what we could previously imagine, and will equip us to offer more valuable, relevant and delightful consumer experiences. Imagine a milk company knowing at exactly what time you have your morning cuppa. A sponsor knowing how many times a fan has worn their team’s shirt in a season. A football boot manufacturer who could tell how many goals you scored and who you scored them against. The IoT means infinitely closer relationships between brands and consumers around the things that really matter to them.
2 WHAT WILL CHANGE IN 2014? Because there is so much technology involved, don’t expect a fully working IoT in 12 months’ time. The concept was first discussed in 2009, so this isn’t something that will explode overnight. Having said that, 2014 could be the first year we truly see the emergence of intelligent products on a mass scale. The IoT was one of the dominant talking points at the
2014 CES (Consumer Electronics Show) in Las Vegas, with hundreds of companies showing off their products of the future. Smart fridges, thermostats, tennis rackets, sports shoes, helmets, inhalers, egg-cartons, dog collars, pill bottles, baby monitors, roads and rubbish bins already exist – expect to see thousands more objects that can talk to you and each other by the end of the year.
So, what should the smarter sponsorship professional be thinking about when it comes to the IoT? To us, there are three varying levels of involvement: LEVEL 1 Greater insight We should be looking at opportunities to learn more about our target audience through their use of smart objects. The more that exist, the more data will be available to manufacturers and stakeholders. Direct information about how consumers actually behave is more reliable and more robust than any current form of market research. It will allow us to understand exactly what consumers want and how they behave. LEVEL 2 Ultra-personal sponsorship experiences The next step is to investigate how we can tap into the enhanced experience and personalisation that will grow exponentially as this network develops. How can we use what is already in place to offer ultra-personal experiences to relevant audiences? For example, a fridge could spontaneously invite a customer to the final of your sponsored event when they bring home your product. 2014 will see a wider infrastructure in place, and through partnerships, there will be the option to harness the power of that, by offering fans unique and exciting experiences. LEVEL 3 Create your own smart objects The third step is to create your own ‘things’ that can connect to this internet. You don’t have to be a global electronics manufacturer to create a smart object. As already mentioned, any object can be tagged and connected. It could be
merchandise that contains secret content, a billboard that connects to users’ phones, or a stadium seat that sends you an e-programme when you sit down. It doesn’t matter whether it is a simple object that performs a specific function or one that can connect multiple times in multiple ways: as long as the result offers a beneficial experience to consumers, you will reap the rewards. Our future with the Internet of Things is still quite unclear. As with all new ‘toys’, it will take the marketing industry a while to learn how to deploy the IoT – just look at the first uses of social media. Expect to see a flurry of objects released in 2014 offering a scattergun range of experiences that will grab headlines due to novelty rather than any particular value. But as this network grows and consumers begin to say “how did we manage without…?” we’ll settle down into a far more fertile world for marketers; a world which blurs the boundaries of brand and product. Brands will increasingly be able to ‘tell stories’ through personal experiences and their products. For sponsorship, an area of marketing famously difficult to be productfocused, the IoT will allow products themselves to facilitate that story-telling, rather than being an inconvenient tag-on. If used correctly, the IoT has the potential to offer immensely powerful marketing opportunities through relevance and personalisation, and marketers may begin to see the emerging buds of that new world in 2014.
3 Wearable technology: PERSONALISING OUR PASSIONS Wearable tech – the accessories and clothing items that incorporate computing or advanced technologies – is seen as the next major digital companion. Over the past few years you’ve probably seen health trackers such as Nike’s Fuelband and the Fitbit Flex, helping consumers digitise and record their daily workouts. Whilst high-tech pedometers have become mainstays in the wearable market over the past couple of years, 2013 saw a number of new players enter the fray, all with different perspectives on how computerised clothing can enhance our lives. Google announced early in the year their intention to release ‘Glass’, a wearable computer with an optical mounted head display – or glasses to you and me. Hot on the heels of this,
the Pebble smartwatch became the single most-supported project in the history of crowdfunding site Kickstarter, with $10 million ample demonstration of the general public’s interest in wearable tech. Following on from this, Samsung launched their ‘Galaxy Gear’, a smart watch which interacts more deeply with (certain) Samsung phones and tablets to provide updates directly to the wrist. For many, wearable tech was just a buzzword for 2013, but at the 2014 Consumer Electronics Show, these pieces of digitallypowered apparel were all the rage. So, what does 2014 have in store for wearables and what will it mean for sponsorship?
Through heart rate monitors, smart clothing, impact sensors in helmets and advanced pedometers, the physical data of the world’s top sports stars has been collected and analysed in professional circles for a long time now. Wearable technology democratises this data capture, and even goes as far as packaging personal statistics in the form of ‘datatainment’. One such case is Race Yourself, an app proposed (and currently being crowd-funded) for Google Glass, which has demonstrated how this kind of personalised data can be used in an entertaining manner to improve runners’ experience of an otherwise fairly dry activity. For example, by tracking an individual’s previous runs it can visualise – much like ‘ghost laps’ on popular racing video games – where you are now versus where you were last time, all of which helps to promote achievements and provide motivation. Sponsorship allows for brands to connect to people through their passions, and with these passions comes a hunger. In the digital age, that appetite manifests itself as a need to watch, learn, share and discuss. Wearable tech is a channel which will allow for more of this to develop, with sponsors taking fans closer to the heart of their passions than ever before.
How long will it be before the right sponsor merges pre-existing elite athlete data with consumer-facing wearable technology to deliver the most personal of athlete-to-fan training experiences? Imagine a goalkeeper with contact lenses that contain a camera: you’ll be able to see the exact moment he saves a penalty, securing a win for this team. Occasions like this are defining moments in the lives of fans, and owning them would be a powerful prospect for any sponsor. Wearables will also deliver new assets for rightsholders to take to market. You only need to look at the popularity of the London 2012 Aquatics Centre pool-cam – which delivered significant engagement across digital audiences – to understand the appetite of consumers for unique ‘field of play’ perspectives. Similar innovations would certainly be saleable assets in any rightsholder-sponsor negotiation.
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The ‘Big Data’ that wearable technologies will provide will also help rightsholders (and the brands that work with them) make significant strides into personalised marketing. As our day-to-day lives continue to be quantified, personal experiences, through the aid of wearable tech, become more relevant than ever.
Datatainment Wearable Tech Personalisation
It’s essential that marketing keeps up with this future default-setting of consumer expectation. With it, wearable tech offers a huge opportunity to learn, engage and curate a relationship with target audiences through hyper-personal interactions.
For example, with the ongoing development of in-stadia Wi-Fi, and the assumption that personal data will become more freely available, it will be possible, through wearables, to track consumer behaviour at events and venues themselves. If, as a rightsholder, you want to look at the footfall of new stadium visitors in order to optimise the location of concessions or experiential activity, then wearable tech could help show you not only how fans move around the stadium, but also their social media behaviour and purchasing habits. All perfect to deliver a tailored event experience. Business Insider believes that the wearable tech market will reach $7 billion in value by 2015, as internet consumption continues to grow with the proliferation of digital devices. Wearable technologies will help to both personalise and filter the broader social bandwidth, providing a more personal perspective on an ever-growing social graph. People’s passion in sports and entertainment will grow as digital technology continues to allow us to share, celebrate and commiserate together as a group. By their nature, wearable technologies are an extension of this very human need to collate, analyse and disseminate the information that matters most to us. With that in mind, it’s obvious that they provide an ideal channel for sponsors and rightsholders alike. It’s just a matter of wear and when.
4 Making live events unmissable: KEEPING IT REAL
because you can go back and watch the four or five different camera angles of an incident and for sports fans that is a really valuable experience that you can’t get on the live broadcast.”
There’s nothing like attending a live event. Or is there? The problem for rightsholders is that the digital revolution and the convergence of online, mobile and TV means that the experience gap between live and in-home may have closed completely. In fact, Cisco Worldwide’s research shows that 57% of people prefer to watch sport at home. We only need to look at the controversy surrounding the recent NFL play-off games in Green Bay, Cincinnati and Indianapolis, which were literally hours away from not being on TV in their local markets due to NFL blackout rules. For Green Bay, in particular, this is an almost inconceivable situation. They have sold out every game since 1959 bar one (in 1983), with 2013 a big year for one Brad Sauve, who finally got a season ticket after putting his name on the Packers’ waiting list in 1976. This is a big deal for rightsholders. Live attendance for most sports is not only the primary source of revenue (through tickets, merchandise and concession sales), but this live experience is also the centre point of fan passion. It is critical to increasing the loyalty amongst existing fans and recruiting new ones, and even goes so far as to virtually define the appeal of the property – which has a critical impact on other forms of revenue, including sponsorship.
In addition, plenty of research has shown that viewers like to actively engage with the content that they are watching on TV. In Twitter’s annual list of top UK Twitter moments (in terms of tweets per second), 8 out of 10 were related to sports (well done to New Year’s Eve and Mumford & Sons at Glastonbury for breaking into that list). Additionally, research from Nielsen demonstrates that up to 52% of smartphone users in Britain are using their devices to look for something related to what they are watching. The growth of this complementary activity is also making it more appealing to consume events from the comfort of one’s sofa.
TV & DIGITAL INNOVATION The exceptional picture quality that consumers now expect from all broadcasts has encouraged fans to choose to watch events on TV. HD TV has seen major advancements, and the consumer appetite for bigger and higher quality screens shows no signs of slowing down. The next step, Ultra HD TV, is already in the market and about to become affordable. This means that with one fixed camera that can display the whole pitch, everyone suddenly gets a seat on the half-way line, but with the added benefit that you can control the zoom, replays and camera angle yourself.
The Sky Sports app already gives users control of their own viewing experience. In addition to a choice of games, the viewer has access to over 20 different camera angles and all of the key highlights at their fingertips. Gareth Capon, product development director at Sky, describes this as “a proper companion viewing experience,
4 Simultaneously, it is getting easier to watch live content. DirectTV and the Manning brothers have given us ‘Football on Your Phone’, which means we can watch any NFL game wherever we are. The PlayStation 4 recently launched with 11 different streaming video services, including both NBA and NHL partnerships. BT have made their new sport channels free to all their broadband subscribers and Sky Sports have used NowTV to make sure that you don’t need a dish or monthly subscription to view their content. And all of this is before the widely predicted (and much anticipated) entry from Google into the sports broadcasting marketplace. According to BT’s CEO Gavin Patterson, their research shows “one in two people want to watch sport on TV, but only one in five does”, so there’s plenty of head-room for broadcasters, platforms, media companies, websites, technology companies and even brands to make it more available. RIGHTSHOLDERS FIGHT BACK Of course, rightsholders are fighting back on multiple fronts to preserve the specialness of the live experience. 1. Cost As the most prohibitive factor for fans attending live events, rightsholders need to continue finding ways to get the price/value ratio right. Bayern Munich have just subsidised the 3,000 away tickets to their UEFA Champions League match at Arsenal, while some clubs have introduced even more innovative pricing structures and incentives. Derby County have brought in ‘Dynamic Pricing’ while West Ham use voucher schemes like
Groupon to market their inventory. It’s only a matter of time before we start seeing more rightsholders looking to offer financial incentives that reward fans for their social activity: so those that recruit their friends or influence others online would then receive discounts on tickets, refreshments, travel, merchandise and the like – a win-win for the clubs and the fans. 2. Technology The role that Wi-Fi can play in enhancing the fan experience is frequently discussed. Internet connectivity allows a wealth of appropriate and personalised content such as stats, competitions, food and drink orders and bets to be pushed to fans to improve their day out. But if the news from Anfield is anything to go by, then 2014 might not be the year that in-stadia Wi-Fi is cracked. Saracens have shown what can be done with technology in their first year at the new Allianz Park. They have just launched a pioneering service that allows fans at the stadium to watch instant replays, catch the action from different camera angles, access stats and vote for their man of the match at the touch of a button. But the Wi-Fi debate aside, rightsholders can continue to use technology to significantly improve the fan experience and maintain loyalty. The Seattle Sounders have created the extremely impressive MatchPass customer
loyalty programme, where a single swipe card acts as a ticket, cash-card and a loyalty rewards card for all in-stadia purchases, with the promise of a wealth of discounts and prizes for Sounders season ticket holders. Clearly, more and more rightsholders are beginning to understand the importance of knowing their audience to create appropriate and personalised benefits which their fans will value. 3. Atmosphere Being part of an unforgettable atmosphere is one key element of live events that is impossible to recreate at home. Manchester United have attracted attention with the introduction of singing sections at Champions League games, and it will be interesting to see whether this experiment is deemed a success. And the movement to bring safe standing back to UK stadia meets two objectives: it helps keep costs down while boosting the atmosphere. The challenge going forward for the larger rightsholders will be achieving the balance between a safe and financially lucrative experience that isn’t too sterile or corporate, which might risk alienating the ‘real’ fans. 4. Entertainment More and more rightsholders are adding value to the price of the ticket by adding other forms of entertainment. The Jockey Club have pioneered the use of music gigs to bring new fans to horseracing over the past decade and they clearly see this as a core part of their future plans with the announcement of a joint venture to secure entertainment events at 15 racecourses. The West Fan Village (formerly known as the West Car Park) at Twickenham is another good example of this. The RFU have created a space which rugby fans can visit to extend their experience beyond the 80 minutes of the match.
This area not only adds value to brands by helping them to connect with their audience but also improves the fan experience. WHAT IT MEANS FOR SPONSORSHIP & SPONSORS With reports such as this, the focus tends to be on the cool innovations that give fans new ways of connecting with their passion. And without doubt, the pace of change in the technological and media landscapes creates huge opportunities for brands. But nothing beats the live experience. For all the excitement brought by the new technology, the feeling of being there when something unforgettable happens is something that no technology can re-create. So successful sponsors should also be working with rightsholders to find ways to tap into the things that make the live experience what it is. Fans will probably thank you a lot more for easing the burden of travel to the game than for giving them another app. Watching events live and watching them on TV should be seen as perfect complements, not competitors. And if rightsholders, brands, media owners and technology companies all work together to optimise the fan experience – however they choose to consume it – then everyone will be a winner.
5 Smarter experiential: TRANSFORMATIONAL TECHNOLOGY TRENDS In last year’s Synergy sponsorship trends report, we identified the power of technology to boost the reach of brand experiences. Fast forward a year, and this question of reach is one of the first we experiential marketers ask ourselves during planning: how to use tech to facilitate social sharing of branded events.
limitless audience for the most brilliant activations, and increased investment starts to feel sensible. Indeed, according to the Event Marketing Institute, the world’s largest marketers – those with over $1 billion in revenues – boosted their spending on events and experiential programmes at a faster rate than their overall marketing spend.
Brands accustomed to hosting large experiential activations will always be looking for earned media generation opportunities; PUMA, for example, regularly installs photobooths at its events that offer built-in social sharing capabilities, as well as more traditional printouts. Now, however, technology is infiltrating the events themselves. Just look at our favourite experiential activations of 2013 – Nike’s House of Deadly, Coca-Cola’s vending machine, and HTC’s photobooth; all made use of cutting-edge technology to jaw-dropping effect.
On top of this, we need to ensure that technological advances enhance, rather than over-complicate, a channel where simplicity remains key. Activations which show a deep understanding of a brand’s audience and their behaviours will almost always do better than those which make gratuitous use of technology. With that in mind, we think 2014 will be the year that experiential gets smart – deploying technological advancements wisely and in a
That said, the suggestion that technology will improve brands’ experiential activity is not necessarily a given. In the past, for example, experiential marketing has sometimes found it hard to keep up with technological developments elsewhere. This goes hand in hand with the issue of sharing; in the past, a channel inherently limited by physical footfall didn’t feel worth investing in, compared to those with a greater reach. Now, the facilitation of social sharing opens up a potentially
way wholly relevant to the brand and audience. So, which areas of experiential do we think will get the biggest boost from technological advances? First and foremost, connectivity – powered by the wider roll-out of 4G technology. While the issue of Wi-Fi in sports stadia remains a hot topic in the world of sponsorship, 4G may go some way to solving the connectivity problem at large events. With a greater data capacity than previous generation bands and providing data at a speed 10 times faster than 3G, in basic terms, it allows more people to connect to the network at once.
5 So, how does this deliver for experiential? First, greater connectivity can play an enabling role for experiential marketers, by allowing temporary systems to be set up on site which do away with the need for expensive pop-up Wi-Fi access, or simply enabling activity not considered before. For example, for IG’s Harlequin Inside photo activation at Big Game 6, conceived and delivered by Synergy, we ran our servers – which allowed photos to be artworked and sent instantly to fans by email – purely off a 4G router. But greater connectivity also allows consumers to engage more and more deeply with brands. It makes possible digital interaction with the physical world – think tweet-powered vending machines and text-powered advertising hoardings – where consumers’ phones become a more engaging tool for brands. Of course, the roll-out of 4G won’t happen instantly. It is expected (according to a new
study by GSMA Intelligence) that 4G will still account only for about one in eight of the global eight billion-plus mobile connections forecast for 2017. That said, this is up from 176 million 4G connections at the end of 2013, and will be clustered in areas favourable to experiential marketing, namely city centres.
In 2014, technology will also have a role to play in boosting impact and standout in experiential – by allowing people to sample new technology while it remains prohibitive for roll-out at scale, and therefore before they have much of a chance of owning it themselves. While staying true to its own tone, a brand can play a facilitating role in helping people experience tech – and wow them in the process. One example of this: 4K TV. Whilst this offers ultra smooth and ultra high picture quality, for it to be available in people’s homes will require serious investment by broadcasters (not to mention the necessary spectrum availability). But many effects and post-production companies are already using 4K to shoot footage, and brandproduced events represent a potential forum for such footage to be displayed at its optimum quality. Indeed, 3D TV was used in this way experientially before it was widely available in homes, with Sky, for example, launching its 3D offering by creating events in pubs centred on the biggest Premier League games. Expect 4K to play a similar role in experiential. Another area ripe for improvement through technology is giveaways. Ubiquitous in experiential but not always unique, advancements like 3D printing offer an opportunity to turbocharge the giveaway. With costs for a 3D printer still in the thousands rather than hundreds of pounds, these remain out of direct reach for most consumers. Therefore, giving them the chance to get a 3D printout ‘mini me ’, as we saw Coca-Cola do in Israel last year, is genuinely radical. Adidas also used 3D printing at their recent pop-up in Shoreditch, where consumers could print their own take-home 3D shoelaces. Giveaways like these enable experiential marketers to arm consumers with a lasting legacy of their brand
experience, not simply give them something that may end up at best forgotten, or at worst in the bin. While not all brands will head straight for 3D printing, quick options for rendering images will increasingly be used, as technology enables the ongoing trend for more personalised brand experiences. Finally, we think amplification via owned channels will be another area of experiential that will seriously benefit from improved technology in 2014. We know experiential has already tapped into the gains of facilitating sharing by consumers, but the power of live streaming on owned channels has not been fully exploited as yet – and this is about to change. Look at the Boiler Room events or Red Bull Revolutions in Sound, which massively expand their reach by sharing through their own channels. Of course, this works best for predictable, fixed events like concerts or talks (hence the use of live streaming more extensively in academia than marketing), rather than more interactive consumer experiences, but the Red Bull events, in particular, set the bar for live streamed branded content. Overall, the fundamental benefits of technology relate to the delivery of new and better brand ideas. It goes without saying that experiences must stay true to the brand and leverage consumer insights – technology is simply an enabler for creating more powerful ways for brands to connect with relevant audiences. At Synergy, we’re committed to making bolder use of technology in experiential marketing, so watch this space – 2014 is going to be an exciting year.
6 Real-time & social marketing: THE YEAR LIVE CONTENT GROWS UP
In 2013, Live Marketing was the young upstart – fresh, brash and in consumers’ faces. The output was varied to say the least. From adidas’ tweet in support of Andy Murray, released the moment he won the BBC’s Sports Personality of the Year award, to the completely misguided LA Lakers’ #NEVERFORGET 9/11 support picture featuring Kobe Bryant – swiftly taken down when users took offence to its insensitivity – to a raft of quick-fire secondscreen content in between. By and large, there was a focus on speed over quality. What certainly became clear is
that live events, particularly sport, provide the perfect landscape for live, branded social content. They’re ‘always-on’, they have big, captive audiences around both TV and social ‘appointments to view’ and they’re full of epic and unpredictable moments – perfect fodder for live content. In 2013 we became the world’s first sponsorship agency to launch a real-time marketing proposition, ‘Synergy Live’, delivering in-play content for RBS, Microsoft and IG – three very different brands, with contrasting objectives and varied campaigns. Here are our thoughts on what we learnt about live content and what live content learnt about itself in 2013 – and what 2014 might look like for the new kid on the social block… 2014 will be the year live marketing grows up and takes its place as a serious option in a brand’s tool box. This rite of passage will be driven by smarter strategy, tighter creative and a more targeted and tactical deployment of content.
1.Technology will drive greater penetration of richer content
4. ‘Live Media Support’ will increase and evolve
4G penetration is set to almost treble in 2014 from 3% to 8% in Western Europe – an upward trend that will continue in coming years. This increase in penetration will drive greater reach of richer content that consumers will be able to see on the move. Waiting for Vines, animations and short pieces of content to load will become a thing of the past once 4G explodes, and so expect brands to seize on these opportunities to trial new and evolving mediums.
Live marketing will make a case for a greater share of media budgets. This will be aided by smarter targeting and automated buying systems that will enable brands to deploy the content to a very defined audience within minutes. Brands will need to become more agile in order to benefit, as simply putting content out on owned channels and hoping for the best will become a thing of the past.
2. Content will get more creative and more relevant Increased live social content from a wider spectrum of brands will lead to more competition to reach and cut through with consumers. Only the best content will succeed, forcing brands to be more creative with what they produce. The term ‘better published than perfect’ was the mantra for 2013. In 2014 this will not cut the mustard. It’s no longer just a fun experiment. ‘Published and perfect’ is now the only option. Simultaneously, rightsholders will need to open up to the content demands of their sponsors, providing this as part of rights packages, with their social accounts as ‘detonation’ channels for a brand’s live content. 3. Social teams will need to be working when their audiences are watching Brands and rightsholders are realising that putting content out Monday to Friday during office hours just isn’t good enough. Brands need to be ‘always-on’, with social content flowing when their audiences are online, and ready to react when something special happens. Synergy Live creative and production teams are based in-stadia and in-office during key sporting events, ready to react to moments in real time.
5. Social media measurement will really kick in With increased brand activation comes an increased need to demonstrate results. Although a universal social ‘score’ is something of a distraction for brands that have their own specific goals, these brands still need to know who their social content reached, how much that audience enjoyed it and, of course, how it worked compared to that of other publishers. Investment in analytics will catch up with investment in creative, especially for those brands deploying social media spend in-play. Synergy Live provides a live social content ‘Engagement Score’ that reflects the impact of live content and enables comparison with other live content publishers. 2014 is going to be a big year for live content, with the brands and sponsors prepared to invest in maturing their approach to the medium, best positioned to reap the rewards.
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Rightsholders getting it right: A NEW APPROACH TO THE BIG SELL We know that brands are getting far more sophisticated at using sponsorship. The question is: how do rightsholders need to evolve in order to keep up? The first thing that progressive rightsholders need to realise is that what they are selling is not the same thing as what sponsors are buying. Typically, rightsholders think that they are selling rights – a menu of “stuff” including IP, naming, branding, web real-estate, social media presence, advertising inventory, player appearances, tickets, merchandise, corporate hospitality, money-can’t-buy experiences,
locations for experiential activity, archive images/ footage and any other bits and pieces that might have value for the brand. The thing is, sophisticated brands are not buying that “stuff”. Sophisticated brands are buying the ability to create a brilliant campaign. As a consequence, rightsholders need to increasingly acknowledge that that their role is not to sell “stuff” to brands, but to work with them to help them tell compelling stories. And this new interpretation of their role will lead to new behaviours.
1. A stronger focus on understanding “what they stand for”
Truths which will give brands a more powerful ingredient with which to create their story.
A key ingredient of a brand’s sponsorship campaign is the Asset Truth – an insight about the sponsorship property that the brand can use to tell its story in a more compelling and relevant way to the audience. And we’re not talking about ‘values’ like speed, teamwork or pursuit of excellence, which are far too generic to be interesting. Rather, this is about the things that make the asset truly meaningful in the audience’s lives. The trick for rightsholders is to create and communicate a rich tapestry of Asset
2. Carving up sponsorship packages on the basis of thematic territories or specific audiences
Obviously, this is grossly over-simplifying things. Most rightsholders deal with hybrid models and offer a fair degree of customisation so that the sponsorship package is tailored to the sponsor’s needs and objectives.
THE CAMPAIGN IDEA The central thought which connects the brand to the asset and the target audience. THE ACTIVATION PROGRAMME The way brands use the sponsorship rights in their marketing efforts to meet their specific business, brand and marketing objectives and support the Campaign Idea. Exposure & Visual Identity
Brand & Product Advertising
Events & Engagement
Digital, Social & Mobile: Content & Channels
What Sponsors are Buying
PR & Comms
THE SPONSORSHIP RIGHTS The rights and assets provided by the rightsholder...which brands are able to use in their sponsorship activation programmes.
Typically, sponsorships are divided into specific rights packages. There are many different models for how to carve up these assets – the Olympic Model (a tiered structure), the Champions League Model (multiple packages with similar rights), the Manchester United Model (regional packages) and the F1 model (where the package is pretty commensurate with the size of the logo on the car) being just a few.
What Rightsholders are Selling
However, for a sponsor looking for some ‘white space’ in which to tell their story, the most important carve-out might not be in terms of rights, but in terms of thematic territories or, indeed, specific audiences. Celebration, elite performance, active healthy lifestyles, patriotism, sustainability, or mums, dads, teens and families are all things a sponsor can build a brilliant campaign around. How valuable would it be for the sponsor if a rightsholder created a package of assets which optimised the brand’s ability to tell specific stories and gave them the clear water to do so?
7 3. Creating new rights and building assets to help brands tell the story Progressive rightsholders realise that there are lots of things that they can do to ensure that they are adding more value to their sponsors. Approaches to this include: Building their social media presence (and engagement levels), customer databases and market intelligence. The more people the sponsor can reach directly through your channels and the more they know about those people, the more value they create. Creating saleable activation initiatives. One example of this would be Bupa’s sponsorship of the Great North Run (a massparticipation half marathon), where the brand created the Bupa Boost Zone, an area at the critical 10-mile mark which gives runners the
final push of energy they need to get to the finish. Had the rightsholder come up with that idea, they could have monetised it, while also creating a more valuable sponsor package. Embracing technology. This document has talked about wearable technology, the Internet of Things, 3D printing and Ultra HD TV. Rightsholders should be proactive and find a way to use these new innovations to create value for their sponsors. Generating brand value and creating exposure for the property. It goes without saying that the more highlyregarded and ‘famous’ the property is, the more valuable it will be to sponsors. This means that rightsholders need to actively manage their brand and create marketing and communications plans in the same way that their sponsors do.
4. A refreshed approach to the selling process itself We’ve all seen the standard rightsholder presentation: here’s our brilliant property (and some standard research which shows how great it is); here are the rights you get; here’s how much it costs. That’s not what brands are buying. Sell them the dream of how you will help them tell their story. 5. Introducing creative, new pricing models There are numerous reasons why the current “here’s the package; here’s the price; and then we arm-wrestle a bit” approach to sponsorship pricing is inefficient. In simplest terms, the same rights have totally different values to different sponsors, because the campaigns they can create and the stories they can tell are completely different.
Progressive rightsholders should try to find a mechanism which better connects the price a sponsor pays for the property to the value that the sponsorship creates. Auctions, revenue share agreements and dynamic pricing are all ways that this connection can be established more efficiently. It all comes down to a very simple truth: the more value that rightsholders create for sponsors, the more value they will create for themselves. Progressive rightsholders will understand this and adapt their approach to reflect it. Vive la révolution.
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Gearing up for Formula E: SUSTAINABILITY GETS SEXY It is generally overlooked but nonetheless undeniable that innovation in the form of new product development (NPD) has been the lifeblood of top sport worldwide in the modern era. Football’s all-conquering Premier League (created in 1991) and Champions League (1992), cricket’s revolutionary Twenty20 format (2003) and resultant cash colossus the IPL (2008), rugby union’s game-changing World Cup (1987) and European Cup (1995) are all standout NPD examples, but there are many more. Next off the production line in 2014 is an innovation which has the potential to have the most profound impact of them all – not just on sport, but on society as a whole. Formula E, motorsport’s most radical innovation in generations, is the first world championship race series for electric cars, and will hit cities from London to Los Angeles after its debut in China in September. Although it’s still early days, even at this stage Formula E is showing all the signs of becoming a major success. It’s backed by the considerable weight of the Fédération Internationale de l’Automobile (FIA). The cars and tech are being developed by companies with serious racing credentials such as McLaren, Williams and Michelin. And the starting grid is full, ten teams having signed up to take part from a combined eight countries – five from Europe, three from Asia, and two from the US.
There’s also already a tangible feelgood factor in Formula E’s commercial programme. Team investors include Leonardo DiCaprio and Richard Branson’s Virgin. Broadcast deals (Fox, TV Asahi) and sponsorships (DHL and Qualcomm) are flowing, with more in the pipeline. All driven by an astute marketing and PR strategy led by CEO Alejandro Agag, the latest example of which saw the first public demonstration of a Formula E car at CES in Las Vegas. But the big question, of course, is whether Formula E will prove a hit with fans.
WE THINK IT WILL Formula E cars will be as good-looking as F1 cars, and seriously fast. 0-60 in 3 seconds, and a top speed of 150 mph. That will feel blindingly fast on the closed-off city street circuits Formula E will use. F1-type cars racing at over 150 mph through the streets of iconic cities such as London, LA,
Monte Carlo and Rio at night will clearly be an amazing spectacle. Add to that the interactive innovations Formula E is working on – including enabling fans to actually influence races online while they are taking place – and it’s clear that it could also be a revolutionary fan experience. WHAT’S NOT TO LIKE? Along with the fact that it will all be delivered with minimal climate pollution, and raise awareness of the benefits of driving zero-emissions electric vehicles in congested cities, and it’s also clear that Formula E could be instrumental in making sustainability sexy, worldwide. Move over petrol heads,the electric heads are coming.
9
Michael Jordan: the iconic image, known universally as the ‘Jumpman’, was actually based on a photo of Jordan, introduced in 1985 and first put on the Air Jordan III in 1988.
Individuals as rightsholders: MAKING THEIR MARQUE Jordan, James, Woods, Wade, Beckham, Brady, Bryant, Bolt. Marbury, Messi, Manny Pac, Shaq, Rafa, Roger, Rose and Ronaldo. You know the names, and, chances are, if you’re a fan of any of these global sports stars, you probably know the logos. Whilst Michael Jordan certainly wasn’t the first professional athlete to have a marque built around him, his deal with Nike (which, legend has it, Jordan was originally reticent about signing) has netted over $1 billion in sales, with the ‘Jumpman’ brand still representing, according to SportsOneSource, 54% of the entire US basketball shoe market. Slam dunk, indeed. It was inevitable that Nike would look to rekindle this magic with other athletes, from basketball and beyond, with LeBron, Tiger, Federer and Ronaldinho brands all deployed to stake a claim on the hearts, minds and wallets of their fans. Competitors naturally followed suit, with adidas banking on Beckham, Messi and Derrick Rose (amongst others) to strike gold. Getting it right is rare alchemy, however, with the output needing to translate beyond just a cool (or, in many cases, relatively iterative) logo; this is an investment in not just a badge but a corporate sub-brand, borrowing from an
individual’s reputation – and very image – with the goal of deepening consumer loyalty whilst increasing both perceived value and, let’s be honest, the retail price of any related goods. Delivering an appropriate representation of an athlete’s very essence in communicable pictorial form is no mean feat, each element of the design charged with meaning and, realistically, subject to the ultimate approval of the superstars themselves. After such a significant investment in design, development, production and marketing – this does beg the question of what happens to any such logo should the athlete leave the Nike/ adidas stable for pastures new? Given that the associated imagery is intrinsically linked to the appearance (or perception) of the player, is the logo – and, by consequence, the brand – the intellectual property of the corporation or the individual? Would that make remaindered marque stock an unsellable white elephant? One solution seems to derive from the approach taken by a growing number of sports stars themselves, who have taken the view that they don’t necessarily need a third party to deliver a logo or identity for them – simply the means of helping translate this into a consumer-facing revenue stream.
Lionel Messi: more superhero emblem than brand logo – adidas designed Messi’s marque with the intention of evoking the Argentinean’s extraordinary capabilities, whilst cunningly incorporating an iteration of the adidas Three Stripes.
Kobe Bryant: Nike designer Eric Avar created ‘sheath’, a logo inspired by samurai warrior imagery, with the intimation that Bryant himself represents the cutting edge of the blade.
9 Player power has never been more obvious in sport. Superstars command exorbitant fees and wages across the major franchises and clubs on both sides of the Atlantic; journeyman mercenaries and hometown heroes alike. A player can make or break a club – just look at the before and after impact of Gareth Bale’s world record £85m transfer to Real Madrid on Tottenham Hotspur: £110m, 7 players and 1 manager down within 6 months of his departure. After a period of injury, Bale appears to have settled into life in the Spanish capital, weighing in with his fair share of goals, including a ‘perfect’ hat-trick against Real Valladolid in November 2013. However, more interestingly, he’s also demonstrated an ability to make his mark beyond the pitch itself. In March 2013, Bale applied to the UK Intellectual Property Office to trademark his personal goal celebration – or, at least, the image of it in specific environments. Dubbed the ‘Eleven of Hearts’, the image depicts a pair of hands forming a heart shape that frames the number 11 – Bale’s Spurs squad number (which, completely coincidentally, was unused by any madrileño players). In July 2013 the UK IPO upheld Bale’s application, granting him exclusive use of the device in merchandise, including “clothing, footwear and headgear”. Whilst a clasped pair of hands alone was unlikely to have felt legitimately enforceable by law, the addition of the numeral and their joint association with the world’s most expensive player made this a simpler trademark to approve. And Gareth Bale isn’t the only major star to take charge of the development of his brand identity: Andy Murray, hot on the heels of his long-awaited Wimbledon victory, briefed agency Aesop to deliver him a visual identity
shapes, sounds or smells – is in the power the individual has to inspire, which is almost exclusively down to their sporting performances. After all, is anyone going to pay over the odds for the body art of an average player? Without Jeremy Lin’s phenomenal performances for the Knicks, the legal wrangles that surrounded the term ‘Linsanity’ would have frankly seemed, well, ‘Linsane’.
that would help take brand Murray one step beyond. What is interesting is that Murray, through his newly-formed management company, 77, has gone about this process without the help of his long-time sponsor, adidas. That’s not to say that there’s no collaboration or sharing of ideas, but the selfcreation imagery based on player-owned IP keeps the moneyball firmly in Andy’s court. Strictly speaking, sports stars have always been rightsholders of sorts – brands and companies buying into their image since the days of Brylcreem and Dennis Compton – only now they’re bringing more to the boardroom table that can be offered to a potential sponsor, retaining negotiation power and delivering rights beyond the typical use of player imagery, personal appearances and signed merchandise. With this move, however, Bale and Murray have given themselves an additional hook – something else to carve up before they have to sell any more of their precious time. And, most importantly, they will own this IP wholesale – giving them ultimate control over who uses it and how. In the case of Gareth Bale, given Real Madrid’s predilection towards acquiring the image rights of their players, this additional piece of IP will have either improved the player’s transfer negotiation position, or offered him something to control and monetise, separate to the personal assets he gave up for his day job.
So what does this all mean to sponsors?
Having noticed the penchant amongst US sports stars for getting tattoos, Matt Siegler from management consultancy CEB took the view that this could be independently monetised. After hunting down the artists behind both LeBron James’ and Kobe Bryant’s signature tattoos, an exclusive – perpetual and worldwide – licence agreement to the designs’ use ‘got inked’ by Siegler and their creators. Whether he honestly plans to legally enforce the exclusivity of this global licence, or simply to create a publicity stunt that might lead to a buy-out offer from one of the aforementioned superstars, the move has been enough to give the NFL Players Association the needle. The body has subsequently advised agents and players to ensure they receive a release from liability – or, ideally, obtain ownership of the copyright – from any tattoo artist they use, to adequately protect themselves, commerciallyspeaking, from the actions of enterprising/ unscrupulous (delete as you feel appropriate) individuals such as Siegler. In the end, much of the value of copyrighting imagery, likenesses – even numbers, colours,
With more and more professional athletes acknowledging the power of their image, and the value this has to others – from branding to body-art – sponsors are likely to see a shift in their relationship with ambassadors. Whilst the additional opportunities to leverage athleteowned IP such as the ‘Eleven of Hearts’ will mean alternative ambassadorial access points for both brands and consumers, it’s likely to come at a price. A greater appreciation of their true position as a rightsholder will lead to more sophisticated ‘brand-building’ by athletes themselves, which may see individuals become a more attractive proposition for sponsors than the very teams they play for. Usain Bolt doesn’t just pull off the posturing because he’s a confident man – it’s because he’s the best in the world. To capture the imagination of consumers and fans, you need to walk the walk – or run it at record speed, in Bolt’s case. With athlete careers short enough already, and only so many places to go round in management, punditry, media or modelling, the democratisation of design has the potential to extend the earning ability of the brightest and best, but only if they continue to do the business on the field of play.
10
The sad truth, however, is that no one has cracked it – and that’s because it is very difficult to do. Anyone in the industry is familiar with the challenges, but fundamentally the difficulty stems from the fact that sponsorship elevates the performance of multiple marketing channels. This therefore makes it difficult to isolate the impact of sponsorship in amongst all the other activity; but it also means that it is difficult to standardise the measurement methodologies across the channels. How do you aggregate advertising OTS, PR AVE and digital CPAs? The result is that most attempts to value sponsorship become a mish-mash of different measures, statistics, outputs and anecdotes. Return on Objectives (ROO) and Balanced Scorecards are the typical solution to this problem, and probably represent the best current thinking in the measurement of sponsorship effectiveness. But even these methods make it difficult to contextualise and compare sponsorship versus other marketing initiatives.
thE vAluE oF SpoNSoRShIp
Value of the sponsorship
200 –
150 –
100 –
50 –
0– Value of the business without the sponsorship
At Synergy, we don’t claim to have completely cracked it either – but we have developed an approach and framework which we think moves the best practice of sponsorship valuation quite a long way down the road. Most importantly, we have been successfully able to apply it to three major clients – so we know that it works in the real world. The starting point for our methodology is the observation that the value of a sponsorship
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Nothing is more important to the future of sponsorship than the industry becoming far, far better at understanding and quantifying its value.
The value of a sponsorship to a brand is the difference between the value of the business with the sponsorship and the value of the business without the sponsorship. That means that there is no such thing as the value of a sponsorship in isolation of the brand that is sponsoring it.
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DECISIONS, DECISIONS, DECISIONS
campaign Architecture
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Meaningful measurement:
6. ouR AppRoAch to vAluING SpoNSoRShIpS
Value of the business with the sponsorship
is the difference between the value of the business with the sponsorship, and the value of the same business without it.
10 Basically, sponsorship is an asset that drives incremental revenue (or cost savings in some cases), which consequently increases the value of the business. As such, it can be valued using the same well-understood financial valuation techniques that are used by investors, private equity, corporate financiers and strategy consultants to value any asset (for example when valuing another company for acquisition). The value of the sponsorship is basically the incremental discounted cash flow delivered by the sponsorship asset. Of course, it’s not easy to develop a perspective on what that incremental cash flow might be. And like any model, the output will only be as good as the inputs and assumptions that go into it. But it is worth considering that there is only one reason to measure the value of the sponsorship: in order to help make better decisions. These can be forward-looking decisions (“How much should I pay for this sponsorship?”), activation planning decisions (“Where should I focus in order to optimise my activation budget?”), or backwardlooking decisions (“How much value did the sponsorship create, and how can I improve it next year?”). There is no point in measuring the value of sponsorship if it isn’t going to change any behaviour or help companies make better decisions. The key is to be very clear what decisions need to be made when building the valuation model in the first place. It’s also incredibly important to keep any valuation model as simple as possible. Complexity can build very quickly and risks making the system difficult or impractical to use. If you are using
the model to help decide whether to sponsor Property A or Property B, you only need to build a model that will get you to that decision – you don’t need to solve the universal formula for sponsorship valuation. Understanding the drivers of sponsorship value is more important than knowing the sponsorship value. Knowing that a sponsorship is worth £5m is useful. But it is far more important to have a good understanding of exactly “what needs to be true” for that value to be realised. What percentage uptick in brand awareness and favourability does sponsorship need to help the brand achieve its goals? How many high value corporate hospitality guests do we need to entertain and what sales conversion rate do we need to hit? What response rate do we need to achieve from our sponsorshipthemed promotions or DM campaigns? How many social media engagements do we need to generate? Breaking down the overall value into its constituent parts, and understanding the assumptions that are driving that value, provides a set of KPIs that can be measured and managed during the campaign.
Finally, it is incredibly important that the inputs and assumptions that drive the model are completely transparent and are there to be discussed, debated, flexed and revised. Sponsorship valuation can’t be a ‘black box’ algorithm, where the all-important number is revealed to a drum-roll, as if by magic. To get a real understanding of how a sponsorship is creating value, the model needs to be “played with” in order to find the key sensitivities, scenarios and break-even points.
In the future of sponsorship, these principles will be well-understood by both brands and rightsholders (but in particular by brands), who will have a much better grasp of how they are going to use sponsorship to create value for their business. And it is this knowledge that will lead to better – and more integrated – sponsorship campaigns.
We are Synergy We make New for our clients and share it with the world. We love change, stay curious, and always ask ‘What’s next?’ We’ve been making New since 1984, so we know a thing or two about it. And if you like what we did yesterday, just wait and see what we come up with tomorrow. We are Synergy. Innovators in Sponsorship.
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