4 tips to ace sporting sponsorships

How many sponsorship deals positively contribute to the overall experience of the sporting events they support? And how many sporting scandals have seen brand associations cut short? In order, the answers are likely to be few and many.

Sports need a clean-up. But do brands need a wake-up call?

Two glaring cases of institutional morality gone awry are the International Association of Athletics Federation (IAAF)’s doping scandal and FIFA’s corruption story. The World Anti-doping Agency concluded that corruption was “embedded” in the IAAF. As for FIFA, the events that led to the resignation and public humiliation of its president, Sepp Blatter, saw the world turn its back – if only for a short time – on football.

Julian Birkinshaw, Professor of Strategy and Entrepreneurship at London Business School, says about FIFA here: “So much was very wrong. I think their problems were partially rooted in nobody really knowing who FIFA’s ultimate customer is and who they answer to. Is it the global federations or the sponsors, or is it you and me who watch games? For many months, Blatter refused to budge until finally there were demands from his paymasters the sponsors that he should go.”

That’s the sweet spot: sponsorship deals hold weight. Corporate brands can request that sports dance to the tune of fair play.

With huge events such as the 2016 Rio Olympics, there’s plenty of scope for sport and sponsorship to work together in the name of progress. But brand associations aren’t simple. They take time and thought and, above all, they have to make sense.

David Arnold, Adjunct Professor of Marketing at London Business School and author of The Handbook of Brand Management, says sponsorship that works for both parties boils down to four tips.

1. Identify brand alignment

What’s the link between the brand and the sport? “If a consumer has to ask that, you know you’re getting it wrong,” he says.

Brands need a strong association with the sport they’re involved with. It sounds basic, but not when you consider the fast-food chain logos plastered in hospitality areas a mere stone’s throw away from some of the healthiest, fittest sportspeople in the world.

“Sports teams and events are just about the strongest brands in the world today, because sporting events enable people to connect emotionally. Best practice in brand management is not just about selling more products; it’s about creating communities that are energised by an affiliation with a sports team that goes above and beyond any purchases. Sports teams build those communities like almost no other business or organisation.”

Consumers are the bedrock of big sporting events, so surely brand association needs to start by making sense to the fans?

“There are some sports organisations who understand their power as a brand and some who merely adopt a seller’s orientation,” Dr Arnold explains. He takes Manchester United football team as an example. “The team wore [insurance services firm] AIG on their shirts in 2010. Today they wear Chevrolet. There’s no brand thinking with either of those in my opinion. They are merely selling the shirt as a sort of advertising billboard, like the ones by the side of the road.”

Where’s brand synergy when the highest bidder wins the shirt?

The level of consumer cynicism is often underestimated when brands clash. There can also be counterintuitive effects. A brand mismatch distracts customers from the very focus of their attention: the teams, players and games that they love.

2. Build on strong brand associations

When sporting events get brand affiliation right, what then? Dr Arnold takes Wimbledon as a case. “IBM is a great brand match for Wimbledon,” he says. For 27 years, IBM has been the official supplier of IT to Wimbledon, supporting its data and statistics. Its tagline ‘Helping Wimbledon in their pursuit of greatness’ fits the game as well as its own corporate values.

“Wimbledon is a very clean environment; there are few visible sponsors. There’s Slazenger, which provides the tennis balls. IBM, which does the scoring. And Rolex for keeping the time. They make sense.”

With brand association as a baseline, companies can then build upon it. The next step is to create a clear activation strategy, where the objective becomes more about developing a two-way conversation with brands and their customers.

When activation becomes the focus, it ensures that the sponsorship deal contributes positively to the overall experience of an event, shaping a relationship based on more than just vague association. “For example, IBM manages the statistics, and allows fans to access live data. If they want to know how many times Roger Federer has made a forehand pass, they can easily find out.”

3. Look beyond customers to B2B opportunities

Be warned. Unless companies target their efforts with precision, sponsorship can be fruitless. The sales funnel, which starts with awareness and ends with action, can get plugged up.

When MasterCard sponsored the football World Cup, it made a huge investment. Did it have the customer sales funnel in mind? Dr Arnold, who wrote a case study on this sponsorship case, says that traction with consumers was probably not the main benefit: “MasterCard got enormous numbers of consumer impressions [exposure to consumers] but it turned out that in all markets they already had close to 100% awareness among their target market.” So in fact, their consumer awareness was of little value while costing them dearly.

Its best efforts were focussed at another level entirely: trade marketing. “Sporting events are a fantastic opportunity to woo trade partners,” says Dr Arnold. “And actually, I think in terms of productivity, the focus should be on trade marketing.” Not least because of the ‘game theory’ – where companies ward off competitors, in this example, Visa.

“MasterCard’s trade customers, that is, banks, have a choice of which card to issue to customers. A sponsorship gives them a reason to push one card over another.

“When sponsors want to corner an exclusive asset, they block their competitors. Sometimes companies can be more intent on that and the signal it gives out than on the financial productivity of the investment.”

4. Have a quick exit strategy

Scandal can turn celebrity endorsements and brand associations sour. Take Nike and Tag Heuer’s association with five-time grand slam winner Maria Sharapova; they cut ties almost immediately after it was revealed she tested positive for a banned substance.

Increasingly, sponsors are playing a more active role in the politics of sport. So what steps should sponsors take when their brand reputation is at stake?

Dr Arnold says: “Sports have a lot of vanity and ego investors, for whom the sports asset they own – a club, a team – is basically a trophy asset. They will hold onto sponsorship.

“Once a scandal is in motion, or a cheat is caught, the only option for corporate brands is a quick exit.”

The future?

Intertwined sports, scandals and sponsorships are slowly unravelling. Opportunities to advance value-adding associations are on the up.

Dr Arnold says: “Sport is getting cleaned up and scandals are being exposed.

“I hope that in the future, sports won’t be considered ‘corrupt organisations selling advertising’. I’m confident that corporate brands and sporting organisations can get to a much better place where sports are managed by leaders who understand the importance of brand partnerships and the management of them.”

For sponsorships to work hard for both parties, corporate sponsors must go back to the start and ask: what’s the link? If it lacks meaning, it won’t work.