How to do a high-profile and high-quality sports sponsorship, without breaking the bank?
We are please to present a special guest post on the subject by Stephen Pearson, CEO of Sports Media Gaming Ltd (SMG). SMG is a leading international sports marketing agency, and has been involved in brokering a number of the recent sports sponsorships by leading Retail Forex and Binary Options brokers. Stephen has held Board roles at UEFA Champions League and English Premier League.
This month saw Nigerian beer brand Star Lager simultaneously become an official sponsor of five top European clubs – Real Madrid, Juventus, Manchester City, Arsenal and Paris Saint Germain.
On the face of it an extremely expensive set of partnerships.
In fact, not at all.
Stephen Pearson, SMG
The brand has actually become official beer sponsor of these clubs in the territory of Nigeria and permitted to promote its association in this single country only. The overall investment level probably under $1m yet association to five of the world’s biggest sports brands and to Nigerians who see the marketing campaigns within territory, an enormous sponsorship.
The drive by sports rights holders and brands to create geo sponsorships has been led by an increasing demand for alignment to global sports properties, the growing regionalization of rights holder assets (via multi language websites and social media, the touring of clubs overseas, signing of foreign sports stars) and the development of new technologies.
Being able to align with a global sports property on a regional level offers highly targeted marketing with limited wastage and at a fraction of the cost of a global sponsorship. If Star Lager had become a global sponsor of all five clubs the investment could have been well in excess of $10m.
The growing sophistication of research has been an important driver in this process. Rights holders now know exactly what fan bases, TV viewership and digital/social media presence they have in every market round the world. This can be used to sell regional sponsorships by continent or even down to a country level.
The geo level strategy is already underway in the online trading market. Instaforex have recently renewed a partnership with Liverpool FC that sees them continue as “official Asia and CIS partner” of the club. Their marketing activities are focused and indeed restricted to these territories.
Football is not the only sports platform that offers geo regional sponsorships.
Formula1 teams for example are also now much more open to these types of partnerships when competing for marketing spend. One of the most expensive parts of an F1 sponsorship is the level of on car branding. Deals can now be structured where on-car branding is limited to certain races rather than being present for the whole season. Since the F1 season visits twenty markets its possible to put together campaigns that take in only key markets and structure the assets accordingly around these races.
Brand Ambassadors also offer a similar opportunity. There is no need to agree a global level endorsement fee with an individual who will be used to promote the brand in limited markets. The rights can be accordingly structured where the ambassador promotes the brand on a geo regional level at a fraction of the cost.
Technology is also playing an important part in the growing trend for regional deals.
La Liga is one of the first sports properties that offers a regional advertising opportunity for brands. A technology called “digital billboard replacement” effectively substitutes what viewers see at home to what spectators see in the stadium. The technology is sophisticated enough to allow different messages to be seen in Europe, Latin America, North America and Asia.
Whilst permitting the rights holder to effectively multiply their revenue stream from the same asset, it allows brand advertisers to acquire exposure in La Liga matches for a fraction of the cost of appearing on the LED in the stadium itself.
Geo regional sponsorship provides the online trading market a unique opportunity to be associated to global sports properties, and this type of strategy is very relevant for brands who are newly launched with limited marketing budgets, brands who wish to test market in newly regulated markets or for brands wanting to simply minimise marketing wastage that could come from a global level sponsorship.
Article by Stephen Pearson, CEO of Sports Media Gaming Ltd (SMG). SMG is a leading international sports marketing agency, and continues to be involved in brokering sports sponsorships by leading Retail Forex and Binary Options brands. Stephen has held Board roles at UEFA Champions League and English Premier League.