Blog Post

SPONSORSHIP INDUSTRY IN CRISIS: Q&A

Author: Ken Ungar

Like the rest of the world and global economy, the sponsorship industry faces an unprecedented crisis. As an agency, we work with brands and properties trying to save their events, hold on to sponsors and keep their businesses moving forward, all while dealing with challenges at home.

It has been important for our agency to support the entire industry at this time of sponsorship crisis.

We recently hosted a Reddit AMA entitled “Sponsorship Industry in Crisis” where we answered questions surrounding the topic of sponsorship and new industry challenges.

While we cannot predict the end of this sponsorship crisis, we are  happy to put our years of experience in the industry to good use.

Question:

I work at a sports property. Cold calling brands for sponsorship dollars right now is brutal (although I still have to). Any suggestions on how to approach brands right now?

Answer:

That’s a great question and one that a lot of property sales professionals are facing right now. Unfortunately, the market will be brutal for a while. Over the next several months, the key will be to think about the following:

  • Don’t be tone deaf. The people you are calling on have had their current sponsorship programs disrupted . . . their budgets may have been cut . . . or they or their team may have been furloughed. Recast yourself as a resource to them in this time of “need” and not trying to sell a deal.
  • Sharpen your research. Ensure that your prospects share the same target audience as you. Understand the current conditions of the prospect and why they really need your property.
  • Establish a connection today . . . but focus on closing sometime down the road. Few if any deals will close over the next 30 to 60 days. Why? We have no idea when sports and events will resume. However, you want to be top of mind when that day comes.

Question:

I’m seeing a lot of companies redirecting their sports and entertainment investments to their non-profit partners during the COVID-19 health crisis. I think I understand benefits such as (reaching target audience in a different way and so forth). Are there any negatives or disadvantages to moving dollars into the non-profit sector and away from sports?

Answer:

In very recent surveys, consumers are saying they want to see sponsors be “socially good.” Redirecting sports and entertainment dollars to non-profits is a great response to that desire. Companies have to always direct dollars to programs that maximize ROI AND maximize their ethical duty to be socially responsible. As such, I don’t see a negative here. I actually see something that’s a win-win for society, consumers and the company.

Question:

I work at a sports property. Was looking forward to expanding our team (digital fulfillment specialist so I could 100% focus on sales) and investing in more digital benefits before COVID-19  hit. Now our team is going to remain at the size it is (or maybe even decrease) and budget to invest in digital benefits is gone. How do you recommend juggling selling AND fulfilling sponsorships once this is all over? What digital benefits are out there that people can offer that don’t cost additional money but add value and prove ROI?

Answer:

It’s always a balancing act: selling, fulfilling and marketing. The past thirty days have caused us to look at these three things differently.

Today, marketing should come first. For instance, look at how your current value proposition meshes with the environment. No one knows when events will resume, and it will be an even longer time before they resume “like the good old days.” We see properties finding any way possible to recast physical inventory as digital inventory. (You were DEFINITELY on the right track investing in digital benefits before).

To the extent you can connect with your audience via social, digital (web or OTT), and other virtual programs, the better positioned you will be to have a valuable sales proposition. You have the opportunity today to actually grow your audience through marketing and improving your value prop. If your property doesn’t have a big budget for expensive digital campaigns, that’s fine. Consider how you double down on better story-telling, creative engagement with your audience and re-using existing, but compelling, content. We see properties creating completely new programs digitally and selling sponsorship positions in them.

Fulfillment comes second. Keep your current partners crazy happy. It’s easier to keep a sponsor than find a new one.

Selling comes third. If you have strong marketing (especially digital) and a happy crew of sponsors, you’ll have an easier time in the field selling.

Question:

How and when do you recommend surveying your audience to collect audience data in a time like this. I am using this down time to prepare selling materials for 2021, but not sure the best way to survey our audience after a crisis like this hits. How do you recommend collecting audience data in a tasteful manner? Obviously, I will have to remove questions such as “how many vacations do you plan to take in the next year” due to mass unemployment. Are there any audience data questions you recommend asking?

Answer:

I’ve had this conversation a lot in the last week or so. Do we delay surveys or go to the field with them? I’ve been recommending going to the field. Why? We need to know how consumers feel. In fact, in the face of chaos, we need this data now more than ever.

Your instincts about being tasteful and sensitive are right on. Consider starting your survey with a paragraph noting the current crisis and why you still want to connect with your customer and solicit their important opinions. In this way, you create appropriate context. Also, you don’t need to remove too many questions. If people don’t want to answer your questions, they will self-select out.

Question:

We have a lot of “sponsors” approach us about selling. We usually turn them down unless they are willing to invest at a MUCH higher level. Now we know we are going to be in a position that we really can’t say no to many people (unless the brand just isn’t a fit). How do you recommend dealing with sponsors that want to sell at your events more so than be a true sponsor?

Answer:

The best sponsors are brands that desire to affiliate with your property because the relationship benefits both. This is the “true sponsor” you referenced. They pay you a rights fee and invest in leverage / activation because they enjoy higher ROI / ROO when they do so.

Companies that want to sell to your audience, but don’t value the relationship (as demonstrated by how they leverage your property), are merely vendors. You should value the commercial relationship and treat them as valued customers. However, I generally recommend that you not treat them as “sponsors”: You would not let them use your IP or allow them access to the special opportunities that sponsors have. A lot of properties use a high rights fee as the cost of entry to sponsorship OR a minimum activation commitment.

With that said, in the post-COVID-19 world, anyone who wants to spend money with you should be welcomed with open arms!

Question:

Have you seen any properties or brands try something different over the last few weeks? If so, what stood out to you about them?

Answer:

On the brand side, I have seen sponsors pivot towards social responsibility activities and messages. Budweiser blew me away with this commercial  and is also producing hand sanitizer.

Properties are adjusting to the new reality without events and are leveraging technology like never before. I love what NASCAR is doing on FS1 with its virtual racing series, for example.

What do these things have in common? First, not being satisfied with the new reality. There’s always a way to address the challenges of the new world. Second, tackle these challenges with new thinking. The old way of thinking should be thrown on the trash heap. Third, keep being relevant to your audience. They need you now more than ever.

Question:

Is pivoting sponsorship dollars into esports a good idea for the short term? With most other sporting events getting canceled or postponed could moving dollars into esports be a good investment, especially given its such an extremely niche market?

Answer:

I thought esports was a great investment well before COVID-19. It has matured into a viable property with a strong audience and compelling value proposition.

While I recommend enhancing all available technologies to up your sponsorship and marketing games, I don’t advise moving dollars into esports for the short term. I do advise researching opportunities, structure a program for the long term and seek out advice from a capable advisor who can share the opportunities …. and pitfalls of esports. If you’d like more information about esports Click Here. We have a lot of free content to get your started in considering esports opportunities.

You can read our ‘Sponsorship Industry in Crisis’ article series here.

Part 1: How to Move Forward

Part 2: Fill the Void

Part 3: New Thinking

WE WANT TO HEAR FROM YOU!

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Check out our previous Blog Posts to learn more on topics surrounding the sponsorship crisis. Contact Us for specific content questions.

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