The Great Recovery

In case you haven't heard, sports marketing has been out of fashion since the onset of "The Great Recession." Of course, there are those who disagree with that analysis. Some believe that sports marketing -- when properly planned, executed with purpose and meticulously measured -- is in fact the best means to responsibly drive growth in all types of economic conditions, with the tremendous passion underlying people's affinity for sport being the primary driving factor. Nevertheless, the ranks of those who viewed the practice of sponsorship as frivolous and wasteful grew, as belts got tighter and cuts went deeper.

Those who disapproved seemed to root their opinions in the expenses incurred by the most visible tactics of sports marketing -- team, league or event sponsorships. And, certainly, the very public questioning uncovered many companies that simply were not confident in answering this question, "What is the ROI of your sports marketing expenditures?"

Some revealed their sports programs' returns, but they were in the minority. Could it be that companies were protecting their positive positions, as weaker programs and marketers crumbled? The result of this short-sighted thinking in the marketplace could be described, at best, as sluggish and, at worst, as paralysis. Sponsorships were not renewed, and creativity in activation tactics was left languishing in favor of media buying and overused event-operations basics.

As a result, companies aggressively cut staff, programs and activation budgets rather than incur the analysts' wrath. And the sports leagues, teams, players and venues saw their asset spreadsheets bulge with unsold inventory. (Of course, there were a handful of entities that experienced growth during this period, but most rights holders would tell you their revenues and/or profits suffered.) News media may have labeled this economic period "The Great Recession," but there were many sports marketers that were definitely "greatly depressed."

So, here we stand (albeit precariously) on the doorstep of "The Great Recovery." The business of sport is seeing some long-awaited growth in a few areas, and hearing more positive discussion and future inquiries in others. Signs point to the start of a rebound in the rights marketplace, although new activation budgets still lag.

Rights holders are getting aggressive in trying to attract new business by offering favorable pricing and terms. As individuals, we have grown weary from bearing the weight of our economic contraction. We have drawn closer to the things that we hold most dear -- faith, family and community (including the arts and sports).

Aren't we all ready for some good news and simple fun? Whether or not we can afford to attend live performances or games, we are still fans. Most of us want to share the fellowship of common cause, and forget our troubles with others like ourselves. Coincidentally, the rights holders are ready to deal and the majority of fans are looking for diversion and fun. The current conditions represent a prime opportunity for those marketers willing to develop creative and engaging new sports programs.

Research shows that for sponsorship programs there is a steep and steady rise in the ROI potential during the first three to five years of the sponsorship. It takes that long to derive the maximum benefits from the members of the "sports tribes" (fans) with whom a brand is engaged through the sponsorship. The brands that will reap the greatest rewards are those that: 1) carefully plan which rights to acquire; 2) develop "ownable" activation tactics that create engagement and inspire commercial reward; and 3) know how to definitively measure ROI derived from each sponsorship.

So, how do companies take advantage of the favorable market conditions for sponsorship rights, while facing the challenge of planning and executing in a world where marketers have fewer resources at their disposal? Zero in on goal-driven planning, and activate creative engagements to achieve measurable success.

There are two key questions to be answered: Can the sponsor brand foster genuine engagement with the members of the particular sports tribes? And, do the tribe members accept that brand as a part of their tribal existence? If a brand can answer yes to both of those questions, now is the perfect time to acquire assets, and start planning and activating their sponsorship in the near future when their competitors just might be thinking about getting back into the game.

2 comments about "The Great Recovery ".
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  1. Gerry Myers from Advisory Link, September 7, 2010 at 1:05 p.m.

    I thought the article brought up some very good points. However, one thing that sponsors continue to miss is the clout women sports fans have on purchases. To be truly successful in reaching fans, sport teams and their sponsors need to appeal to women without being condescending or patronizing. By focusing at least part of the budget on marketing to women, they will have an even higher ROI.

  2. Howard Brodwin from Sports and Social Change, September 7, 2010 at 10:22 p.m.

    Kent makes some great points here. Most importantly, now is the time to get involved with the events, teams and programs that truly connect your brand with your audience. If you wait until the economic climate has fully recovered, you'll be watching from the sidelines, because the costs will go up and your competitors will already be deeply entrenched with your customers.

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