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Find data to 'prove' how sports are the 'last captive audience' for brand marketing
Hello! Thanks for your question about sports being the last captive audience for brand marketing. The short version is that sport has the power to unite people through shared passion and allows brands to attach marketing messages on a global scale. However, brands must be aware of the changing nature of the way people consume sport, moving to digital, mobile and apps, and the new opportunities that it can offer, especially as these are constantly evolving. Below you will find a deep dive of my findings.
METHODOLOGY
I first researched the importance of sports and sporting events for marketing and agencies. The first breakthrough was finding a 2017 article from Campaign highlighting not only the importance of sports for brand advertising and development, but the relevant trends marketers and agencies need to know within sports for 2017 and beyond. I have incorporated this into my research. I then researched trusted media sites, academic sources, official organizations such as the IOC, business and sports-related specialty sites and more in order to discover the additional information you needed -- such as the changing trends for Millennials when consuming sports content.
In my write-up, I have concentrated on providing both hard data and opinions, examples and arguments from leading media and marketing commentators, as requested.
INTRODUCTION
SPORTS: A $700BN MARKET
We live in a constantly connected 24/7 world where we’re always plugged in, moving from one platform to another seamlessly accessing whatever content we want on demand. Throughout all that, sport retains the power to unite audiences through shared passions and allows brands to attach marketing messages on a global scale. For this reason, the sports market is estimated to be worth $700bn.
Despite a fragmented media landscape, for instance, half the world’s population still watched the 2016 Rio Olympics, making it the ‘most consumed Olympic games ever’. According to the IOC, awareness of the Olympic Games is highest among all sports events surveyed.
The data, however, reveals that the way people consume sports is changing, largely driven by technological advances. There were more than seven billion views of official Rio 2016 content on social media platforms, for instance, double that of London 2012.
In the U.S. alone, for instance, NBC Olympics digital video totaled 3.4billion steaming minutes for Rio 2016 (2.71 billion was live coverage), more than 1.2 billion minutes more than all previous Olympic Games combined.
There’s no doubt that with such changes in consumer behavior, marketers must alter the way they play the sports marketing game.
James Kirkham, head of fan media channel Copa90, told Campaign, "Sports marketing in 2017-2018 is an exciting mess. An elegant chaos. Traditional sponsorship is not dead, but great use of assets that genuinely engage are few and far between."
TV VIEWING DECLINING
A key factor for sports marketing is the knowledge of how people prefer to consume it. Sports marketing is shifting to new and different platforms as traditional TV viewership declines.
The NFL, for instance, has seen massive TV viewership growth over the past decade, but late last year TV executives started to ask ‘where have the viewers gone?’ By October 2016, for instance, each of the NFL’s prime-time series suffered a double-digit percentage drop in viewers. Sunday Night Football, for instance, saw a 10% drop in viewers.
Some TV execs suggested the Presidential election and the Olympics were to blame, others point out the proliferation of digital channels and new streaming options are taking viewers away from the TV.
Lee Berke, president and CEO of LHB Sports, Entertainment and Media and a longtime media consultant told Sports Business Journal: “I think we’ve reached the tipping point. The TV industry has moved from being mature with broadcast and cable outlets to a startup with all these streaming options.”
He was backed up in his analysis by Neil Begley, senior vice president of Moody’s Investors Service, who said: “People are not watching less, they are watching on other devices which are not metered.”
ATERNATIVE DIGITAL VIEWING DRIVEN BY MILLENNIALS AND GENERATION Z
Millennials and Generation Z in particular are driving the trend towards digital and streaming viewership. 65% of Generation Z and younger Millennnials prefer to access sports content on a mobile, according to #SCORE 2016: The Impact of Changing Sports Fan Behavior on Media, Advertising and Spending.
Overall, mobile devices tie with computers as the second most popular media platform for consuming sports content behind TVs, says the joint survey from USC Annenberg's Center for the Digital Future and ThePostGame.
It doesn’t stop there. 32% of older Millennials (ages 29-36) would watch a sporting event streamed from a mobile phone via apps such as Meerkat or Periscope. Content beyond the game play on the field is also important to fans, with 60% of people saying it is important to them and 50% regularly watching it. Younger Millennials lead this category.
Snapchat is a popular top five social media source for younger Millennial and Generation Z fans. 45% of Generation Z and 23% of younger Millennial fans consume sports-related content on the mobile app, pretty high for a relatively new entrant.
SOCIAL BROADCASTING RESPONDS
Social media networks can combine viewing, gaming and real-time commentary. Engagement no longer has to be linear, and neither does sports marketing. It’s a game-changer.
More fans, for example, are choosing to watch their sports via the ‘live’ functionality now offered by the likes of Facebook and Twitter.
Last year, Twitter won the rights to broadcast NFL’s Thursday Night Football games, which claimed at its height 3.1million viewers (Oakland and Kansas City). While it may have been a small proportion of the total viewership for the games (NBC said Oakland vs Kansas City had 17.4m TV-only viewers, for instance) Twitter claimed to be happy with it.
Users could access the game for free on browsers, on Twitter’s mobile app, and on apps for Amazon Fire TV, Xbox One and Apple TV, even without a Twitter account or cable package.
The video played on one part of the screen while tweets were shown on the other, alongside play-by-play commentary. Important for advertisers, of course, is that it also featured advertisers throughout its games. Twitter also live streamed Wimbledon.
Twitter’s global head of sports partnerships Laura Froelich told GeekWire: “Our hypothesis was that we had the ability to instantly explain the value and power of Twitter by having both the game, and the conversation around the game, all in one place,” she said. “It’s really, really resonating with fans.”
YouTube live, in partnership with BT Sport, now live streams UEFA Champions League and the behind the games and beyond the play content that people are looking for. It streamed the Champions League finals last year and its audience was up 5% year-on-year compared to 2015.
Facebook, meanwhile, is seeking to become the go-to platform for live sports streaming. Facebook has partnered with Fox Sports to stream UEFA Champions League games on Facebook Live, and just this year alone has signed separate deals to stream MLB games, World Surf League events and Major League Soccer matches.
BUILDING BRANDS VIA SPORTS: THE BENEFITS OF CHANGE
As Facebook seeks to create a social experience around live sports, sponsors and brands supporting it can also benefit. Organizations such as the NFL, for instance, can learn exactly who is watching and commenting on their brand, potentially giving them the option to engage with fans on a more personal level. Sponsors can also gain real-time information on viewership and engagement levels.
As Forbes says, personalized data and real-time analytics may encourage sponsors to choose social media for advertising over TV spots.
Kantar’s Nénon-Zimmermann told Campaign: "The digital explosion allows marketers to launch increasingly targeted campaigns and engage in meaningful conversations with fans." He stressed that as digital transforms measurement, marketers can track the direct impact of marketing on a specific call-to-action.
According to Forbes, Facebook expects a slowdown in advertising growth moving forward and is instead hoping to attract those marketers shifting their advertising spend from TV to digital, and siphon TV ad spend. It aims to do so with its huge user base and personalized ad targeting features, plus its plans for a TV app in the future. This strategy, says Forbes, can ‘bring the next wave of growth for the company’.
This only serves to give marketers and agencies even more digital choice in the future.
POSITIVE REACTION FROM FANS
Sports is the last category of must-see-now content, says Jeffrey I. Cole, PhD, Founder and Director of the Center for the Digital Future at USC Annenberg.
#SCORE 2016 clearly reveals that GenZ and Millennial fans are clearly shifting preferences, behavior and spending away from watching sports on traditional TV.
Why target these generations? Because 37% of Gen Z and 35% of younger Millennials say they like advertising during sports programs and tend to watch it. More than half (50% Gen Z and 56% Millennials) also believe the advertising gives them useful information about products and services.
THE KEY FOR BRANDS AND GREAT BRAND EXAMPLES
The truth is that sports fans are demanding a more immersive experience than ever before, with sport moving from a passive spectator activity to one of participation. Fans want to be closer to the action, stats, camera angles, insider views and more. Marketers have to respond by creating captivating and exclusive content and this gives sponsoring brands a great opportunity to take part in the conversation and get closer to its customers.
If a brand can use its access to players, behind-the-scenes action and managers in order to create interesting content, then it gives it a genuine reason to join in and host the conversation. Nissan’s vice president of marketing, Jean Pierre Diernaz, believes that conversation is the main asset behind a sponsorship deal.
He told Campaign, "Sports sponsorship gives you the entry ticket to access engaging content in an agile way. As a way to deliver logo impressions, sponsorship doesn’t work. As a way to deliver content, it does. Having a sports contract gives you souped-up content and a way to engage with people that are passionate and are going to react to what you say with a high level of engagement."
Red Bull is a superb example of this. Its sponsorship deals have spread wider and across more traditional sports, but it hasn't merely advertised. Red Bull has become deeply involved in the sports in an unrivaled sponsorship marketing strategy that has changed the way many multinationals think about sponsorship. As part of its unusual sponsorship strategy, it hasn’t just sponsored sports-based events, but also art shows, video game events and break dancing.
Its involvement with Extreme Sports — being involved with more than 500 extreme sports and redressing the lack of media attention the sports typically had — has allowed it to connect with young people all over the world via its own multi-platform media company. By spending the money to fuel sports and sporting events instead of advertising the drink itself, Red Bull's brand image resonates with young people across the world.
Intel is one tech giant jumping into the sports marketing world in a bigger way than ever before. While it dabbled in sports previously, it created the Intel Sports Group in September 2016, a formal business unit, to focus its investments in a more concrete way. Intel seeks to use technology to attract fans and to boost value for leagues and right holders alike, and is specifically concentrating on immersive video — virtual reality streaming, plus 360 degree replays.
The technology becoming available and changes to consumer media behavior have created the ‘perfect storm’ for this project, says James Carwana, general manager of the Intel Sports Group.
Younger generations have grown up on social media and want unadulterated interaction with athletes. Nike On Demand is a great example of this, offering a one-to-one with athletes and coaches via WhatsApp to inspire fans to achieve their own personal sporting goals.
Such content, that makes fans feel closer to their sporting idols, has a lot of power. Brands such as DFS, who gave gold medal winners Laura Trott, Max Whitlock and Adam Peaty home makeovers, allowed fans a sneak peek into the athletes’ real lives.
This in return allows brands to deep the customer relationship far more than basic logo sponsorship ever did.
USEFUL QUOTES
"Sport is now the only potential discipline where you can engage very high numbers of people. It still provides one of the few moments that is broadcast live where having a replay doesn’t make sense. When it comes to sport, Netflix has zero value." Jean Pierre Diernaz, vice president marketing, Nissan Europe
Digital that matters will be the differentiator in 2017. 2016 was dominated by social media, fake news and ''noise" on the Web. The next great opportunity will be for sponsors and for sponsorship properties to create relevant, timely digital and social content that the audience actually cares about.
The measurement of return on sponsorship investment has never been more clear, with the rise of social media. This year, for example, we learned that hockey fans value a Retweet more than an autograph. For 2017, we expect to see more innovation to personalize sponsorship using social, most significantly with video. Video sponsorship, specifically with our Twitter Amplify program, is a core focus for us this year in Canada, and the launch of a live 360 video experience on Periscope is just one example of the innovative video tools brands can take advantage of in 2017. We can't wait.
We aren't guessing about what fans would engage with what brands, we are using algorithms, case studies, focus groups and more to gather information and make effective decisions for brands. 80% of fans use social media during live sporting events both in events and at home. That's an incredible percentage for brands who want to create a dialogue rather than the traditional monologue.
Micro-targeting is the future. Brands will target their marketing efforts to much smaller groups rather than large groups at one time. This will put pressure on brands to tell more meaningful stories and have more diversity in them. One slogan isn't going to touch all their target demographics... so more communication objectives will be needed.
To wrap it up, sports marketing is still a huge area of potential for sponsorship and advertising. This seismic shift in sports viewing platforms offers brands a previously unknown opportunity to get closer to fans, but they must respect the changing nature of technology and the attitudes that it brings. This is especially true of the younger generation who are willing to give brands incredible access to them if the brand plays its cards right.
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