COVID-19 has been unprecedented in many ways - and we are still counting new records and measuring historical benchmarks as 2020 progresses. As a society we get to study ourselves in real-time, and we’re observing what “essentials” we can live without (think hamburgers and Red Lobster - c’mon folks!) and which “non-essentials” are actually pinnacles of civilization.
While we can all easily acknowledge that conferences, music festivals and sporting events are not a priority, it’s clear from the rapid collective shift to online meetings, e-concerts and streaming sports games that we cannot go entirely without these forms of socialization.
The professional sports industry is perhaps one of the few that was least-prepared for a worldwide pandemic such as this - but in equal measure has been one of the fastest to bounce back with an entirely new game. This week, we’re looking at the key interruptions the sports industry is fielding - anyone remember the Olympics was supposed to happen this year?? - and their rebound back to taking center court once again.
Initial challenges to sports teams, venues, and sponsor partners center around one thing: what to do with the money.
Even just 5 months into 2020, sports advertising is down nearly 30% from last year. Nearly every major brand, from Geico and Kia to Coors and Gatorade, has dropped ad spend on televised sporting events. It makes sense - there are no games, and nobody is watching. As we mention below, the sports world is scrambling on the other end to drive more demand lest they continue to lose profitability. But the issue is more complex than maintaining a short-term balance between viable marketing channels and long-standing partnerships, as Director of Publicis Sport & Entertainment, Ashley O’Rourke explained to CMO. “It would have been very short-sighted to pull funding from sports partnerships purely as a cost saving exercise, because fans’ memories are long and they are going to remember those brands who abandoned their passions.”
Such is the brave world of branded content: don’t bet too much on consumer loyalty without having truly invested in building brand awareness and engagement first. Brands playing to win the set will reallocate funds away from these traditional channels if they’re not driving ROI. Brands playing the long game will maintain spend (albeit reduced) on core marketing channels.
At ThoughtLeaders, we believe there’s a third winning strategy somewhere in the middle - brands can repurpose campaigns and assets to achieve connection with the same fans they had access to through a plethora of digital campaigns that are based around partner-generated content.
Here’s a great example: in April 2020, the Australian Football League announced they had signed Colgate as the “official smile of the AFL”. It’s clear Colgate signed onto this partnership with expectations of major displays and poster ads at stadiums, commercials during broadcasts, and the jersey sponsor patch that is a trademark of sports advertising. Without 90% of these channels rendered viable by COVID-19’s shutdown, Colgate has pivoted, leveraging player-generated content to access audiences.
Colgate’s agency Wavemaker has been handling coordination, and while coronavirus has certainly complicated collab opportunities for brands and sports partners, as Wavemaker Director Alexis Antonis explained, “there have been challenges with regard to accessing talent, so we are working remotely and asking talent to shoot their own content and send it through for us to edit it. But we are very much still working as we would, it’s just the execution is different.”
Brand Menulog and rugby team Rabbitohs also had to adapt their partnership, moving to digital and social platforms to drive engagement. Menulog’s marketing director Simon Cheng hit the needle on the head that a jersey sponsor patch just won’t be enough for the 2020 season given the new gameplay/venue occupation limitations: “the original plan was to be the front of jersey sponsor for a number of the junior leagues and we are not doing that anymore, so we have a much heavier social media plan to create more engagement in the online world with members.”
With a constant flurry of action on the brands side, let’s go right to the sidelines to see how the Sports and Entertainment side is reacting to these changes and what opportunities are available for brands and teams looking to transition quickly.
The Olympics represents one of the hardest hits due to COVID-19, being one of the largest and most widely broadcasted sporting events in history. The Olympics are coordinated far in advance and athletes prep for years ahead of the next official games, so it follows that equal amounts of time and resources are invested into sponsorships, says Jim Kahler, executive director of the Sports Administration program at the Ohio University College of Business.
In looking at a statement from the Olympic Committee, there seems to be an agreement that the games will still be held in Japan, but pushed back to some undetermined time in 2021:
"All of that rework in terms of construction, logistics ... I don't want to say the money goes down the drain, but anyone who was planning to participate [as an advertiser] in Tokyo is going to have to think very carefully about how they can push everything back to 2021," he said to Marketing Dive in their recent report.
The dividing line seems to be the size of the brand and the relative investment they made into a particular athlete or event at the Olympics: larger brands may be better equipped financially to weather the storm, but smaller brands (who in some cases invested as much as $10,000 into a single athlete) may need to renegotiate how those partnerships will generate an ROI given their star athlete’s debut will be experiencing a technical delay.
Where possible athletes and brands are looking to keep doing what they’re doing, just virtually. For example sponsors ON running and Saucony and their respective Olympic athletes Jake Riley and Jared Ward, competed over a virtual 5k live on instagram on July 4th.
While the Olympics outshines American sports leagues in global viewership, Basketball is a contender for “highest spender”: in 2019, brands and advertisers spent an estimated $1.126 Billion in total on March Madness advertising for an estimated 22.5 Billion impressions. March Madness is the culminating collegiate basketball championship tournament, so the attention given by advertisers to this massive event doesn’t even scratch the surface of how much is invested into the NBA YOY. How can the NCAA and NBA continue to supply those 22.5 Billion+ impressions as payment to their sponsors if they’re currently banned from hosting games?
Disney may have found the solution, at least for the NBA league teams: the Disney campus will host the NBA 2020 season, allowing for games to be streamed and brands to capitalize on massive virtual crowds tuning in online. Unfortunately for collegiate athletes, their campuses are looking to remain closed or proceed with a cautious reopening with limits on student events such as sports games.
Disney has an 80% stake in ESPN (and a controlling interest in many other companies if you’re curious), which explains why the upcoming modified season is being held at the ESPN Wide World of Sports facility, a component of the Disney theme parks in Orlando. Just one small complication: already 16 of 302 players have tested positive for coronavirus, showing just how complicated the future of competing is stacking up to be. At ThoughtLeaders we’re holding out hopes that we’ll see the Raptors back in action soon (shoutout to Toronto!), but until finalized best practices can be put in place for competition, we have a back-up plan.
We’re tracking the lifetime of conversation on YouTube and podcast in our platform regarding various sports teams and events, and we can tell you that even though we might not have a live game schedule for NBA teams quite yet, the creator content world is filling the void.
In a quick search of “NBA” just on our Thought Leaders publication search page shows there are 31 podcasts alone with the word NBA in the title.
If we expand our search using the Content Feed, we can easily find almost 1800 podcasts discussing topics on the NBA, NCAA and pro basketball (easily over 10K+ podcast episodes from these channels mentioning the topics, across Sports, News, Entertainment, Lifestyle, and Health & Wellness content creators).
According to our content trend tracking, conversation around the NBA, pro basketball, and college basketball has seen a steady increase on influencer channels. We can observe a yearly “spike” in conversation, most likely due to March Madness.
Things change in 2020: upon entering 2020, NBA/NCAA basketball mentions were at an all-time high in the 5000-6000 mentions per month range. We’ve seen a drop from these mentions back down to pre-2020 levels, hovering at around 3000 mentions per month.
Our takeaway? There are publications still talking about the NBA and these conversations are gaining more followers YOY. Better yet, amidst the complete lack of active games, these publications are maintaining pre-COVID levels of audience engagement and discussion on the topic. These digital and social platforms represent the perfect place for brands to capitalize on the stability and consistency of the content and the associated impressions generated.
10K+ episodes from the network of 12 channels and 233 definitively sponsored episodes:
Locked On Podcast Network is a great example of how multiple content channels can be leveraged for a targeted approach for brands that have a specific consumer demographic. We can see that even though there are 12 unique podcasts (all with slightly different listenership and engagement) the discount code is “LOCKEDON”, meaning that a brand can book an adspot with multiple podcasts on this network for maximum reach. This network of podcasts most likely can offer dynamic insertion, wherein they track the demographics (geolocation, gender, age, HHI, etc.) of each podcast and can place adspots only on the podcasts that have the highest impressions in the brand’s target audience.
It's not just Podcast however, on YouTube channels like BBALLBREAKDOWN function similarly, with masses of content on all things basketball and a whole bunch of sponsors as well, like Blue Apron, Honey, Ridgewallet, Raycon and SeatGeek.
PRO TIP: Interestingly the podcast network identifies as “Lifestyle” content when it clearly is a sports-oriented publication. Sorting through content using YouTube and iTunes category filters is often pointless for this reason - there are so many channels that self-identify and mis-categorize that as a marketer in branded content it’s essential to run a custom keyword search to identify the “slant” of the channel’s content. Ping us to see what custom searches can do for you
Not unlike the NBA, the MLB is experiencing similar facilities issues and reformatted gameplay that has affected various park sponsor partnerships.
For the vast majority of teams, Spring Training 2.0 will be held in the clubs’ Major League ballparks, as recent spikes of the coronavirus in both Florida and Arizona caused all 30 spring facilities to be shut down for deep cleaning.
Directly from the MLB site, we can also see new rules instituted to combat the risks of COVID-19:
Other social rules include:
Like I said, will it truly even be America’s favorite pastime if players can’t spit and finger lick?
Furthermore, profits aren’t stacking up for a pro-Corona season. The MLB said 2019 revenue was 39% local gate and other in-park sources, followed by 25% central revenue, 22% local media, 11% sponsorship and 4% other. They’re projecting a $640K per game loss with no fans if they continue along traditional methods of bringing in revenue.
What is the opportunity for the MLB? Interestingly, 20% of YouTubers discussing the MLB at all are actually doing liveplays of the game MLB the Show 20: Diamond Dynasty.
And there is no shortage of potential for brands looking to align with MLB and keep the connection going when the sport itself can not be played.
According to the data ThoughtLeaders is tracking we are in the midst of an explosion in sports content as more and more creators are coming to the conversation. Look at the increase in mentions of MLB on podcasts through 2020.
We’ve talked about esports before, and we will talk about it in our e-book, because it’s really just THAT important to the future of branded content and digital marketing. Gaming and sports have always had a crossover in demographic (young males), and now sports might just NEED gaming to continue to engage fans. Check out the amount of attention the NBA’s NBA2K tournament garnered - fans loved watching their favorite NBA stars playing as themselves (or even more hilariously, as their teammates/frenemy competitors), and it showcases how esports can help leagues and teams stay afloat through digital means.
The MLB and NBA also already have significant traffic in esports that has hereunto been viewed as a periphery form of entertainment to the main spectacle of the sport itself. With an unclear timeline as to when fans can attend competitions normally, more budget should be allocated to encouraging these other forms of profit-driving audience engagement.
One potential limitation of esports is that it skews younger compared to live sports like college football, where brands can target older or wealthier fans such as alumni, said Schonenberg of VentureFuel, which is an accelerator that connects brands with innovate startups.
Schonenberg also suggested marketers look for out-of-the-box sporting activities to sponsor, such as OpenSponsorship, a platform designed to automate the matchmaking process for athletes and influencers with brands. These sponsorships could be as simple as supporting athletes who are showing off their training techniques at home via social media, for instance.
Ultimately the major sports while leaving a large hole in the tv schedule still very much have their fans and crave content around their favourite leagues and teams. The question is can everyone in the ecosystem take advantage of it. Can teams and leagues leverage e-sports to become a serious part of their revenue mix, are the brands typically taking over the live airtime going to try and maintain the connection with fans through creator led media?
According to our own data we can see over 8,000 sponsorships where the content references one of the big four American sports so the opportunity is firmly there for anyone who wishes to seize it.
If you want to learn more about how you can take advantage of sports content and fans get in touch with us.