So much is beyond our control, but that does not mean that we are powerless.
If we take a look outside of sport and into the wider world, it can feel as though business has stopped. But we know that commerce has not gone away altogether.
The same is true within the sports sector. The audience that supported a thriving ecosystem of live events just a couple of months ago has not disappeared. Weekly sales revenues for sporting goods and apparel have actually almost doubled year on year. Online streaming is up 40 per cent on where it was before Covid-19 hit.
This creates opportunities in marketing.
The audiences that we want to engage are still actively consuming content. The only question is, what message do we want to share with them?
In performance marketing is, that is knowing how many fans we can reach, where to reach them, how to engage them and how to drive them to a conversion. T
These core principles will still serve brands well – if they can be properly applied.
Navigating the new normal
Digital channels have provided a medium to reach individuals at scale and, with that, created a direct to consumer landscape that allows audience owners to build sustainable commercial models. Some organizations in our industry, though, have not moved fast enough to transform their business model around digital and direct to consumer marketing. They have been hit hardest during this pandemic as a result.
To do that now, we looked closely at where revenue generation can happen in sport during this crisis. A performance-driven approach to focus on the five enabling revenue generation pillars of direct to consumer marketing: live and virtual events, audience development, ecommerce, subscription video on demand (SVOD) and over-the-top (OTT), digital sponsorship.
These can drive direct revenue through measured transactions, or indirect revenue in the form of partnership media value.
Explore each of these enabling pillars and see where the opportunities may lie.
Live and virtual events
For plenty of rights holders, live events marketing represents the primary – or even sole – D2C channel, as well as their major source of revenue. Cancelling those events, or closing them to fans, will be devastating.
In the meantime, a survey by Event Marketer suggests that 63 per cent of live promoters are shifting their attention to virtual events. And while these cannot achieve the same revenue outcomes in most cases, they will help keep fan bases together and provide value to partners in the process.
Esports has been the answer for some, drawing together overlapping audiences, while other promoters have turned to simulated sport and remote races. In Italy for example, AC Milan and Jay-Z’s Roc Nation delivered “From Milan With Love”, a virtual concert that has raised more than €650,000 (US$724,000) for frontline healthcare workers.
Even as live matches resume in empty arenas, remote digital communities will gather around them, so examining the dynamics created by these kinds of events will be a valuable exercise in itself.
If we strip back the playground of sports, when we are talking about rights holders, we are essentially talking about businesses that have large volumes of potential customers.
Think of a standard performance marketing funnel – awareness at the top, consideration in the middle and conversion at the bottom. Here, you have large numbers of sports fans, sat in limbo in the consideration segment, waiting to be directed towards a product or service.
So, whether or not you have a product to offer right now, keeping these people engaged is critical.
When it comes to growing your audience, the crisis period has seen the lowest media buying rates on record. For example, Facebook CPMs dropped by up to 60 per cent across global markets versus pre-Covid rates. This presents an obvious opportunity to reach audiences at scale at a significantly cheaper price than before.
That said, this reduction in costs to buy audience attention, together with a rise in content consumption, has, in turn, created a very competitive market.
All of this only underlines the importance of being able to move at pace to capitalize, while being completely clear in what your value proposition is. So whether the longer-term objective is in selling apparel, memberships, subscriptions, or tickets to an event, keeping your audience interested is going to be key to success.
In April 2020, with consumers having accepted lockdown for the foreseeable future, we began seeing online shopping trends skewing towards new stay-at-home necessities. That includes gear to help people stay active. According to Bazaar Voice, orders for sporting goods are up 220 per cent versus April 2019, the second-biggest rise for any category after hardware.
Not only are consumers buying more online, but they are also spending more time on each session, up 40 per cent versus the pre-Covid period. This could be a result of the general population having increased downtime and, consequently, taking higher consideration into the products they are buying, especially given that self-care is more important than ever.
For businesses in the position to capitalize, having a retail presence online has never been more important. Looking forward to 2021, eMarketer has predicted that this online trend will continue to grow, with over 16 per cent of total retail sales now happening online, and 25 per cent of the total global population contributing to this.
For those that have been considering an online retail offering to sell directly to their consumer, this could be the moment to move. The growth of ecommerce has made this a relatively frictionless activation – with affordable, ready-made solutions available from the likes of both Amazon and Shopify, which has just announced a partnership with Facebook.
Taking the time now to ensure you respond to these consumer trends by offering an intelligent and relevant ecommerce strategy for your audience will only benefit your business in the long run.
SVOD and OTT
The online and subscription video space has been the talk of the town for as long as I can remember. But many organizations still remain on the fence. So here we are, with consumption of streamed film and TV content up 40 per cent since the outbreak began in the US and the UK and more people than ever now considering paying for content.
What can we do to win here?
You may not have Netflix and ESPN’s smash hit Michael Jordan series, The Last Dance, or UFC Fight Pass’ new original programming, but that does not mean your audience will not see value in your storytelling.
Look at your value proposition, which will, of course, be driven by content, and you may find a lot of answers in your archive.
That once-forgotten repository has all too often attracted more dust than eyeballs. Now, it has a reason to thrive – but it only pays dividends if you can decide how to spin a new story with it.
Look at Fifa on its #WorldCupAtHome project, harnessing the potential of a library of games dating back to 1970. More than 750,000 votes have been cast by fans on Twitter to choose a line-up of 32 classic matches to stream free and as live on YouTube, which also carried three official tournament films. Across the nine weeks, there were more than 85 million video views on YouTube, Facebook, Instagram, Twitter and Weibo.
The great thing about the archive is you can really play with this kind of footage, re-editing it around star athletes, memorable events and types of action to find combinations that really work for fans. Again, its value may only be supplementary to live in the long term, but at this point, it is a perfect way to keep your audience engaged when they could look elsewhere.
The market for sponsorship will become a difficult one in the months ahead. Brands have paused messaging in recent weeks, both for financial reasons and as they take greater care in their public positioning. That will change as the economy moves into its ‘new normal’ phase over the next few weeks.
Marketing budgets will be under pressure and sponsorship will be viewed as a luxury for brands needing a good reason to pay for rights rather than going direct to the consumer. This will make data-led, performance-oriented partnerships more attractive, but rights holders are going to need to be in the position to define their value proposition, their packages and convince brands that they have an engaged audience to leverage.
This is not a major change in its own right, of course, as brands have been crying out for such a progression in sponsorship activation for some time, but it’s now mandatory for a sports property to deliver in terms of content output and a tangible business outcome.
So what’s next?
This is undoubtedly the biggest challenge this industry has faced but as long as the demand for sport remains, the obstacles we face are not insurmountable. It is about finding rational solutions to meet the moment. With the right ideas, backed up by the right evidence, we can find a way to the other side.