Here’s how marketers are adjusting their sports sponsorship budgets for 2020.
Wait and see for the big leagues
For postponed events such as the Olympics, Major League Baseball and the NFL, brands are in wait-and-see mode.
Sponsorships for the NHL and NBA playoffs are mostly on pause until marketers have some direction on when – or whether – the leagues may restart. And MLB sponsors are waiting to see if the season will be shorter this year before adjusting their budgets accordingly.
NBC is allowing brands to push media commitments for the Tokyo Olympics to 2021, but how elaborate those activations will be will depend on how the economy impacts sponsors over the next year.
I would suspect a significant number of Olympic brands will downplay their activation compared to what it would’ve been this summer.
Depending on whether the NFL season can start on time, Q4 could see a lot of sports sponsorship activity.
But today advertisers are waiting anxiously for direction before moving any money around.
The harsh reality is that it’s unclear if we will see future waves of the pandemic, or how quickly fans will be ready to jump back into a seat in a crowded stadium.
We can’t assume all fans will return, without people in arenas, it’s difficult for brands to want to activate at sporting events.
What’s done is done
Coronavirus abruptly canceled the live events circuit, but marketing dollars are tied up in sporting events long before the air date.
Marketers spent over $1 billion on NCAA Championship advertising last year, and projected to spend even more this year before the tournament was canceled.
NCAA sponsors are allowed to push their committed dollars to next year’s tournament or reallocate the money across its portfolio. The network is also giving refunds to distressed brands that request it.
Some travel brands who have been hit very hard have made tough decisions to not move forward with certain sponsorship commitments, or they’ve eliminated agency resources they worked with in the past.
That scaling back is having ripple effects across the sports media world, beyond just the TV networks that air games live.
Sports Illustrated publisher Maven Media laid off 9% of its staff on Monday, with CEO James Heckman noting a “dramatic pullback” of sponsorship dollars and 40% CPM declines.
Brands often tie product launches, new brand messaging or product line extensions into the NCAA tournament, meaning commitments pushed off until 2021 will most likely require creative updates.
Finding the audience elsewhere
Brands that rely heavily on sports are trying to stay connected with players and the fan base in spite of live event cancellations.
Even when they’re not playing, sports teams are integral parts of our communities.
Some Sports Agencies are reorienting sports content around community support.
Brands are turning to audience targeting to find sports fans in different places. TV sales consortium Ampersand was able to repurpose about 90% of its clients’ sports ad dollars committed to cable networks airing the NCAA tournament, NHL and NBA game to new places by targeting audiences on linear TV.
With daytime TV watching up 102% in mid-March, there’s a lot more opportunity to spread that money around.
Take me out to the virtual ballgame?
Marketers are also shifting sponsorships to virtual sports and esports as leagues experiment with remote competition.
Nascar launched a virtual tournament in response to the pandemic and allowed sponsors to transfer their committed dollars to the event. The second race, aired Sunday, March 29 on Fox and FS1, drew in 1.3 million viewers, breaking Nascar’s own record for an esports broadcast set the week before.
On Friday, April 3, the NBA is hosting the NBA 2K tournament on ESPN, where 16 NBA players including Kevin Durant and Trae Young will battle each other live in the famous esports league.
“We’re seeing gap-filling going on through assets being granted or extended to the virtual world,” said Nicole Pike, head of Nielsen’s global esports business.
Esports lets brands reach a younger male demo, and many clients are warming up to the idea of sponsoring virtual sporting and gaming events.
But gaming isn’t the right environment for all brands, and many are hesitant to jump in. Reach and audience profile will be top of mind for any marketer looking to recommit sports dollars virtually.
A lot of this is experimental, there’s going to be different levels of interest and acceptance from brands.
I think the general sentiment and overarching feeling is: We’re in this together. These are unprecedented times, and let’s come together to re-imagine our future.