Digital Opportunities in Sport
In recent months SRi has seen a tangible increase in demand for experienced digital media professionals across our client base in sport and entertainment. Having consulted to a number of clients who are not always able to clearly articulate what their business objectives are in this space, we have observed a number of trends and patterns emerging.
As a result, Will Banbury and Chris Jordan recently hosted a breakfast roundtable with a number of leading sports digital media experts to discuss “what digital means to me” and explore some of the opportunities and challenges involved in this dynamic, but often misunderstood space.
The Digital Environment
The continuing development of the global sports industry is due in part to the emergence and integration of new media (digital) technologies that have dramatically changed the manner in which sport is produced, delivered and consumed. These new digital technologies allow sports organisations to meet consumer needs worldwide and for brands to discover unique and effective ways to communicate with new markets.
Broadcasters, media owners, rights holders and their commercial partners, are all looking for ways to connect and engage with fans across a variety of different platforms from TVs to mobile phones to tablets. As well as this, they need to keep up with the consumer demand for customisation by providing more personalised and engaging experience based on fans’ past and future habits.
While traditional media remains by far the most popular channel to consume sports content, with 94% of the world’s sports fans still using linear TV, the growing consumption of sports content via new digital channels is significant and cannot be ignored. Various reports have suggested a rise of almost 50% in sports content consumption across digital channels within established markets in the last four years, while circa 75% of sports fans in emerging markets (Brazil, India, Russia etc.) are now consuming sports content online.
Broadcasting still generates the lion’s share of income from media rights, but social media and other digital channels are increasingly driving interaction, hype and interest. Engagement through the internet and mobile phones can help to bring people to live matches and encourage them to purchase merchandise. Rights holders can enhance and expand the fans’ experience by using different media platforms and social networking in an integrated way, adding further value for themselves and the user.
Trends and Opportunities
The Fan Experience
Fans now have the ability to consume live sports content, join discussion forums, share content via social media and gain access to a multitude of match statistics, all from the confront of their home. There is a fear that this will cause falling attendances at stadiums, an issue that has arisen in the US across a number of NFL games in recent years.
While it is important to provide content for fans that cannot make it to the stadium. Rights holders also need to prioritise finding ways to capitalise on WIFI and mobile technology to provide a match-day and in-stadium fan experience that cannot be rivalled by sitting on the couch.
Understand the Audience
Platforms such as YouTube have created an army of content owners, therefore rights holders and commercial partners combined with their sponsorship agencies need to first do their homework to understand who their audience is. If they don’t create content that is complementary to what broadcasters are producing then it will be worthless, as no one will view it. They need to create content for the appropriate platform and engage with their fans by considering their experiences and what they would actually enjoy.
Create an Authentic Voice
The digital world is a complicated one where content is created and optimised for discussion. As sports fans have more choices and places to consume content, the challenge is how to engage with fans on whatever platform and devices they are on. Destination is now irrelevant in the way people navigate through digital.
Digital can be extremely important for a brand in terms of building a connection with the sports fan using content. People who consume engaging sports content on a particular digital platform also tend to be loyal to the other services available for that provider. However, in order to attract fans, digital platforms need to have an authentic voice and create content that is credible, engaging and mobile optimised. This involves having editorial teams that manage and approve every single piece of content that gets uploaded and working with producers of content to create dedicated made for web optimised video programming.
With growing fan access to content 24/7, anywhere in the world via mobile technology and social media, rights holders are accelerating their global expansion plans into new markets. The ability to connect and engage with a global audience, coupled with the capability to effectively manage a significant amount of fan data, creates a solid platform for brand amplification and commercial opportunities. This can be seen where brands are now able to localise their activations in different regions and countries to create a wide range of online content in partnership with rights holders.
Add Value for Commercial Partners
There remains untapped potential for many commercial partners who think that just by being associated with sport, instead of how they engage with the fans, will achieve their desired ROI (i.e. where sponsoring sport is still an emotional purchase). Sports sponsorship no longer means simply attaching a corporate name to a stadium. It has evolved to become a triangle of association between the rights holder, their commercial partners and the passionate fan. Ultimately the responsibility for driving this increased value falls to both the rights holders and their commercial partner.
Firstly, if the rights holder can create more innovative packages to sell on to their commercial partners, to help them create more interesting and engaging content, then this will ultimately create more value for everyone. Rights holders need to be more proactive in helping their commercial partners achieve the ROI they require, even if they are not asking for it.
Secondly, commercial partners of rights holders need to take a similar approach to FMCG businesses and view sport as just another consumer brand, only then will they achieve more cut through and better results.
This process starts with the rights holders and their commercial partners defining their objectives and ensuring their creative, activation and measurements are all aligned. This also creates opportunities for creative sponsorship agencies to provide rights holders and commercial partners with the insight needed for them to be more proactive, so both parties are aware of what rights packages could actually be available.
One of the largest areas of opportunity revolves around collecting data. Do organisations collect and store their own 1st party data or do they work with 3rd parties? Once sufficient data has been collected they then need to work out how to use it and how to build the systems to monetise it.
Many digital platforms already sit on a huge amount of data from their users, which they can now trade via programmatic advertising. Gone are the days of the old advertising/sponsorship model of “eyeballs”, they need to ensure they have valuable data where they can reach specific audiences rather than just context.
Lastly, as the value of media rights continues to gravitate towards the premium properties, smaller rights holders are struggling to realise the value of traditional broadcasting and are looking at digital platforms to enable them to become a direct to consumer business, therefore they need to collect relevant data in order to understand the customer better for this to succeed.
The Programmatic Ad-funded Model
Originally the industry was very wary of programmatic advertising as people just saw the efficiencies rather than the opportunity to target specific audiences through the use of data. However, over the last 18 months it has been embraced more and more, especially for smaller campaigns where it doesn’t make sense having a large sales force trying to complete deals that will cost as much to fulfil as the revenue it generates.
More recently there has been a move towards Programmatic Guaranteed, as this will maintain the premium publisher environments that advertisers crave along with delivering the same efficiencies and automation that the industry is now capable of providing.
Many organisations are now beginning to bring their programmatic buying in-house because media buying agencies may deliver poor returns. Organisations still need to invest in programmatic advertising properly and need to continuously manage the process themselves. They cannot expect to “plug-in and go”, there still needs to be a physical body on the selling side talking to someone on the buying side, there is still a need for clever and creative individuals and agencies to provide solutions.
A Greater Range of Services
For a traditional media rights agency acting between their clients and broadcast customers with a view to maximise the full set of rights they have taken on, digital has seen a shift in mind-set towards helping their clients structure new rights packages, so they do not give everything over to broadcast clients, which was historically the model.
This leads onto the opportunity of providing a greater range of services. While some of the larger and more sophisticated clients have their own teams to manage the process, there are many smaller rights holders that are not large enough or do not have the right management expertise. Therefore, agencies need to step in to provide a broader range of services, so as a business they need to invest in those skills and capabilities themselves.
Next week: The Digital Challenges in Sport