Advertisers like Procter & Gamble and Visa have adapted their approach to sponsorship to meet post-pandemic consumer needs, writes WARC’s Alex Brownsell.
Way back in the land before COVID-19 – in early February 2020, to be precise – WARC released a report advising brands on how best to capitalise on the year’s ample sponsorship opportunities. While much of the guidance remains valid, especially on the need for rigorous measurement of sponsorship outlays, our timing was absolutely rotten. Within six weeks the world was in lockdown, with all major events postponed or cancelled.
A quick look at the numbers show how far things have tumbled since the turn of the year. WARC Data predicted that global sports sponsorship spend in 2020 would rise by 5% year-on-year, the strongest growth in a decade, reaching a total of $48.4bn – driven by major quadrennial events like the Tokyo 2020 Olympics and the Euro 2020 soccer championships.
In the wake of the pandemic, a subsequent study by sports agency Two Circles forecast a 37% year-on-year decrease, with worldwide spend dropping to $28.9bn.
WARC’s recently released Marketer’s Toolkit 2021 spelled out the threat to the sponsorship industry even further: over a third (35%) of the advertisers surveyed for the report expect to decrease investment in sponsorship, with only 17% planning to spend more than they did in 2020. Of those brands cutting marketing budgets over the coming 12 months, over half (53%) anticipate reduced sponsorship activity.
With marketers operating in a recessionary environment and businesses demanding immediate results, where does this leave sponsorship? We asked several of the world’s leading CMOs for their view on the challenges facing the channel.
Poor value in a cheap media market?
One of the consequences of coronavirus has been a deflation in offline media prices, with rising consumption coinciding with a decline in the number of active advertisers. Marketers have been able to get more bang for their buck in TV, radio, print and OOH media – reducing the desire to spend large sums on sponsorship programmes.
For brands with deep pockets and an eye on longer-term goals, media deflation has provided numerous opportunities. Take dairy cooperative society Amul, a major advertiser in India. Speaking to WARC, Dr R. S. Sodhi, managing director of the Gujarat Co-operative Milk Marketing Federation, revealed he had challenged his agency to use Amul’s spending power to boost the brand’s reach.
“I told my agency, if we double our budget, can you get us a good deal? So, they got us some good deals and we doubled our advertising spend,” said Sodhi.
Amul struck gold when its “very reasonable” sponsorship of the re-rerun of two classic serials, Ramayan and Mahabharat, broke global TV viewing records at the height of the pandemic. “We got 10 times more viewership than the Indian Premier League finals match, at one tenth of the cost,” he added.
UK food delivery company Just Eat has similarly taken advantage of reduced media prices to build brand awareness, as revealed UK marketing director Matt Bushby.
While competitor Deliveroo has much of its annual budget tied up with an official sponsorship of the England football team, Just Eat has been able to give additional support to its latest brand campaign featuring US rapper Snoop Dogg, a campaign that has appeared to achieve omnipresence across commercial TV media in recent weeks.
A new purpose for sponsorship
Yet not everyone has thrown in the towel. For established sponsors like Procter & Gamble (P&G), the past year’s events will go down as a bump on a long road along which it uses sponsorship properties to build brand metrics. Indeed, despite the postponement of Tokyo 2020 for a year, and as the Olympic movement suffered its worst crisis in a generation, P&G chose to extend its sponsorship until the Los Angeles 2028 Summer Olympics.
“When P&G enters a partnership, we tend to enter those partnerships on a long-term basis,” said Marc Pritchard, the company’s chief brand officer. “We've found a pretty good model that works for us, in that we work together with our brands, which basically use [the Games] as a tentpole opportunity and convert some of their marketing work to an Olympic focus.
“On Tokyo, we’ve obviously had to delay some of that work and other efforts. Our teams are still activating and still ramping up to it, so we’ll see. [But] for us, the Olympics is not just about the Games themselves.”
The focus of campaigns like ‘Thank You Mom’ on athletes and their families partially insulates P&G from the vagaries of sporting action, and ensures that the advertiser can adjust to new situations – for instance launching a fund to support athletes helping their local communities through the COVID-19 outbreak.
AB InBev similarly redeployed its sport sponsorships for the betterment of society during the pandemic, according to Marcel Marcondes, the brewer’s US CMO.
“On our social listening systems, we started to see people concerned about shortages of blood reserves in the hospitals. We spoke with all the sports leagues and with all the teams that we sponsor, and said ‘it’s time for us to work as one team’. We converted multiple sports venues in the country into blood donation centres for the Red Cross.”
Finding fresh ways to activate sponsorships
While sporting venues and cultural centres fell silent for months on end during quarantine, some forms of sponsorship were able to continue largely uninterrupted. In China, food and beverage company Wahaha focused its investment in the growing esports market, namely with a sponsorship of the 2020 League of Legends Pro League.
“We looked at the current and future target audiences of our soda water product. While the former segment is dominated by males aged above 35, we wanted to look forward to having more young people to target,” said Cheng Gong, Wahaha’s deputy director of branding and public relations.
By their very nature, digital properties like esports are more resilient to potential government measures restricting freedom of movement during a pandemic, as well as offering valuable reach among younger demographics.
Yet other advertisers have found new ways to activate more traditional partnerships. Take Visa, which invests huge sums each year in sponsoring the Olympic Games, the NFL, women’s football in Europe and many other properties. Rather than scale back activation and rely on badging to reap rewards, the payments brand has sought to innovate.
Visa sponsors the annual Toronto International Film Festival, which took place virtually this year. To engage fans unable to visit movie theatres, the brand created ‘drive-in’ film experiences. Similarly, it encouraged NFL fans to support local businesses during the harshest moments of the crisis.
“Certainly, we've had to think a lot about how we evolve our sponsorships in light of the current situation,” said Lynne Biggar, Visa’s chief marketing and communications officer. “We've had to stay very flexible, we've had to think differently about how we go to market, and we've had to think differently about activation.”
While plenty of advertisers will give sponsorship a miss in 2021, opportunities abound for those brands willing and able to continue to invest – just as long as they are prepared to innovate and reframe their activation to the new media reality.