COVID-19 has had an impact on everything and everyone in the world. As countries move out of lockdown (or back into it) navigating this new world with new limitations and economies that have been damaged exponentially is the mammoth task on every businesses mind.
Sponsorship is an industry that has been impacted hugely due to the cancellation of nearly all live entertaining, cultural and sporting events. Following this, it has been near impossible to maintain, let alone secure. With businesses removing all excess resources and focusing on mere survival, sponsorship has been pulled left, right and centre and the last thing many businesses are considering is a new deal.
According to IEG (a sponsorship valuation company) there is an estimate that $10 billion will be hit by COVID-19 in the USA alone which is 38% of the $26 billion committed to sports and entertainment in 2020. Sponsorship is a huge funder of sports and entertainment and the implications of these withdrawals could be excessively damaging. The pandemic has “impacted more than 120,000 active sponsorship agreements and left more than 5,000 brands needing to recoup lost value.”
The consensus amongst the sponsorship community is that sponsorship will be changed for good. There will be decreased spending, there will be a transformation in the way future partnerships are designed and executed and marketers will face increased pressure to secure results and create true value.
Value is a word used a lot in the marketing and sponsorship world as the aim is to build brands with value. Consumers will only buy into a brand or business if they see it is valuable to their lives. How will it benefit my life? How will it bring value to my life experiences?
Consumers need two predominant things to make a purchase. A solution and an emotional connection. Marketers offer facts to prove that the TV, the phone, the car will do everything that you need it to do. They then build value and appeal to the consumers emotions. That phone is perfect because you can have your pictures and you can keep in touch with your friends. It does what you hold valuable to you, your life and your experiences. This process of building value is what marketing and sponsorship is and with the impact of the pandemic, businesses and stake-holders will need even more value proven before they strike a deal.
What is the actual benefit of this partnership? What measurable results will we receive from this partnership? These are questions that will become louder and louder. It is not just about having an advertising platform anymore; it is now a case of how this will bring value to my business and brand and also, how will it help build a committed community who will support the business even if there is no game to attend or shop to go to.
When securing sponsorship presently there needs to be even more proof provided on what the advantages of sponsorship can be. We all know the impact of sponsorship, we see it everywhere and brands have made their fortunes through well thought out partnerships but now, marketers need to go back to basics. There needs to be more attention paid to how the sponsorship will benefit the business, how the value can be created and what are the proven results. The story needs to be told fully to engage stakeholders and to secure their trust and understanding that this will benefit and build the business back up again. Exposure is still exposure and as the world rebuilds it is a great time for businesses to get their name out, to show they are helping rebuild the economy and to direct messaging that shows support to the community and the general drive for a better world.
Consumers and industry experts alike have really focused on these words such as value, trust and community. If the community is built together, consumers will trust the brand and see its benefits and therefore will commit to it. This dedicated community then builds value in the brand that in turn brings financial results.
Brian Gordon, CEO of Engine Shop explains “Both sides have been too reliant on assets like signage and media that exist around the live event itself; instead the focus should be on how the two can work together to engage and add value to the community and fan base outside of a game day. If that partnership strategy is already in place, there’s no need to pivot when the play stops, only the need to develop new tactics and messaging.”
This focus on value, truth, community and measurable results was the focus of a recent seminar ‘Rebuilding your Sponsorship Pitch’ hosted by SponsorshipX. This seminar focused on the impact of COVID-19 on the sponsorship industry and how, like in evolution, adaption is needed for survival. We have seen numerous accounts of adaptation during this pandemic. Restaurants became grocery stores, distilleries became producers of hand-sanitisers, comedians and performers created performances with the backdrop of their beds and kids as their co-stars.
The quarantine and resultant suspension of sports, entertainment and events has shown both sides that they are too dependent on physical media. As they move forward, it's important for sponsors to work more closely with CRM, building on fan bases, audience engagement, and collaborative content. What can the business actually provide to the consumer? How are they helping with the pandemic? How are they helping society as a whole?
According to the European Sponsorship Association (ESA), 72% of brands continue to consider the acquisition of sponsorship assets. This means that sponsorship is still seen as an important advertising channel and therefore, with the correct messaging and engaging methods, relationships can be built and we will hopefully see a rise in the industry as the world slowly begins to rebuild, or at least, survive.