Hi ,

It’s been a while….but we are back and excited to share our first newsletter of the year!

In this article we take a data-led approach to selling sponsorships, diving deep into one of the major partnership categories.

As always, we encourage you to share this to anyone inside or outside your organisation and we welcome any thoughts, questions or criticisms.

To check out our other articles, click HERE

Happy reading.

Alex

Sports Business Newsletter

Check out previous articles and sign up to receive direct to your mailbox

Supercharging sponsorship sales

We’ve written previously about how brands may use sponsorship investment data to inform investment strategies. But what about those selling these partnerships? In this article, we’ll show how teams and leagues can supercharge prospecting efforts by taking a targeted, *data-led approach to selling their partnerships…

We’ll cover:

1. Category targeting (which categories should you target?)

2. Brand targeting (which brands should you target?)

3. Brand insights (building sales narratives tailored to each brand)

4. Partnership insights (case study of real-world partnership in action)

_{*for a refresher on our sponsors landscape database, scroll to the bottom of the article}

1. Category targeting

To walk through a real example, let’s assume we are in-charge of bringing new business to one of the Sydney-based NRL clubs. Our sales team is drastically under-resourced and their time is valuable, so we are keen to avoid a ‘spray and pray’ strategy. Where should we begin?

An obvious starting point is to look at brand categories that are currently vacant in our portfolio. This will narrow our search a bit, but we can go further. We should ask ourselves ‘which of these categories, when targeted, is likely to give us the best chance of a good outcome’? Breaking it down further:

1. Which of the vacant categories invest most in sponsorship?

2. Which of these categories are under-invested in our sport/market?

3. Which of these categories are growing fastest?

4. Which of these categories are increasing sponsorship spend fastest?
   

For the purposes of this article, we’ll focus on questions 1 and 2.

Which categories are spending most on sponsorship nation-wide, but are relatively underinvested in Rugby League and/or the NSW market?

We can see above, of the vacant categories, Auto spend most heavily in sponsorship, accounting for 7% of the overall club market. However, category spend in Rugby League and NSW is much lower; on average, NSW-based NRL clubs see only 3.5% share of investment from Auto, about half that of clubs nation-wide. This represents a compelling opportunity for an Auto brand to drive market share in an uncluttered environment.

Let’s say our total sponsorship portfolio is currently worth $10M a year. The above data suggests an Auto sponsorship is worth between $350k - $700k per year to our portfolio based on what the category is currently yielding in the market.

As the chart shows, similar opportunities exist across Financial Trading, Banking, Insurance and Tourist Authorities. But, since the data suggests the potential upside is greatest for the Auto category, we’ll continue our case study with a deep-dive here.

2. Brand targeting

Next, we’ll explore the category deeper, assessing the suitability of each brand prospect with the goal of identifying a number key targets to pursue.

Let’s start by taking a look at the biggest players in the Auto sponsorship market.

Toyota and Kia alone account for nearly two-thirds of all spending. This is primarily driven by their Tier 1 partnerships with the AFL and Australian Open respectively. These outlier deals at the league level (an order of magnitude higher than a typical Tier 1 club deal) somewhat skew the data, so it is useful to focus on deals in clubland.

Interestingly, despite its relatively small stature in the Australian car market, Chinese-owned automaker, MG, tops the category when it comes to clubland spend. This is driven by Tier 1 deals with both the South Sydney Rabbitohs and Port Adelaide Power.

By itself, level of spend does not tell us much about about whether a brand is suited to a partnership with our club. A high spend could indicate high suitability (brand is an active spender) OR it could indicate low suitability (brand has exhausted its investment budget). We must look at other indicators.

Any one indicator can be misleading when taken in isolation, so we’ve devised an approach that calculates an overall suitability score based on a suite of suitability indicators. In this example we want to identify brands that:

1. Have low investment in Rugby League relative to their broader landscape spend

2. Have low investment in Rugby League Clubs relative to their broader Club spend

3. Have low investment in NSW Clubs relative to their broader Club spend

4. Have a low share of sponsorship spend relative to their broader market share (as measured by Google search interest)

5. Are growing their market share (as measured by Google search interest)

6. Have a low market share in NSW relative to Australia-wide (as measured by Google search interest)

7. Item 6 gap is growing over time

Assessing each auto brand against these criteria, we can rank their suitability for an investment with our club. In this instance, Mitsubishi, Ford and Mazda come out as key targets.

It is worth noting that each sport, market and category is nuanced, so the above indicators and weightings may differ from one case to the next. The above simply illustrates a framework that enables a bespoke brand suitability assessment for a given category.

3. Brand specific insights

Not only can this assessment help identify ‘best suited’ targets, but with the underlying data, we can produce tailored insights for each target we wish to engage in prospecting conversations. For example, for Mazda:

• Mazda currently has an AUS market share of 6.5%, but a sponsorship investment share of only 3.1%

• To keep up with their overall market share, Mazda should consider increasing their sponsorship investment by $3.1M per annum

• This gap in spend is reflected in their overall market share trend in Australia, which has declined steadily since 2015

• The decline in market share has been much more pronounced in NSW, which has historically outpaced other markets

• Having no current footprint in the state or in Rugby League, Mazda has an opportunity to step into a relatively uncluttered environment by partnering with our club, a move that would help rectify their loss of market share

With this approach we can produce tailored insight slides for each target in the category, an extremely powerful advantage in a competitive sales environment.

But it’s not just about sales! This same data can be powerful in demonstrating the impact a club is having for its current partners.

 4. Proof that sponsorship works 

By matching share of sponsorship investment to broader market share, we can produce compelling case-studies for how sponsorship has positively impacted brands from the Auto category.

Given we don’t currently have an auto partner, let’s look at an example from elsewhere in the market.

Earlier, we saw that MG had an outsized share of sponsorship investment relative to their market size - but let’s put some numbers to back that up.

• MG currently has a 16% share of Auto investment in clubland, the highest of any brand

• Their brand market share amongst consumers (as measured by Google search interest) is only 2%
  

• The brand is investing 8 times what their market size would dictate, a significant delta that is no doubt causing a significant disruption in the market

• Google search data indicates that MG has grown its market share 8X since entering the Australian market in 2017

We, of course, aren’t suggesting that all of this growth is because of sponsorship. After all, it is but one of the many tools in the marketer’s toolbox. So, how could we look to isolate the impact of MG’s club partnerships? One way is to localise these results at the state level.

Below is a chart summarising Auto investment by state. What immediately jumps out is the extent to which MG dominates the share of investment in NSW. Their Tier 1 deal with the Rabbitohs accounts for nearly half of all spend from the category!

This dominance of investment must surely translate into stronger market share results in NSW relative to the rest of the country right? Well, let’s take a look.

When overlaying the NSW trendline, it is plain to see that MG have had exceptionally strong results in the state, significantly outpacing the national trendline in the last few years.

This demonstrates the power of sponsorship in driving market share, particularly through investment in a state and code that is highly uncluttered when it comes to Auto investment (as shown in the charts below).

If you’ve found this article useful and are interested in seeing how your sales and partnerships teams could benefit from such insights, feel free to reach out for a chat HERE.

A reminder of our sponsor landscape database

We scrape more than 100 League and Club websites each quarter, producing the most comprehensive database of commercial partnerships in the Australian sporting landscape:

• 3000+ individual deals

• Each brand is assigned to one of 54 major sponsorship categories

• Investment weighting determined based on sport/club popularity, tier and any public benchmarks

This database allows us to deliver targeted insights to teams and leagues:

• Unpacking key trends within the sponsorship industry

• Identifying specific category/brand opportunities to target

• Crafting compelling narratives for sponsor prospecting

Powered by Analyst Economy

All analysis contained within this document is strictly non-commercial and has been derived from publicly available sources. To access more comprehensive data and insights tracking across the sporting landscape, reach out direct to [email protected] or [email protected] 

Copyright © 2023 Analyst Economy. All rights reserved