There are Storm Clouds on the Horizon for Sponsorship Spend
…and there’s Less Time Than We Think to Prepare.
Budgets continue to get slashed on the brand side and re-prioritized to areas that can prove value and impact. This has had a substantial impact on the sponsorship industry, which continues to struggle to get out of its own way.
Imagine you’re in the cockpit of a plane. You look around and see hundreds of buttons, gauges, and levers that all control vital aspects of the airplane. They inform you on where you’re positioned, how you’re doing on fuel, and whether or not you need to take action to steer clear of trouble. Now imagine someone comes in and throws a blanket over all of the controls and tells you that you need to fly now, navigate, predict, and react to problems blindly. Sorry to be the bearer of bad news, but that plane will come crashing down at some point. The worst part is you could have taken the blanket off the controls if you had just known how.
I don’t know what the rest of you are seeing around the industry, but it’s not all sunshine and rainbows from what I’m seeing. I believe there’s a lot to worry about when it comes to the stability of sponsorship to continually survive (much less thrive) without delivering good data that supports the value of these investments. Is no one else tired of just how bad our industry has had it when it comes to reporting? Why do we settle on only reporting on social and broadcast when that is only a small piece of the overall picture? Disjointed methodologies, bad customer service, unclear answers… why do many organizations, leagues, agencies, and brands continue to settle for mediocrity?
In the last 2 months alone, I have had numerous conversations with friends, former colleagues, ownership groups, and league entities, and there’s a recurring theme - budgets are getting cut and it’s not just a short-term trend. The reality is that there are a number of things that have changed our landscape over the last several years-
Data continues to be more readily available for most advertising channels, putting pressure on internal teams to have to prove and fight for the dollars they are spending. However, historically, sponsorship spend is a black box on what the actual return is. Budgets will continue to stagnate or decline as other advertising channels outside of sponsorship become more trackable.
The global pandemic of coronavirus has forced non-data-driven groups to start thinking about data more holistically. How many stories do you have from the pandemic about departments getting reduced, brands being pissed off, budgets getting cut, and entire companies going out of business? I know, literally, dozens. The groups that fared well through this time? The ones that were prepared to tell stories with data. The ones that lost budget, the groups who got let go, the brands that decided not to stick around, and the companies that went under were the ones who didn’t have the right data or approach to leveraging data.
The old guard is slowly disappearing. “It’s how we’ve always done it” -- gross, how many times am I going to hear this? My other favorite is, “My partner has never asked for more insights beyond what I’ve given them” -- of course not, but it’s because we’ve fallen accustomed to the status quo, not what is possible. Innovation, storytelling, and effectively using data and information are how groups now differentiate themselves and distance themselves from that pack.
Ultimately the line of thinking goes like this. Brands are under more pressure and scrutiny on WHAT they are spending on, and HOW they are justifying it. It’s not as easy as it once was to get approval on budgets and just spend hundreds of thousands if not millions of dollars. As such, they are prioritizing spending in areas and with groups that track and report the performance of their investments, especially when it comes to their sponsorship investments.
This was what we set out to solve when building Trajektory. Maximize sponsorship revenue by having both a full and clear picture of how your portfolio is performing. We’re here to help -- social, television, email, web, mobile, in-arena LED, static, premium areas, concourse signage, earned tv, earned social, you name it.
As Jack Welch puts it, “Change before you have to”.
We’re here to help :)