Q: What are some of the key challenges the current pandemic is having on a commercial department operating in the Sports and Entertainment industry?
In this climate, the challenge is almost exclusively being able to: a) capture attention, and b) convince budget holders to spend. If the value proposition and solution being presented are not well thought through, then it would be fair for commercial teams to expect to receive some fairly blunt responses from the market place at present.
Everyone talks about the need for the sponsorship landscape to change its approach in valuation and activation methodologies. That’s a given and, frankly, if we’re not thinking in this manner, then I quite often refer back to Henry Ford when he said: “If you always do what you’ve always done, you’ll always get what you’ve always got.”
The value points of Sport and Entertainment remain true on the whole and will largely be unaffected by COVID-19. However, this environment is mandating the change in approach by commercial departments to a much greater effect.
In today’s world, the lack of traditional assets focuses minds on following the vast majority of marketing spend into digital routes. Digital and marketing teams must now work harmoniously with – or as part of – commercial departments to service all stakeholders needs. Value propositions and purchase cycles must be at the heart of all commercial thinking in order to achieve quantifiable and measurable business outcomes for partners.
Q: What challenges are you facing that relate specifically to work with brands?
As brands consider their investment in the sporting field, or for those who are considering investing in the same, the challenge will be to find the rights holder who can address how they will help the brand ultimately achieve its objectives.
More developed markets and verticals want to focus on latter stages of the purchase cycle – the trigger opportunities, the drive to conversion and the affinity and advocacy for their brands.
Rights holders still build out their valuation stack utilising traditional media returns and tangible assets, while seemingly ignoring industry trends that show more than 70% of global marketing budget is directed towards digital activities, with a view to driving conversion and advocacy.
Brands must be able to locate the right partner who can support in an aligned manner. In the recent 2020 Global Marketing Trends Report by Deloitte, they identify that purpose-driven companies witness higher market share gains and grow on average three times faster than their competitors. Now, how many rights holders in Sport and Entertainment lead with a clear purpose and conviction to their raison-d’etre? Authenticity to this strategy is paramount and while brands continue to do more around purpose-led initiatives, Sport and Entertainment has some way to go to as a whole to catch up.
Q: Likewise, what challenges are presenting themselves to rights holders at this time?
As always, talent remains crucial to drive clear understanding and interpretation of a rights holder’s value proposition. Alongside this, in a market where there is no sporting activity, we are seeing increasing numbers of rights holders furloughing staff. This will ultimately lead to negative growth in their pipeline development.
Brands in certain segments are still marketing and are still spending, albeit with adjusted or curtailed objectives in mind. Rights holders sit on some of the most engaging and compelling materials that the digital industry has to offer, and so as the on-field action halts, the off-field action should continue – however with a much more rigorous consideration in place as to how it can help stakeholders.
Failure to balance talent with stakeholder needs will see an adverse effect on pipeline development, which, in turn, delays revenue conversion, promotes negativity around the proposition and therefore has continued negative financial consequence.
Q: How is the search for ‘new business’ being impacted, from a Right Formula perspective and for those clients the consultancy operates on behalf of in the partner acquisition space?
Undoubtedly, what was always a tough job just got a whole lot tougher. But as per some of my aforementioned insights, there needs to be a well thought out strategy as to how we are engaging with potential new clients.
Within the acquisition consultancy, we are very pleased to be aligned with rights holders who very clearly understand their purpose and can articulate this in a manner that few others can. In almost all our rights holder client’s cases, they are clear as to what their value proposition can provide for potential partners across different industries.
For Right Formula, we are focussed on driving against objectives and have found that, now more than ever, strategic consultancy is required and turnkey solutions are more highly in demand now given market flux.
Q: In the Activation space, there has been ‘new opportunities’ to show value through digital/virtual treatments. What have been the ‘new opportunities’, if any, on the commercial side?
Showcasing transparency has been one of the biggest opportunities for us in this period. You have to engender trust with clients and rather than using just the word, we act.
We provide all clients across our divisions with absolute transparency to our workflows, with access to live reporting portals to track progress. It’s probably quite surprising to some that I’ve chosen this, but it shows value and makes us accountable, which, in turn, gives our clients a much more integrated view on our works.
Q: How else has Right Formula displayed real value in these difficult times for its clients?
In times of change we must be quick to react. We have adopted pro-active communications across the board to address challenges that each client faces. Rather than shying away, we tackle head-on the scenarios at play and ensure that we constantly adapt our scope of works to ensure we can continue to deliver against objectives.
We have provided strategic guidance on how to navigate business development, adjust approaches to market, alter marketing spend and bring a multitude of insights for client internal teams to the table.
On top of this, we have moved quickly to deliver strategic advice to help navigate these unprecedented times in relation to contracts, rights, assets and marketing programmes. The cross-consultancy work ethic to pull on knowledge and provide this back to our clients has been quite astonishing.
Q: How does the current situation and the learnings from it now change aspects of how the Right Formula Commercial arm operate going forwards?
I think in any downturn it makes you consider your approach to conversation. It emphasises the need to ensure you understand why you are trying to hold conversation with certain parties and that the value proposition is absolutely clear.
Secondly, we must consider how we add flexibility to rights pools. This is slightly trickier to address, but true partnerships endure the tests that come their way over the course of time and, ultimately, flexibility has to be given on both sides so we continually look at how this can be baked into conversations and commercial arrangements as a given.
Q: For clients reading this – and those operating in the wider industry – what advice would you offer with regard to maintaining positivity?
Sport and Entertainment is so resilient. It forms a corner stone for communities across the world and has done for many, many decades. Although our landscape will change, we have to believe in the strength of our arena and the fans’ desire for our product.
That desire will continue to fuel the engine and, in doing so, continue to attract the support and interest from the marketplace as to how both fans and corporate partners can consume and leverage this unparalleled space.
The content of this article was originally published and adapted by Sport Business. Click here to read.