How brands are pivoting sports sponsorship in the face of COVID-19

Brands spent somewhere well above $750 million sponsoring sporting events and clubs in Australia in 2019. That number was on track to be bettered in 2020 thanks to the benign economic climate and the Tokyo Olympics.

Then COVID-19 ran rampant, social lockdown was imposed, and the Olympics – and almost every other sporting contest you can think of – was postponed.

No sport meant no exposure for sport sponsors. And for some brands, that led to an immediate re-evaluation – and even cessation - of their commitments.

According to director of Publicis Sport & Entertainment, Ashley O’Rourke, while the early days of the crisis saw many brands questioning the value of their sponsorships, ultimately the vast majority have stuck with their commitments.

“It would have been very short-sighted to pull funding from sports partnerships purely as a cost saving exercise, because fans’ memories are long and they are going to remember those brands who abandoned their passions,” O’Rourke tells CMO.

But while many sponsors maintained their relationships, they have also been racing to ensure the money spent isn’t dead money by repurposing campaigns and assets to achieve some of connection with fans. And the results is a plethora of mostly digital campaigns, usually based around user-generated (or in this case, player-generated) content.

One example is the Australian Dice Football League, hosted by Andy Lee and presented by Telstra, where prominent AFL footballers compete head-to-head by rolling a dice to determine the game’s score. According to Telstra’s senior sponsorship manager,­ Will Koukouras, the goal has been to bring out the competitive spirit of the players in a fun, unscripted environment, while providing opportunities for fans to engage with their heroes.

“So far we’re really happy with the way the concept has been received by the players - some of whom have brought their competitive spirit to an entirely new playing field - and most importantly, footy fans,” Koukouras says. “The great thing about this campaign is that it has time to grow and evolve with no two matches alike, and the unscripted nature of the matches hopefully gives fans an authentic, sometimes drama filled experience.”

Rewriting the script

Telstra is not the only AFL sponsor that has had to rethink its relationship. Colgate entered discussions for its inaugural sponsorship arrangement with the AFL long before the COVID-19 crisis hit. So when it became clear social distancing would lead to the seasons being postponed, Colgate and its agency, Wavemaker, had to find alternative means to derive value from the partnership.

“The reality here is some brands will need to revisit their partnerships strategies and adapt to ensure they are meeting their objectives while remaining visible and relevant,” says Wavemaker’s business director, Alexia Antonis. “We have also had to be agile and pivot. What we had thought the season was going to look like isn’t where it is now, and we are determined to see it through and remain relevant.”

That pivot has been from high-quality content to user generated content featuring the sponsorship’s various ambassadors, including AFLW star, Tayla Harris.

“There have been challenges with regard to accessing talent, so we are working remotely and asking talent to shoot their own content and send it through for us to edit it,” Antonis says. “But we are very much still working as we would, it’s just the execution is different.”

One fortunate coincidence has been the emphasis on positivity within the campaign, with Colgate having become the ‘official smile’ of the AFL. “It was fortunate the message was more relevant than ever during this current period, but it was always planned to be that way,” Antonis says.

Hospitality ecommerce and logistics company, Menulog, is another brand which had planned to dip its toe into sporting sponsorships in 2020, through a partnership with the NRL team the South Sydney Rabbitohs, only to have COVID-19 throw its plans into disarray.

“We have had our eye on a number of sporting codes for a little while, the main reason being sport and the meal occasion are a natural fit,” says marketing director, Simon Cheng. “And the Rabbitohs are a really impressive outfit. We have aligned goals through their strong focus on community and 30,000 members and really strong grass roots programs.”

The COVID-19 shutdown has, however, seen the cancellation of several programs Menulog was developing, especially in relation to the Rabbitoh’s junior teams. But Cheng says he has been keen throughout to find ways to stay connected to the team and its fans.

“We had to reshape to have more online and virtual elements rather than the physical elements,” Cheng says. “The original plan was to be the front of jersey sponsor for a number of the junior leagues and we are not doing that anymore, so we have a much heavier social media plan to create more engagement in the online world with members.

“With these sorts of partnerships you need to play the long game. The whole strategic intent behind this particular one is the natural fit between the two different industries, and so it is about making Menulog synonymous with that live sport meal occasion.”

Up next: How Boost Mobile, Menulog and others are rethinking consumer engagement as sports continue to be impacted, the role of digital, plus how the current crisis will change sports sponsorship in the long term

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New engagement mechanisms

For some brands, the reshuffle of sponsors resulting from the COVID-19 crisis has actually created opportunities to new forms of engagement.

For Boost Mobile, the COVID-19 crisis presented an opportunity to get deeper into sports the brand has traditionally been connected with in Australia – Supercars. Boost Mobile general manager, Jason Hayne, says action-oriented sports has been a favourite playing field for the brand, which has historical ties to motorsports and surfing, while also sponsoring numerous brand ambassadors.

So when one of the title sponsors of the fourth car in the Tickford Racing team pulled out due to COVID-related reasons, he saw an opportunity to step into the gap. This also enabled Boost to get its brand ambassador, James Courtney, back behind the wheel of a car following his decision to quit the Team Sydney project earlier this year.

“Tickford had to find someone to come in and fill that role for that fourth car,” Haynes says. “We were looking to solve how we would get back into Supercars and get James Courtney into a car.”

The arrangement goes far beyond just placing decals on a car and driving suit. Boost Mobile pays Tickford to run the car and the team and also pays the driver, and can sell the sub sponsorships on the car.

“It is almost like running a team without owning a licence,” Haynes says.

Haynes says having such a deep involvement suits Boost Mobile’s desire to be a vocal proponent of the sport, rather than just a passive advertiser. Like other brands, Boost has also turned to digital channels and user generated content to connect fans with the sport and their heroes, and has been actively working with its ambassadors to create and develop content.

“To be authentic in these spaces it has to be more than just branding and logo placement,” Haynes says. “And it has always been more than that for Boost. The people that work at Boost live and breathe it and immerse themselves in these cultures.”

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Digital realm

While many traditional sports have struggled because of the COVID-19 crisis, one group – esports – may find itself benefitting in the long term. While face-to-face events have been cancelled, gameplay and livestreaming have jumped remarkably. Gamer streaming platform, Twitch, for instance noted its audience grew by a third in March, and brands are taking notice.

Numerous sporting leagues and competitions have also launched or strengthened esports offerings, such as the virtual Grand Prix hosted by Formula One. These initiatives have caught the eyes of marketers, including at Menulog, which has signed on to sponsor the ESL ANZ Championships.

Cheng says this relationship also serves to help Menulog reach additional audiences. “A large portion of the esports audience are an underground audience that can’t be reached through other media,” he says. “It is all incremental audiences. And there is a natural fit between our product and their product.”

While the short-term impact of the COVID-19 crisis is plainly apparent, the impact of the recession that will follow is less clear. With the IMF expecting the Australian economy to contract by 6.7 per cent this year, there will be obvious repercussions for marketing and sponsorship budgets. Similarly, sports fans are likely to have less disposable income at hand to spend on their passions – or may find themselves simply unable to do so should social distancing measures remain in place.

“Even when sport returns it is still not going to be the sport that we know, and the whole experience around sport is going to be vastly different,” says O’Rourke. “We are not going to see the MCG packed out like it used to be for at least another nine months.”

At the same time, he says the crisis has given fans a more personal look at their sporting heroes, by showing them in unscripted scenarios, and by welcoming them into their homes.

“We are all in together – that is the narrative,” O’Rourke says. “Athletes and celebrities have often been seen as ‘other worldly’ entities that are more than arms distance away. There is something engaging about seeing in the background see what Ellie Carter from the Matilda’s living room looks like.”

O’Rourke also believes the growth and interest in esports will continue long after COVID-19 restrictions are lifted.

“But if you look at things that haven’t evolved, its badging exercises,” he says. “They don’t work anymore to create cut through because fans are so used to seeing logos, and brands involved in sport become white noise. What we’ll end up seeing the future is creativity to activate partnerships, and for brands to get a lot deeper in them, as opposed to them being an afterthought.”

That thinking is very much on the mind of Haynes and the Boost team. “The value proposition is going to be different,” he says.

“What brands can and can’t offer needs to be reset. We are doing what makes sense now, but in the long term it is going to be different. So what is the new normal, and what are the new expectations from a brand and what’s provided from a sport or organisation?”

At the same time, with some sponsors having pulled back from their investments (or having ceased to exist), that leaves significant room for new names to join the roster. And as players start to return to the courts, fields and pitches, many marketers and agencies are looking at the opportunities to fill those gaps.

According to Wavemaker group business director, Jamie Connolly, who was the client lead on the Colgate relationship, sport will continue to represent a means of authentically reaching mass audiences.

“If I had some budget and was able to, would now be a time to go into that market and establish yourself?” he asks. “Potentially yes, because if there are deals to be had and you can sew something up, in three, five or 10 years from now, we are still going to be looking at the sports environment as a highly effective way to do what we need to do.”

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