Brand equity: How sports marketing enhances the value of a company or brand
Sport is an increasingly large and effective communication field. This is the observation on which agreed Emmanuel Ferry (President of Ogilvy Paris), Nicolas Blanc (Owner and President of Sport Value) and Vincent Jay (Olympic Champion and Head of Sports Partnerships Banque Populaire Auvergne Rhône Alpes), the three participants in the Webinar "How does sports marketing add value to a company or brand?" organized on June 26, 2021 by Club ESSEC Sport Business. Three main points were discussed: the evolution of the athlete's role, investment strategies, and their valuation process.
"Sport has emerged as an unavoidable marketing opportunity", says Emmanuel Ferry, underlining the economic importance of sports today, particularly in France, where it represents more than €40 billion with a growth rate of 2.9% over the last five years. The French sports ecosystem also connects to 20 other professional sectors (food, banking, construction, music, etc.). Out of the overall turnover of sports in France, sponsorship represents €3.3 billion. "Sponsorship investments go beyond the sole framework of marketing and communication policy and have become cross-functional strategic axes", says Nicolas Blanc. In this constantly evolving market, "one asset has become the core of marketing strategies over the past few years: the promotion of the athlete", says Emmanuel Ferry, citing examples such as the partnership of Babola with Rafael Nadal and of Quicksilver with Kelly Slater.
The role of the athlete has evolved in three phases:
- The first phase was that of the athlete as object, the most rudimentary form of sponsorship, where the athlete was "the brand's human billboard". The brand exploits the high performance of its athlete and becomes the embodiment of that performance. The better the athlete's performance is, the more the brand is in the spotlight. "To establish itself as a reference in its sport, the brand takes the gamble of investing in athletes in the hope that they will become the best performers in their category. […] Investing in a multiplicity of athletes is then necessary in order to be sure to succeed at least in one bet in terms of return on investment", underlines Emmanuel Ferry.
- The second phase stems from a more partnership-based perspective and presents the athlete as "the guardian of modern moral values, beyond the world of sport". In order to impose itself on its market and establish its positioning and/or differentiation, the brand appropriates the values conveyed by the athlete, through a mechanism of image transfer. Examples include the partnership of Nike with Colin Kaepernick in his fight against racism, or the partnership between Axa, Berlei Lingerie, and Bumble and Serena Williams in her promotion of gender equality.
- The third phase is collaborative. It has arisen with the advent of social networks where the athletes "become their own brand and decide on their relationship with the sponsors who wish to use their services". Beyond the performance and the values conveyed by athletes, the community that they bring into the collaboration is of the utmost importance. Emmanuel Ferry says that "one of the best examples of this is Kylian M'Bappé with his 52M fans and an engagement rate exceeding 3.69%. To put this in perspective, an influencer is considered highly successful if they have between 1% and 3% of engagement. […] But in this field, the athlete also competes with new types of "non-athlete" competitors who appropriate the territory of sport via lifestyle". Nicolas Blanc notes that there are however two main risks that need to be taken into consideration: reputational risk (doping, personal life) and strategic risk (opinions, speaking out).
Looking back on his experience, the 2012 Olympic Biathlon champion Vincent Jay says that the management of athletes’ social networks is now essential and must be conducted professionally. "After my Olympic victory, my training rhythm was 6 days out of 7 and I devoted the remaining day to representation activities with my sponsors. This rhythm was exhausting and certainly contributed to the premature end of my career at the age of 26 ", says Vincent Jay. Today, he works for the Banque Populaire Rhône-Alpes. Within his role he accompanies young athletes over four-year cycles, where he notably makes them aware of the risks they may incur in terms of communication. These risks echo, more generally, the different variables that impact the value of investments, depending on the assets chosen.
Once the sponsorship strategy is in place, it becomes necessary to calculate the return on investment, but according to Nicolas Blanc “it is still difficult to value a sport marketing asset on the advertiser's balance sheet”, for the following two main reasons: Lack of reliable comparable data (non-public contracts) and lack of visibility on the cash flows generated by the sponsorship investment. However, it is still possible to evaluate the profitability of a contract according to the following indicators:
As in many other sectors, digital has changed the game of sports sponsorship. The athlete and to a lesser extent the clubs and events have always been at the heart of sponsorship interests, but today, their presence on social networks takes the form of a horizontal interaction model where the fan has a say. The watchword for the future will therefore be: engagement. Brands that will adapt to that will benefit from better opportunities to engage with consumers and then improve their return investments in terms of sponsorship.