The recently “completed” economic recession has continued to leave a footprint in the world of Sports Sponsorships and corporate involvement in sports events into 2010. As covered thoroughly in this piece by Patrick Rishe in Forbes Magazine, several major sports sponsors including Monster.com, Citi, and UBS have dropped out of mega deals within the past three weeks. This may only be the beginning for an industry that has been riddled by inefficiencies and poorly evaluated deals and is in dire need of revolution.
Spotlight has a very unique seat in this theatre as a manager of corporate inventories for over 700 firms and a partner with 38 teams. From this viewpoint, Spotlight can see exactly what business sports tickets and suites are driving without a conflict of interest. Rishe brings to light a number of inefficiencies and flat-out bad business practices in his spot-on analysis of the current sports sponsorship landscape that have been apparent for years.
According to Mr. Rishe, 20 of the top 50 sports sponsors dramatically reduced their sports marketing spending in 2009, with the biggest reductions coming from the Auto Manufacturers Toyota, Chevy, Dodge, American Honda, GM, Nissan, and Cadillac. Not surprisingly, none of these firms used or currently use a sports ticket management software to evaluate the tickets and on-location activation tied to these sporting events. It’s not a stretch to assume that these sorts of inefficiencies aren’t limited solely to the ticket holdings and were more than likely prevalent in the sports sponsorship spending in general – with a few of them using sports marketing firms and middle men. This sort of arrogance in spending is much more rampant than most shareholders would like to know as major firms put little effort behind utilizing their resources, usually pawning them off to a staffer low on the totem pole that has no ability to leverage what is sometimes in the tens of millions of dollars in tickets to drive business.
Mr. Rishe correctly points out that “Part of the problem is the logistical difficulty of actually tracing sponsorship dollars to new sales.” Understandably, the first reaction to reading such a thought would be “didn’t these firms track these things in the first place?” The answer is no. Some still do not. This is the biggest risk for sports media and ticket providers. The Sponsorship head of a major national airline’s thoughts sum up the issue nicely when he considers tickets, of which his firm has about $5 million dollars invested, as “throw-ins that can be tracked on an Excel spreadsheet by interns.” These firms are the most important challenges of the current sports industry as the provider either needs to find a way to help them understand their value and better manage it, or risk seeing these sponsors go the way of Citi, UBS, & Monster.com. Eventually stakeholders in this airline will demand a return on investment and one can be assured that disparate excel spreadsheets kept by college kids will not be evidence enough for intelligent business executives.
Tracking the return on investment for the on-site portion of the sponsorship including tickets, hospitality events, player meet and greets, and suites is not only easy but extremely inexpensive. As Mr. Rishe points out, there are a number of consulting firms and providers focused on providing sponsorship executives with the tools they need to effectively drive business. There are also, however, a number of “sports marketing” firms that are simply middle men to media buys, sponsorships, and on-site events. The industry, through continued evolution, will need to cut out those “sports marketers” that offer little to no value to their customers. Many of these firms are simply interested in billable hours and, on more than one occasion, have actually sabotaged tracking methods to try to paint their suggestions in a better light or to keep additional staff on hand to bill the customer. These negative forces will need to be navigated around to see sports sponsorship flourish once again. More than a handful of these firms have begun to partner with third party objective providers to evaluate their recommendations. As common sense would imply, a firm will always tell you how great a buy you made when they advised the purchase and took a commission in the first place.
Spotlight Ticket Management is a foundation on which corporate responsibility and sports analytics is built. Firms operating Spotlight have been able to act on a buyers market while those that haven’t been responsible have been forced to cut spending. Using sports tickets and suites as a viable business tool shows Influenced Revenue numbers that make Marketing and Sponsorship Executives drool. The numbers show that sports tickets for business use are a terrific product. The question is, can corporate America as a consumer evolve past inefficiencies, egos, and back door deals to take advantage of them.
