Everyone knows the digital age has turned traditional sponsorship models on their head but there are still revenue-generating opportunities that many clubs and organisations are missing.
Take commercial segmentation, for instance. In the world of top-flight sports, brand share is the mainstay of any model – that’s why shirt sponsorship and ‘visible’, almost above-the-line style of promotion is still the pinnacle consideration (think shirt sponsors) – and segmentation of data is rarely considered in the endless quest for more valuable commercial opportunities. As a result, performance is the biggest factor in driving commercial growth. It’s simple – teams that win command more value.
Only, it’s not simple. At least, not anymore. Winning teams will always command a premium but there’s huge commercial value left on the table when audience segmentation is not a driving factor in revenue generation.
Potential revenue is being ignored by sports clubs and organisations
Digital allows us to break down and target our audiences almost to the individual and enables round-the-clock analytics – meaning we can show true ROI, which at Nifty we measure in terms of reach, recognition and return.
This ROI is famously difficult to track in more traditional media forms but it’s almost a bonus when we talk about the real power of digital. The true benefits are now much simpler to understand.
Do you remember the dawn of social media, when everyone jumped on the latest channels and spent hours scrolling, digesting what they were all about? Well, that period ended at least 10 years ago.
What are the benefits of audience segmentation?
TikTok aside, we’ve all had time to settle into the platforms that suit us best and as a result, there are now clear social groups in terms of engagement across platforms – and across our client’s audience sets these demographics are clear to see.
It’s not always as succinct as this but for the interests of simplicity, and your attention span, we’ll break these down as generically as possible: Boomers are on Facebook, Millennials engage on Instagram and Gen-Z love TikTok.
Now think about it commercially. Any marquee commercial partner who is after a front-of-shirt deal might be looking to establish brand awareness across all these demographics but there will also be brands out there who aren’t. Home Insurance, for instance, isn’t likely to resonate with a TikTok audience... but for Facebook?
That’s one of the possibilities we mean when we talk about segmenting commercial opportunities. These are only suggestions but consider a services company as your ‘Official Facebook Partner’ or an apparel and/or aspirational partner as your ‘Official Instagram Partner’.
This opens new avenues in content through collaborative, hands-on relationships with your commercial partners. Whether that’s through partner-led, value-added content or more wide-reaching themes, the possibilities are almost endless. There are also more opportunities to turn your audience into direct costumers for your partners, and vice versa, meaning increased ROI and long-lasting relationships. Consider your demographic’s unique behaviours
Now, I’m not saying that 24-year-olds aren’t on Facebook, it’s just that they use it differently from their primary channel – which is most likely TikTok or Instagram – just as the over 40s will use Facebook differently to how they use TikTok.
While we’re on TikTok, it’s worth noting we don’t often consider TikTok partners early on in a new client relationship. Instead, we focus on CSR content among news and follow the principled purchase ethos that helps pull Gen-Z in over the long term.
To summarise, there’s huge commercial value in your digital audiences and it’s never been easier to unlock that value. All it needs is a new approach to commercials and the desire to build long-lasting, mutually beneficial relationships between clubs and partners.
Before I go, let me leave you with a stat we work to. Nifty aims to convert between 1-2% of an audience into paid subscriptions on either Facebook, YouTube, Instagram, for instance. That means, a club with 100,000 Facebook followers is leaving around £24,000 in the platform each month – nearly £300,000 a year through Facebook subscriptions alone. That’s before we run subscription-driving campaigns too.
How does it work?
There are essentially two strands to what we do – content and commercials.
First, we drive subscription-focused content strategies to unlock immediate revenue. These subscribers often break down into niche audience segments which we can then create further commercial opportunities around, meaning income growth from subscriptions but also bespoke commercial offerings that resonate with our niche audience segments.
From there we encourage long-term commercial relationships with brands that want to speak to these specific audience segments. This increases commercial opportunities and opens up the possibility of title partners across social channels, without the need to sell. After that, we generate audience-tailored content in collaboration with our new, niche partners.
Content that not only resonates with the target audience but pulls in new eyeballs; eyeballs that likely sit within the existing audience segment. It’s not as simple as it sounds but the principles are there.
By doing this we achieve increased revenue from subscriptions and the additional commercial relationships to grow the audience and achieve the all-important reach, recognition and return.
This collaborative approach between commercials, marketing, communications and partners means compelling content that addresses fans’ needs while establishing mutually-beneficial commercial relationships.
This is what we at Nifty see as the future of sports revenue, particularly across digital. In fact, we believe this approach could rewrite the traditional commercial model altogether. We have already seen teams building robust, sustainable digital plans that increase revenue and engagement. This isn’t something new but the longer clubs ignore the potential, the more revenue will be left on the table.
By Christian Collison, CEO of sports marketing agency, Nifty Communications