Why is sponsorship asset underutilization still rife and what to do about it?

The world of sports commercial partnerships is rife with untapped opportunities. While it's challenging to pinpoint the exact amount of "value left on the table," in the global sports business industry, consensus suggests that significant under-utilization of sponsorship rights exists. Estimates range from 20% to 80% of the potential value being left unrealized, translating to billions of dollars in untapped potential globally each year.

Recent research provides insight into the scale of this issue. The 2023 Sponsorship Benchmarking Report by IEG reveals that 56% of sponsors believe they could be extracting more value from their sports partnerships. Furthermore, Turnstile, another industry authority in this area, suggests that 37% of deals fail to include intellectual property sponsorship value. These numbers paint a clear picture of the vast opportunities being overlooked in the sports commercial landscape. In my experience of working with the best of the best in this industry, I have observed that nearly a third of the numerical rights in commercial partnerships are left completely untouched. The situation is far worse than that.

One of the primary areas where sponsors fall short is in data and analytics. Many sponsors and marketing teams lack the expertise, tools, or resources to analyze sponsorship data effectively and optimize their activations based on brand impact, fan engagement, and ROI. The tendency to hire sponsorship activation agencies as sponsorship strategy consultants often exacerbates this shortcoming. While some agencies excel in this role, many lack the necessary brand management experience to effectively monitor, evaluate, and track their implementations.

Digital activation potential represents another significant area of under-utilization. Sponsors and brand managers frequently fail to leverage digital platforms such as social media, team apps, and streaming services to their full extent. These platforms offer unique opportunities to engage fans and create interactive experiences, yet they often remain under-exploited.

Content creation is another realm where the potential is left unrealized. Rights to players and other team assets are valuable resources for creating compelling content that resonates with fans and drives brand engagement and connection. However, these rights are often underutilized, representing a missed opportunity for deepening fan relationships and brand affinity.

Relationship building between teams, athletes, and sponsors is another area ripe for improvement. Many fail to fully tap into the potential of deeper partnerships, missing out on co-branding opportunities, joint initiatives, and community engagement. These deeper relationships can yield significant mutual benefits and create more authentic connections with fans.

Lastly, an overemphasis on short-term activations and metrics can overshadow the potential for building long-term brand affinity and strategic partnerships. While immediate results are important, they shouldn't come at the expense of cultivating lasting relationships and brand equity.

Several factors contribute to the under-utilization of sponsorship assets. A lack of expertise is a common issue, with many teams and sponsors lacking the in-house knowledge or resources to fully activate rights and develop creative campaign strategies. Many are stuck in a 1990s-style view of sponsorship, focusing on logo placement and exposure rather than creating meaningful sponsorship value.

Poor sponsorship planning, budgeting, and activation planning also play a role. Marketing teams often fail to plan adequately and/ or budget sufficiently for these initiatives, limiting their potential impact. Measurement challenges present another hurdle. Attributing value and ROI to specific sponsorship elements can be complex, leading to uncertainty in activation strategies and hesitancy to fully leverage available assets.

Internal silos within teams and agencies can hinder collaboration and effective rights activation. Too many organizations view sponsorship as solely a marketing program rather than a company-wide initiative, limiting its potential reach and impact. Finally, the pressure to deliver immediate results can overshadow the long-term potential of building brand equity and strategic partnerships. This short-term focus often leads to missed opportunities for deeper, more meaningful engagement.

To unlock the full potential of sports sponsorships, several steps can be taken. Investing in data and analytics expertise is crucial, whether through internal capacity development or bringing in third-party expertise. Developing clear, long-term activation strategies aligned with business/brand objectives should precede asset acquisition and partnership finalization.

Creating engaging and interactive fan experiences both in the venue and remotely is essential. There's often too much focus on in-venue activations and experiences, which reaches only a small percentage of the potential audience. Instead, sponsors should focus on reaching the upper 90% of the potential sports partnership audience that exists beyond the venue.

Building stronger relationships with sponsors and fostering collaboration is key. When brands sign partnerships, they commit to maximizing each other's assets. However, far too many brands sponsor assets and then proceed to activate them on their own without leveraging the full might of their partners' assets.

Adopting a data-driven approach to measure and optimize activation effectiveness is crucial. If you know your objective, make sure you can measure it. If you can't measure it, it's worth reconsidering whether it's worth pursuing.

By addressing these challenges and capitalizing on the full potential of commercial rights, both rights holders (teams and events) and brands (sponsors and advertisers) can unlock significant value that is currently left untapped. The sports sponsorship landscape is evolving, and those who can adapt and fully leverage these opportunities will find themselves at a significant advantage in the years to come.

#sportbusiness #sportmarketing #sportindustry #sponsorship #sportsponsorship

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