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The thing about starting a tech business in a new industry is that you need to build up new contacts, more knowledge and generally get a grasp of what the heck brands are spending money on and how the people at the top are seeing the industry growing.

For the past 18 months I’ve been learning all I can about the sports industry and where technology fits in across both fan engagement and digital marketing.

Having spent years in print, digital media, ecommerce and technology and worked with clients ranging from massive multinational travel companies to tarot card readers to the NHS, I thought I had seen it all.

This assumption was erroneous...

The more I dived into conferences, met agencies, wormed my way into meetings and networked my butt off, the more I uncovered a remarkably close-knit group of senior decision makers and started to get a feel for how one progresses and becomes ‘known’ in digital & sport.

With each new person in the industry you meet you unlock more contacts into other parts of the industry. Some are red herrings. Shadows that will never return your email that you hear about from others at events or mentioned on conference calls.

Some move jobs so quickly you need a CIA spy satellite to track them. And some are valuable contacts that help your steps to even higher in the industry.

And what an industry to pour you efforts into…According to PwC, sports sponsorships in EMEA will hit $14bn in 2012 and grow to $15.86bn in 2014. There are obvious instigating factors here such as the European Football Championships, the London Olympics and the 2014 World Cup in Rio. But this is still a staggering figure.

Of course, much of the success and attraction of sports sponsorships lies in the broad appeal sports have not just in demographics but also location. It’s truly a global game.

In November our own second-screen football startup Squawka attracted nearly 100,000 users from over 170 countries around the world – this was with a tiny marketing spend solely in the UK and a moderately consistent Twitter, Facebook & blog strategy.

Such is the pull of the black hole that is the English Premier League (and to lesser extent the Spanish La Liga) that fans globally were drawn in. Seriously, we have users in Lesotho, Africa. You don’t need to be a rocket scientist to realize there are clear advertiser opportunities in digital and sport.

So, what do the people at the top of the behemoth that is Sport think of digital and its potential impact on their businesses?

Into the field

In September I visited a top sports conference at Chelsea’s Stamford Bridge stadium to hear what leaders in sport were doing to place digital at the heart of their strategy. This was easy as there was a dedicated ‘Digital’ stream of talks so I was eager to hear what the leaders of sport thought about digital.  

There was a lot of discussion around using Twitter and YouTube to engage fans (to much scribbling in the audience, but it wasn’t anything above and beyond something an experienced digital practitioner would already know).  

Cristian Henandez from Facebook gave a presentation on why sports brands should be using Facebook campaigns around specific sporting events. Its always great to hear Cristian talk but again there wasn’t anything new here that a regular Econsultancy reader wouldn’t know.

There were some great noises coming out from global brands and how they have launched innovative campaigns. I would wholly recommend looking closely at Western Unions PASS initiative in which the company donates funding to young peoples’ education based on the number of passes in a UEFA Europa League football match.

But when the sessions were over, the drinks started flowing (or as I like to call it, ‘Truth Time’), I got the opportunity to speak to brands and rights holders about what they were focusing on and how digital was important to them.

And our survey says….

Content management systems. Yes. CMS. Yes, the thing that you have been using for about a trillion years. Yes, the thing that you were taught on the first day of your digital work life.

The ability to speak directly to fans that have been accumulated through digital strategy is nirvana for the sports industry. For rights holders it is the sum of all content distribution and for brands it’s where the ‘sell’ is implemented.

Let me be clear, I have no issue with CMS as a focal point of digital strategy but implementation is key and I’m afraid this is a fine art yet to be mastered by the industry.  

I have seen digital sport campaigns designed purely to drive up email addresses that reach in tens of millions of pounds. When I look at some of the implementation of the campaigns I shudder. As would you if you were the planner.

In my opinion a great place for sport to be taking advice would be the performance marketing area and, after talking to top affiliate networks, it does appear to be a rising market.

According to Stephen Kerin, Managing Director of affiliate network Webgains who run return-on-investment campaigns for the likes of Nike, Tottenham Hotspurs and Chelsea FC:

Sport has not traditionally been a key sector in the world of performance marketing but we have started to see a real trend of sporting teams and brands looking to the performance channel in an effort to maximize their digital returns. 

This concept of focusing more on acquisition versus brand obviously needs to be dealt with carefully because sport clearly isn’t ecommece but there are still lessons to be learned.

Trend spotting

One of the very interesting trends that ones sees when an entire industry tries to adapt to a sea change is that industry looks to another similar industry that has undergone the same change.

For Sport, that industry to compare to is Music. The concept of a rights holder shifting a B2B business to embrace a direct to consumer model is very similar across the two industries and many technology providers are moving to take advantage of the fact.

Steve Machin, founder of Entertainment Consultancy Stormcrowd said: 

The type of disruption seen in (recorded) music is mostly replicated in paid content channels where the purchase mechanism can be subverted (eg to ad funded streaming) and the content commoditised by digital (eg news). The sports consumer is already well calibrated to these types of business models that have been in play for over 20 years via satellite services, cable, and pay-per-view.

Companies such as Mobile Roadie (who have had success building apps for Universal Music, EMI and Live Nation) have seen the trend and added the NFL, NBA and Cristiano Ronaldo to their client lists.

It’s an understandable reaction. Both industries face the shocking reality of a model that completely bypassed them in terms of pirated content on the web. The untouchable seat of power that they held for generations suddenly looked amazingly flawed. But if digital is the illness can it also be the cure?

Which brings us nicely to the rights holders (the governing bodies, the teams, the players whose work produces the content and also brands who pay to become authorized content distribution/sponsorship partners).

It’s clear that digital has enabled a whole new world for activating sports sponsorships and also given a route to market for smaller brands that would not otherwise have entered the arena.

I spoke to Charlie Dundas- Executive Vice President, EMEA for leading sports sponsorship insights business; Repucom, about rights holders understanding the importance of digital in their businesses.

Dundas, who was also Head of Sport at Mediacom UK for a number of years said: 

All rights holders recognise the importance of digital media. Some have embraced it better than others. The difference in quality is largely due to resources, talent and/or the politics that govern the rights holder in question.

It’s the politics point that I have found to be the difficult factor with a mixture of both push-backs and lack of understanding at senior levels. But, in a large part, rights holders are at the very pinnacle of sport – surly they need to be doing more to integrate with digital?  

According to Dundas: 

Clearly some could be doing more but their main focus is to run the sporting property for which they are responsible and I don't think we should expect them to be taking the lead in digital media.

So, it’s more of a point of the agencies then? Possibly but I would say that it is the start up community that is driving the change and fuelling agencies to correctly activate digital and sport in innovative ways.

Leading the charge are boutique conferences and hack days designed to push the digital sports industry forward such as the excellent Sports Tech Meetups (SportsTechMeetUp.com) organised by Stephen O’Reilly and Dan McLaren from the UK Sports Network.

There is a palpable sense of excitement in agency land around the coming wave of innovation and if it really is the agencies who hold the key to sport & digital then they should be embracing the start ups revolution as quick as they can.

Sanjit Atwal

Published 19 December, 2012 by Sanjit Atwal

Sanjit Atwal is Co-founder & CEO at Squawka.com and a contributor to Econsultancy. 

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