A recent JohnWallStreet article cogently summarized a festering situation in the relationship between sports rights holders and their brand partners: access to fan data and the critical insights that stem from it.
This is an issue that has been addressed numerous times by this blog and in conversations on the All Access Interview Series podcast. While properties talk a good game about capturing and using fan data, the JWS piece reinforces two key points we have been banging the drum about for years now:
· Sports organizations continue to lag in their ability to fully utilize the customer, follower and stakeholder information at their fingertips.
· They are not making the data and insights they have available to corporate sponsors, even though those partners increasingly demand it.
The big question is why properties have so far been either incapable or unwilling to unlock the true value of their fan data and to see it, as JWS does, as the “next ticket to increased revenues and valuation multiples.”
Nick Goggans, co-founder of Pumpjack Dataworks—a company that works with sports properties to manage and monetize their first-party data—hit the nail on the head with his answer to that question, as summarized by JWS. “With so much revenue coming from media contracts, clubs across the big four leagues have lacked the incentive necessary to invest in building data warehouses and the infrastructure that would make fan information easily accessible—and actionable—to people throughout the organization.”
The idea that major sports properties don’t innovate because their media revenues have made them complacent comes as no surprise, especially to those in the sponsorship field. Many properties continue to bundle IP, signage and tickets into “partnership” packages that haven’t changed substantially in decades because they are not compelled to offer more value in a segment—sponsorship—that accounts for a much smaller share of their overall revenue than media rights do.
JWS offers multiple reasons why rights holders are being short-sighted by not taking full control of their fan data and optimizing its value, including three I am in full agreement with:
· Although the time, effort and cost of centralizing multiple data sources may once have been an obstacle, advances in technology have made a once onerous and expensive process manageable and cost-effective.
· Similarly, while previously the smart play was to allow media partners and social media platforms to have control of fan, viewer and user information in exchange for their reach and wherewithal to distribute a property’s content, the ability of sports leagues, teams and events to go over the top and direct to their consumers puts them back in the data driver’s seat.
· While protecting consumer information must be taken seriously, privacy concerns are not a reason to avoid optimizing fan data. As Tom McDonnell, CEO of Monterosa, a digital engagement platform, said to JWS, “Privacy laws should not be seen as a barrier to organizations who go about acquiring first-party data from audiences in a fair and transparent way. When fans participate in a quiz challenge, vote or prediction game, or if they are then given the chance to enter a draw for a prize from a sponsor, their data is always requested alongside optional consent. When an exchange of value is taking place, the subsequent level of engagement and opt-in to marketing is remarkably high.”
To those, I would add two more arguments for why the time is now for properties to seize the opportunity presented by their fan data:
· For any properties that have tried and failed to compete with other opportunities based on audience size or reach, data will enable them to stop playing a game they cannot win and instead offer real value that smart sponsors want. They can demonstrate that their fans are the brand’s target audience and provide behavioral information that will allow sponsors to design personalized, relevant activation programs that can achieve significant results.
· While income from media rights—whether it is generated from traditional broadcasters, streaming services or through a property’s owned channels—is likely to account for the lion’s share of sports property revenues, there is no guarantee that it will continue to be as lucrative as it has been the past few decades. Providing significantly more value to brand partners offers a prudent hedge in the face of a changing media marketplace.
It's abundantly clear that closing the deliverables gap between properties and sponsors will be tremendously beneficial to everyone, including fans, as soon as rights holders are willing to take the necessary steps.