MMAPayout.com has been pretty vocal about the importance of corporate sponsorship in the future development of mixed martial arts; both on the promotional and fighter front. We’ve taken a look at rudimentary ways to value sponsorships in MMA, means of increasing ROI, and how sponsorship could conceivably be used to support an online business model.
Now it’s time for an update that takes a look at some of the current trends in the overall sponsorship industry and how those trends will likely impact MMA business in the future.
Current Trends Within the Industry
1.) There’s been a sizable shift in the thinking of sponsorship professionals over the last 18 months largely borne out of this latest economic downturn. Purse strings are tightening as companies look to trim the fat, and it’s no longer feasible to simply sponsor a sports property without sound justification. These sponsors need to know how it benefits their brand to sponsor a particular property, but they should not be expected to bear the weight of that investigative process entirely on their own. Therefore, a great deal of that due diligence has shifted towards sports properties.
The onus is on sports properties not just to provide better information about consumer demographics, but also provide more creative means of activation for potential sponsors. There’s no longer any room for template packages in a very lean and competitive sponsorship – the typical bundle of signage and naming rights isn’t going to cut it. Instead, the properties that are currently securing sponsorship dollars are the ones actively working to create value by integrating the sponsor brand with the sports property to better target and associate with the properties demographic. That involves working to identify the brand with the property through use of the athletes, personalities, and cultural artifacts (symbols) of the property. Moreover, it’s becoming increasingly important to help brands track the progress of the sponsorship; in some cases all the way back to retail. It’s not always possible – certainly not easy – but if a property can help a sponsor answer “how does this impact my bottom-line,” it’s going to be getting a lot of business.
However, the sponsorship departments of these big brands are also finding themselves under increased scrutiny to justify their agreements with evidence that the plan is going to increase awareness, interest, and in many cases, sales. The sponsor needs to set its objectives ahead of time and then follow up with a plan to achieve those objectives. So, just the same as typical templates no longer work for sports properties, it’s also no longer sufficient to align a brand with the demographic of a sports property and cut loose a big check. That means not only spending money on the sponsorship, but also ways to further activate around the sponsorship and evaluate how effective the investment truly is.
2.) The impact of the Tiger Woods scandal has affected the entire sponsorship industry as brands are now more cautious than ever as to whom they align their brands with. To be fair, this trend has been developing for some time – Michael Vick, anyone? – but the events surrounding Tiger’s transgressions and, now, more recently, Gilbert Arenas with the NBA, have forced brands to rethink the way they target and pursue sports consumers.
How risky is it to associate with a particular property and invest millions of dollars in that relationship when it could sour in a very big way?
There are also further ethical implications from the property side – especially for smaller properties like MMA organizations – when taking on new sponsors. The issue goes beyond just good for business, and into the realm where, via this association, does the property agree with what the sponsoring brand stands for. Is the property aware of what that signals to the greater sports community?
The Impact of Sponsorship Trends on MMA
1.) The shift of responsibility towards sports properties will force MMA organizations like the UFC, Strikeforce, and Bellator to up the ante where information gathering is concerned; something we’re already starting to see from the UFC with surveys and other analytics that evaluate magazine readership and live event audience. It will also force these properties to get more creative where branded content is concerned. The future of sponsorship involving MMA organizations will involve fighters in commercials, contests, and themed product bundles because that’s where the value creation now lies.
2.) If Tiger Woods – once widely seen as the most reliable athlete endorsement in sports – can fail, what does that say about the riskiness of an MMA property or athlete? Many of those considering a potential relationship with MMA have pulled back to evaluate whether they can afford the risk that MMA brings to the table (this, on top of the normal pull back that most companies have had in general).
The only thing that MMA and its properties can really do in this situation is continue to advocate the sport’s legitimacy, safety, and substantial economic potential. Sure, minor adjustments can be made, like avoiding excessive displays of blood and violence (e.g., showing a gaping cut on cable television replay for five minutes straight – once or twice is enough), but there comes a point where you risk trying to become everything to everyone. MMA’s greatest chance for success is focusing on its core audience and cultivating an even deeper relationship with those individuals.
Likewise, MMA is never going to attract an investment fund like Accenture as a sponsor, because that’s not an image Accenture is looking to associate with. So, there’s no sense in worrying about it. The industry needs to focus on establishing partnerships with brands that can leverage the male 18-34 demo (possibly even the female side of that demo), but also contribute to MMA’s double agenda of diversified revenue generation and awareness/interest building.
Leave a Reply