One of the featured speakers for Thursday’s session at Sportaccord was Sir Martin Sorrell the Chief Executive of WPP. The focus of his presentation touched up four main topics:

The economic importance of sport

The cultural importance of sport

The good and the bad of new technology

What you need to do to future proof your sports brands

These topics linked perfectly with the objectives of Sportaccord, which is to further educate the participants about significant trends in their industry.

In discussing the economic importance of sport Sir Martin pointed out that “there is clear evidence that there is a significant quadrennial effect associated with the Olympics.” “In all but one Olympics we saw higher growth in the year of the Olympics. As such we can see that major sports events like the Olympics, and increasingly the World Cup, spur further growth in the global economy.  The growth comes from increased advertising spending, greater investment, greater government spending (in the host country) and greater consumption.”

He went on to note that the Beijing Olympics will shatter spending records. “$40 billion is being spent on construction around the Olympics in this great city. The most expensive games yet was the Athens Olympics which spent nearly $12 billion. To put this number into even sharper focus, this $40 billion represents over 40% of all money spent on the Olympics since the Montreal games. The spend in Beijing is estimated by The Economist to be adding 2.2% on Beijing’s underlying growth rate.”

As was later pointed out by Peter Ueberroth, Chairman of the USOC, who followed Sir Martin, its important to note that the return on these investments is not about the 16 day ROI of the Olympic Games themselves, but the long term legacy and return to those cities that host the Games with the improved infrastructure and capabilities that are left behind as a result of the Games.

Transitioning to the Cultural Importance of Sport the key point was that “sport will become even more important as the process of globalisation gathers pace….because globalisation and modernisation, even in very cohesive and collective societies creates, greater individualism.”
As a result “Family unit size becomes smaller, women marry later, we move further away from home and divorce rates increase.  Meanwhile technologies like the mobile phone and the internet allow us to achieve a great deal, on our own.  TV is increasingly delivered on digital platforms, which allows us to watch more of what we want, when we want.  Very simply, our lives become more and more atomised.  In such a world where atomisation is abundant, the thing that is scarce, collective experience, becomes ever more valuable.  Family friends and hobbies become more important to us and for that reason sporting hobbies can be characterized as the building blocks of our communities.” And the web offers a great platform to aggregate and leverage these communities efficiently.

In closing Sir Martin offered ten points to consider in light of the rapid changes occurring in the distribution and consumption of sports media, as he described it “What you need to do to future proof your sports brands.”  Below is his list:
#1 Understand your competition

At a time of technological discontinuity it is vital that you think broadly about your competition.  As it will prevent you from being blind-sided. The late Theodore Levitt in “Marketing Myopia” wrote about peril of narrowly defining your business.  He illustrated this by looking at the decline of the rail industry in the US.  You need to judge your brand not against other sporting brands but against other forms of entertainment.  If you don’t do this you could end up in trouble Speaking of the rail industry – Levitt said  “The reason they defined their industry incorrectly was that they were railroad oriented instead of transportation oriented; they were product oriented instead of customer oriented.”

#2 Develop a Customer Mindset

Think like your consumers.  If they are going online – you go online. Don’t deny it.  Don’t file it in the “too difficult folder”  Be constantly fascinated as to what your fans are up to.

#3 Understand what you have to protect, enhance and explain

Think of your business as a brand.  Understand its values. Values are timeless, but you may want to express those values in new and more contemporary ways.  Look at Formula One it is glamorous and values technology.  Today the expression of the value of technology is in how you can make the sport greener through the application of leading edge technology.

#4 Are you talking to the young?  If not, why not?

The young take their media habits with them.  So if you are not part of their habit now – you most definitely won’t be in their future.

#5 Don’t rely too much on one partner

Sleep around.  You need to develop multiple partners and wean yourself of an over-reliance on broadcast partners.

#6 Start Understanding Best Practices

Start up an audit of leading players who you admire.  We’ve been involved in a number of projects recently in this area and we have looked with interest at the way MLB have developed their new media property.  They are now driving nearly $200 million directly from subscription revenues to their website.
#7 Audit Your Long Tail

Great sporting brands have a long tail of wonderful content.  You should start a process of auditing what you’ve got and how you can exploit it.  Long tail economics work when the cost of distribution drops – hence you can start to make significant money from small numbers.

#8 Think of ways of growing the franchise – and value

Related to this point is to start to think about how you can build the footprint of your brands from moving it from live broadcast to more non-live content that lives online.

#9 Create more contestable markets and start to talk to “new” media players

The other element related to multiple partners is if you are unbundling rights don’t do it by platform but by time.  That way you create more contestable markets with more players bidding for the rights.  By doing this you will create more value for your brand

#10 Think about what digital inventory you can offer sponsors and partners

Finally start thinking about the digital inventory you can offer sponsors and partners.  Many large global sporting brands still think in a very analogue manner about their inventory.  But what many advertisers want is more exclusive digital inventory.  You can mark yourselves out from your competitors by bringing real innovation into this space.

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