In this article SiGMA News spoke to Kai Dowling as he shared exclusive points and conclusions reached from his dissertation submitted in fulfillment of his Master of Science degree in Sports Marketing at Manchester Metropolitan University
For many years now, sponsorship has become the norm in sports. Whether it is a sporting event or a club, there is always going to be some sort of sponsor involved who is looking to expose their brand to an audience. It is becoming the fastest growing sector within sports business, and gaming companies can definitely benefit from this.
Most companies tend to look at the large market rather than small market sports. This is due to the perception that the brand will achieve higher brand recognition and an increase in brand value within large market sports, but within those sporting events comes huge competition and to actually gain value from that sponsorship deal will be extremely difficult unless the company is a global player.
Determining the sports market
When evaluating a certain sport to determine whether it’s a large market or small market sport, there are a number of factors that must be considered such as:
The Global Fan Base
Viewership on TV
TV Right deals
Presence on social media
However, apart from the ‘Big 3’ sports - football, baseball and basketball - the markets in which different sports fall under varies depending on the country. For example, water polo is considered to be a small market sport in countries such as the UK and France, but if we move to Eastern Europe, this sport is then falling into the large market sport category due to their national success and the overall audience they attract.
Companies can take advantage of this by sponsoring, for example, a water polo club in France. This sponsor will have a small cost compared to sponsoring a water polo club in a big market, however, French clubs often qualify for the water polo Champions League which will see that sponsor being exposed in different level markets across the world for a minimal price, and in turn the brand will experience a higher return on investment.
It is no secret that sponsoring a small market sports club or event will not get you the same exposure from a short advert at a major event such as a World Cup, but the brand value and recognition gained from sponsoring a small event or club can be much bigger than that little advert. One must consider that during a large event such as a football match, big companies are able to place their brand in prime areas where supporters will be able to notice them while smaller brands get lesser time or less visible areas or no space at all.
Moreover, if your brand is not that well-known one must question whether supporters would actually conduct some sort of research on the brand. Therefore, a number of questions arise, such as, how many people actually took notice of my brand? How effective were those few seconds – was it worth the price paid? Did it increase the brand’s value?
The company must realise that simply placing their brand name around the stadium is not enough when it’s a small company and some sort of sponsorship activation is needed for people to actually remember the brand. This is why sponsoring small market sports is becoming so popular.
Why sponsor small market sports?
Firstly, niche sports clubs have a close relationship with their supporters, who are usually a community rather than a global fan base. The main difference between having a community behind a club rather than a global fan base is loyalty. Small market clubs have a close relationship with their community who are more passionate and devoted to their club in comparison to the average sports fan.
This is extremely important to take into consideration when sponsoring a small market sports club or event. Before sponsoring, the company must establish whether their brand aligns with the community’s values to maximise the potential of the sponsorship. To give a simple example, it would be pointless for a gaming company to sponsor a club whose community actively campaigns against betting.
If the company does this part well then, the participants and fans of these small market sports or events are more likely to purchase the product or service of the sponsor, regardless of quality, since they will consider the sponsor to be part of their lifestyle, due to the special relationship they have with their club.
Nowadays, however, gaming companies must be wary of promoting their products or services to a community especially with the emphasis on responsible gaming recently. Having said that, if these gaming companies produce merchandise, the community will purchase the goods and wear it with pride which will in turn expose the brand effectively to a number of other communities.
Moreover, due to the stigma around gaming companies and the perception that betting companies could cause harm, sponsoring small market sports would be a perfect opportunity to carry out Corporate Social Responsibility. This will help the company create a unique relationship with that specific community which will increase the reputation of the company among other communities within that sport.
One must remember that small market sports have a close-knit global family so the image of the brand will be respected worldwide rather than just within one community, similarly to a large market sport club but with more effectiveness.
In conclusion, the concept of sponsorship has constantly evolved, and it has resulted in the growth of sponsorships of small market sports. This is because it gives the sponsor a chance to target and penetrate a specific audience and, although the sponsorship may reach a smaller amount of potential consumers when compared to the larger market sports sponsorship, its return on investment will still be greater since supporters of these types of sports will purchase merchandise related to the company since they would genuinely appreciate the sponsor helping their club and sport grow.
It’s about time that we see gaming companies, who do not have huge budgets like PaddyPower for example, penetrate these small market sports and reap in all the benefits while developing valuable relationships with a number of communities around the globe.
Words by Kai Dowling. Kai Dowling is a graduate in MSc in Sports Marketing from Manchester Metropolitan University with a Bachelor of Arts in Business Enterprise from MCAST. During his master’s degree, Kai engaged in a number of interesting topics such as: consumers in digital environments, sports events management, digital strategies, sports marketing and international business and emerging markets. Kai now finds himself working as an intern at SiGMA, where he continues to broaden his knowledge by learning about the gaming industry.