What Does A Next-Generation Sports Agency Need To Do?
A flurry of recent moves has demonstrated that traditional sports agencies are looking, well, less traditional. Some examples of this include investments in innovation and investment funds (i.e. CAA's Evolution Media group and Nielsen's Innovate), acquisitions of product companies and digital solutions (i.e., Wasserman's acquisition of Laundry Service, Endeavor's acquisition of 160over90), expansion into esports (i.e., GMR esports, Octagon's esports Passion Drivers®). Furthermore, the addition of executives with deep technology experience shows how agencies are striving to develop more value across their increasing array of talent representation, sponsorship consulting, event management, experiential marketing and evaluation services.
While this tech focus is not new, the influx of new sports tech companies ups the game for agencies to develop technology-powered services that can be delivered at a higher margin and be easily measured and valued by their clients. This means some specific new requirements. Here's our top 10 list.
The Next Generation Sports Agency Will:
1. Identify new technology sponsorship categories to pitch to properties and brands. 'Unicorns' like Uber (Ridesharing), 23andme(Biotech), SoFi (FinTech), Magic Leap (AR/VR) and Palantir (Big Data) exemplify the new categories now being created for sponsorship. Agencies will become experts in these emerging technologies and then mobilize this expertise to identify opportunities for brands to showcase innovation and for properties to drive new revenue.
2. Hire a Chief Innovation Officer that brings together development and marketing teams to deliver customer-centric innovation. We developed the job spec to help. Ideally, this leader has experience working in a development and customer-facing role. In November 2017 the NBA hired its first Chief Innovation Officer, Amy Brooks, whose software, product development and marketing experience made her the perfect candidate.
3. Keep their finger on the pulse of innovation through partnerships with technology funds, incubators and universities. Nielsen has been a buzz of acquisition activity with the addition of companies like Gracenote and vBrand. This is no surprise given their commitment to innovation in analytics, AI, big data, consumer behavior, IoT, media, VR/AR, campaign measurement, advertising and marketing with Nielsen Innovate. On the university side, CSM has a long history of partnering with universities like Loughborough and the Columbia Sports Management program to bring greater academic rigor and in-depth research to clients.
4. Develop robust fan segmentations and profiles. Most agencies develop fan segments and profiles with the help of traditional consumer survey data like Scarborough and MRI. Some go further to buy and integrate 3rd party sources of consumer data like Epsilon and Acxiom. Next generation agencies will seek out and integrate novel data sources through sports OTT partnerships, mobile carriers, and fan profiling services like Zoomph and MVP Index to develop rich insights that tell a story about their brand preferences, sentiment, interests and more.
5. Prepare for incentive-based sponsorship. Anheuser-Busch, one of the top spenders in sponsorship, decided to shake up the model in 2018. AB InBev announced the move towards a new incentive-based model that borrows from the athlete compensation model. The model is built on incentives for performance on the field, pitch or court, as well as off of it. Every Anheuser-Busch sponsor deal going forward, whether with a team or a league, will include a base compensation amount, plus metrics that trigger larger investments by the company.
6. Provide transparent and dynamic measurement and valuation solutions. A number of computer vision, analytics and measurement companies now provide what Hookit calls "Spontech". This category of companies and services includes Futures Sport & Entertainment, GumGum, Blinkfire, MVPIndex, and Block 6 Analytics. There are several of these companies, but they all aim to do the same thing: make it possible for brands, agencies and properties to measure, monitor and value their assets in near real-time. This eliminates the 6-week post-event summary and allows for real-time adjustment on creative. Agencies need to be prepared to take advantage of that situation with well-structured asset libraries and programmatic messaging. These solutions also provide tremendous value to teams who can value and price their assets with the support of timely analytics and data.
7. Leverage technology to optimize assets and ROI. Only two-thirds of sponsors actually measure the effectiveness of their sponsorship investment. That leaves more than 30% of companies flying blind. Agencies need to own this opportunity and develop technology that gets the clients' sponsorship assets out of Excel and PowerPoint and into cloud-based platforms like SponServe and Optimy. This sort of platform provides global contract and asset tracking to ensure clients are getting the most out of their investments. It also provides essential data to leverage in negotiations and/or contract extensions with properties.
8. Empower talent with technology tools and data. The Winter Olympics have been referred to as the "social Olympics." Hookit and Sports Pro's report showed that 65% of athletes engaged in social media, and they collectively saw 43% growth in followers on Instagram. This influence is something sports agencies with talent representation businesses are in a unique position to monetize. The next generation sports agency will equip their talent with the digital tools to amplify their brands and customize those platforms to accommodate the affinity that talent has with affiliated brands and sponsors.
9. Actively learn from esports. Many agencies mistook esports for a fad, standing by and watching as it grew into a global and immersive industry that is fast approaching one billion dollars. Meanwhile a multitude of endemic consultancies like Stark Esports and Player 2 Studios have surfaced to fill the void and provide strategic consulting and talent management for teams and brands. Intel, Red Bull and Audi all jumped in early, and these smaller esports specialists are providing tremendous value and taking share from the more traditional agencies who don't have the specialization in-house.
10. Have a point of view on immersive media. The 30-second spot isn't going away, but activation dollars continue to shift toward fan engagement through social media and immersive experiences. While innovative companies like Mercedes Benz are testing 360 content that allow customers to put themselves into the driver's seat, other brands are playing catch up to understand how their brand and creative will and should show up in these rapidly changing mediums. There is a real opportunity to provide forward-thinking insights on how the immersive media landscape is evolving and what it means for brands and properties.