A Supplement to the Los Angeles Business Journal: Corporate Social Responsibility & Giving Guide
Published November 30, 2015.
Sports is not just a game. It is big business. On the backbone of sports, Red Bull built not just a brand but an entirely new category, energy drinks.
It is at the center of globalization.
- Man City and the New York Yankees formed a Major League Soccer team.
- In August 2015, Chinese property and cinema giant Dalian Wanda Group paid $650 million for Florida-based owner of the Ironman triathlon brand and race series, forecasting explosive demand in China for the sport.
- The acquisition adds to Wanda’s growing stable of sports businesses. In February, it bought Swiss marketing rm Infront Sports & Media for 1.05 billion euros. A month earlier, it took a 20 percent stake in Spanish football team Atletico Madrid for 45 million euros.
Sport is the lifeblood of broadcast and cable networks. In an increasingly fragmented media environment, sports is the one thing that people still watch live and that still grabs the attention of a widespread audience. And, it is driving new media plays. Consider three of the NFL’s newer deals: Yahoo! global live stream of Buffalo Bills & Jacksonville Jaguars game; Snapchat, User-generated content; and Twitter, Official video content.
IT is also fueling new technologies, think Levi’s Stadium. Sports apps, video games, fantasy leagues and stats are fueling the growth of new media and new delivery channels.
And increasingly, sports is being used to create social progress.
The link between sports and social progress is found in two of the biggest trends in business today, social media and corporate social responsibility or what we at IEG call corporate social opportunity.
People seek out brands that deliver both great value and great values, so companies need to communicate their values. Sports—with its built-in fan base, media coverage and attention-grabbing athletes—is the highest profile channel for companies to promote their values.
One early example of this trend: In 2008, Hublot became the first luxury brand to sponsor football. But rather than use football to build awareness of its brand, Hublot used football to build awareness of its values. The watch company gave all of its signage to a nonprofit working to stomp racism out of football. As people discovered what Hublot had done, they learned more about the brand and its values and Hublot sales grew.
Hublot understood that luxury watches are not purchased for their time-telling attributes. Phones and $50 Swatches tell perfect time. A watch like Hublot is a signaling device, it communicates the values of the wearer. A strong social idea or purpose becomes a rallying cry for the entire company and its many stakeholders.
Had Hublot just donated money to Unite Against Racism and skipped the UEFA partnership, few people would have known about it. More importantly, the issue of racism would remain buried. Hublot’s bold move put it front and center on screens around the world.
Beyond cash, awareness and conversation, brands are in a unique position to trigger significant shifts in behavior, with the potential to leave a legacy of positive change long after a sporting event is over.
For example, around the London 2012 Olympic Games, Coca-Cola, a leader at integrating its corporate social agenda into its sports partnerships, made sustainability one of its goals. It recycled all clear plastic waste at the Games and turned it into new Coke bottles, back on the shelves within six weeks.
To achieve this, Coca-Cola built Western Europe’s largest food-grade plastic recycling facility. It also invested in bio-gas trucks to deliver product for London 2012 and incorporated sustainability into its supply chain. None of this would have happened without its Olympic partner-ship. The sponsorship was a catalyst for mobilizing action with environmental benefits well beyond the Games.
Now, as millennials are becoming the majority, companies are shifting from purpose as an add on, to purpose as reason for being.
Purpose is as relevant to sports rightsholders—the leagues, teams, events, broadcasters and athletes—as it is to their corporate partners.
With sports news so often about the negatives: match fixing, violence, racism, doping and more, the power of sports needs new narratives.
For example, in response to a survey showing 82 percent of the French population had a negative opinion of the national football team, the French Football Federation created a program to connect unemployed fans with the companies of the sponsors.
But the way forward is when purpose is neither an add on nor a response to a perceived negative but embedded in the DNA of the brand.
For example, Brazilian pro team Sport Club Recife, known as having some of the most passionate football fans in the country, launched a program created by Ogilvy Brazil called “Immortal Fans” to combat the lack of organ donors in the country. Within the first year, heart transplants had quadrupled and the waiting list for corneal transplants was eradicated.
And, nearly 100 percent of the 60,000 people at the September 2015 Global Citizen Festival in New York’s Central Park were there not because they could afford tickets to the star-studded event instead they earned them by going to Global Citizen’s website and completing nine specific “action journeys,” a series of tasks like petitioning world leaders to prioritize polio eradication as part of an effort to end extreme poverty by 2030. Pearl Jam, Beyonce, Coldplay, Sting and Common all gave free performances while non-musicians from first lady Michelle Obama and Vice President Joe Biden to Hugh Jackman and Bill Gates appeared, demanding gender equality, clean-water mandates and climate-change legislation.
Uniting brands, fans and the sports and entertainment they love around collective action for the issues most meaningful to audiences, is a more powerful cocktail than any of these pieces on their own. It goes beyond marketing, cause marketing, sports marketing into helping to effect substantial social justice. For example, on the night of the Global Citizen Festival, organizers say 2 million global “actions” were taken.
Linking an organization’s reason for being to improving lives and impacting society amplifies the ROI of any sports partnership.
- The most viewed ad around the 2014 FIFA World Cup was Shakira’s “La La La (Brazil 2014),” which featured her official song of the tournament and a partnership with Danone’s Activia yogurt in support of the World Food Programme’s School Meals initiative.
- Chobani, sponsor of the U.S. Olympic Team, incorporated opposition to Russia's anti-gay laws into its packaging and creative during the Sochi 2014 Winter Games. Its visible support of human rights provided a point of differentiation and measurably increased purchase consideration, according to YouGov Brand-Index.
- Research by Lloyds, official bank of London 2012, revealed that customers aware of its Olympic partnership were 40 percent more likely to recommend the bank, but customers aware of its Olympic tie as well as its community overlay to the Games, Lloyds Local Heroes, were 60 percent more likely to recommend Lloyds.
Purpose can take many forms—breaking down barriers for disabled athletes and normalizing views on disable sport, combatting childhood obesity, empowering disadvantaged communities, and more.
What they all have in common is a new approach to driving shareholder value, a shift from marketing to service, from pushing messages out to drawing people in by making a positive difference—to individuals, communities and/or the planet.
Everyone in sports should be looking at the social value of what they are doing, because there is a cause-and-effect relationship between financial performance and purpose.
“In an authentic economy it’s what makes the company, not just what the company makes,” said Brad Jakeman, PepsiCo beverages CEO at the Association of National Advertisers 2015 annual meeting.
Brands that mean more make more. People connect with products and services that speak to powerful emotional drives and give meaning to purchasing decisions or strengthen loyalty to a team or club.
To help elevate the world of sports, the value that you create as sponsor, broadcaster or rightsholder should be in this zone.
So how are you working to help make the world a better place through sport?
The Sport and Cause Combination
The body of sports sponsorship research reveals that partnerships are most effective when brands embed a mission or cause into the partnership.
- This makes business sense on several levels. First, as a hedge against risk. Brands do not want to link their fate entirely to the reputation of the sponsored property. In addition, adding a bigger purpose to sports investments helps brands appeal to new audiences and build supporters for when the team is losing.
- And millennials, with their BFF and inclusive mindsets proactively seek companies which do more than pay lip service to doing good. Sport, with its built-in distribution channels and massive reach, is an efficient opportunity to showcase a brand’s good works.
- Whether appealing to people as customers, employees, stock holders or neighbors, capital is created by partnerships with a deeper purpose and these can be measured in terms of financial and social ROI.
Examples of sports sponsorships with cause overlays include:
2014 US Olympic Team
2014 FIFA World Cup
UEFA Europa LEague
Challenged Athletes Foundation
Drive to End Hunger
Brazilian Blind Soccer Team
Thank A Million TEachers
St. Jude Children's Hospital
Pass for Education
By Lesa Ukman
FOR INFORMATION ON MEASURING THE SOCIAL CAPITAL CREATED BY YOUR PARTNERSHIPS, OR ON HOW TO CREATE PROGRAMS THAT BUILD SOCIAL CAPITAL, CONTACT LESA@LESAUKMAN.COM.