Tech Transformation and the Sponsorship Sector: Part 1

It’s one of the perennial challenges of being a rights-holder or sponsorship consultancy that industry sectors you’ve come to rely as core revenue generators suddenly become victims of tough government restrictions. 

The loss of tobacco was the first hurdle for the industry, but by no means has it been the only one. While most sectors aren’t subject to the same level of blanket prohibition, alcohol, gambling and hfss foods have all been subject to control in various forms. Oil & Gas, while not expressly banned, has encountered such opposition from the environmental lobby that some rights holders won’t work with it.

Against this backdrop, there is a constant race to find the next big sector – the one that can step up and replace lost revenues. This isn’t a particularly easy process, but the good news is that tech innovation offers a partial answer. With digital advances across retail, finance, energy and health – to name just a few sectors – a new wave of brands have turned to sponsorship to establish their credentials and boost engagement with audiences. Below, we look at some of the tech-led sectors that are providing an alternative to legacy sponsors.

Fintech: The financial services sector has always been a sponsorship stalwart (Lloyds, Barclays, HSBC, NatWest, etc.). But in the last decade, the industry has undergone its own revolution thanks to fintech challengers such as Monzo, Revolut, Starling and Klarna. Now some fintech brands are getting into sponsorship – with Clearpay’s deal with London Fashion Week a recent example. The FT also recently reported that cryptocurrency brands are getting in on the act. Various European soccer clubs, including Arsenal and Manchester City, have done deals with crypto exchange Socios.com, for example. Elsewhere, F1 has joined forces with Crypto.com, a company that provides digital wallets for storing and paying with digital currencies. Coinbase, meanwhile, has an esports partnership with Counter-Strike: Global Offensive. Ironically, fintech raises its own potential concerns (unsustainable lending,etc), but for now it’s a hot option for the sponsorship sector.

Software Solutions: There’s a sprawling array of digital technologies that are rapidly transforming businesses – with AI/machine learning, data analytics and cloud computing some of the most exciting areas. Often these solutions are supplied by a single provider, with Amazon, Microsoft and Google among the biggest and best known. Just behind these companies in terms of scale come the likes of Oracle and SAP – both of which have proved to be valuable partners for rights holders. Oracle, for example, recently signed up with F1 team Red Bull as a strategic partner. The plan is for AI/machine learning and data analytics to help optimise team performance on and off the track. SAP, meanwhile, recently extended its partnership with German Bundesliga club Hoffenheim until 2025. The company also has relationships with F1, various US sports leagues and recently made a move into esports – becoming Team Liquid’s innovation partner.

Website Services: Everybody has a website these days and there are dozens of brands vying to help with registration, construction, launch, servicing, etc. The most high-profile firms were quick to identify sponsorship as a way to achieve cut through in a crowded market. GoDaddy, for example, became an official sponsor of the ICC Men’s Cricket World Cup in 2019. This year it expanded its partnership with the ICC as sponsor of the inaugural World Test Championship Final. Wix, meanwhile, has a longstanding relationship with Manchester City as the club’s ‘official website design and hosting partner’.

Ecommerce: Amazon is the first brand most people would think about in the ecommerce arena. However, Chinese rival Alibaba has generated a lot of global exposure in recent years – in part thanks to its ground-breaking partnership with the International Olympic Committee. These is some crossover between this section and the last, with Wix a leading ecommerce partner for small online stores. But there are also brands like Shopify and Squarespace. Fast-growing Shopify, which has had a particularly strong 2020/21, recently launched its own esports team – and has been active around this sector for some time. SquareSpace, meanwhile, has been much more active around YouTube, preferring to link with content creators.

Health & Wellness: It’s not quite right to refer to health & wellness as a tech sector, but there’s no question that the biggest and most trusted brands have generally built their businesses on the back of smart digital strategies. Weight Watchers is a case in point, rebranding as WW and pivoting towards mobile. Likewise, brands such as Crossfit, FitBit and Mindbodygreen are all completely products of the digital age. Looking more broadly, current estimates are that the global digital health market will be worth more than $500 billion by 2025, suggesting that there will be numerous firms in search of effective brand-building strategies. In terms of sponsorship activity, FitBit has been very active – working with The X Factor and NBA.

eSports: Sponsors are rushing to join the esports party – plastering their brands across live events, leading teams and inside games franchises (though there are issues with the gaming sector at present following allegations relating to Activision Blizzard). While mostly the story is about mainstream brands moving into esports, it’s important to remember that esports games are also brands – and have their own marketing engagement requirements. While much of their promotional activity takes place within their own sphere of influence, there are examples of esports games turning to sponsorship for exposure. This year, for example, Fortnite secured a shirt sponsorship deal with Brazilian club Santos (presumably part of its attempt to increase penetration in the LatAm region). Perhaps, given the current issues surrounding lack of gender balance/respect, the opportunity may be to engage more effectively with women through sponsorship.

Clean/greentech: Last month, we published a short profile of Ecotricity, sponsor of Forest Green Rovers – but there are many more brands involved in the race to save the planet. In terms of consumer-facing companies, the most prominent sectors right now are probably energy and automotive. Chinese EV manufacturer Nio, for example, has a long-standing association with Formula E. Of course, most greentech companies aren’t really in the business of b2c brand-building right now. Instead their focus is on influencing decision-makers and potential partners. And this is where sponsorship can come in. Battery storage firm Zenobe Energy, for example, has sponsored events as a way to promote its offering to businesses and public stakeholders. So has integrated transportation firm Arrival.

Final Thought

There’s no question tech transformation offers a great opportunity for sponsorship. But it’s important to realise that digital-first companies like Coinbase, Shopify, FitBit and Oracle are not necessarily interested in analogue-led marketing solutions. For rights holders and consultancies to really take advantage of this burgeoning business opportunity they need to be engaging in a digital transformation of their own – incorporating the power of social influencers, data analytics and content marketing as part of their armoury.

Next time – a look at mobile sponsorship – the brands, their key strategic partnerships and the rollout of 5G services.