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Team vs Individual - Which is the Wiser Sponsorship Spend?
This week adidas announced it will be renewing its long-standing partnership with the DFB (the German Football Association), adding another £39million to this year’s football team sponsorship pot. The global sports brand has also recently signed a deal with this year’s Champions League winners, Real Madrid, whilst La Liga champions FC Barcelona have renewed their deal with rival brand Nike. The two deals are respectively worth £106m and £120m annually for ten years; netting the clubs £1.2 billion by 2026.
Deals of this kind of magnitude aren’t a great surprise given the sheer size of the fan bases that the teams attract. Shirt sales, image rights and social media fans are all valuable assets to acquire, however there are other things at stake here. Brands are looking to protect their associations with these teams. As a German brand, adidas’ values chime with those of the German community, so what kind of message would it send to allow one of its prized assets to join one of its fiercest rivals?
Sports sponsorship endorsement deals appear to be on an inflationary spiral. How much value can be derived from numbers of this magnitude? It seems we are on course for team sponsorship deals to make little sense from a business perspective, so are individual endorsements the safer option?
Individual sponsorship deals continue to grow, with savvy business minded players and agents aware of their ever rising brand values. However with the misjudged kick from twelve yards striking a post, putting all your eggs into one basket, or net in this case, doesn’t always pay off.
With yet another Champions League medal to display in his growing honors cabinet, Cristiano Ronaldo went into the European Championships with his brand value higher than it has been at any time this year. Fast forward two weeks and with his struggles on and off the pitch, his brand value has decreased. What is crucial now is that this is measurable. For example, at Brandtix, where we analyse and index-score football players and clubs in real time, we combine on-pitch stats with social media reach and fan sentiment so we can tangibly prove that Ronaldo is 6.66% less valuable than he was at the start of the tournament. 56% of the people talking about him on social media are doing so in a negative way.
With the pendulum of popularity swinging back and forth over Ronaldo, it is antics off the field that prove why individual endorsements can be such risk. You only need to look at Nike’s track record with some of its individual endorsements (Tiger Woods, Justin Gatlin, Lance Armstrong and Maria Sharapova) to see why brands might opt for team sponsorships.
This is why data insight can be used to good effect, especially during hard times for the athletes. Sticking with Ronaldo, if we segment where his social sentiment has changed during the tournament, we can see that Spanish social conversation has gone from 52% positive pre-tournament to 61% negative following his penalty miss and his teams stalemate with Austria. Compare that to fans in Turkey who are more prepared to stand by the Real Madrid forward, with social sentiment only dropping from 70% to 65%. When you consider Ronaldo has over 200M fans across his social channels and is mentioned 18.5k times a day, that is a significant amount. The commercial use for this data is to help brands decide geographically where they should be targeting.
This was written by Jon Rosenblatt, CEO of Brandtix