This article was originally posted by PRWeek here.
Brands are sticking by sports even though they stand to lose significant sums of money invested in summer campaigns that are now shelved. PRWeek investigates the impact of the coronavirus on sports sponsorship, starting with postponed events.
One of the most anticipated summers of sport has been put on ice as the coronavirus outbreak grips the world.
The Olympic Games, European Championships and host of other events have been postponed for a year as much of the world endures a lockdown to tackle the pandemic.
The disruption is hard enough for many sports fans to bear, but spare a thought for major sponsors who stand to lose substantial sums of money.
Partners of the Olympic Games, for example, have already committed significant investments in merchandising, brand campaigns and media, and some of these costs will have to be written off, sports marketing experts have warned.
Despite the challenges and disruption, PRWeek is not aware of any big brands pulling out of major events, and several key Olympic Games sponsors have publicly backed the move to postpone.
Hill+Knowlton managing director of sport Jamie Corr tells PRWeek that brands and commercial partners have reacted to the Olympic Games postponement in a “very subtle and dignified manner”.
“All have been deep into the planning of their creative and advertising, shaping of their messaging and implementation of their activation concepts for an Olympic Games taking place this year,” says Corr, whose agency is a partner of Team GB.
“With the postponement, we will certainly see revisions in plans, but we believe brands, athletes and rights-holders including the IOC and National Olympic Committees will work through this collaboratively to ensure their overall objectives are still delivered when the Games do take place.”
Sports marketing experts speaking to PRWeek weren’t aware of any brands pulling the plug on sponsoring the Olympic Games, Euro 2020, or other major events.
“Everyone is in this together,” Engine Sport managing director Lisa Parfitt says. ”It’s the most extraordinary situation of nobody’s making.
“Sponsors are going to stick with sports governing bodies, and there’s too much downside for sponsors and brands to be publicly talking about compensation or being difficult.
“They do not want to appear insensitive to the challenges of the world at a time of humanitarian crisis.”
The coronavirus has caused disruption to major sports in two distinct ways: postponement and cancellation.
Both have substantially different outcomes for major sponsors. Today, PRWeek is analysing the impact on events that are postponed, and during the week will investigate the impact on cancelled events, sports administrators, and how brands and sports are finding creative ways to engage with fans during the lockdown.
The countdown clock and marketing plans have been reset for the Toyko Olympic Games (Photo: Getty Images)
The two biggest events scheduled for this summer – the Tokyo Olympic Games and Euro 2020 – have been postponed by a year, with the Olympics to run between 23 July and 8 August 2021, and the Euros to run from 11 June to 11 July.
The major impact on sponsors is that they will need to either renegotiate or write off money already spent on media placements, advertising that has been produced, themed product ranges and merchandising that will have already been manufactured.
“At a global level, that’s a lot of money and some of these costs you will not be able to get back,” Parfitt explains. “You’ve got sponsors who are being hit fairly hard by the coronavirus situation who have already committed budget to significant campaigns and marketing spend across the summer.
“For example, Coca-Cola will have been very far [into] producing what goes on the shelves in supermarkets over the course of the Olympic period. At the same time, you are starting to see Coke pull back on [its] marketing budgets for this summer.”
Parfitt says brands will need to write off investments in agencies, talent and production for campaigns that cannot be repurposed for 2021.
Perhaps with this in mind, the Tokyo Organising Committee of the Olympic Games has decided to retain its ‘Tokyo 2020’ branding for next year’s Games.
This decision should make it easier for sponsors to repurpose some of their Tokyo 2020 marketing investments, but doesn’t guarantee brand campaigns conceived several months ago will be appropriate for a post-coronavirus world in 2021.
“The reality is the world is going to have changed significantly, so who can say that campaigns and ads that have been in the bag for a while are actually going to be relevant when it is time to start talking and engaging again with the general public?” Parfitt says.
“That challenge becomes a budgeting issue and a phasing issue, and comes at a time when brands can least afford it.”
The focus for these brands right now is navigating the economic disruption caused by the pandemic, and some, including Coca-Cola, are using marketing budgets to help communities.
When brands do have sight of the new Olympic Games marketing runway in a year’s time, it could prove to be an extra powerful platform to launch brand campaigns.
“These postponements provide an opportunity for some longer-term brand planning because when the events do come back they are likely to be bigger and stronger than ever before,” M&C Saatchi Sport UK chief executive Jamie Wynne-Morgan says.
“Once this is over people are likely to be so desperate not to take sport for granted that they are going to be even more engaged than usual, creating greater opportunities for brands to provide meaningful support.
“Sporting events are also likely to bring in huge numbers of new fans as they become the physical embodiment of us coming back together again.”
Focusing on what matters
It’s not just global events that have been disrupted; all domestic competitions have been suspended, from the bright lights of the Premier League to smaller niche events in endurance sports.
Brands and sports bodies in many of these domestic sports have pivoted their focus and messaging toward helping the community off the field while the on-field action is on pause.
Cycling is one sport that has had to postpone several events. PaceUp Media specialises in sports marketing for endurance sports and has clients including Matt Prior’s sports supplements business One Pro Nutrition, and postponed events London Bike Show and Triathlon, and Evans Cycles’ London eBike Festival.
“We’ve used the [postponement] opportunity to give added value to the brands signed up for the events through PR, social media and email marketing activations,” PR manager Ben Davies says.
PaceUp Media is working with One Pro Nutrition’s sponsored athletes to come up with ideas to activate the sponsorships in more creative ways, including using athletes to motivate fans to stay active at this time.
“One silver lining from this situation is the team has more time for PR and social activations, albeit not directly race-related,” Davies adds.
Premier League football clubs and players have used the postponement period to donate their time and money to food banks and other community projects.
This includes a £100,000 donation by Manchester United and Manchester City in their #ACityUnited campaign (pictured above), and Marcus Rashford’s fundraiser to feed 400,000 chidren.
“For the majority of brands, it doesn’t make sense either tonally or commercially to be launching or creating [sports] campaigns when there is no action and little consumer demand for their products,” Pitch Marketing Group managing director Adam Raincock says.
“However, sports fans’ thirst is growing daily, and when the tap does turn on expect most brands and organisations to be back bigger and better to meet this demand.”