As we move in to a new decade there are five key trends that we anticipate for 2020 and beyond.
1. Video, video, video
Content is the most overused word in the industry but video is only getting bigger and becoming more important. With 5G networks and 8K resolution arriving, production of video is transforming entertainment. Importantly video content needs to be tailored for each audience and each platform, it is no longer acceptable to recut ATL ads and expect them to have the desired impact on a social media audience.
How can video content be produced faster, better, cheaper? With the proliferation of video production houses we are seeing more and more full service sponsorship agencies able to produce content ‘in-house’ at a fraction of the cost. We are also seeing the rise of new production products with the likes of Pixelot and Veo who are creating automated video production.
With engagement of video on social channels being significantly stronger than other formats, and the focus for rapidly expanding channels like TikTok, expect video to become the norm on all content platforms.
2. The changing role of social
In the last 10 years we have seen social media shift from a ‘nice to have’ component of the marketing mix to a central cornerstone of any marketing strategy and, more recently, in the past five years social compete heavily for production and advertising budget. Social and digital marketing expenditure is now providing a more tangible and robust Return on Investment (ROI) than advertising and this trend will continue.
However, going into the next decade the role of social channels may well change for rights holders. As they develop their own digital platforms, including OTT style offerings, social will be key to driving fans towards rights holders’ own digital platforms which will be a key driver of ancillary revenue streams, be they event ticketing, subscription content, merchandising etc.
3. A new era for sports marketing agencies
The role of agencies in the sponsorship industry has changed significantly over the last 20 years. From initially establishing the market through the growth of professional sport, global sponsors and pay TV broadcasters to optimising rights sales and directing global brands, agencies have been critical to the scaling of the industry.
However, with rights holders now more advanced in their offering – with a clear focus on direct-to-consumer opportunities – and brands better equipped with sponsorship expertise, the traditional sports marketing agency offering has been marginalised somewhat. The role for agencies in the next decade will likely be to provide content and technology solutions, distribute rights and sell direct to consumer. Expect agencies to take more of a vested interest in sports and entertainment properties, to share the risk and the upside, in response to reduced margins on traditional fee structures.
4. Smart Cities
With the arrival of 5G and LTE (Long Term Evolution) networks – think your traditional company ethernet-cable network server but wireless – the connected world is going to provide endless opportunities for the sports and entertainment industry.Infrastructure and technology is arriving across our cities and stadiums which can truly transform a fan’s experiences. F1 and the European Tour are good examples of rights holders working in tandem with commercial partners to harness this new technology. The opportunities for rights holders and brands to engage, excite and monetise are endless. Those that can exploit this technology in a meaningful way, adding value to consumers, will take their partnerships to the next level.
5. The politicisation of sport
The only trend that is not digital and innovation orientated!
2019 was a tumultuous year from a global political perspective and I believe this has and will continue to have a considerable implication on the outlook of rights holders and brands into the next decade. Fall out between the NBA and China over freedom of speech resulted in significant commercial damage, cancelled events in Hong Kong due to political unrest, the advent of numerous events in Saudi Arabia – Joshua vs. Ruiz fight, Spanish Super Cup, WWE events, Formula E Prix, European Tour events and many other events mooted – the global political climate has considerable implications on rights holders. Sport and entertainment has become brutally commercial and whilst money talks, sport, in particular, has values and fan bases that need to be considered. There is a balance in play between short term commercial gain and the long term entrustment of individual sports.
Sport and politics have always been entwined but now more than ever rights holders need to tread a fine line between efforts to grow their property and defaming their brand.
In summary
Digital innovation is the key growth driver for the next decade as rights holders shift towards direct-to-consumer engagement and provide even stronger opportunities for partner businesses. Whether it be video, technology or the connected world, the opportunities around sports and entertainment are evolving quicker than ever and partnership marketing is becoming more and more intricate, set against the backdrop of a changing geopolitical landscape.
At Mallory Group we pride ourselves on being a nimble and innovative agency, that understands the needs and expectations of rights holders and brands, to help curate mutually beneficial and impactful partnerships over the long term. We act as an extension of our clients’ teams, providing insight and expertise that challenges the status quo. For more information please get in touch – jamestoller@mallory-group.com.
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