Sports business - profiteer or victim of change
The sweeping technological and social changes of globalization, digitalization, and commercialization – and the countless buzzwords, synonyms, and manifestations that go with it – won't spare the sports business.
But with its broad public interest, worldwide media presence, distinctive emotionality, and intrinsic daily relevance, the sports business offers ideal conditions to be a pioneer and driving force in the successful strategic handling of future developments.
The stakeholders, however, are not yet positioned for this strategically, culturally, or organizationally. For this to be possible, it is essential to not only be aware of relevant trends and innovations but also to understand them, to evaluate their content, to develop an attitude towards them, and then systematically incorporate them into your own corporate strategy. Only then is active, strategic management of change processes possible.
VA | AR
The advent of virtual advertising in German football has given rise to a new era in marketing. The virtual live overlay of panel advertising messages in different TV signals marks an important first step towards increasingly personalized advertising in sponsoring. And already today, this first step offers excellent opportunities for clubs and their agencies to significantly boost revenues in international marketing while offering existing partners significant added value.
Recently, however, the question of the best technical solution has taken center stage, with the strategically much more pressing issue of effective commercialization and implementation strategies only pursued as a second step. Finding a solution involves analyzing the individual market potential and goal as a basis for developing appropriate concepts for virtual advertising.
Likewise, technical innovations in augmented reality create new fan experiences and unique activation opportunities for sponsors. But here, too, the emphasis is often more on technical feasibility than on strategic sense.
So technology must be used with a clear strategy– not passively as a showpiece – to offset this and achieve one's own goals. VR and AR are only the first steps in the development of more personalized advertising messages and individual event experiences. In the future, the question of which stakeholder holds the relevant marketing rights will increasingly arise. Stadium, club, and media advertising rights are merging more and more and should ideally form a unified communication channel for both advertisers and consumers.
The permeation of the sports business with digital technologies is progressing rapidly. Big data, intelligent algorithms, cloud computing, crowdsourcing, audience development, analytics, wearables, chatbots, machine learning, and the Internet of Things are just a few of the developments that will impact every sports organization’s strategy, structure, corporate culture, and processes.
Social media has brought about a permanent change in media consumption. The commercialization and media staging of sport is increasing.
In digital transformation, fan behavior plays a central role. And digital interaction with fans is becoming a vital part of the customer dialogue – conversion is the new currency in sport.
The complexity and speed of these changing conditions regularly overwhelm rights owners. They are unable to provide a permanent in-house solution for each individual area.
The complex requirements of digital transformation cannot be countered with small-scale, operational actionism, but only with a holistic, individual strategy that provides orientation in these turbulent times, reduces complexity for decision-makers, and puts parentheses around the many fragmented individual topics. At present, the market is not well-positioned for this, and most stakeholders lack focus, competence, and dedication. Solving customer’s problems should be the focus of digital activities and not technology as an end in itself.
CRM | Data
Data is the oil of the 21st century! In today's highly fragmented and digitized media world, data is the single most vital tool to communicate in a relevant way and efficiently connect with your target groups.
Companies are investing heavily to generate and monetize data. But sports take a unique stance here that no other brand can offer: the infinite loyalty and inseparable bond of a fan to his club. Once a fan, (almost) always a fan. And this forms the basis for an unrivaled readiness to – with the right offers and added value – provide the club and its service providers with personal data. But the line between readiness and resistance is extremely fine. And as soon as offers and information take on a purely promotional character with no added value whatsoever, the benefits are gone.
We help rights holders to systematically generate fan data, advise them on technical solutions, and support them in creating real added value for fans.
A recent VAUNET study "Media Use in Germany 2018" showed that media consumption continued to rise in 2018. For the first time last year, audiovisual media consumption by Germans (aged 14+) rose to over nine hours per day. Radio and television continued to be the most frequently used media (albeit increasingly as a "side medium"), but the use of audio and audiovisual media content via the Internet continued to rise.
In 2018, the daily use of video was 5:12 hours in total, the majority of which was still in TV use at 3:54 hours.
In the age group 14-49 years "only" 1:34 hours of TV was consumed, mainly through the use of the Internet (e.g., VoD, streaming, short-form video). That means that 14- to 29-year-olds consume more than three hours a day ("ARD/ZDF online study"), an increase of more than one hour compared to 2017.
The consumption of sport is what distinguishes the generation of millennials and Gen Z from other groups. Interest in sports is just as high, but both the duration and frequency of consumption are significantly lower. They prefer highlight shows and statistics (see McKinsey Report "We are wrong about millennial sports fans" 2018).
Another trend is now a reality in esports: With its added value of interactivity (e.g., twitch), the majority of the target group watches events via streaming, independent of linear TV services. The increasing popularity of OTT content – from tech platforms such as Facebook and Amazon to sports platforms such as DAZN – opens up further growth opportunities for rights holders, like the ability to create and distribute own content. Suppliers in the sports business should take these trends into account when structuring their content. Because of the digital transformation, they are increasingly becoming their own media suppliers.
In Europe, the vast majority of stadiums were built years ago and are outdated by today's requirements for digitization and fan experience. At the same time, Smart technologies are increasingly becoming part of everyday life and rapidly becoming a "must-have" for stadiums and arenas to meet the needs of Generations Y and Z. The Saturday stadium visit is increasingly competing for consumers' leisure spending and also has to compete with other offers in terms of experience value.
For stadium owners and operators, Smart Stadium solutions provide additional and direct revenue streams along with better live experiences and control of visitor traffic, which significantly improves safety and comfort.
Second screens, hologram technologies, smart seating, smart catering, smart parking, and stadium vision are just a few keywords.
Moreover, smart stadium and arena technology form the backbone for the systematic collection, processing, and use of data.
We help our customers with the planning, implementation, and operation of digital stadium technology, actively guide them through the many offers, and make arenas fit for the future.
esports | Gaming
Hardly any other topic causes such differences of opinion as esports - the competitive playing of computer and video games in single or multiplayer mode according to fixed rules. It requires athletic skills (hand-eye coordination, reaction speed) and strategic and tactical understanding (game overview, game understanding).
Is esports only a passing trend, or will it endure?
Is it an opportunity or a threat to classic sports?
And is esports "sport" at all?
But these and many other questions make two things clear:
The demand side – brands, media, agencies, service providers, and even potential investors – still lacks the know-how. And as is the case with many innovations, this is typically manifested at first in "not knowing," "not understanding" or "not wanting." On the supplier side – teams, publishers, event organizers, streamers, and gamers – there is a lack of senior-level professionalism, transparency, market access, and clear strategies. In the end, this limits the full utilization of the esports business.
Ultimately, this division mirrors the strategic gap between the "offline generations" of marketing experts and budget makers and the "digital natives and gamers" of Generation Y and Z.
We aim to systematically close this gap with our consulting services and help all market players to break down existing barriers and find their strategic positioning. We develop individual strategic positioning and economically efficient solutions within and for the esports market.