Insights

Many brands consider sports sponsorship to be the pinnacle, the ultimate platform by which to showcase their message to the world. But with sponsorship fees – particularly for top-tier properties – already prohibitively expensive for many brands, and rising still, this channel is out of reach for all except leading global brands with huge marketing budgets. Most brands are likely to funnel a great deal of the budget into digital channels such as Google Ads, sponsored content, and social media campaigns and leave sponsorship to the big fish. But what if there was a way to do both? Here we will explore how and why future focused brands are using virtual advertising to increase revenue and connect with their audience.

Another factor, beyond cost, which can deter brands from engaging in live sports sponsorship is the inability to target specific audience segments. It’s an all or nothing approach, which of course benefits global brands whose target market is everyone, or at least almost everyone. For example, who is a brand like Coca-Cola not trying to reach?  

But not every brand’s target market is this broad. In fact, most aren’t, and this is why the popularity of digital marketing channels continues to rise, due to the targeting and analytic capabilities offered. And for the majority of brands who do invest in sports sponsorship, they are willing to eat the costs of reaching the portion of the audience for which their brand’s messaging is irrelevant. The 2018 FIFA World Cup final, for example, experienced viewership of more than 3.5 billion. These viewers span generations, genders, cultures and geographical borders. So, if you are a bank, for example, specific to a certain market, and you wish to sponsor a top-tier event like this, how much brand exposure (and budget) is wasted on audience segments that will never be interested in your company or its services? 

This is why brands that are looking for the massive exposure that live sports sponsorship offers, along with enhanced targeting capabilities, should be looking at virtual advertising. The technology is not new, but relatively few rightsholders and brands are really taking advantage of the value that is on offer, The technology is currently used among some top-tier leagues, but that really Is the tip of the iceberg when it comes to Its potential.  

Going back to the case of the bank – if your client base is almost entirely based in the UK, it’s unlikely that your brand will be of any particular interest to viewers outside of that market. Wouldn’t you be better off only targeting only viewers in the UK with your messaging? 

There is a way for brands to target a particular desired audience as a sponsor of live, televised sports. Virtual advertising enables virtual content to be inserted directly into the broadcast feed of live sport. The inserted content can “erase and replace” any existing advertising within the main camera view or new content can be inserted onto any other surface, such as the field of play. This virtual advertising content does not exist physically within the sports arena, but virtually for the television audience. The main broadcast feed can be duplicated, and each resulting feed can be augmented with advertising content that is indistinguishable from real physical advertising. This means that different broadcast feeds can be distributed to different audiences around the world, with unique advertising from brands that resonate with those targeted audiences.  

Looking back at our example from earlier: virtual advertising would enable the bank to purchase only the sponsorship rights for the UK broadcast. The bank still reaches almost the entirety of its desired audience, but likely at a much lower cost than purchasing the sponsorship rights to target the global audience. This would also allow the rights holder to offer the remaining virtual inventory to other sponsors or advertisers who are interested in targeting markets outside of the UK. Virtual advertising enables the slicing up of the global sponsorship “pie” so that the individual slices can be sold to different brands. Or put another way, rights holders can now sell their visible on-screen inventory several times over instead of only once for the same match, increasing effectiveness and ROI for the advertiser and increasing revenue for themselves. 

Considerable value is also created for multinational brands who do want to reach a global audience but understand that different messaging is more effective for different audiences. For instance, a fan is certainly going to be more receptive to a brand’s messaging if it is given in their local language. In this case, virtual advertising technology enables the multinational brand to translate its message into the local languages of its various target markets. Messaging could align with local marketing campaigns, if, for example, the brand marketed particular sub-brands in certain regions, or used different slogans depending on the market. The multinational is still targeting the global audience but tailoring its messaging to best resonate with the fans in each market.  

With this technology, smaller local brands are no longer “locked out” of the opportunity to sponsor top-tier sports, and larger brands can derive more value than ever. The technology already exists to make this a reality and rights holders have the means to offer this to their sponsors, but the brands have to be the ones that drive the change and demand this level of targeting as part of their sponsorship packages.  

And the potential doesn’t end there. With increasing consumption of live sports via OTT and IP-based streaming platforms, purchasing live in-game advertising via programmatic sales platforms seems to be pretty close on the horizon. This could enable brands to target individual fans with personalized advertising based on their data and preferences. For example, two friends, streaming the same game but on different devices, would see different photo-realistic advertising on the LED boards of a live football match, on the rotational boards in a live baseball game, or any other camera-visible inventory tailored to their personal demographic data.  

As with everything in business, demand will fuel supply, so as more brands learn about and begin to take advantage of virtual advertising technology, we can expect more opportunities and creative solutions for brands to connect with fans.