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Hangin' With ... GumGum Sports GM Jeff Katz Pitches New Sponsorship Service

JEFF KATZ was brought into applied computer vision firm GumGum to analyze new applications that would be possible with the company's technology. As GumGum's VP of business development, he was tasked with applying the computer vision technology to solve real problems for customers. With the launch of GumGum Sports at the end of '16, Katz was named GM of the new venture and is using his experience in advertising to help brands and rights holders gain leverage in sponsorship negotiations. In partnership with Catalyst Sports & Media, GumGum Sports has already expanded to Australia and has the Premier League as well as Japan in its sights. Katz spoke with SBD Global about GumGum Sports' model and why its service is needed in the competitive sports rights marketplace. 

On what GumGum Sports does ...
Jeff Katz: We’re finding the media equivalency, so in television what would it have cost to buy a 30-second spot? In social media, what would it have cost to purchase the same amount of exposure on any given social media network? We don’t give the full value of that because it doesn’t have 100% shared voice. We have six variables that we use to score the quality of those impressions and engagements. We’ll look at things like how big the brand is when it’s in view -- how many pixels relative to the entire image does it take up? ... We look at the position -- where on the screen does it appear? Is it in the foreground or the background? ... We also look at shared voice -- how many other brands are in view? It’s a robust scoring system so that if the full media value is say, $100,000 for a given piece of media, once we score it, it likely goes down to $20,000 or $30,000. The great thing is that the brands and the rights holders can see every single post, impression, engagement and score to understand how we arrived at the valuation. ... We are the currency.

On what got GumGum Sports started ...
Katz: The thing that we always asked ourselves was, "Is there a problem that is both painful and persistent?" ... Sponsorship spending is an over $60 billion market, and the challenge is that it is an inefficient market, in that the sponsors aren’t satisfied with the valuations that they’re getting. Especially as the world moves toward digital media, and with how many metrics are available for digital media, it seems like the sponsorship space needs to catch up. What really hit home was that these teams, the rights holders, they are missing significant gaps in the media valuations that they currently conduct. Let’s say a team is finding $50 million in media value just by looking at television. If they were to include social media they could potentially double that media value. So from the rights holders’ perspective, how do they unlock all of that value?

On social media valuation ...
Katz: Social media valuation is kind of a new thing. It’s very difficult to look outside the properties that are owned by the teams. So if I’m the [NBA N.Y.] Knicks, I can look at my Twitter account, my Instagram account, so on and so forth and try to do a valuation that way. But once you go outside that space it’s really difficult to scan all of social media without computer vision. Especially because it's visual, not textual, so traditional tools aren’t going to work. A couple of accounts are impactful in the sports world, but I don’t know how many people understand this yet. Look at House of Highlights on Instagram or Ximo Pierto on YouTube. Those accounts are posting sports video highlights all the time, so the signage that State Farm or Geico will buy at a sports event -- where historically they’re looking at television -- they may not realize that there are likely millions of views and engagements coming from these non-owned accounts.

On the partnership with Catalyst Sports & Media ...
Katz: Catalyst are industry veterans in the sports space. We’re a tech company first and foremost, and we saw that they’ve got the DNA we’re looking for. So they’re bringing all of their background from sports marketing, sponsorships and agents. They’ve verified that our solution hits on a lot of the pain-points they’ve observed from their experience. So they are helping us bring our product to all the folks in the sports ecosystem that they’ve come across over the years.

On working with brands versus rights holders ...
Katz: It’s actually two-sided. What we’re aiming at is we want to arm these brands and rights holders with data, because it's an inefficient market right now. The first movers are going to have the information advantage until everyone else catches up. A brand can do things and learn that certain signage placements do OK on TV, but get buried on social. Conversely, there are positions that don’t do well on television but do amazing on social. So for those placements that do amazing on social, brands may be able to find them for a bargain right now. Brands can find where to buy and how to buy and how to optimize their spend for a particular team. On the rights holders' side, their rate-cards still only reflect broadcasts. So they have a great story to tell the brands when they say, “Hey look, you’re already getting all this TV value, here is all the social media value you’re getting.” They can bring a much more robust package to market.  

On global expansion ...
Katz: As a company, our media business was a homerun [In Australia]. So we saw a great opportunity to follow that success by starting to introduce the GumGum Sports product into that market as well. It was more opportunistic than anything, and we’re excited to become part of that ecosystem and be a voice at the table. We’re looking also at the Premier League. That league is a tremendous opportunity to better reflect the value that is exchanging between the brands and rights holders. Our media business is there already, and we’re in the pilot phase of discussions with a couple of teams. We have the most market penetration domestically in the United States, but I’d say in the U.K. and Australia, we’re in the process of getting those up to speed as well. ... What’s really interesting about the Asia market is not just the sports that emanate from Asia, but the audience that our domestic sports have in Asia are immense.

Hangin' With runs each Friday in SBD Global.

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