Across the sports and experiential agency landscape, 2016 starts with a feeling of extended holiday cheer.
Last year, agencies benefited from swelled marketing budgets and enough consumer confidence that new car sales established a record, surpassing levels not seen for 15 years. Accordingly, as a new year begins, agency chiefs are asking larger questions than where is the business.
“We still see increased spending behind sports and entertainment marketing, but clients are still trying to figure out how to activate sponsorships in the world of technology and social media in a way that’s not just checking a box,” said Mike Reisman, principal at the newly rechristened MKTG, owned by Dentsu Aegis. “Consumers still find it remarkable when a brand is personally responsive to them, which means the upside for creating content and social media is immeasurable as far as engagement, and hopefully sales.’’
The dependability of sports in the face of unpredictable media consumption patterns is helping to fuel growth.
“With the overall media industry changing so much and so quickly, sports is a reliable enough marketing tactic that it has moved from important to imperative,’’ said Chris Weil, CEO of Momentum Worldwide, which hired 220 new employees in the U.S. last year, fueled by adding Verizon’s sports and entertainment marketing. “You look at the Olympics this year driving business and there’s a pretty good tailwind behind the industry.’’
While sports are still the driver, some profound changes in standard agency offerings are now common.
The Marketing Arm produced a Super Bowl ad last year for Dove Men+Care and is a finalist to produce a Super Bowl spot for a different brand this year. The agency generated around 350 separate pieces of content last year, a figure that will likely double in 2016, putting them squarely in the production and media side of the business.
“Four years ago, I didn’t know we were building a media department, but we have,” said TMA Chief Executive Officer Dan Belmont, whose agency’s big win for 2015 was securing Nissan. “On any account now, there’s considerably more sophistication in how paid, owned, and earned media are delivered. We are more involved in that discussion than ever.”
For all the focus on content, the biggest marketing question facing agencies remains unresolved.
“We’re in the midst of the massive migration to mobile anything/anytime availability, and of course, sports are a big driver there,” said Octagon Chairman and CEO Rick Dudley. “We still have to see if there’s an ad model to support that.”
Analytics have become table-stakes offering for most agencies. Now agencies and their clients are looking to balance data and creative.
“You’ve got to own heads and hearts,” said WMG consulting chief Elizabeth Lindsey. “Every CMO I talk to says, ‘bring me ideas.’ They have to be grounded in numbers, but none of them are saying to me, ‘bring more data.’”
Added CAA Consulting’s Jeff Filiberto, “When every client is looking for content — and they are — we have been telling our people to think like a marketer, act like a producer.”
Concerns expressed by agency principals ranged from how an indifferent Wall Street would influence marketing spending, to the resolution of daily fantasy’s legal problems, to the far more ominous threat of terrorism at an American sports venue.
Getting up to speed on new technology, from e-sports to virtual reality, was on everyone’s to-do list.
“We haven’t seen the definitive business model yet for VR,” said Reisman, “but one thing we all know is that every fan wants to be closer to the game and that’s what VR does. It won’t be long until the NBA will use it to grow their audience in places like India and China.”
Every agency is trying to get its arms around the opportunities presented by e-sports. A leading question: Are e-sports complementary or adversarial to the stick-and-ball sports that have been these shops’ business partners for years?
“E-sports are a compelling and intriguing platform to build a marketing platform around and reach large numbers,” said Michael Neuman, managing partner at Scout Sports and Entertainment, which added FanDuel to its client roster in 2015, “but there have to be concerns from properties that are encouraging kids to be active.”
Genesco Sports CEO John Tatum said it’s a two-headed monster for any league. “The NFL looking to sell more Madden games likes e-sports. But the [NFL] worried about losing the minds [of kids] playing touch football in the front yard probably hates it,” he said.
Not that many agencies or marketers have found an easy way into e-sports.
“The audience numbers, the demographics, and the companies investing in e-sports are all impressive,” said Brian Cooper, president of S&E Sponsorship Group, Toronto, whose client roster includes some of Canada’s biggest sports spenders: Molson and Canadian Tire/Sport Chek. “The question for any brand is whether and how much they can integrate themselves without alienating the consumers they’re targeting.”
Octagon’s Dudley summed it up by saying, “E-sports are made for today’s world, but 10-15 years ago, we were asking the same questions about action sports and it never grew anywhere close to what the predictions were. E-sports are bigger and will get more so, but I don’t think they will ever compete with big sports properties.”
Terry Lefton can be reached at tlefton@sportsbusinessjournal.com.
