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Data analytics will be a major topic for the business of sport in 2019. Digitalisation of content and fan relationships means that sports properties have access to more and more first party data (information you yourself have collected about your fans or participants) than ever before.

I read a lot about how data is the new oil. Just like crude oil, data has limited value until it goes through a refinement process.

But let’s take a step back first and look at how to build data capabilities and the tensions this can create for sports organisations…

Building data capabilities

The big US leagues are streets ahead in data maturity terms but here in Europe, you just have to look at the types of roles that are being recruited, to see that leading sports rights holders and agencies have ambitions to catch up.

It’s important for sports organisations to know where they are (and where they need to be) in terms of their data analytics capabilities. That’s where data maturity comes in. This simple model from Dell shows the various stages organisations go throw before they are considered to be truly “data driven”.

New era, new tensions

We are entering a unique space in the sports business where commercial and marketing departments are increasingly reliant on technologists. In the past, it was the sports or competitions department upon which the commercial and marketing teams depended heavily.

Tensions would regularly arise between the “pure” sporting perspective of the sports or competitions departments and the “customer” or cash-driven perspectives of the marketing or commercial departments. These tensions were managed in various ways and rightly or wrongly money increasingly won the day.

As value shifts increasingly to the digital world, the source of tension within sports organisations is also shifting.

Agile long-termism

It is the technologists that sit as the gatekeepers of first party data. The commercial guys are dependent upon data engineers (commonly sitting within IT departments), amongst others, to ensure that the right data is collected and cleaned and is made available for analysis by the data analysts and scientists that in many cases will sit within a marketing or commercial team.

It is imperative that the marketing and commercial guys help technologists to understand the business priorities and equally important that the technologists ensure that the marketing and commercial teams understand the challenges they face.

For example, technologists are keen to promote an agile approach whereas marketers are typically nervous without clear strategic direction. They want to be clear and invest time in working towards a longer term vision, including placing some “big bets” as opposed to iterating in small steps through a continuous cycle of short development sprints.

Agile long-termism, a term used by creative and strategic intelligence agency Contagious, is one perspective that can bring both sides together. According to Contagious, “Agile long-termism means keeping your eyes on the prize but being adaptive and flexible in the short term”. Agile long-termism is about taking the best of both worlds.

Data is a means. It’s not the end

In the same way that culture eats strategy for breakfast, so does meaning eat data. I’ve talked so far about data maturity and how the ultimate goal is to become “data driven”. But it is misleading to see this as a panacea. Used in the wrong way, data can be detrimental.

For all the buzzwords that I have used and all the buzzwords we will use collectively in 2019 around data, let’s agree not to overlook “meaning” in sport.

Data, when leveraged well, can create unforgettable stories…and impact. When presented as numbers on a page, there is no meaning, no story, no hook. To use the oil analogy, it is crude data.

When recruiting data and business analysts into the sportsbiz, we must ensure that storytelling skills are not overlooked.

We need to recruit and develop data storytellers.

A recent Think with Google article positioned it this way,

“Rudyard Kipling once wrote, ‘If history were taught in the form of stories, it would never be forgotten.’ The same applies to data. Companies must understand that data will be remembered only if presented in the right way. And often a slide, spreadsheet or graph is not the right way; a story is”.

Sport is packed with meaning. No other industry comes close. Data analytics deserves its heightened focus. But let’s not fall into the trap of using crude data to suffocate the meaning of sport.

The fly on the wall Netflix drama “Sunderland ‘Til I Die” (thanks to a colleague of mine for the recommendation to watch it) is one of the best examples that I have seen in years of the meaning of sport. The series opens with a scene in a local church. As the preacher addresses his congregation and invites them to pray, he says:

“Let us pray for Sunderland FC and for our city. Lord our God help us understand what football means for our community (…). Help us through our anger and our fury, when the team is not performing as best as it can (…). Guide us in our love for our city and our club for it is a love born out of passion”.

This is sport.

This is meaning.

Amen to that.

About the author of this post:

David is a Chartered Marketer with almost 20 years’ experience in international sports marketing roles. You can follow David on twitter (@davidgfowler) or connect on LinkedIn (linkedin.com/in/davidgfowler).

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In terms of revenue, Nike is by far the number one sports apparel brand in North America. However, according to analysts, the momentum is with adidas who up to mid 2018 had increased sales by 20% or more in nine consecutive quarters (here’s a good comparison of the financial performance of both companies. Which to be fair, is also not too shabby in the case of Nike).

Whatever your opinion on the motivation behind Nike’s decision to feature Colin Kaepernick in its 30th anniversary “Just Do It” campaign, to say it has created a splash is a massive understatement.

Nike has attempted a major re-boot of its brand (which is not to say that its intentions are solely commercially motivated). It has regressed to its anti-establishment roots and done so in what appears to be an attempt to create an almost instantaneous tipping point.

Malcolm Gladwell, author of The Tipping Point (a highly recommended read), likens tipping points to epidemics. In epidemiology the tipping point arrives when a small change tips the balance of a system and brings about a greater change (for example, when the regular spread of influenza throughout a population suddenly turns into an epidemic or put into a marketing context, when a piece of content goes “viral”).

Gladwell suggests that a tipping point can come when a change occurs in one of three areas:

  1. the law of the few…which purports that the success of any kind of social epidemic is heavily dependent on people with knowledge, the ability to persuade and/ or the ability to connect it to large numbers of people,
  2. the stickiness factor…the quality that compels people to pay close, sustained attention to a product and,
  3. the power of context…which holds that epidemics are sensitive to the conditions and circumstances of the times and places in which they occur.

For the Nike brand Colin Kaepernick single-handedly represents all three of the ingredients spelled out in Gladwell’s bestselling book.

He is synonymous with a huge social justice movement in the US (power of context). He is a connector and persuader on a national level by virtue of his NFL past and his current campaigning. He is a personality that divides opinion and as a result, holds an inherent fascination to many (or “stickiness” as Gladwell refers to it).

Brand tipping points don’t happen overnight. Do they?

It’s hard to think of many examples (with the exception of passing fads) where leading brands experienced overnight tipping points that jolted their equilibrium in a positive direction (on the contrary, there are plenty of examples where top brands tipped from one day to the next towards extinction).

Take Facebook for example. Facebook launched in February 2004 and by the middle of 2007, with an estimated 30 million users, about 90 percent of US college students on board and 1.2 million joining every week, the platform was arguably moving towards its tipping point. This was shortly after it had launched its news feed product (in September 2006) which set the standard for many social networks that followed. There is no single day, week or month that is regarded as the day, week or month that Facebook tipped.

Tipping Tough Mudder

Turning to the world of sport, and to take the example of rising star Tough Mudder, their tipping point is another which can’t be pinned on a specific point in time. It arguably came around 2015 / 2016 (their story is told in another great book I highly recommend). Founded in 2010, Tough Mudder had hosted more than 50 events across three continents by 2015 and in August of that year had welcomed its two millionth participant.

A partnership with IMG in 2016 accelerated the brands’ international growth (IMG in this case representing the law of the few), a cultural shift towards social rather than solitary endurance running (power of context) and a strong brand identity built around the concept of a “tribe”, as well as increased investment in innovation and product development (the stickiness factor), pushed the company to its tipping point.

Tipping points and the business of sport

The sports business has been fortunate to witness many emerging properties and brands achieve tipping points over the last ten years. This keeps the industry on its toes. Properties like Tough Mudder, UFC, WWE and Formula E, brands like Under Armour and new formats like 20:20 cricket come to mind.

As the sports industry continues to move at a faster and faster pace, and product life cycles in some sectors shorten, the concept of the tipping point is going to become an increasingly relevant theory. However, for those like Nike looking to inject a shot of adrenalin into their brand, the trick is not to overdose.

About the author of this post:

David is a Chartered Marketer with more than 15 years’ experience in international sports marketing roles. You can follow David on twitter (@davidgfowler) or connect on LinkedIn (linkedin.com/in/davidgfowler).

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You heard it here first…the 2018 world cup will officially be lauded as the most streamed event on the planet smashing all existing live streaming records.

While it doesn’t take the sports business equivalent of Nostradamus to make this prediction, it has not been plain sailing for live streaming at the tournament.

#FloptusSport

Optus, a top telco and digital rights holder in Australia for all 64 world cup matches, experienced frequent lags and buffering issues with their streams prompting consumer outrage. Early in the tournament, the Australian Prime Minister himself was given direct assurances by the CEO of Optus that the issues would be fixed quickly. By the end of the group phase, Optus admitted defeat and decided to refund users who had already paid for an Optus Sport subscription and agreed to allow broadcaster SBS to simulcast all remaining matches on TV.

Online video measurement specialists Conviva estimated that 20% of all attempts by viewers to play video streams in the first week of the world cup “were lost due to various streaming errors and/or slow start times.”

A stream of confusion

One thing the world cup has shone a light on is the blatant confusion that streaming metrics often provoke. I particularly enjoyed this paragraph in an article by The Independent (UK) that appears to try to compare apples with pears:

“More than 3 million people requested to watch the first two England games across BBC Sport and BBC iPlayer live, with a total of 31.2 million browsers watching the group matches. This compares to 32 million online viewers for the whole of Brazil 2014”.

Sorry. What?

Ok, this is maybe a little bit facetious. Clearly the BBC saw enough in the numbers to declare early on that the world cup was rocking it when it came to fans live streaming matches online.

The world of streaming according to Telemundo

The BBC was not alone. Following their streaming success at last years confederations cup, US Spanish-language broadcaster and NBC-owned Telemundo made noises early in the tournament about new streaming records. Mexico’s 3-0 group stage defeat to Sweden generated over one million concurrent streams (the peak number of streams that were served during any single second of the match) across TelemundoDeportes.com, the Telemundo Deportes en Vivo app and the NBS Sports app. This made it the biggest streaming event in NBC’s history with the exception of the Super Bowl.

According to Conviva it took only three match days for the world cup to smash the peak concurrent streaming record set by this years Super Bowl (of 5.5 million). The new benchmark of 7.7 million concurrent streams was set during the Argentina vs Iceland match.

The Optus case and the Conviva stats in respect of failed streams illustrate that live streaming, from a technical perspective, is not necessarily that easy. However, as technology continues to develop apace and as costs continually come down on both the distribution and consumption side, these types of issues will very soon be consigned to history.

Where does streaming go from here?

One thing that has surprised me in my own experience of consuming world cup streams (albeit based on a sample of three broadcasters / territories out of hundreds), is how little FIFA and its broadcasters are embracing the true power of streaming.

The world cup streams that I have watched have been nothing more than TV broadcasts over the internet. There has been no real interactive experience in and around the video player. If you look at any leading streaming platform today you will see that the big added value that streaming offers the viewer is the ability to interact and engage with and/or around the video player and content (e.g. check out Twitch extensions or (full disclosure) the video player of the company that I proudly work for, mycujoo).

This possibly explains why, despite the omnipresence and higher popularity of traditional sports content, in a recent survey (*) the proportion of respondents claiming to live stream “sporting games/matches” was only marginally higher than “gaming sessions/esports” (31% to 29% respectively). Admittedly, traditional sport (at least at the premium end), is still distributed largely via traditional broadcasters and gaming/esports is synonymous with streaming. Nevertheless, esports appears to punch above its weight by this measure having embraced the interactivity and engagement that live streaming can offer.

Your online viewing experience at the 2026 world cup

Let’s fast forward to the 2026 world cup when the internet is the default distribution channel for live sports video…

Here are three predictions in terms of what you can expect from the online live viewing experience when the world cup comes to Canada, Mexico and the USA…

  • the ads that you are served in and around the matches will feel less like advertising and more like branded, gamified experiences. They will be completely tailored to your interests and needs (driven by data). Perimeter boards will be just as targeted, delivering actionable commercial messages that are contextually relevant.
  • you will be at the heart of the action. You can add your own commentary, choose your camera angles and personalise your stream with overlays that enable you to interact with the content in myriad ways (again, think Twitch extensions).
  • the entire process from content capture to content production and distribution will be automated (powered by AI / machine learning of course) which will enable you to request stats in real-time. Want to know how Ronaldo scored that stunning free kick? You can study instantly where and how he planted his foot, the speed and trajectory of his swinging leg, the point and speed of impact on the ball, wind speed and humidity, etc. You will also be able to compare the difficulty of this goal with that of a previous goal scored by Messi (ok, I admit that this is a bit far-fetched…in 2026 Messi will be 39 and Ronaldo will be 41).

And forget rights holder fears relating to rights infringement. As with social media, rights holders may take some time to adapt, but in time they will embrace this level of fan empowerment.

Will this kill the stadium experience? Definitely not. Just imagine what will be possible to do at the match (e.g. just think how all of this could merge with augmented reality)?

Many of you will be thinking that this is all possible today. Indeed most, if not all, of what I have described is technically possible today.

I’m definitely no Nostradamus. This might not be your 2026 viewing experience. It could well be your 2022 world cup viewing experience.

(*) 21-market IAB (Internet Advertising Bureau) study of adults owning / having access to the means to consume video digitally who have already consumed and live streamed video digitally (report issued on June 2018).

About the author of this post:

David is a Chartered Marketer with more than 15 years’ experience in international sports marketing roles. You can follow David on twitter (@davidgfowler) or connect on LinkedIn (linkedin.com/in/davidgfowler).

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This is not my usual type of post…but perhaps interesting all the same for those of you out there who, like me, are students of the #sportsbiz.

In March 2018, I sat down with Sean Callanan, aka the Sports Geek, to talk a little about my career in the business of sport, some thoughts on the digital side of sport and my motivations for starting this blog (and the challenges finding the time to maintain it!).

Enjoy…

Sports Geek podcast #192: Digital and football with David Fowler

PS. If you don’t already do so, Sean is well worth following on twitter @seancallanan

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Innovation is all the rage in the sports business. The mere mention of the term fills most of us with an irrational, child-like sense of excitement.

Since departing my role with a global sports governing body to join a fast-growing sports start-up, I have had to challenge my own view of innovation. The mentality amongst sports governing bodies tends to be to search for the next big (technological) thing. Once identified, they will invest over a lengthy period to develop or acquire and then integrate it.

This contrasts markedly with the iterative, agile approach taken by start-up firms. Frequent development “sprints” deliver the minimum required evolution to their product in the quickest possible time. This also avoids the risk of over-committing to certain directions that could quickly become redundant.

Sports governing bodies also tend to look at innovation as a tool to sustain their current business model whereas start-ups, by their very nature, are often innovating to disrupt incumbent business models.

Innovation with a purpose

No matter who you are, innovation needs a purpose. One clear and common purpose is to leverage it to create competitive advantage.

Competitive advantage in any industry is generally derived from having a) stronger customer relationships, and/or b) a better product offering and/or c) a more efficient way of operating than your competition.

The below examples illustrate how each of these three sources of competitive advantage has been (or could be) created with the help of innovation…

  1. Formula E: Innovation and building strong customer relationships

To use the words of its CEO, Alejandro Agag, one of the key principles of Formula E “is to allow the utmost fan participation in our sport”. How many top sports leaders have we heard making such a promise? You could be forgiven for a sense of deja vu.

However, few other top sports today have delivered in the way that Formula E has done. Central to this has been the Fanboost concept.

Fanboost is awarded to the drivers who generate the most votes on Twitter or via the Formula E app. The driver’s cars each receive extra energy which can be used during a specified window. Fanboost has not been universally popular and indeed has received criticism from within the sport. Nevertheless, Formula E, which started only 4 years ago, continues to build an attractive property and recently reported a sharp rise in engagement with its social media content amongst younger age groups.

  1. UFC: Innovation and developing leading products

UFC is a great example of innovating on the product side. Since taking over a sport in 2001 once referred to as “human cockfighting”, Dana White and his team have developed the product beyond recognition.

They introduced regulations to ensure heightened athlete safety (which ultimately led it back onto the radar of the mainstream media). Indeed, to address safety concerns, they built their rulebook on the Olympic sports of Greco-Roman and freestyle wrestling, boxing, taekwondo and judo. In stark contrast to boxing, they have a streamlined sport with only eight weight classes.

  1. The International Olympic Committee (IOC): Innovation and operating efficiently

The IOC, as outlined in their Agenda 2020, has recognised the need to increase operational efficiency. In their case, they want to reduce the financial burden currently placed on Olympic Games host cities.

While it remains to be seen whether the IOC choose to tackle this problem via innovation, many would agree that this area is ripe for a completely new approach.

Disruptive versus sustaining innovation

The examples above illustrate how innovation (and not only tech-driven) is helping (or, in the case of the IOC, could help) three very different sports properties to create competitive advantage.

Of the three organisations highlighted above, UFC is a great example of an organisation that has used innovation on a deeper, strategic level to disrupt its own business model and transition to a digitally-driven direct-to-consumer business.

Disruption is at the heart of many sports start-ups (as well as some sports agencies and progressive sports properties, amongst others). Few in the sports business would bet on governmental sports bodies or sports federations using innovation to disrupt their own business models.

In a highly unusual and potentially unique case (in terms of its ambition) of a governmental sports body attempting to disrupt an entire sports eco-system, the Australian Sports Commission (ASC) recently issued an impressively bold digital and technology strategy. The strategy was designed to reinvigorate sport in the country and included the ambition to develop the Aussie sport equivalent of Silicon Valley.

In order to leverage digital and technological innovation to disrupt the Australian sports sector and ultimately achieve its country’s lofty sporting ambitions, the ASC has been very open that disruption starts from within:

“The ASC must transform its culture, practices and capabilities to enable globally leading innovation and achieve efficiencies across all aspects of the business. Without this we will continue to be siloed and fragmented including in high performance innovation and will not meet stakeholder expectations more broadly”.

I don’t know the ASC personally and can’t comment on the suitability, acceptability or feasibility of this strategy. What is interesting and unique in this case is the attempt to put disruptive innovation at the heart of an entire nation’s sports strategy.

What challenges do sports governing bodies face in delivering disruptive innovation?

The ASC, like other governmental sports bodies (and sports federations), will potentially face some significant (but not insurmountable) obstacles in pursuing such a strategy that start-ups typically do not face.

First they are more likely to operate under a traditional hierarchy structure, where communication cascades from the top-down and information / power resides at the top. This is likely to be the most effective structure for such a politically-driven organisation to deliver its day-to-day commitments however, this is unlikely to facilitate the speed and agility required to deliver disruptive innovation (unless, for example, those responsible for facilitating or driving this operate outside of this hierarchy).

Second, for innovation to flourish, managers need to exist to support employees (to ensure that they are able to get on with their jobs). Not vice versa. It is perhaps the single most difficult thing for highly-politicised sports governing bodies or sports federations to achieve if they harbour ambitious to deliver disruptive innovation.

I for one will be observing closely the impact of the ASC’s digital and technology strategy over the coming years. If successful, it may well establish a new model for and lay down a challenge to sports governing bodies and sports federations across the world.

(You can read the ASC’s digital and technology strategy here)

About the author of this post:

David is a Chartered Marketer with more than 15 years’ experience in international sports marketing roles. You can follow David on twitter (@davidgfowler) or connect on LinkedIn (linkedin.com/in/davidgfowler).

If you are following the ASC’s digital and technology strategy, or if you are aware of publicly funded sports bodies or sports federations pursuing disruptive innovation, then I would love to hear from you.

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AR, VR and AI are difficult to avoid in the industry’s predictions for the year ahead. In this post I talk through three unsung but nevertheless key topics that can’t be ignored by sports organisations of all shapes and sizes during the year(s) ahead.

In 2018…

  1. cross-platform audience measurement approaches will become more commonplace and reveal the true nature of live sports consumption
  2. strategic intellectual property (IP) ownership and management will become even more important in the battle to build and “own” the audience
  3. new products and services from disruptive tech-driven start-ups will enable sports organisations at all levels to capture, manage and monetise new content forms

While these topics will play an increasingly significant role across the industry, the impact that each has will be most profound at one of three levels of the industry.

The arrival of cross-platform audience measurement will enable sports properties to fully understand and leverage the true value of their content…

Traditional TV audience measurement systems such as those historically provided by BARB in the UK or Nielsen in the US, which monitor in-home viewing of linear TV channels, have become outdated as media consumption has shifted to mobile and streaming has become commonplace.

Enter the next generation of audience measurement approaches such as Nielsen’s total audience measurement system which measures media consumption across platforms and which we will hear much more about in 2018.

There has been much written about declining in-home TV audiences for premium sports properties including the NFL and English Premier League. Depending on who you believe, domestic TV ratings for both properties have declined by around 10% year on year.

Fortunately for both properties, and thanks largely to competitive market dynamics and the strategic premium that both command, this has so far not translated into falling media rights fees. However, this can only be bad for those properties and, were this trend to continue longer term, is highly likely to have an impact on revenues.

In December 2017, ESPN reported the first weeks of data generated by Nielsen’s total audience measurement system and the figures make for very interesting reading. Audiences for live college football were up 16% above the regular in-home numbers, 18% up for NBA broadcasts and 13% up for NFL (Monday Night Football).

2018 take-out: ESPN was reportedly the first client to opt in to Nielsen’s out-of-home reporting service and has already sold commercial airtime based on the new metric. The audience uplifts represent fertile territory for sports properties at the premium end of the market to leverage in future rounds of rights negotiations.

IP (from video content to trademarks to patents) will become an increasingly important part of the growth strategies of the next generation of leading sports properties…

A 2017 analysis of the filed and registered trademarks conducted by the World Trademark Review revealed that Barcelona (293), Manchester United (271) and Real Madrid (217) had significantly more trademarks than any other top football clubs.

While there is no empirical evidence linking the number of registered trademarks with a clubs brand value, it is interesting to note that these same three clubs have the most valuable football club brands according to Brand Finance. By contrast, Leicester City, recent Premier League champions, had only 12.

Branding, one of the most familiar forms of IP, is probably the most important tool for sports clubs to communicate their purpose and relevance to fans and marketing partners. Juventus FC, the Premier League and F1 (amongst others) have all recently rebranded in an attempt to signal a step change in their brand purpose and capture the attention of a global audience. These brand marks and the investments made in IP ownership and protection will form the cornerstone of the growth strategies of these leading sports properties for years to come.

There are countless recent examples of top sports rights owners making major IP plays including UEFA (created the Nations League and European Qualifiers) and the IOC (established the Youth Olympics and the Olympic Channel) in an attempt to grow commercially. China is building an entire sports industry around the acquisition and creation of IP secured via strategic investments in sports organisations across Europe and North America. Esports is also a rich territory for IP ownership, a fact illustrated by the proliferation of investments by game publishers, sports agencies, media companies, brands and traditional sports properties in the creation of their own teams or events in an attempt to own and commercially benefit from the growing audience attention.

As technology continues to disrupt sport, patents are becoming an increasingly valuable form of IP. US major leagues in particular are investing in start-up companies whose value is often underpinned by their patented technologies. BAM Tech, who started life as part of MLB Advanced Media and were recently valued at USD3.75 billion, were granted a “geo location” patent as far back as 2004.

2018 take-out: Premium sports properties such as Manchester United have for many years been building their brand value based on shrewd investments in owning, protecting and leveraging their IP. Strategic investments in IP ownership and protection will be key for the next generation of ambitious sports properties to ensure they own and control the tools to compete in the attention economy.

2018 will see disruptive start-ups continue to create opportunities for organisations across the sports industry to package and leverage previously unattainable content…

The last five years have seen a slow, but gradual creep of start-ups whose disruptive products and services are facilitating an eco-system of valuable content from the bottom up. Pixellot, Mycujoo and Catapult are great examples.

  • Automated filming and production technologies have emerged from companies including Pixellot that make high quality live production more accessible for sports clubs and leagues who don’t have the benefit of sizeable production budgets.
  • Mycujoo is revolutionising long-tail football content, making it possible for sports clubs, leagues and governing bodies to live stream, manage and monetise content for which there was previously no significant demand from mainstream broadcasters.
  • Catapult sports recently launched Playertek, a player tracking system for amateur teams and athletes. Playertek allows amateurs to compare their progress and performance against, not only teammates, but also professionals.

As a result of the content that is being generated and the capabilities that are being offered by these new and disruptive companies, and combined with the continued price inflation of premium sports content, more attention and investment will turn to the non-premium end of the market in 2018 and beyond.

2018 take-out: Brands and media companies will increasingly find fertile territory in sports properties that are untouched by athlete ego’s, are commercially clean and not strangled or sanitised by over-bearing competition or commercial regulations.

About the author of this post:

David is a Chartered Marketer with more than 15 years’ experience in international sports marketing roles. You can follow David on twitter (@davidgfowler) or connect on LinkedIn (linkedin.com/in/davidgfowler).

Any thoughts on the big topics of 2018? If so, please add a comment or contact me via twitter or LinkedIn.

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In October 2017, the Omidyar Group (founded by Pierre Omidyar of eBay fame) published a report entitled “Is Social Media a Threat to Democracy?”

The report asserts that,

“It is becoming increasingly apparent that fundamental principles underlying democracy – trust, informed dialogue, a shared sense of reality, mutual consent, and participation – are being put to the test by certain features and attributes of social media.”

Many of the top political and legal institutions in the US and Europe agree and have the major social media platforms in their sights. The ever-expanding list includes the US Congress, the European Union and the German government.

The influence Facebook (and those leveraging the platform to further their own agendas) is believed to have wielded on the US presidential election is concerning for many (ironically, it has also highlighted the incredible value advertisers can get on the platform).

The German governments decision to hold social media platforms to account for offensive content has set a significant precedent. Social media platforms face increasing regulation and the business of sport must adapt to this new reality.

Trust is the new social currency

Ever since the YouTube brand safety “scandal” broke in early 2017 (which saw around 250 brands pull their spend from the platform), Google has been trying to win back trust with various investments and policy-led changes.

As more institutions challenge the ability of social media platforms to self-regulate and question their trustworthiness, it has never been more important for sports properties to build trust in their own brands. This means getting it right on social.

It may not be so long until ratings are exchanged on social media (think of an Airbnb, eBay or Uber style rating of both “publisher” and “consumer”). How would your fans rate your social media performance today? Are you listening? Are you responsive? Are you reliable?

In the so-called “sharing economy”, where Airbnb, HomeAway, Uber, Lyft, Freelancer, etc facilitate the sharing of assets, trust is king. To quote a 2015 PwC report on the subject, “…what ultimately keeps this economy spinning – and growing – is trust.”

As this economy grows to become more influential, and at the risk of stating the obvious, sports properties without a trusted brand will struggle to secure marketing investments from this sector.

The opportunity for sports properties on social is to set a clear brand promise and regularly over-deliver.

Social is becoming antisocial

You don’t have to look far for evidence that social media is not a welcoming place for everybody. This presents an opportunity for sports properties.

It’s common for social media teams within sports properties to boil with frustration at the restrictions that are placed upon them as the “official” voice (e.g. hamstrung by tradition, limited by strict brand guidelines, obliged to exercise caution when reporting on poor team performances, etc). However, as we move towards a more regulated social media environment, sports properties are ideally placed to leverage their “officialness”.

Through the adoption of a zero tolerance approach to any kind of inflammatory or abusive behaviour, sports properties have the opportunity to provide a safe platform for fans to connect. This will demand a greater focus on and investment in moderation but is no different in principle to what responsible sports properties are doing within the stadium environment.

Social is for the underdog

It would be fair to say that both Trump and Brexit started out as underdogs. A lot has been written about the influence social media had on both of these results. It has been the slingshot that has increasingly enabled underdogs to bring down bigger opponents.

Sport is littered with examples…

givemesport created an unrivalled Facebook following on the back of which they have challenged established players to create a successful sports media business (they have over 25 million followers on Facebook versus 13 million for BBC Sport)…

Hashtag United created a sizeable following on You Tube and have built a brand that challenges top football clubs in England for attention (with 300,000+ You Tube subscribers they comfortably out perform most English Premier League teams on the platform)…

Southampton FC, through clever use of social media, have continually punched above their weight despite the clubs lack of trophy success. They were recently ranked by Campaign / SocialBakers as the premier league club with the 5th most engaged Facebook audience and they were the first EPL club to launch on Snapchat…

top gaming / esports “influencers”* are outperforming top sports properties on key social media platforms. According to Forbes the top ten gaming influencers have a collective reach of 152 million You Tube subscribers (by comparison, Manchester City FC recently became the first English Premier League club to hit 1 million subscribers). They have captured the attention and gained the trust of generation z whose attention all sports properties should be fighting for…

To cut above the rest on social, sports properties, whether challengers or leaders, will increasingly need to develop (or more likely acquire) the entrepreneurial spirit that all of these organisations and individuals have consistently demonstrated.

Cutting through the clutter on social and digital platforms is generally becoming more difficult. SocialFlow found evidence of a 52% decline in organic reach following a recent study of the Facebook activity of 300 media companies. A recent analysis by Beckon of branded content posted by leading brands found that “just 5% of that branded content garners 90% of total consumer engagements.”

For sports properties, this means that investments in valuable “hero” content hosted on owned channels are likely to become even more important in the future (i.e. quality over quantity).

From match day event to every day brand?

Perhaps the biggest impact social media has had and will have in the future is in driving the transition of sports properties from leagues, teams or athletes competing on a match day to brands living every day.

A quote from Phil Carling (Octagon’s Head of Football) in a recent edition of Sportcal’s Insight magazine, captures nicely the implications of the social revolution on the business of sport,

“most football clubs and rights-owners within the football space are brands, but they’re brands almost in spite of themselves. They’ve become brands without any conscious knowledge or effort to identify, propagate and develop what the brand actually is.”

As digital offerings consume our world and become increasingly important to sports properties, we should pay attention to the wise words of Jim Griffith, Dean of eBay Education (quoted in PwC’s Sharing Economy report),

“digital assets inherently feel less like a possession than physical ones. As a result, companies need to figure out how to shift from offering an item to offering a relationship…”

Amaras Law is playing out today in social media – we appear to have overestimated its effect in its formative years (the early 2000’s) and underestimated its effect in the mid to long-term.

Are you about to hit a social media wall?

(Note: *Forbes will publish its first list of top sports influencers in December 2017)

About the author of this post:

David is a Chartered Marketer with more than 15 years’ experience in international sports marketing roles. You can follow David on twitter (@davidgfowler) or connect on LinkedIn (linkedin.com/in/davidgfowler).

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Over the top (OTT) video streaming is all the rage right now. Used in the right way, OTT platforms can drive brand and commercial value for sports property owners. However, as DAZN’s recent teething troubles with their NFL streams in Canada proved, it’s not all plain sailing.

OTT video streams are delivered via public internet direct to viewers as opposed to the closed networks of cable or satellite providers. Netflix, one of the best known OTT platforms around today, have almost single-handedly driven a step change in TV consumption habits. They have created a binge-viewing culture and we have come to trust the algorithm-driven recommendations they serve us.

Netflix built their business in the early years on recycled content from the likes of Disney and this is an interesting case for sports property owners to study.

Digital TV Research predict that Netflix will increase its subscriber base by 44% from the end of 2016 through to 2022 (from 89 million to 128 million subscribers). However, their success does not come cheap. The $5 billion they invested in video content in 2016 (more than top US networks NBC and CBS) is compelling evidence that content remains king.

Only ESPN, who are suffering at the hands of other (sports) OTT platforms, invested more in content (an estimated $7.3 billion), most of which is tied to long-term sports rights deals.

Don’t write off linear broadcasters just yet

Sports property owners need to decide where they see the value in OTT and what role OTT should play in their commercial strategy. Although this will slowly change, the big audiences and big returns for premium sports content still come from linear broadcast networks.

Somewhat ironically, linear TV is playing an important role in building the Olympic Channel. The IOC has signed partnerships with linear broadcast networks to carry Olympic Channel content in an effort to find bigger audiences for the content and build the brand in the long-term.

Experimentation is key

Most top sports properties (and many broadcasters) are already testing and learning on OTT platforms (principally on leading third party platforms such as YouTube and Facebook Live). The more adventurous, such as MLB, are already experienced producers, aggregators and distributors of content via their own OTT platforms.

Experimentation is key for any sports organisation with an eye on future-proofing their property. The NFL, more than most, have taken this approach by giving a big chunk of NFL content rights to DAZN in Canada.

Know your audience

Fans are often getting their sports fix from free or low cost online platforms including illegal streaming sites. A recent BBC study found that 36% of English Premier League fans streamed live matches online through an unofficial provider at least once a month.

Until viewers become more accustomed to OTT platforms, a certain level of investment may be required to educate them to ensure that they know how to get the best viewing experience (e.g. in terms of device, browser and internet speed). Otherwise there is a risk that they may go elsewhere, including searching out illegal streams.

New forms of content and editorial styles are also gaining traction. This has given rise to a new wave of disruptive sports media platforms like Dugout (launched in 2016), Whistle Sports (2014), SPORTbible (2013), COPA90 (2012) and GiveMeSport (2011). These new players recognise the importance of video and in some cases are streaming live sports content direct to fans.

The landscape is shifting rapidly

Unsurprisingly, content producers like Disney (parent company of ESPN) and the big cable networks are chasing the cord-cutters and so-called cord-nevers. Disney are planning to launch an ESPN-branded OTT service in 2018.

Disney will face tough competition from Turner (launching a sports OTT channel in 2018 that will include UEFA Champions League matches), CBS (planning their own sports channel) and Amazon (who have paid a reported $50 million for the rights to NFL “Thursday Night Football”), amongst others. Consolidation in the sector may come at some point but until then fans will be faced with an increasingly complex array of platforms.

Most of the big social media networks, leveraging their own OTT video capabilities, are also making forays into the premium sports content market via rights acquisitions or partnerships. For example, Facebook partnered with Fox who will broadcast live UEFA Champions League matches on some of their Facebook pages during the 2017/18 season.

Sports property owners need to understand that the big content producers like Disney and 21st Century Fox would rather see the pay TV business thrive for as long as possible. They get anywhere between 30% and 75% of their total revenues from cable channels. However, Disney’s move into sports OTT is a clear sign that they see the need to diversify. Sports property owners would be wise to monitor this shift in terms of both financial muscle and audience.

Data without structure is worthless

It is the access to first party data (i.e. data that you collect directly from your audience) that is driving value for OTT platforms. This point will not have been lost on the IOC when they set out to deliver their own platform.

The insight generated from data is the key to creating personalised viewing experiences and more effective commercial integrations (e.g. highly targeted advertising). Unsurprisingly, it is difficult to find established third-party OTT platforms that offer flexible data collection opportunities and freely share data with those bringing content to their platform.

The current debate in the sports industry around data remains at a superficial level. The most advanced OTT video platforms including Netflix, Twitch and YouTube are investing heavily in machine learning and predictive analytics techniques to generate the kind of insights that grow their platforms. This is where sport needs to aspire to be.

Where to next?

OTT video streaming will slowly democratise sport. Premium content from the top level (and long-tail content from the lower levels) of every sport is increasingly accessible to the 3.2 billion people with internet connectivity. Fans are being empowered to vote with their eyeballs.

Those sports willing to adapt by adjusting formats and scheduling will have a greater chance of survival in this era of accessibility, while others may fade away.

Sports property owners without access to the rich first party data that an OTT platform can generate (and without the ability to deliver content tailored around individual fan needs) will find themselves very soon at a competitive disadvantage.

About the author of this post:

David is a Chartered Marketer with more than 15 years’ experience in international sports marketing roles. You can follow David on twitter (@davidgfowler) or connect on LinkedIn (linkedin.com/in/davidgfowler).

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In January 2016, Facebook claimed to have 650 million sports fans on its platform. This figure is likely to have increased to at least 700 million. Each Facebook user is worth on average $5 per annum to Facebook (according to TechCrunch) meaning sports fans could be driving as much as $3.5 billion in revenue.

There are two basic ways for sports properties to monetise Facebook and social in general: collaborate with the platforms on their terms (e.g. ad revenue share with YouTube, license content to Facebook, etc) or commercialise on your terms (e.g. charge sponsors to post or amplify branded content).

Collaborating with the platforms: the case of Facebook

Real Madrid were amongst a small number of top football clubs that had agreements in place with Facebook to produce video content for Facebook Live (FC Barcelona were reportedly being paid USD1 million for a 10 month period spanning the last football season). According to recent industry reports, Facebook did not renew these agreements and a new model is emerging.

Mobile and video are changing how Facebook will work with sports rights holders. Facebook are placing more emphasis on getting access to premium video content (including long form) as their deal with Fox Sports to stream several Champions League games in the 2017/18 season illustrated. They are also working on ways to better monetise this video content (via mid-roll ads) and will share 55% of ad revenues that are generated on top of a minimum guarantee.

As this new model is rolled out, top sports properties need to understand the value of their content to Facebook whether it is licensed directly or sub-licensed (as in the case of the UEFA Champions League / Fox Sports example).

Should Facebook be sharing more ad revenue with top sports properties?

Based on a top-down assessment (illustrated below), Real Madrid’s Facebook page could be worth $10-15 million to Facebook and a revenue share could be worth in the region of $6-7million.

Is this interesting for a club like Real Madrid? It is not game changing when you consider that the club earned EUR620.1 million (USD730 million) in revenue from the 2015/16 season (according to Deloitte), including EUR80 million (USD95 million) from the 2015/16 UEFA Champions League campaign alone (according to UEFA). More recently, they reportedly earned a staggering $10 million for one El Clasico match played in Miami.

Arguably, Real Madrid could claim that they are entitled to even more than a 50% share of the ad revenue generated by their Facebook page by virtue of the intangible brand value they bring to the platform.

However, even if a top sports property like Real Madrid was dissatisfied with the current rate of return from Facebook, would they seriously consider leaving such an important platform? To put it simply, if you are not on Facebook, with its 1.32 billion daily active users, you are nobody.

Facebook could also argue that Real Madrid generate (indirect) revenue from a range of Facebook functionalities such as the ability to enrich their customer database with data collected from their Facebook fans and the ability to integrate the “shop section” on their page.

Commercialising social on your terms

The media value generated by Real Madrid for their sponsors via their Facebook (105 million fans), Twitter (40+ million followers), Instagram (51 million followers) and YouTube (2.5 million subscribers) accounts, not to mention their presence on Snap, Google+ and Line, will easily run into the high tens of millions. If the club is able to convert this media value into revenue, the returns would dwarf the $6-7 million they could claim from a broader Facebook revenue share.

For all but a select few sports properties, locking horns with Facebook to claim a slice of their ad revenue would not go down well and would likely prompt Facebook to get tougher on attempts to commercialise their pages in other ways. Therefore, it would be more appropriate for top sports properties to focus on converting into revenue as much of the media value they can deliver to sponsors as possible.

What should sports properties be doing?

The sports business has struggled to find the right commercial model on social and it feels like it is still in an exploratory phase. However, its important to put the performance of the sports business in context.

A recent study by Digital Content Next found that premium publishers including The Financial Times, ESPN, Bloomberg, NBC, and The New York Times generated on average $7.7 million from distributing their content on third-party platforms (including Facebook, Twitter, YouTube and Snap) in the first half of 2016 (about $15 million per annum). Most top sports properties are not doing too badly by comparison in terms of their overall (or potential) revenue return from social.

There is no one-size fits all approach for sports properties trying to leverage social for commercial gain. Clear objectives help and these can be boiled down to a) building brand equity (i.e. taking a longer term approach and more suitable for a growing page / account) or b) harvesting brand equity (short-term approach and better for an established page / account with limited growth).

It never helps to have “all of your eggs in one basket”. In the case of Real Madrid, they are in a position of strength. They are building a strong, direct relationship with their fan base (with the support of Microsoft), have a presence on multiple social media platforms and have a stake in / presence on Dugout, club footballs premium video on demand platform.

While the potential returns from social media can be significant for the top sports properties, mid- to lower-tier properties with niche / long-tail content will need to be more creative. For these properties, emerging specialist-streaming platforms like mycujoo in football will play an increasingly important role in the search for revenue and complement a brand building strategy on the established social channels.

No matter your size, in the data economy, the ultimate digital strategy will leverage the reach of third-party platforms to drive audiences to your own platforms where you can build a direct relationship with your audience fueled by the data that comes with it.

About the author of this post:

David is a Chartered Marketer with more than 15 years’ experience in international marketing roles in sport. You can follow David on twitter (@davidgfowler) or connect on LinkedIn (linkedin.com/in/davidgfowler).

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The business of sport is faced with a choice. Adapt to meet the needs of a more sophisticated and demanding generation of fans (who, for the sake of clarity, I’m going to refer to as consumers from this point forward), or suffer a slow and painful death.

Smart data capture and analysis helped the likes of Facebook, Netflix, Snapchat, Spotify and Uber win over these consumers (including the infamous Millennials as well as the emerging Generation Z).

These tech behemoths balance production on one side (the Snapchat publishers or Netflix content producers) with consumption on the other (the Snapchat users or Netflix subscribers). Their ability to stimulate production and consumption is driven by data collected from both sides and the value of their platform grows with every new active user added.

Every one of the 4 million likes per minute generated on Facebook helps Facebook deliver more (targeted) value to users and advertisers. The same goes for Spotify every time someone subscribes to one of their 2+ billion playlists or for Google every time one of the 3.5 billion daily searches is conducted on their platform.

The business model of sports is not comparable to that of Facebook. However, the value in capturing and leveraging data to drive stronger consumer and commercial relationships (both of whom I will now collectively refer to as customers) is no less significant. In a world dominated by digital media, those who don’t understand their customers intimately will lose relevance. While (live) sport in general is likely to remain as relevant as ever, those properties that are slow to embrace this view, will become increasingly vulnerable.

The sports business needs to change and must view this transition as one almighty change management exercise.

According to the experts (including Professor John Kotter), successful change management starts with a clear vision for change, involves removing barriers to change and is reliant upon securing and communicating quick wins.

What can the business of sport do to make this transition?

Image above: Kotter’s (2014) 8 Step Process for Leading Change

Look outside the sports business for expertise

One challenge the sports industry faces in making this change is a lack of collective expertise in data-centric marketing.

As less sophisticated users of data, the business side of sport is not ready to recruit leading data scientists. However, a recent job ad for a data science position at Spotify gives some idea of the pivotal role these organisations see data, analysis and insight playing:

“you will study user behavior, strategic initiatives, markets, content, and new features and bring data and insights into every decision we make. Above all, your work will impact the way the world experiences music”.

In sport, the NBA has recognised the value of recruiting data expertise from outside of the industry for roles in their recently formed Customer Data Strategy Group.

Identify and challenge silos

Channel silos can be a challenge to break for marketers in sport and beyond. Consumers are channel agnostic and don’t care less that a sports property might have separate teams for digital, events and marketing/CRM. Mayur Gupta, a leading marketer at Spotify, recently called this the “single biggest opportunity and the single biggest challenge” for marketing today.

Breaking internal data silos is an absolute must for sports properties to generate the kind of insight required to understand and meet the increasing demands of emerging generations of consumers. Organisation-wide collaboration is key to identifying and effectively analysing relevant data from digital and non-digital sources.

Get back to marketing basics

Let’s forget about technology for a moment. Age-old segmentation, targeting and positioning strategies will continue to play a central role in driving this change and delivering value to consumers and commercial partners. However, understanding your customers is only part of the problem. Deciding which ones to focus your limited resources on, can be even more challenging.

Here is another insightful quote from Spotify’s Mayur Gupta: “as a brand, you bleed twice – first, you pay more to acquire that user, then you pay even more to retain someone who never wanted to be there to begin with.”

Sport can’t continue its mass marketing approach for much longer. Its becoming a cliché but one size increasingly fits no one.

Know your own customers better than Facebook!

While it’s entirely unfair to compare Facebook with sports properties, there is no reason why the latter, with clever mining and analysis of data from various sources, can form a better understanding of their own customers than Facebook could.

Why is this a compelling vision for change?

Because only by achieving this vision can sports properties hope to be able to understand how to connect with increasingly sophisticated generations of consumers and help commercial partners to understand the role sports properties can play in helping them achieve growth in a digital world.

Further reading:

8 step process for leading change, Kotter International

How Spotify Curated the Ultimate Playlist for Brand Growth, Advertising Age, March 2017

The NBA’s New Customer Data Team Wants More Global Fans, Advertising Age, April 2017

About the author of this post:

David is a Chartered Marketer with more than 15 years’ experience in international sports marketing roles. You can follow David on twitter (@davidgfowler) or connect on LinkedIn (linkedin.com/in/davidgfowler).

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