It isn’t only brands that face increasing pressure to be more socially responsible.
This issue is particularly acute for any organisations with a strong influence on their local communities and the wider public, such as professional sports teams.
A prime illustration of how this has played out is that gambling has lost its status as the most common primary sponsor among team sports in this country (note this research does not cover second-tier or category-specific sponsors).
In 2019, gambling firms were the most prevalent main sponsor across the leading 221 football, rugby and cricket teams – accounting for 15.3% or almost one in every six main sponsors. Fast-forward two years and gambling’s share has nearly halved to 8.1%.
It has now been overtaken by the construction and engineering (11.2%), automotive (9.4%) and financial services (8.5%) sectors.
Gambling’s fall has been driven entirely by football, where the share has dropped by more than half from almost a third of all sponsors (32.7%) to 15.2%.
This demand to be more socially responsible has also resulted in alcohol suffering the second biggest decline in prevalence behind gambling, while environmental services and healthcare are among sectors that have recorded the biggest increases in prevalence.
A prime example of this change is Norwich City FC (pictured above).
At the beginning of our research phase, the club signed a deal with Asian betting brand BK8, but by the time the research finished Norwich had terminated the deal due to public pressure over the sexualised nature of BK8’s marketing activity, and replaced it with Norfolk-based Lotus Cars. Not only is Lotus a local firm but it is clearly trying to do some “good”, such as its £2.5bn investment to move completely away from petrol and diesel to producing only electric vehicles.
Alongside this “unofficial” demand, there is the potential legislative element, in that the government is debating whether to ban betting firms from sports sponsorship. So, in some cases, it’s a case of the clubs simply being smart or practical in getting ahead of such a ban. But either way, it boils down to society saying that it is not appropriate for gambling and sports to be heavily promoting their natural alliance.
It’s worth noting that despite the drop, gambling remains football teams’ most prevalent sponsor, compared with financial services across rugby (union and league combined), while automotive and construction and engineering jointly lead the way in cricket.
The increasing shift to a digital world
The other major societal change affecting the sponsorship landscape is how the coronavirus pandemic has accelerated the shift to a more digital world, particularly the rise of working from home.
The IT services/software sector has had the biggest increase in absolute terms in the number of primary sponsorships, rising by eight, from six to 14 (a 133% rise) over the past two years. The biggest increase in relative terms has come from the telecommunications sector (up by 200% from two to six).
Interestingly, the increasing prevalence of IT services/software companies sponsoring sports has been almost entirely driven by women’s teams, which are responsible for six of the eight new sponsors. This makes it the dominant sector among women’s teams, accounting for 18.4% of sponsors, and shows how increasingly important female professional sport is seen as a way for brands to gain exposure and recognition.
The shift to a more digital world has also played out in a more consumer-facing angle in that the automotive sector is the second-fastest growing sector in absolute terms behind IT services/software. Although automotive has traditionally been a major user of sponsorship, the recent growth has been driven by online car retailers such as Cazoo, a firm that seems to be playing out a sports sponsorship battle with Cinch – although the latter is focused on events and governing bodies rather than individual clubs.
Room for more?
It’s worth pointing out that, overall, 24 sectors covered the 221 teams analysed, with the top five sectors accounting for 44% of sponsors and the top 10 accounting for 67%.
What is clear is that although sponsorship as a marketing channel is gradually opening up to more sectors, the relatively high concentration shows there is still a huge opportunity for new sectors and new brands to use sponsorship as a vehicle to drive awareness, positive brand associations, engagement and loyalty.
Whatever your brand, there will be a perfect sponsorship partner out there. I’ll bet the house on it.
Alex Burmaster is head of research and analysis at Caytoo
Photos: Norwich City featuring old and new sponsors (Getty Images)