Sponsors Are Playing Moneyball to Snag Unsung Olympians
From the Zika virus to polluted Guanabara Bay to Russian doping, the 2016 Summer Olympics in Rio is fraught with controversies. This year, sponsors face another problem: more competition.
The International Olympic Committee is now allowing athletes to enter into sponsorship agreements with companies that aren’t official Olympics sponsors. Yes, the committee has placed serious limitations on this arrangement. Athletes can’t talk about non-official sponsors or post about them on social media during the blackout period that started last month. And non-official sponsors aren’t allowed to mention the Olympics in their advertisements. Athletes very much hope to loosen these restrictions further, but the situation is already creating more competition among brands to find Olympians who can help them maximize their sponsorship dollars.
That’s part of why sponsors are turning to social media. “What happened in the past is it that social media was just a value add,” says Kyle Nelson, chief marketing officer of the sports social media analytics firm MVPindex. “‘If you pay me to be on a billboard, a commercial, I’ll throw in some social.’ Now it’s being measured, it has value.”
Social media gives sponsors the opportunity to target ads more narrowly. It enables them to measure the effects of traditional broadcast ads by seeing who’s talking about them. Most intriguingly this year, it’s also creating opportunities for athletes who in years past might have struggled to sign sponsorship deals at all. It turns out you don’t have to be the most popular Olympian to help sponsors make a splash with their target customers. Call it the Moneyball of corporate sponsorships.
All They See Is Gold
Traditionally, sponsors have been content to pay the biggest names in the Games—think Michael Phelps and Usain Bolt—to do traditional ads like TV commercials and billboards. But that’s an expensive prospect, and one that doesn’t always pay off. “You can go and spend ridiculous amounts of money to get a big deal star in any sport,” says sports marketing expert Joe Favorito. “But whether that resonates with the core audience, that might not happen.”
That’s why brands are turning lesser known athletes from sports that don’t receive quite as much attention to harness the audiences these Olympians have built on social media. Favorito says you can trace this trend at least back to 2012, but it’s starting to accelerate. In a normal year, he says, you might expect only about 25 to 35 Olympic athletes to get some sort of sponsorship deal. This year, he puts that figure between 75 and 100.
The idea is to find athletes that might not be well known but have passionate, engaged followers. For example, wrestlery Jordan Burroughs is the 56th-most followed US Olympian on social media, with 372,772 total followers across Instagram and Twitter (Twitter handle @alliseeisgold), according to MVPindex’s data. (Burroughs’ Facebook page is private and cannot be tracked, the analytics company said.) But he’s the 25th-most engaging active US Olympic athlete. That makes him a great investment for sponsors like yogurt company Chobani.
According to MVPindex’s research, Burroughs generated $62,174 worth of marketing value for the company through a series of Instagram posts featuring Chobani. By a comparison, MVPindex estimates that Michael Phelps generated about $124,102 in marketing value for Under Armour in the past 90 days. That’s about twice as much, but Phelps is the far better known star. Chobani wouldn’t comment on how much it has spent on sponsorships, so it’s impossible to know how good a deal the company actually got. But it’s a safe bet Chobani spent less on Burroughs than Under Armour spent on Phelps.
Wave the Flag
Of course practically all marketers are trying to be more data-savvy about their marketing these days. But the Olympics pose a particularly good opportunity for brands looking for a large return on their advertising investments. “As a company we’re taking an approach that is more data informed,” says Chobani spokesperson Michael Gonda. “Not just the Olympics campaign, not just in marketing, but at every single level of our organization, because there’s so much more to draw from year on year.” Gonda says sharper tools and the sheer availability of more information allows the company to get much more precise with who it targets and where.
Advertising on social media during the Olympics is a bargain compared to other big events, according to a forthcoming report from analytics company SocialCode. For example, the cost of advertising on Facebook during the 2014 Winter Olympics went up 15 percent. But that same year, ad prices during the Super Bowl went up 50 percent. What’s more, ads that paired a US flag with a winning US athlete during the Winter Olympics garnered about five times as much engagement as a typical ad.
One company that has managed to tap into this patriotic fervor is jam maker J.M. Smuckers, which promised to donate $1 every time the hashtag #PBJ4TeamUSA appeared online. The campaign paid off, at least according to analytics company Networked Insights‘ ranking of the Olympics-related social media attention companies received during the 100 days leading up to this year’s Games. Smuckers came out on top, beating out several larger brands that spend far more on advertising.
“People connect to brands that advertise on the Super Bowl, but it’s more about entertainment than emotion,” says Networked Insights VP of customer success Rick Miller. “The Olympics really elicits a lot of emotion.”
For all the trouble brewing in Rio this year, the Olympics is still stirring fans in the US. At least that’s what the data says.