Category endemicity is an important consideration when thinking about the properties you have, or may add to, your sponsorship portfolio. It is especially important when you are thinking about activation planning across your portfolio.
Layers of Endemicity
There are two layers of endemicity. The first is the degree to which the category in which you compete is endemic to the sponsored property’s core function.
Let’s use football/soccer as an example. The sport footwear, sport apparel and related accessories category partner of FIFA is adidas. Football cannot happen without involvement of that category’s products, whether FIFA has a category sponsor or not. For the game of football to work, there needs to be a ball and a net.
The second layer of endemicity is the degree to which your category is endemic, or adjacent, to the fan experience.
Let’s stay with football, and with FIFA for our next example. Budweiser (a Lumency client) is the beer and cider category partner of a number of FIFA properties, including the Men’s FIFA World Cup tournament. Culturally, alcoholic beverages are a companion to the watching of, as well as the socialization and celebration around sport. The categories that Budweiser holds with FIFA are endemic to (not essential for) the fan experience.
We were recently speaking to the CMO of a large financial institution. He suggested that his brand—part of a non-endemic category for the sports team in question—meant that activating would be “easier” than for endemic categories.
We offered a different perspective. The less endemic your category is to the core function of the property you are sponsoring, or to the fan/patron/attendee/patron experience, the more creative and the more intentional you need to be about activating in a way that is relevant to the audience.
Do you have utility?
If your category is endemic to the property’s core function(s) or to the fan experience, your category enjoys utility. You can activate around that utility and attribution becomes easier. In the adidas example above, adidas does not need to force fit a connection to the game. In Budweiser’s case, the multi-market beer brand provides utility to the celebration and the social connection that is part of the fan experience.
But what about for brands in categories that don’t have clear endemicity; the motor lubricants category in ice hockey, the insurance category in music festivals, the financial institution (FI)//banking category in e-sports?
First, consider how endemic your category may or may not be to the property’s core function or to the fan experience. If your category is not endemic then look for ways to mitigate this.
An airline provides travel for away games to the sports team it sponsors. The airline is an enabler for the property’s core function. A waste management company enables a stadium or venue it sponsors to minimize its waste impact and facilitates recycling and organic waste diversion from landfill. The waste management company provides an opportunity for the building and its tenants to demonstrate their values around sustainability.
The FI/bank brand enables the museum it sponsors to manage its finances efficiently so that more money goes into upgrading the facility or displaying the art. As a sponsor, the FI/bank enables payment processing by museum patrons with safe and quick-register transactions. The telco brand builds and maintains venue connectivity, which supports everything from reliable wi-fi for fans, near-field technology for coaching staff, and digital wayfinding and concession signage for the venue.
The storytelling opportunities in each of those examples help demonstrate the sponsor’s commitment to the property and to the community around the property (fans/patrons/attendees).
What if your category is highly non-endemic?
The activation fit can be more challenging, and the need for creativity in your approach more necessary if your brand is in a highly non-endemic category. Focus on how you can activate your properties in a way that helps you demonstrate your brand values or your brand positioning, while adding value to the fan experience. Activate in a way that gets fans/patrons/attendees closer to the game, the team, the stage, the artist. Strive to add value in a way that your brand would be noticed if it were absent.
An automotive brand may be strongly positioned around safety. There are ownable spaces in a property that can help the automotive brand demonstrate that commitment to safety—for example, safety on the field of play.
Highly endemic brands often under activate
Brands that are highly endemic to either the property’s core function or to the fan experience, can wind up under-activating their sponsorships. They may believe, through endemicity, that they’ve done what they need to do to activate because they have associative benefits. They may fail to leverage the sponsorship rights across their full omni-channel connections mix.
In some cases, a property may buy products or services from the sponsor, creating a strong direct and/or indirect revenue (through licensing) opportunity through the property. This can mask the necessity of activating the associative benefits or borrowed imagery that the property provides more deeply.
Referring to the example we used earlier, where adidas is a sponsor of FIFA, adidas has the right to produce, market and sell the official game balls that are used in FIFA tournaments. In an example like this, the margin contribution from the direct and indirect sales through licensed product may more than underwrite the investment in fixed and variable rights fees.
Hard and soft goods, FI/banking, telco and in some cases food and beverage are categories where direct and indirect revenue can pay for the rights fees (maybe not the activation) on some or all properties in a portfolio. Where direct or indirect revenue becomes a significant, or even the major, driver of sponsorship value, it can be easy to neglect the omnichannel opportunity to activate.
These categories can wind up leaving a pathway to stronger ROI behind, and because a sponsorship may self-liquidate on investment there can be little pressure from within the organization to do better.
The degree of category endemicity a brand has serves as an essential compass, guiding how brands activate their sponsorships. The lower the endemicity, the more creativity required. The higher the endemicity, the higher the risk that a brand will rely on margin contribution from direct and indirect sales in lieu of a more omnichannel activation plan.
By: Ian Malcolm
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