Digital information, social media transforming sports marketing

CAPE TOWN, South Africa – Sports marketing and the fundamentals underlying the practice are changing rapidly in the internet era, and horse racing will need to adapt to those changes if it hopes to stem declines in its popularity in many jurisdictions worldwide, speakers at the Asian Racing Conference in Cape Town, South Africa said on Wednesday.

The changes, which include an increasing reliance on data collected through digital sources and a rapid run-up in the power of social media, have caught all sports off guard, the speakers said, though some sports have adjusted more rapidly than others. Racing will have to keep pace in order to benefit from the changes, and, perhaps more importantly to conference attendees, to remain relevant as its existence shows increasing signs of stress.

“There’s an urgency about contemporizing our sport,” said Greg Nichols, a longtime Australian racing executive who moderated the panel, at its conclusion. “We cannot procrastinate. We have to be a sport that’s out there and doing things.”

While the panel largely sidestepped the most critical issue facing the sport globally – animal welfare concerns are slated for major discussions on Thursday and Friday of the three-day conference – speakers on the panel stressed that racing companies must adopt practices that leverage the increasing availability of customer data to better respond to customers and to present a “strong narrative” to sponsors, said Nick Goggans, the chief executive of the sports-marketing company PumpJack, which is based in the U.S. and counts several NBA and MLB companies as clients.

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“The value of the industry of sport and of horseracing is the fan,” said Goggans. “That is what brings everything together. It’s why we do what we do. Data is merely the traits of the fan, at its simplest. And that is the facts of the narrative you tell to your sponsors.”

However, Goggans cautioned that all data is not created equally, and that all companies are going to be faced with a flood of new data as high-capacity 5G mobile networks take hold across the world, a development that many experts predict will lead to a geometric increase in mobile-device usage and data collection over the next several years.

“It is going to be a firehose” of data, Goggans said. “You need to start preparing to filter this.”

The collection of data from digital sources has revolutionized the area of sports sponsorships, according to Giles Morgan, a consultant who once headed up the global sponsorship unit at HSBC, the international bank, for more than a decade. While rights holders of sporting events used to be able to sell sponsorships to companies based on their “emotive power,” the collection of data has shifted the balance of power in those negotiations to the sponsor, because now a rights holder must prove that there is data to support a sponsor’s decision to be associated with the sport, Morgan said.

“The traditional sports business model is creaking,” Morgan said. “Can you tell them [why they want to be associated with the sport]? Can you tell them about things that they want to know about?”

Andrew Catterall, the chief executive of racing.com, a racing broadcast and account-wagering company in Victoria, Australia, said that even as his company collects extensive data on its best customers, it has begun to focus more over the past 18 months on the “casual” fans who may bet only once a month. Catterall said the company hopes to get those fans to bet two times or three times a month, a tactic based merely on the sheer numbers of the casual fans using the service.

“They are a much larger community than the hard-core punter,” Catterall said.

Aly Vance, the host of a program on CNN International called “The Winning Post,” said that synergies between different CNN brands led the network to reposition her program with the additional tag “An Elegant Life,” based on the metrics collected on how the program was received by viewers. The program is now cross-promoted on CNN Style and CNN Travel, Vance said, based on that re-branding.

The show has also now expanded to other equine sports, such as polo in Uruguay and horseback archery in Japan, Vance said.

“We’re trying to tap into different audiences,” Vance said, “while also appealing to the existing racing fans.”

The organizers of the ARC paid for the reporter to travel to South Africa and for his accommodations there.