The rights holders and sponsors are evolving from patrons of events into curators of vibrant, interconnected communities. This evolution is driven by an insatiable appetite for data and an unwavering commitment to harness the power of technology for meaningful fan engagement - the opportunity to help build and foster a valuable community. In today's dynamic world, where every data point counts, technology and innovation have ushered sponsorship into a new era.

An ever-changing DTC model

So, brands are pioneering the direct-to-consumer (D2C) relationship - not only for their own benefit - but to create immersive, purpose-driven experiences that resonate with audiences on a profound level. How do they do it? 

Gone are the days of waiting for scheduled TV broadcasts; today's fans revel in real-time engagement. They follow their favourite athletes and clubs on social media, where every thrilling moment unfolds in their feeds. TikTok offers bite-sized highlights, Apple Watches provide live updates, and smart TVs are no longer limited to traditional channels.

In the world of business, 'the innovator's dilemma' is a timeless truth - it takes money to make money. This concept, explored in this insightful article by Benedict Evans, dissects the intriguing dynamics of companies like Disney, where massive investments in customer acquisition and innovation are essential for long-term success. The path to profitability often necessitates substantial spending to gain a competitive edge and build a loyal customer base, who will return wanting more and more. Evans' analysis sheds light on how these companies navigate this delicate balance, embracing short-term losses in pursuit of practically business and life-changing gains, ultimately redefining their industries (AKA, Netflix and MrBeast with Streaming and YouTube) and reaping the rewards of their forward-thinking strategies.

The statistics above reveal Disney's substantial investment in a new direct-to-consumer strategy, navigating high losses. The polar opposite results to Netflix indicate the brand's late arrival to the direct-to-consumer landscape, attempting to mirror a now famous model. However, emulating this approach poses substantial challenges, as showcased by the considerable losses incurred. Whilst user sign-ups promise a customised experience leveraging 1st party data, this cautionary tale underlines the difficulty in replicating direct-to-consumer success and the careful balance required between short-term losses and long-term consumer engagement strategies.

Connected TV: A new age of streaming

Speaking of smart TVs - surprisingly, despite the rise of streaming platforms like Netflix and Disney+, YouTube reigns as the top Connected TV app in Switzerland. It's the go-to destination for match highlights, interviews, and even in some sports - full games. In this evolving landscape, fans curate their OWN digital experiences, connecting with the global sports community and savouring every pulse-pounding second. 

According to an analysis conducted by eMarketer in Q1, CTV ad spend is set to increase by about $5 billion - (yes, $5,000,000,000!) compared with its 2022 levels. In 2022, CTV ad spend increased by about $3 billion compared with the previous year. The reason for the increase? As this is the first full year that streaming services Netflix and Disney+ will feature advertising, a larger bump is expected for 2023.

What’s working?

The dawn of the direct-to-consumer (DTC) model - inspired by industry giants like Amazon - is reshaping the sports landscape. In a world that craves data-driven, personalised, and always-on experiences, sports organisations are heeding the call. This evolution transcends traditional TV broadcasting, ushering in a new era where fans are no longer JUST spectators but ACTIVE participants in their sporting journeys (all from the comfort of your own sofa through the power of technology).

At the heart of this transformation are features that redefine how fans engage with their beloved teams and athletes. Highlights, or clippings, offer bite-sized doses of sporting magic, while live broadcasts during events like the record-breaking FIFA Women's World Cup 2023 unfold seamlessly live in countries all over the world. The archive of FIFA+ preserves iconic moments, while editorial content delves deep into the stories behind the games. League organisers such as the Premier League and NBA have jumped onto the train of gamification - adding an element of competition, while eShops cater to the fervent shopper in every fan. Ticketing becomes a breeze, allowing supporters to secure their spots effortlessly.

What does this mean beyond the surface? It means richer user data, a deeper understanding of fans, and the golden ticket to first party data - a trove of valuable audience segments. In an era where internet cookies are fading into obscurity everytime the big red X in the top corner is clicked, first party data emerges as a vital, central asset for re-targeted engagement. Connected TV and fast channels offer a seamless bridge to this data-driven utopia, where sports organisations cultivate communities, empower fans, and usher in a new era of fandom.

All well and good - but how do we capitalise?

So - that leaves the question: how do we get started? In the direct-to-consumer model, success hinges on a few crucial pillars. Real-time content is the heartbeat of engagement, delivering pretty much instant gratification (smartphones and smart watches) through live matches and immediate highlights. Gamification - adding onto the point from earlier - also fuels high retention rates, transforming fans into active participants who compete for the top spot on leaderboards. Think FIFA+ Play Zone (with their mini-games during the World Cup) or sports leagues implementing the worldwide takeover of Fantasy Football/Basketball/Baseball - you get the point.

Behind the scenes, a robust data infrastructure and ad operations shape the DTC landscape. Data isn't just collected; it's leveraged for personalised experiences, forging deeper connections. Advertisers benefit from precise targeting, leading to (most importantly) higher conversion rates. In this era, these elements converge to create a dynamic sports ecosystem where fans thrive, organisations flourish, and the boundaries between spectators and participants almost blur a little bit - crafting an immersive sports experience beyond traditional boundaries.

In the realm of new brands and products within a vast market, there’s a lot of choice - but there's also a lot of room for improvement. Gaining traction and expanding reach isn't guaranteed; it demands a strategic approach to SEO and content marketing to dominate SERPs. Whilst paid advertising can be a killer engagement driver, optimising campaigns in terms of targeting, ad creativity, and budget allocation remains crucial. Focusing on targeting, ad creative, and ad spend allocation can enhance the effectiveness of paid advertising efforts. 

Final thoughts

In summary: It's clear that change is the only constant. Digital sponsorship demands a strategic approach that caters to users across various stages of their journey, from initial awareness to eventual conversion.

It thrives on being real-time, data-centric, and aims to provide authentic value to fans, prompting users to consider the compelling reasons to sign up and engage. Crucially, sponsorship audiences have evolved into pivotal targeting tools, where 1st party data serves as the linchpin connecting companies with their fan base.

This underlines the indispensable role of a robust data strategy, steering the course of modern sponsorship, and ensuring personalised, meaningful interactions that resonate with the dynamic preferences of fans and consumers - the priority in any line of business.