This week at the IEG World conference in Chicago, executives and thought leaders from some of the most innovative sports brands in the world are asking themselves, “What is the next frontier for sponsorships?” Trailblazers such as Renie Anderson with the NFL, Josh Cella with Activision Blizzard Esports League, and Jim DeLorenzo, with Amazon Video led an engaging panel advocating for the power of partnerships. We agree that partnerships are the future. And the key to unlocking the future is to engage in ecosystems.

So, what is the traditional sponsorship model, and why are its best days a thing of past? In the sponsorship model, brands cut checks in exchange for rights and benefits that lead to exposure with their target customers. An example of a sponsorship is Coca-Cola’s longstanding relationship with the Olympic Games, which provides the Olympic Games revenue and Coca-Cola tremendous advertising power.

Although sponsorships continue to be a huge source of growth for companies, the game has changed. The fight for customers attention span has become exceedingly competitive not only with the sea of options brought forth by the age of the consumer, but customer attention spans are actually getting shorter. Goldfish anyone? If that didn’t make things hard enough for brands to connect with consumers, there is a growing trend called “silence is gold” where customers are actually putting down their digital devices and disconnecting. What are brands to do?

The leaders at “The Sport of Sponsorship” panel state that partnerships are the key for winning the hearts and attention spans of customers. In a partnership model, brands, rightsholders, and media engage in symbiotic relationships to better serve not each other, but what matters most: customers. For example, Citi is involved in thousands of sports and entertainment sponsorships that go well beyond advertising. Citi taps into the tribal popularity of sports and entertainment events to provide Citi card holders special access to tickets and the chance to participate in VIP events such as backstage access to entertainers. When Katy Perry released her album Prism, Citi offered its customers pre-sale tickets to a special event in Los Angeles to benefit the Young Survival Coalition. In addition to offering pre-sale tickets, Citi partnered with Katy Perry to offer cardmembers special experiences such as an album-themed garden lounge with food and refreshments and a surprise Q&A with Perry linked to Twitter. Perry also performed a set of acoustic songs just for Citi cardholders. This kind of experience combines digital and offline touchpoints to create engagement that is so difficult to capture now.

Sports and entertainment companies might do well to look at other industries for models of how they can create deeper partnerships where businesses share products and services. For instance, as we have blogged:

  • IKEA, for instance, realized that meeting the needs of its customers meant helping them with product assembly, certainly one of the most undesirable aspects of buying furniture. But IKEA lacked the capability in-house, so it looked outside to Task Rabbit, which IKEA ultimately acquired and will operate as an independent business.
  • Another example is Netflix, which needed Amazon Web Services to shift its model from mailing movie rentals to streaming them. And now Netflix needs to work with entertainment studios and a host of other businesses to create original content.

Businesses such as Amazon and IKEA are tapping into more complex forms of partnerships known as ecosystems, in which two or more businesses create interlocking relationships, sometimes even with competitors. Gartner defines ecosystems as “Interdependent groups of enterprises, people, and things that share a platform for a mutually beneficial purpose such as commercial gain, innovation, or common interest.” A more direct definition might be this: ecosystems consist of partnerships and capabilities needed for business growth. I think the Overwatch esports league created by Activision Blizzard functions as an ecosystem. Activision actually launched an entire esports league consisting of business owners, advertisers, and participants, which has created a tremendous revenue stream.

As my colleague Amish Desai recently blogged about, there are four key principles that brands should live by to successfully engage in what he calls experience ecosystems:

  1. Understand that your competition is your user’s last best experience.
  2. Identify where the experience ecosystem will add the most value.
  3. Map your user’s journey through your ecosystem.
  4. Have a contingency plan for negative experiences.

Engaging in ecosystems is core to who we are at Moonshot. We were founded in one of North America’s largest technology startup hub, 1871. We believe sports and entertainment organizations can create more successful ecosystems as Activision has. Tools such as design sprints help businesses test ideas such as new business relationships in a way that mitigates against cost and risk. We use design sprints in a larger methodology known as FUEL, in which we help businesses launch new products and services. For more insight, contact Moonshot.

Mike Edmonds

Mike Edmonds

Managing Director, VP Product