Making a Case for Category Exclusivity

Last week’s post questioned whether category exclusivity would remain a prominent element of sponsorships and outlined a number of the factors that have chipped away at its importance to brands over the last few decades.

But even though the tide is turning against exclusivity, we should consider what that will mean for sports marketers on both the buy and sell side of sponsorship.

What the loss of exclusivity means to brands. When exclusivity is either unavailable or too expensive, sponsors have developed clever carve-outs that maintain an association with the property and allow them to connect with audiences.

For example, we have had pro sports franchises that have successfully offered on-site activation rights to one brand in a category while another brand secured the rights to market its partnership in retail and other sales channels outside the venue. At least publicly, all sides have professed their satisfaction.

No doubt splitting up sponsorship inventory is relatively simple. Brand A gets naming rights to a stadium lounge; Brand B gets the right to promote its official status with media partners, etc. Both brands should clearly be able to achieve short-term objectives by activating those rights.

But long-term sponsorship success is determined by forging a clear association with the property in the minds of fans and borrowing the equity rights holders have created to build interest, consideration and loyalty to brand partners. The industry long ago agreed that sponsor clutter—too many non-competing partners—makes that job too difficult and diminishes sponsorship value.

Isn’t the same true for sharing the spotlight with others in your category? Rights and benefits may be easy to divide, but consumer loyalty and interest is not. Forgoing exclusivity may be the right short-term move for some brands, but it will likely come at the cost of longer-term value.

What the loss of exclusivity means to properties. If brands determine that exclusivity is no longer a priority for them, rights holders will adjust sales pitches and proposals accordingly. But at what cost?

Removing exclusivity from their benefits basket takes away what has long been a unique selling proposition for sports, entertainment and other properties. Advertising and other forms of marketing communications don’t or can’t offer exclusivity. Sponsorship has been the one haven where brands could go and create a true point of differentiation from their competitors.

Without that USP, rights holders lose an advantage as they compete for brand budgets with an exponentially expanding universe of marketing opportunities that are personalized, automated, immersive, experiential and measurable.

Certainly, much of this discussion is theoretical. Exclusivity will not go away entirely. Any brand-property partnership can be deemed exclusive if the two parties want it to be.

But on the macro level, marketers who are ready to dismiss the importance of exclusivity should consider the long-term impact of forgoing it before deciding it’s not worth it.