The Data Tipping Point for Sports Properties & Brands

Mike joined podcast host Jim Andrews to explore why the elimination of third-party cookies spurred the introduction of Sportradar’s new FanID solution and digs into the opportunities and challenges of collecting, connecting, activating and orchestrating data insights across rights holders and their multiple partners. Below are edited highlights of the conversation.

Jim: Sportradar is one of the companies where if you asked five people to tell you what it does you would get five different answers because it is involved in so many aspects of sports technology. Can you share a concise overview of Sportradar and its primary components?

Mike: You’re right, Sportradar is a sizable business now. We refer to ourselves as the world’s leading sports technology company and that’s broadly safe for us to say as far as the scale and the range of products and services we provide across the sports ecosystem.

We are a 23-year-old business founded by Carsten Koerl and we are now a public business, having IPOed on the Nasdaq in 2021, which was the culmination of over 20 years of significant growth and expansion from our provenance in sports betting.

The business now is in a central position within the sports ecosystem, with customers across different constituencies. We work with a number of significant rights holders—such as MLB, NBA, NHL, UEFA and AFC—media owners from across the world, and just about every sports betting operator around the world, including FanDuel and DraftKings in the U.S. and Bet365 globally.

We also work count technology companies, including Google, Apple and Meta, among our customers.

Jim: That clearly gives us a lot to discuss, but I would really like to focus on FanID, a new solution you recently launched in the fan engagement space. Let’s start off with the explanation of what FanID is meant to do and the process it entails, and then we can dig a little deeper into some of the details.

Mike: This has been a major initiative for us for over two years now. We recognized that the digital landscape was changing, so we started to make significant investments in people and technology so that we could bring a product to market that we think is future-proof, answers a number of challenges and also provides opportunities based on the way the digital universe will work.

There have been a couple of seismic changes. The first is the way the world now sees privacy. There is a different view on individual privacy, initiated by GDPR and the European Union deciding that privacy had not been fully respected and changes needed to be made to digital practices.

Second is the shift from third-party to first-party cookies amongst all the major browsers—Safari and Firefox a couple of years ago decided to deprecate third-party cookies because they observe your browsing behavior without you knowing about it. GDPR decided that if we are going to observe people in terms of their digital practices, then we need them to give consent. That is essentially what first-party cookies are meant to do: track behavior on a much more consensual and much more known basis where the value exchange between individual and the platform they are visiting is understood and individual rights are respected.

That structural change forced a change in perspective and philosophy around data sharing. Outside of sport—in retail and media—already there are lots of examples of what might have been historically competitive businesses starting to collaborate around data for mutual benefit. As that need arose, technology was developed to facilitate that collaboration, specifically new platform technologies called data clean rooms.

Data clean rooms are environments where first-party data can be shared and connected while complying with all of the new privacy regulation that surrounds it.

We saw this as a significant opportunity for the sports ecosystem, in particular for the relationship between rights holders and their commercial partners. There was an obvious opportunity through data clean room technology to facilitate an effective exchange of data with significant material benefits to both parties.

Wind that forward to now and we have brought to market the world’s first sport-specific first-party-data marketing activation platform. FanID has four principal components: data collection, data connection, data activation and data orchestration. By providing technologies that can operate at scale and satisfy those four demands, we think we are bringing something valuable, innovative and future proof to market.

In terms of data collection, lots of rights holders and brands sit on significant first-party data sets and are always interested in scaling that. But they are also interested in deepening that. Having an identity of somebody is a usual thing when it has been given consensually. But understanding their preference and intent and what they like—what teams they support in simple terms for the sports ecosystem—is very useful. So when we talk about collection, it is increasing the scale of a data set but also increasing its depth.

Connection is where our sport-specific clean room comes into play and where the magic happens, because we deliberately built it as best in class. It sits on confidential computing, which is the most progressive end of clean room technology. It is multi-party, allowing for an almost limitless number of participants in the room. For example, it can include a league or a team, all of their commercial partners and a range of other interested parties that might surround them as a rights holder. It provides the connective tissue between the respective first-party data sets. It is privacy safe, so everyone can participate without concerns over their data sovereignty and can set their own rules in terms of the extent to which and the occasions they want to share.

The third element, activation, is just as crucial because having data and having identity is one thing, but if you can’t find these individuals in the wider digital domain the value diminishes pretty quickly. So we built technology and developed relationships with a number of identity networks, whereby on a consensual first-party basis you can engage the individual on whom you have collected identity based on the preferences, intents and behavioral insight you have around them. It facilitates very personalized, very relevant engagement, which is good for the fan, good for the brand and good for the rightsholder because they are improving their fans’ experience.

The fourth element, orchestration, is the binding layer. A league will have numerous commercial partners, all of whom are trying to engage the fan base. That’s why they have paid rights fees. When you have a lot of entities trying to do the same thing, that needs some decision-making and you can’t do that on a human basis.

So we built a next-best-action model on the basis of all of the inputs and considerations those sponsors and rightsholders might want to make. We will organize the engagement so it is thoughtful, fair and respects the fan experience. And it reflects what we refer to as responsible data custodianship.

Jim: Let’s talk a bit more about orchestration. Of your four pillars—collection, connection, activation and orchestration, the last one is an element that may not be top of mind in many organizations. We may take for granted that every partner has been offered the opportunity to leverage the rights holder’s fan data and insights for personalized marketing but neglect to consider how that gets operationalized. And at the same time does the FanID orchestration limit some of rights holder’s ability to control things if it’s taking away the human element?

Mike: It has been very interesting to think through what those decisioning considerations are! What we observed very early on was when you activate against first-party data the baton was being dropped because two things were happening. One was that these collective sponsors were activating in silos, each doing their own thing. That created a chaotic environment. There was no supervision or control over what was happening.

That in itself is bad for the fan experience because there is no one looking out for them. The other thing that was happening, which was more of a worry for brands, is that they were pushing each other’s prices up. You would find that one sponsor was bidding against another sponsor to engage the same fan, which is counterproductive. The only “winner” there was the media owner.

With those two thoughts in our mind, we asked ourselves how we could create an environment where there is fairness, and where sponsors’ different status was considered and respected, and at the same time eliminate the internal competition that existed, all the while ensuring that the fan experience is curated.

With those considerations, the next-best-action model, which is learning all the time and will get better as the platform matures, can decide what is the best message to serve from whom at that particular moment. That is what the decisioning engine does. It already understands status and the sponsor’s campaign objectives, so it operates across all those considerations. As long as you are able to be conscious and considerate at scale of all of those many inputs and factors, to be able to serve that right message that has relevance and purpose and is additive to the fan experience, that’s the environment we want to create.

Jim: Knowing that sponsorship is a relationship business and sometimes circumstances arise that require deviation from the plan, is there ultimately a human on the customer side who can say, “We need to do something out of the ordinary?”

Mike: Certainly there are humans involved, but because we build our products and services with scale in mind, we invest in the necessary AI and machine learning that can, at an automated level, in real time make those necessary decisions. That’s where 23 years of history building products and services like this really comes into play.

Jim: What are the questions that brands should be asking of their rights holder partners in order to determine if they are prepared to deliver on the promise of first-party data?

Mike: Sponsors are demanding more in and around access to first-party data and that will only continue. The good news for rights holders is that if you can satisfy that demand, brands are willing to pay for it. In the first-party world we are now in, brands recognize the value-add of relevant, timely messaging.

Rights holders should see their first-party data set as a value asset and invest in it as such. That involves two things. One is preparedness, or looking after that asset like you would look after your stadium or any other value asset you have at your disposal. There ae a lot of things rights holders can do to organize the data they collect—simple data hygiene—to make sure that value asset is as strong, at scale and deep as can be. That requires investment in people and recognizing it as an asset that can be monetized and that will benefit the fan experience, so it deserves focus, priority and attention.

Self-servingly, we also would say that you need some technology to deploy that data and take it to market. A connected platform is a requirement. We’re not always saying come to Sportradar and use ours, but recognize that all data clean rooms are not the same. That’s going to become an emerging question and issue. We talk about data clean rooms as a sort of generic technology. While that was true a couple of years ago, we are moving into a phase where clean rooms have different capabilities and some may not have the means to do what a rights holder’s sponsors will want to.

The orchestration/activation question is also vital. Try to find ways to exert some control over how that data is deployed or activated. Don’t abdicate responsibility for your data once it has come out of the clean room. Make sure you can access technology that can organize it, that can give you a level of control and can facilitate your brand sponsors collaborating themselves.

If you can provide an end-to-end ecosystem, a kind of walled garden around your own sport, where all your sponsors can access fans and provide them good experiences, then everyone benefits.

Jim: Often when we talk about novel solutions such as FanID, it would seem that there is no reason a potential customer wouldn’t want it, but clearly there are considerations involved, including cost. What do you see as the biggest challenge to actually persuading rights holders that they need an end-to-end solution like FanID?

Mike: We’ve had two-and-a-half years of experience in market talking to all of our partners and thinking through that exact question, because it’s not simple. This is innovation, this is changing the way you do things for a different world. Anything of that nature, involving transformation, takes time, planning and involves a lot of thought.

We are trying to remove barriers to entry for rights holders and for brands. The actual investment cost here isn’t significant because we see this as a profit center for rights holders, not a cost center.

We recognize that the decisioning around making this move involves a number of different stakeholders within rights holder organizations. Thankfully, we have gotten to a point where we have groups of people aligned with those stakeholders. A rights holder will have someone responsible for the data platform, someone responsible for data security, someone responsible for partnerships with sponsors, someone responsible for innovation, etc. All of those groups have a vested interest in the decision.

We can help rights holders short-circuit that decision-making process. We know the questions that need to be answered.

You’re right that it is not a simple product to buy, in a sense. What we have done is make it as simple as possible, removing barriers around investment cost for sure and also understanding the composition of people of the rights holder side that is required for the organization to get comfortable with this and recognize it is all about potential.