Why Flexibility and Creativity Are Keys to Successful Partnerships
With a partnership portfolio spanning numerous pro sports leagues, teams and venues, Wells Fargo is a major player in sports marketing.
The company’s Nick Carey spoke with Jim Andrews for an All Access Interview episode offering sponsorship advice to brand marketers and sports and entertainment rights holders regarding what each side needs to bring to the table. Below are edited highlights of the conversation.
Jim: One of the many developments coming out of 2020 is the rise in importance of virtual events. While born of necessity when live gatherings were not possible, it’s clear that virtual events, when done right, can be a valuable asset to sponsors. You had some success with virtual events this past year, can you share some lessons learned?
Nick: One of the lessons we learned was to be nimble, creative and innovative. So the silver lining was the opportunity to try new things, whether that was digital technologies, new platforms or virtual events. Those were a tougher sell previously because they weren’t as necessary as they were in the pandemic.
One example is with our partnership with AEG and the Staples Center. We shifted to some of the virtual events they were offering, including the Lexus All-Star Chef Classic, which in prior years was held at the Staples Center with about 15,000 people attending. Shifting that online allowed us to still engage with our Los Angeles customers by bringing that experience into their home. They were able to receive a package of ingredients and connect with a top chef online who walked them through preparing an amazing dish.
In the sports space, we were able to take meet-and-greets and make them virtual. For example, we have players from the Mexican national soccer team doing post-game interactive chats. You don’t have the same experience as being in the same room as them, but on the other hand it opens up the opportunity to many more people. That is the type of program we will probably adopt going forward and which will become part of our new normal.
Jim: 2020 was also the year that “makegoods” became a larger issue than ever in sponsorship thanks to cancelled events, seasons, live audience restrictions, etc. Many of us entered into conversations with partners that we never anticipated having. What were those discussions like from your perspective?
Nick: We have had our sponsorships for a long time. These are relationships that we have built and want to maintain. So we want to be a good partner and be empathetic, be flexible and afford rights holders some time to figure things out. We were never looking
for refunds. Ultimately, we wanted an equitable re-expression of the value. If we can’t use tickets, if experiential assets are not going to have value because events are cancelled or attendance is restricted, what are other ways we can earn value from the sponsorship? It could be shifting the value of tickets to televised signage, of from live fan experiences to digital content and social media posts. Some properties responded better than others. The NBA, MLS and others leaned into it and had a plan for what they were going to do, while some others sat back and tried to wait to see what would happen. At the end of the year, the effects will still impact renewals and the type of assets we will purchase going forward, but we feel we have mostly been made whole by those groups that pushed forward and proactively reached out with what they could deliver.
Jim: The discussion around “getting what you paid for” leads to a bigger question of what rightsholders need to bring to the table to make sure that sponsors are receiving value for their investments. Do you see a gap between brands and properties in this regard?
Nick: There is a gap, but it has narrowed over the course of my career. That has happened because now you have both sides of the table working with very similar data sets. You have agencies and other entities working with both the seller and the buyer, so the delta is getting slimmer.
Rights holders are doing a fair job given what they are up against with the pandemic. But there still is a gap because there is uncertainty around scheduling and attendance for upcoming seasons and events. We’re not going to buy what we bought before or spend what we spent before when there is this huge unknown around the rights holder’s ability to deliver benefits.
Jim: From the rights holder perspective, it sounds like maybe they should not expect sponsors to be all that interested in signing long-term agreements at the moment. Is that the case?
Nick: I can’t speak for the broader industry. But if you look at the financial services category, we are in a relationship business with our customers, so experiential and hospitality are important for us. For other industries, it may be a buyer’s market if they are looking for content or media-driven benefits and value those higher than we would.