Sport has a tremendous amount to learn from traditional business and industries that have embraced data. I’m going to lay out how commercial sustainability of sport is fundamental just as it is in any other businesses and outline where the focus for sport needs to be in adopting strategies from traditional businesses that leverage data through analysis for commercial and strategic return.
The Oxford Learner’s Dictionary defines business as “ The activity of making, buying, selling, or supplying goods or services for money”. The common thread here? To be commercially viable.
Commercial viability is rooted in the activities of sales and marketing. Nothing in business happens without a sale or the pursuit thereof. Sales and marketing activities in business generate metrics, data, that can be verifiably measured to analyse the quantum of success and failure to sustainability. The business of sport is no different. Businesses need to understand their customers and influence the market to generate sales. Sports teams, events and brands have the same ambitions, which centred around their fan base aka. their customer.
Taking this business to consumer approach, sports business can learn and adopt data strategies used in digital advertising agencies who in the cut-throat environment have embraced the power of data analytics to uncover advantages and ensure success. This success or failure can be measured as fact, not opinion. The use of data analytics is widely adopted and leveraged in advertising, PR and brand management sectors. Similarly, the sustainability of sport is heavily dependent on sponsors and the support of its fans, which presents a powerful advertising opportunity. Adopting similar approaches to data found in the media advertising industries can yield significant financial returns
The world of business has been digitally transforming for approximately 35 years according to Auriga. As we near the middle of 2021, we are very much emerging out of the 3rd industrial revolution where society has adopted electronics and information technology wholesale and we have learnt to automate our lives for the better. The continued transition into the 4th Industrial Revolution will see every facet of society engaged with high-speed mobile internet generating big data through a plethora of platforms and IoT devices. This presents an opportunity to creatively leverage AI and ML supported by now ubiquitous cloud technologies to digitally transform society even further. And it’s not coming, it's here already.
A recent study by Deloitte highlighted the importance of digital maturity to drive financial performance. A key component of reaching digital maturity is the adoption of a data-first strategy. A business sector that stands out as an early adopter of digital transformation and in particular see’s the value of data analytics has been the Advertising and Media industry. A key offering of any agency is its digital media. Their offerings have pivoted from traditional advertising channels of radio, TV, billboards etc to now include skill sets that deliver solutions to drive online consumer engagement. An example of this can be from the one of world's largest agencies Dentsu who recognised the value of a data-first strategy and developed a creative intelligence unit with soft and data engineering firm DotModus. The unit’s focus is to use AI video analytics technology hosted in the cloud to analyse big data generated from campaign video content across their various client campaigns and portfolio so that they are able to quantify the effectiveness of the creative against commercial success.
Sport is not exclusive to this global transformation phenomenon, but it is behind the curve against other sectors of industries in the wholesale adoption of a data-first strategy to underpin commercial success. The majority of sports organisations have yet to take this approach of adopting a data-first strategy in their critical thinking. Those that have, are now enjoying an ability to drive revenue in unique ways. One such example highlighting the benefit of pursuing digital maturity is the football club Real Madrid Football. Their commitment to the fan-made them realise that only 3% of their fan base could attend games. Searching for ways to engage their global base of fans led them to develop a digital strategy that leveraged data at its core. This in turn opened up commercial partnerships opportunities in the digital space, adding revenue and this shoring up its sustainability.
The adoption of a data-first strategy to digitally transform, with a clear road map is fundamental for any sports-related organisation. This road map will have a backbone of key milestones to the investment, implementation and adoption of technologies needed for an overall architecture, which will be unique for every organisation. Even those organisations in the same sporting codes will have their own unique priorities and resources to realise those milestones along a roadmap which provides measurement against its broader business strategy.
Sports has long been lauded for its power to create and evoke emotional connection through powerful imagery and experiences. These events and sentiments have always been subjective and difficult to fully quantify. No longer, thanks to how data can be used to measure levels of engagement and sentiment across digital platforms. A practice well entrenched in other business to customers based activities. Revenue generating sponsorship partnerships will be enhanced, brand value extended and fans bases preserved and grown all through leveraging of data through a data-first strategy as the sports business across the board accelerate to digital transformation.