INSIGHTS
The Future of Sports Marketing
By Felipe Ribeiro
TWE Insights • 6 min read
Recently, during a conversation with the CEO of a major Brazilian football club, I was asked what the future of sports marketing would look like.
The question seemed simple, but it revealed something deeper: we are entering a structural transformation in the way brands, clubs, and fans relate to each other.
For decades, the commercial value of sports has been concentrated mainly in brand exposure. In the coming years, however, the true asset of sports organizations may be something else entirely: a deep understanding of fan behavior.
Sports Marketing and Its Traditional Logic
First, it is important to understand that marketing — whether it uses sports as a platform or not — is the channel through which a brand builds relationships with its audience through multiple tools, very well summarized in Kotler’s famous 4Ps.
Through these tools, brands communicate stimuli and messages designed to increase perceived value, with the ultimate goal of converting that value into sales.
All major brands, with their inspiring values and narratives of overcoming challenges and achieving victory, ultimately face the same reality: regardless of how genuine the relationship with their audience may be, it must eventually translate into revenue.
There is no successful marketing campaign that has not ultimately converted into financial results.
The Transformation Driven by the Data Economy
In today’s globalized, digital, and highly competitive world, the ultimate objective of every brand — increasing sales — increasingly depends on the quality of its relationship with consumers.
It depends on the sharing of ideas and experiences and on the ability to anticipate trends and desires.
As a result, information about nearly every aspect of our lives — income, age, geolocation, preferences, habits, social networks — has become an extremely valuable asset.
We are standing at the edge of a transformation in communication and marketing that may be even more significant than the shift from analog to digital at the turn of the last century.
As someone born in the mid-1980s, I belong to what might be the only “dual-voltage” generation in human history.
I lived long enough in an analog world — without smartphones or cable television — to remember clearly what life was like then. But I was still young enough to fully integrate into the digital transformation of the new century and its profound social and economic changes.
This perspective allows me to better understand the speed of digital transformation, its potential, and its profound impact on how we relate to products, services, and brands.
The Social Media Model
The next transformation has already begun, although it is still in its early stages — especially in Brazil.
It will emerge from technological development that allows the collection of data (Big Data) and its efficient processing through artificial intelligence algorithms to become the true asset companies seek when deciding where to invest their communication budgets.
We are entering the era of ultra-segmented communication, or what could be called individualized marketing.
This was precisely the insight behind the business model of social media platforms, which explains their extraordinary revenue growth over the past 15 years through advertising.
Why Sports Is a Unique Platform
So where does sport fit into this transformation?
In a fragmented world like the one we live in today, few platforms — beyond social networks — possess such a strong power to bring people together as sports.
The diversity of consumers across demographic, social, political, economic, and geographic spectrums is difficult to find in any other communication channel.
If we look at clubs with global audiences such as Real Madrid and Barcelona, the numbers are staggering.
Moreover, the emotional relationship between fans and their clubs, idols, and national teams greatly facilitates the collection of extremely valuable data for a wide range of advertisers.
"Big Data will become the primary return brands seek when investing in sports, even more than brand exposure itself."
Big Data as the New Asset of Sports Organizations
Sports will naturally follow the path created by social media monetization models and will become a powerful catalyst for information.
Big Data will become the primary return brands seek when investing in sports, even more than brand exposure itself.
This will become the most valuable asset of sports organizations and the main engine for their development.
As a result, we will likely see significant growth in sponsorship values and commercial partnerships based on profit-sharing models in the coming years.
The Still Untapped Potential in Brazil
In the annual report published by Itaú BBA on Brazilian football clubs, several data points are particularly interesting.
First, the combined commercial revenues of clubs in Brazil’s top division grew by more than 40% in recent years, a very positive figure considering that Brazil’s GDP growth was far below that during the same period.
Another important insight emerges when we compare the number of supporters with advertising revenue.
For example, Flamengo, despite having the largest commercial revenue in the country, is still far from the top when it comes to converting fan base into proportional commercial value. It generates less than a quarter of the result achieved by Palmeiras, which leads this ranking.
This data clearly illustrates the enormous potential for advertising revenue growth among clubs with large fan bases.
And this monetization of fans will come precisely through the collection and sharing of their data.
The First Step: CRM and Data Intelligence
The first step in this direction should be investing in CRM systems and Big Data infrastructure, allowing clubs to collect and process relevant information in a structured way for both the club and its partners.
At the same time, maintaining a strong presence on social media with relevant content that drives engagement — and therefore data exchange — is essential.
Within a few years, this kind of data ecosystem may become more valuable to sponsors than the size of their logo on a club’s jersey when negotiating sponsorship contracts.
Although I know that no club in the country is currently making serious investments in this direction, I hope Brazil will awaken to what lies ahead.
Ideally, clubs, sports organizations, and brands will position themselves at the forefront of this movement.
Warm regards,
Felipe Ribeiro
Founder — TWE Brasil