Jump Racing Focus - Future Trends

Increased participation of consumer brands
Sponsorship spend
Why sponsorship retains its place in the marketing mix, in the digital age
Reaching out to a valuable demographic
Increased participation of consumer brands
Media exposure
Greater use of experiential marketing
Leveraging sponsorship to deliver greater ROI
Combined rights offerings make sponsorship more accessible
Summary

Future Trends

Increased participation of consumer brands
Racing faces frequent criticism, mostly from within the sport, that there is not enough participation from consumer brands. Several big name brands are involved, including a range of beverage companies like Guinness and John Smith’s, but also newspapers like the Sun, Independent and Mirror, and retailers like Thomas Pink and Ryman the Stationer. However, we are likely to see even greater involvement from consumer brands in the future.

With the retail market under intense pressure and the high street losing out to home shopping, there is likely to be growth in event marketing – where consumer brands meet their customers at major sporting or social events rather than expecting the customer to come to them. This shift towards experiential marketing plays to racing’s advantage, with the premium events particularly well placed to capitalise on this trend.

Racing is an ideal environment for the acquisition of customer data; there is lengthy dwell time and a captive market of attentive, affluent individuals at each venue to engage with brand owners. Joules, Hi Ho Silver, Sky, Hamlet Cigars, Burts Chips and AGA Rangemaster are just a few of the consumer brands to have tested products with a racegoing audience to good effect. Similarly, there are over 8,000 betting shops on UK high streets, presenting racing to a broad consumer audience and new consumer brand sponsors could work in tandem with bookmakers to gain exposure.

Consumer adoption of mobile apps continues apace and Jump Racing is ideally suited to this content-rich milieu, offering a wealth of technical information (about the relative strengths of the runners) and colour (the spectacle of racing and stories behind the racegoers, owners, trainers and horses), that can engage audiences through digital platforms. Media organisations – creators of the content – tend to be in the vanguard of delivering these new channels, but rights holders are cottoning on to their value and working both with media organisations and with prospective sponsors to deliver all-round marketing solutions. Racing’s consumers are attentive and hungry for knowledge, so there is considerable scope to broaden this market.

Sponsorship spend
Those involved with the management of Jump Racing recognise that current and potential sponsors are keen to have more opportunities to sponsor high quality events and are working to increase the number and type of sponsorship opportunities available, as well as the scale of the existing premium opportunities.

In addition, they are seeking to anticipate changes in why, how and what organisations sponsor. In many instances, the motivation to sponsor has a single objective. This could be to drive sales through corporate entertainment of key prospects, or to publicise the launch of a new brand.

Yet too often, decision-makers focus on one key objective when several could fit the bill. For example, a racecourse could be used to gather together key staff for an annual training session, perhaps in preparation for a sales campaign that uses the same sport to entertain key clients. In addition, there is a strong argument for incorporating experiential marketing techniques because of the large broadcast and on course spectator audience, whether the target audience is B2B or B2C.

For example, a very successful campaign is run by the Irish Independent, the leading daily newspaper in Ireland, built around the Festival at Cheltenham. The title spends one and a half times as much as is spent on the prestigious Arkle Trophy on the opening day of the meeting, in order to provide its readers with the official programme of the event and this helps to drive sales of the title across the UK and Ireland.

And Molson Coors, official pouring partner of Jockey Club Racecourses, recently worked with its on-trade outlets to deliver some spectacular new footfall to some of the Group’s racecourses through a free entry offer that registered Exeter’s highest ever attendance. At the same time, it helped itself to sell more beer – a virtuous circle.

So in the future, sponsorship may not necessarily be about retaining title rights to a particular property.

Why sponsorship retains its place in the marketing mix, in the digital age
Whilst the use of digital media has exploded among all age groups and among both genders, an equally visible trend has been an increased desire to experience live events. This is most evident in the music industry where attending live events or festivals is more popular than ever and now represents the primary revenue stream for many musicians and groups.

Jump Racing performs especially well in this respect. The sport is intensely sociable, bringing together viewers, betters and spectators in different environments that are a community in their own right. One noticeable trend over the past few years has been a more partisan approach to each spectator’s favoured horse, to the extent that spectators now wear merchandise bearing the name and colours of their chosen horse.Long Run, Denman and Kauto Star scarves have brought additional colour to the racecourse and given those horses a fan status previously limited only to the owner, trainer or jockey directly involved with the horse.

And whilst racing is no dinosaur, with its own share of mobile apps, daily blogs and chat rooms, getting up close and personal with the sport is an intensely intoxicating affair as anyone at the final fence of a race will testify. These rare moments of excitement are what consumers remember when the PC, smartphone or tablet is closed down for the day – and it is that buzz that attracts brands into sponsorship deals.

Reaching out to a valuable demographic
It might be inferred from the heritage aspects of the sport that it would appeal only to a narrow band of elitist premium brands – high end jewellers, wealth managers and so on. The reverse is largely the case.

Of course, Jump Racing has its own set of high end sponsors seeking the premium end of the market. But it also appeals to a much more mainstream audience of middle income earners and professionals. And whilst there are certainly very wealthy men and women involved in racehorse ownership, the growth of syndicate ownership has enabled people of modest means to share in the excitement of ownership and to be immersed in the sport on several levels.

So Jump Racing’s strength could be perceived as its approachability. It is something of a chameleon, adapting itself to a sponsor’s brand aspirations, whether they are chasing a predominantly ABC1 spectator market, or a C2DE television market. These brands rub along together rather successfully, reflecting the welcoming character of the sport’s participants and administrators. And as the importance of these demographic bands becomes increasingly blurred – the new opinion-formers are often people blogging or tweeting rather than heads of industry – then the ability to reach a wide and diverse audience makes Jump Racing an even more attractive proposition going forward.

Media exposure
One trend consistent to most business activity has been a fragmentation of audiences. This has happened because of the proliferation of new, different channels, particularly when it comes to media outlets, available to target different demographic sectors. Sport is no different; with some notable exceptions, sport as a whole has allowed sponsors to focus their attention on the consumers most directly interested in the sport, rather than passers-by who have no more than a peripheral interest. Yet online media lets consumers link to content on an ad hoc basis that they might not otherwise have viewed as interesting, potentially providing added value in terms of overall reach and value.

What’s more, the changing media landscape plays to the strengths of Jump Racing. The fact that consumers can press “Fast Forward” on their Sky Plus box or other Personal Video Recorder means that commercials in the breaks between programmes are fighting a losing battle for attention in a way that real sports content does not. It is no coincidence that product placement is now to be permitted within TV programming and that programme sponsorship continues to grow when orthodox advertising is struggling to make itself heard. In this respect, integration into the actual content of the programme, through direct sponsorship, ensures a sponsor’s voice and message is heard throughout the event.

Sponsorship of racing coverage in the form of bespoke content solutions for racing followers must be a significant next step in the media strategy of many sponsors. Indeed such strategies have already been adopted by some of the more innovative sponsors. The sport’s future will, in part, lie in harnessing that appeal and bundling up both content and sponsorship rights as an added-value package.

Greater use of experiential marketing
Experiential marketing is recognised as an increasingly important part of the marketing mix and the Jump Racing ‘experience’ perfectly complements sponsors who may wish to engage in experiential marketing to promote their brand.

Four-fifths (82%) of those sponsors who had undertaken experiential marketing at a Jump Racing event considered it to be a valuable experience:

“To touch the customer base in an environment which they care about is something which is a great opportunity.”

“I think it is a big thing when you can get people to touch and feel your product, so I think Jump Racing compares well with other sponsorship environments. I think it works very well.”

However, only 34% of sponsors had engaged in experiential marketing at Jump Racing events to date. This means a significant number have yet to leverage the potential of experiential marketing to provide a more tangible connection to potential customers. As experiential marketing becomes increasingly common within sponsorship generally, Jump Racing offers an environment within which this strategy can be maximised.

Leveraging sponsorship to deliver greater ROI
Sponsorship is not generally an off-the-shelf purchase. Although the basic offer by the rights holder may be formulaic, it’s the ability to adapt this to individual client expectations that makes for success or failure.

Flexibility in approach, so that a client can decide which parts of the offering are more important than others, allows racing to over-deliver and to focus sponsor clients’ expenditure where they believe they will achieve the best outcome. For example, if branding is less important than the experiential delivery, then spending large sums of money on signage production and logistics is rather fruitless.

Those involved in racing are coming to appreciate that sponsors will purchase sponsorship rights but need to be shown devices to help them activate brand engagement. In many instances, these devices are relatively undeveloped and we can expect them to become more sophisticated, detailed and targeted over the coming years. Further development of these types of print solutions, data capture opportunities, e-commerce and online applications will support sponsors marketing strategies and sponsorship objectives and ultimately help to deliver more measurable ROI.

Combined rights offerings make sponsorship more accessible
Racing’s fragmented approach to the sale of its sponsorship rights has probably been the single biggest obstacle to more sponsorship involvement in the sport by major consumer brands. Unlike other sports bodies where a single approach can produce a campaign plan across multiple venues and a 12 month timeline, a similar approach in racing would require up to 50 calls. However, this barrier could be removed through greater cooperation and a more consolidated approach to rights bundling.

In Jump Racing, Cheltenham has been leading the field in this respect. Cheltenham has negotiated with other racecourses in order to bundle the major televised prep races for each of the Cheltenham Festival’s 14 Championship races. This has enabled Cheltenham to market a selection of “Roads to Cheltenham” to sponsorship partners, with each “Road” representing a clear narrative in the form of a multi-race solution over a 5–7 month timeframe, with a national footprint.

Stan James, the Gibraltar-based online bookmaker, provides the benchmark experience of this type of sponsorship package. The company’s branding is attached to the majority of the key trials for the Champion Hurdle, culminating in the eponymous race itself. Their competitor, Sportingbet, has been prevented from pursuing exactly the same strategy for the “Road to the Champion Chase” only by the current lack of availability of all the relevant races. Tantalisingly, for ambitious sponsors, there may be scope to extract similar enhanced value from the “Road to the Gold Cup” after the 2012 season. The Gold Cup, the most prestigious and important race in the Jump Racing calendar, has not been available to the market since 1980.

That in itself will cause some excitement among potential sponsors, but a Gold Cup “campaign” has the ability to transform the sport, bundling together all the key lead-up races to the Gold Cup in the UK under one sponsor name. It is true that many of those races are already sponsored so it may take a year or so for existing contracts to run their course, but the proposition would be genuinely unique and offer a credible brand “ownership” of one of the UK’s best loved and most exciting sports. What’s more, this would be made possible at a reasonable entry point in comparison to other sports.

Picking up on these developments from Cheltenham, it is likely that other racecourses will begin to work together more closely to create more credible and sustainable sponsorship solutions both for their existing clients and for those they have not yet acquired. Racecourses already pool their rights and share revenues from media deals, so it should be possible to pursue a similar strategy with regards to sponsorship. However, that will require the business managers of racecourses to work together closely and sell sponsorship rights in a way that is not historically the norm. Nevertheless, the prize of significant revenue streams from blue chip sponsors could help to take racing – and the benefits for other sponsors of racing – to an entirely new level.

Summary

Sponsorship is one of the most visible forms of marketing, yet it also remains one of the most difficult to measure and to quantify in terms of return on investment. Jump Racing sponsors are not alone in this regard and it is interesting to see how sponsors are trying to measure the benefit they derive from their sponsorship activity. Better tracking and analysis can help to illuminate specific returns, such as media exposure, but even this does not accommodate the intangible benefits of an association with Jump Racing, such as the halo effect of the excitement and prestige of Jump Racing on the sponsor’s own brand attributes.

The media landscape is changing but the appetite for watching racing has actually increased. In this respect, the digital age does not hold a threat for Jump Racing as it cannot rival the live experience – and whether consumers attend on-course or watch coverage on terrestrial channels or online, the sponsors will follow the audience.

This is why the demand for sponsorship opportunities and the level of sponsor satisfaction remains strong. Brands believe they are benefitting from their involvement from the sport, or they would not intend to continue with their sponsorship agreements.

What is clear is that both parties could be doing more to improve the efficacy of sponsorship of Jump Racing. Those involved in running and managing the sport could undertake new initiatives – such as bundling rights packages – to make sponsorship across racecourses simpler and more efficient; in addition this can deliver a narrative that fits better with a brand’s other marketing activities.

From the sponsor’s point of view, the research confirms that sponsors could do more to incorporate their sponsorship activity into their overall marketing plan. This could help the brand utilise its sponsorship activity in a more strategic way. In addition, brands could do more to leverage their sponsorship activity by implementing other tactics to help increase brand activation.

It is hoped that this report will increase understanding between the racing industry and its existing and potential sponsors. By working together more closely, both parties can and should do more to increase the overall return on investment and build their respective business.

Horse jumping water

Companies are coming up with more innovative sponsorship agreements, particularly in terms of off-course activity, in order to benefit from a link with Jump Racing while directly generating more sales.

Horse and jockey

Horses racing

…the growth of syndicate ownership has enabled people of modest means to share in the excitement of ownership.

syndicate ownership