What are the sponsorship strategies they adopt most frequently?

I will try to answer these questions in this article, which aims to analyze how the instrument of sponsorship is strategic, within the communication mix, to establish a brand in the financial sector.

The volume of investments

Let’s start by delving into how relevant investments are in this industry.

Among the big spenders on sponsorship, the financial/insurance sector is second to none

In Italy, for every 100 million euros invested, over 10 million come from commercial brands in this sector, without considering the weight of foundations.

For several players in the sector, the share of sponsorships in the communication budget is predominant and higher than that of other media and even classic advertising.

The big spenders

But who are the main investors in this sector?

Allianz, Gruppo Unipol and Generali amongst Insurances.

Intesa Sanpaolo, UniCredit and BNL Gruppo BNP PariBas amongst Banks.

Where they invest

Sports take the lead, garnering about two-thirds of sponsorship investments.

Art and culture receive about 20% of the money invested. The remainder is distributed among music, entertainment, environment, training and solidarity.

Theater and sports are the preferred areas of investment

Brands in the financial sector are primarily tied to institutions and events. Pairings with individual personalities are rare.

Players in the sector traditionally invest considerable resources in the world of theater and art, with the aim of enhancing cultural heritage.

Che Banca! thus lends its name to the Teatro Nazionale in Milan, UniCredit sponsors the Arena di Verona Opera Festival and the Filarmonica della Scala.

Furthermore, Intesa Sanpaolo is the main sponsor of the season of the Teatro alla Scala, but also sponsors the Teatro Regio in Turin, the Teatro Franco Parenti in Milan, the Teatro La Fenice in Venice and many others.

In the sports field, soccer and tennis are the disciplines that gather the greatest investments in the sector.

In tennis, for example, there is a strong presence of:

• BNL Gruppo BNP PariBas, title sponsor of the Internazionali di Roma since back in 2007;
• Intesa Sanpaolo: sponsor of the ATP Finals in Turin and of the ATP Next Gen Finals in Milan (of which it is title sponsor), but also partner of two of the emerging young Italian tennis players, Jannik Sinner and Lorenzo Musetti;
• Reale Mutua: sponsor of the Internazionali di Roma for 3 years, has chosen Lorenzo Sonego as its ambassador;
• UniCredit: sponsor of the 2021 Davis Cup Finals.

The commitment of the finance sector to music and the world of entertainment is rarer, although there is no lack of important operations, such as that of Intesa Sanpaolo alongside the Jova Beach Party.

After having analyzed who the big spenders are and where companies usually invest, let’s now see which objectives sponsorships generally respond to and which are the chosen methods of intervention.

Community at the center

Through sponsorship, the companies in this industry seek first and foremost opportunities for dialogue and a way to express their closeness to the community, sharing the passions of their stakeholders (clients, institutions, employees, etc.).

Thus, they invest mainly in the areas where they are based or where they are particularly active: Unipol Group in Bologna, Intesa Sanpaolo in Turin and Milan, Allianz in Milan and Trieste, Generali again in Trieste and Venice.

The goals

Among larger companies, in addition to territorial control (institutional relations, PR, incentives), investments often respond to positioning objectives: consolidate the reputation and image of the brand.

This objective is frequently combined with that of reaching/preventing specific client targets (e.g. younger people).

Commercial objectives or those of involving the network are, on the other hand, rarer: an effective example in this sense is given by Banca Mediolanum with the Giro d’Italia.

Among smaller companies, sponsorships are also often activated to (quickly) reinforce awareness and recognition at a national level.

Giant agreements

This sector is characterized by high-impact investments: agreements with main/title sponsors are frequent (e.g., Internazionali BNL d’Italia or Intesa Sanpaolo Next Gen Finals in tennis).

The finance sector is also among the most active in naming rights (for sports facilities, but not only):

• stadiums: Allianz Stadium in Turin, Unipol Domus in Cagliari
• arenas: Mediolanum Forum and Allianz Cloud in Milan, Unipol Arena in Bologna, Allianz Dome in Trieste
• golf clubs: Allianz Course by Trent Jones Sr and Allianz Bank Course by Hurdzan-Fry in Turin
• theaters: CheBanca! National Theater in Milan

Sponsorships as a strategic rather than tactical activity

Sponsorships are usually used to promote the brand of the group (e.g. Unipol Gruppo), the parent company (e.g. Intesa Sanpaolo) or its subsidiaries (e.g. Unipol Sai), rather than to push individual products and services.

The sector is characterized by multi-year agreements (often of very long duration) with facilities, institutions and events: BNL has been the sponsor of the Internazionali di Roma since 2007, Allianz has given its name to the Juventus Stadium since 2017 and will do so until 2030, UniCredit has been the sponsor of the Arena di Verona Opera Festival since 1994 …

Alongside agreements of a predominantly strategic nature are tactical transactions, but these are less frequent than in other industries.

Activation investments are lower than other industries

Sponsorships are rarely promoted in the media through dedicated advertising campaigns; an exception is Reale Mutua, which last year promoted, also on TV, the combination with the International Tennis Championships.

In some (and rare) cases, companies promote dedicated offers or launch personalized products aimed at the reference public: a case study is that of BNL Gruppo BNP PariBas, which developed an offer reserved for members of the Italian Tennis Federation at special conditions.

Examples of the construction of real communities founded around the specific passions of their members are still isolated. Once again, the exemplary case is that of BNL, which over the years has promoted We Are Tennis, the online community launched in 2011 and today a point of reference for all fans of this discipline, where it is possible to keep up to date on all the main international tournaments.

Among the big spenders in sponsorship, as we have seen, the financial/insurance sector is second to none, but the strategies of the operators are very different from each other.

Analyzing them helps investors understand how the competition is moving and helps marketers find out which companies are likely to show the most interest in their offerings.

[:it]L'articolo The sponsorship investment strategies of Banks and Insurances proviene da Chainon.[:]

To subscribe to this first smart contract were Volleyball League, the consortium that brings together the teams participating in the men’s volleyball leagues of Superleague, Series A2 and Series A3, and ChainOn, the first marketplace for buying and selling sponsorship and media rights in sports and entertainment that operates through the use of proprietary algorithms, blockchain and artificial intelligence.

The legal representatives of the two parties remotely signed a smart contract, or digital contract. By virtue of this first, historic, smart agreement, ChainOn has become an Official Innovation Partner of the Volleyball League.

The agreement provides free access until the end of the year to the www.chainon.it marketplace for the league and its 53 member clubs, which will then be able to submit their sponsorship deals on the platform.

To mark the occasion, the ChainOn/League Volleyball Innovation Award was established, which will be given to the league club that has most distinguished itself during the season in the area of innovation.

As part of the agreement, ChainOn was featured on the courtside LEDs at the 2022 Italian Cup Final Four that saw the Perugia team triumph.

The signing of this agreement, which took place on Chainon’s platform, opens the door to a new scenario for sponsorships, sports and otherwise.

How ChainOn works and its features

ChainOn is a peer-to-peer (P2P) trading marketplace , based on the use of blockchain and artificial intelligence, which, in the ambition of its creators, wants to revolutionize the market for sponsorship and media rights.

The
blockchain
is a very secure cryptographic system and allows “smart” contracts to be drafted that can be negotiated with the same guarantees as traditional ones: in very little time (days, not months) and automatically managing variable consideration. All with a much reduced cost of intermediation compared to the traditional offline market.

The platform www.chainon.it is online as of March 4, 2022. It is a restricted-access “showcase” in which investors (companies) and sellers (clubs, federations, athletes, intermediaries) have access to a growing database of sponsorship opportunities. Investors and sellers can meet virtually, exchange information, negotiate and conclude digital sponsorship contracts.

Will blockchain also take hold in sports sponsorship and media rights?

The world of sponsorship has often lagged behind technological progress. But a service such as the one launched these days requires-as Giovanni Palazzi, Ceo and Founder ChainOn, states. New paradigms, based on the transaction speed, the possibility of demobilizing the stock of unsold sponsorship rights (a market estimated to be worth about 100 million euros a year in Italy). All with commissions that today on ChainOn are 1 percent of the sale value, compared to the average 15 percent charged with traditional brokerage. All without counting the additional savings in search, negotiation, contracting and management costs.

A digital marketplace like this overcomes some of the traditional limitations of the sponsorship marketplace as we have known it to date, which in my opinion have greatly limited its development:

• First and foremost, the implementation, negotiation and management (including any litigation) of contracts. The implementation and negotiation of the sponsorship contract alone can be very complex. How many times have I been busy for weeks with the contracting party!?!! The innovative solution offered by ChainOn is the Smart Contract, a digital contract with legal validity that simplifies the process and also allows for: the breaking down of national borders for signing and payments; the security of collections on due dates; the possibility of automation of performance-related fees; and the rapid handling of disputes through online arbitration.
• opacity, because a marketplace is necessarily characterized by transparency-both of supply and prices.

What are the opportunities for investors (companies) and sellers (clubs, federations, athletes, intermediaries)?

Among the main opportunities that an offer like this promises I highlight these four:

1. make a large database of sponsorship (and later media rights and licensing) opportunities available to investors and rights sellers;
2. suggest to vendors the product sectors and companies that may show the most interest in their offerings, identifying, for example, companies that sponsor in his or her region with a specific spending cap, or identify sponsors that have been contracted by a competitor;
3. show potential buyers the partnership opportunities with higher Return on Investment (ROI) in a given area or which entities sponsor a competing company;
4. thanks to technology, sponsorship rights will be able to be turned into digital tokens exchange able on the Internet for cryptocurrencies. A Token allows an investor, for example, to expose three minutes of an advertising message on the LEDs of a sports competition. After purchasing the token, the buyer can either advertise his product or resell it again at a higher price than the purchase price. Tokens are a lever to broaden supply and demobilize significant amounts of resources.

What’s next

Today I am unable to say whether ChainOn’s selling proposition will be a success, but it could represent a revitalization opportunity for sports at every level. This is a revolution from which even smaller clubs and even grassroots sports associations could benefit, as they will be able to access the platform and publish their sports sponsorship deals in blockchain, to propose them to even much larger investors than those with whom they usually collaborate.

But the revolution promised by ChainOn is not limited to sports: in the future, the system may also be extended to the world of entertainment and culture.

I personally expect that blockchain can, at least in the medium term, decisively change the process of buying and selling sponsorships that we currently know.

Blockchain will be able to enable supply and demand matching, negotiation, and contract signing in real time with very high savings on commissions through disintermediation, benefiting smaller sellers in particular. All of this is done by streamlining processes and reducing costs.

Let the revolution begin….

Published by

Alexander Donato

Senior Advisor | +20 years experience in Marketing and Sponsorship Management | Sports Manager

[:it]L'articolo Blockchain, smart contracts and AI poised to revolutionize the sponsorship market proviene da Chainon.[:]