Where There’s Mystery, There’s Margin: The Challenge Of Investing In Sport

Dentsu Aegis Network’s incoming Chief Data and Tech Officer Patrick Darcy hosted a panel discussion last week on the role of technology and data in sport in Australia. The discussion was part of the AthletesVoice Vision2020 event held in Sydney.

Darcy framed the discussion: “Sport in Australia is a religion. Scale is not an issue, but investing in the category can be challenging, at times lacks accountability and lacks a focus on measurement.

“Everyone’s doing their own thing, few pipes are connected and very few are growing their ROI in investment in technology and data.

“It makes it hard from a marketing perspective and super inefficient. And then you have the athletes themselves who are incredibly powerful brands.”

Darcy went on to say that in his view the data technology promise is not yet being delivered on when you think about acquisition of new fans, or clients or customers or sponsors.

He also warned that that there’s big change coming from a regulation and privacy perspective:

“Cookies, that thing you’re all asked if you’re ok with them using on a website, they’re not going to be around very long. But they’re still the primary currency for how we use this stuff (data). And I don’t think people are prepared for that change.”

Joining Darcy on the panel was general manager at TEG Analytics Andrew Reid, senior account executive at Adobe Roland Irwin and founder of Mindbox Nic Halley.

Reid said, “The grocery retailers are doing well in finding the right sponsorship or sport opportunity using their own data or partner data. If they understand more and more about their customers and integrate these data points into their customer profile, it often leads them into discussion with the sport more generally.”

Adobe’s Irwin agreed advising, “Form key partnerships and use other partner data along with first party data to make more informed decisions about going out to market.”

And you don’t necessarily have to own the data. It could be about enriching what you have.

Mindbox founder Nic Halley added, “The old idea of going to Fairfax with a bag of money and you get an ad and that’s the job done, has changed considerably.

“We put it as ‘swapsies and sharesies’. So a company like Coles, for example, might be looking for their data to merge with Rugby Australia and what can come out from that? That not might be a monetary transaction but it could better both sides of data.”

Halley thinks there are two main problems where the industry finds itself today.

The first is whether the technology or data is actually “fit for purpose.”

“A lot of people have spent a lot of money on platforms and literally it’s been like putting rims on a wheelie bin. They haven’t got the infrastructure together, it’s a much bigger idea than they thought it would be and the actual application of that data takes a while to build.”

The second problem he identified is the lack of commitment. CEOs are telling him they need to hire extra people just to manage the new technology, which doesn’t seem necessary when the advertising team is telling them what they’re doing already is working.

“Where there’s mystery, there’s margin. There’s a lot of people selling the ‘you need to buy everything to work’”.

Adobe’s Irwin advised, “It’s a maturity curve. Do it over time, structurally and sensibly.”

TEG’s Reid added, “Start with the insight piece. Just understand the fan in a little more detail. This will trickle down to better conversations about the better experience in the stadium, experience with food and beverage, the sponsors experience.”

On the question of measurement, Halley summarised, “As an industry, we’ve gone in two directions.

“The internet is an electronic order trail. We’ve created this noose where we’re measuring everything, down to the last minutiae. Which cuts out so much.

“The other side of it is mainstream advertising, like TV. There’s a lot of measurement on that which are just moot, they make no sense. No one has ever convinced me that Nielsen has any grounds in truth. I just don’t get it.

“What we need to do is find a middle spot. A lot of it is softer metrics like consistency over period.”

Darcy wrapped up with a nice summary of the panel’s discussion and key takeaways:

1. The most valuable data is what you’ve already got. Figure out if you have any and if it’s valuable first.
2. In terms of personalisation and customer journeys, you don’t need to do it all now. Start at step zero before investing millions in a tech stack.
3. Trust your instinct. But pull it back to something that matters to your business, not just a media metric buzzword.