🏟 The New Generation: Sports Influencer Marketing and OpenSponsorship
🏟 The New Generation: Sports Influencer Marketing and OpenSponsorship
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Executive Brief: Sports influencer marketing is becoming a very lucrative business for professional, and college athletes with the rise of name, image and likeness (NIL) rights in the U.S. OpenSponsorship realized the potential back before the boom in 2015. Today’s newsletter discusses OpenSponsorship’s story, what they do, where they’re going, and why I think they’ll survive. Enjoy!
Ishveen Jolly (Anand) grew up playing sports all her life, including her time at Oxford University. Like many of us who did the same, she wanted to do something sports-related for a career.
Then, she fell in love with sponsorship marketing.
She worked in the sports industry primarily focused on securing sponsorship for athletes, teams, leagues and events in India and Europe.
During her experience, she found it was difficult for athletes and agents to connect with companies and vice versa. She also realized that results weren’t always what either party had envisioned. The process was inefficient – the sports world was slow-moving in terms of brands contracting athletes for partnerships.
At the same time, social media fostered the rise of influencer marketing.
Spotting an opportunity to combine her experience and passion, Ishveen realized she could create a service like an “Airbnb meets LinkedIn” for the sports industry.
In and around late 2015, she partnered with Ron Nesbitt to start OpenSponsorship.
OpenSponsorship is a sports sponsorship company that provides an accessible and easy-to-use platform for athletes, agents, and companies to find each other and partner on marketing deals.
In 2016, OpenSponsorship was among the first online marketplaces looking to broker sports marketing deals. Now, dozens of like-minded companies have popped up through the U.S. to compete in the market thanks to the rise of name, image, and likeness (NIL) rights advocacy and legislation regarding the NCAA and its athletes.
How does it work?
Brands create an account on OpenSponsorship by choosing a subscription plan. Companies pay a monthly membership fee ranging from $79 to $1,250 to access the platform. Athletes and agents join the marketplace for free. Then, companies post their marketing opportunities and connect with athletes and agents interested in completing deals.
Brands can navigate the platform searching through athletes, teams, and events, including filtering down to those that fit a need like social media, logo placement or appearances. Then, the brand will create a campaign and either choose an athlete or let OpenSponsorship do the work. From there, the brand can launch and measure the campaign’s success.
The deals available through the platform include product endorsements, athletes posting about the brand on social media, product logo placement on uniforms, appearances at promotional events, and more.
OpenSponsorship takes a commission from any deals secured through the platform, ranging between 10% to 20%.
Since 2016, the company has built a base of up to 12,000 athlete sign-ups, including players from the NBA, NFL, NHL and other professional leagues and college sports. The platform has around 2,500 brands signed up, actively searching the athlete database and running campaigns.
OpenSponsorship generally works with small to medium-sized companies looking to reach athletes with whom they don’t have a pre-existing relationship. However, large companies are starting to flock to the markets after realizing how powerful influencer marketing is.
The company started integrating massive companies like Walmart, Foot Locker and Levi’s.
Check out their 1-pager here:
Why It’s Going to Work
Sponsorship is a $60 billion industry and is only becoming larger as influencer marketing grows.
OpenSponsorship’s goal is to redefine what sponsorship means. Whether it be digital, repurposing content, photoshoots, or whatever else might be new and innovative. The company’s goal is to make sponsorship “cool and accessible” to all brands and to the benefit of as many athletes as possible.
Back to Jolly’s original mission, the company aims to make securing sports sponsorships easier and more effective for all parties.
OpenSponsorship’s main value propositions are that its online marketplace provides:
Flexibility
People want flexibility, but traditional sponsorship doesn’t always allow for that—instead, brands locked into multiyear contracts with one athlete for huge money. Now, small companies and brands can optimize their ad spend in the most effective way possible.
If you have a 100,000 budget, you can spread it over 8-10 athletes and have variety across the industry while also targeting influencer audiences. You can split it up amongst professional athletes, college athletes, male and female influencers.
Local Advertising Help
Local advertising benefits from sports sponsorships because athletes often stay in their hometowns, return home for summers, or maintain ties with their hometowns.
Likewise, local advertising with athletes where they compete builds that community connection with athletes.
Gender Equity
Sports sponsorships focusing on influencer marketing tend to skew females.
For so long, female athletes have been under-supported, underpaid, under-invested-in, and have less exposure and advertising support. However, with the dawn of influencer marketing, women athletes tend to have better conversion rates and market more effectively to male audiences, making up a more significant proportion of sports fans.
Sponsors see the data and realize this now.
Of course, the marketplace provides value to national advertising brands and the more traditional stakeholders in the industry too.
Competition and Where It’s Going?
OpenSponsorship generated between $4.5 to $5 million in revenue in 2021, more than double their revenues from 2020. Near the end of Q3 2021, the company facilitated nearly 1,000 sponsorship deals that year.
Notably, nearly 25% of those transactions involved a college athlete.
OpenSponsorship was one of the first movers in the market back in 2016. But the competition is quickly entering the market. The company plans to focus more on college athletes to thrive in the landscape.
With the opening of NIL rights in the NCAA, multiple companies will have tons of opportunities to capitalize and provide the service. For perspective, nearly 460,000 college students participate in varsity sports in the U.S.
Meanwhile, only roughly 2% of those athletes play professionally.
You touch more college markets, towns, and cities with more options with substantially more college athletes. Also, college sports fans are arguably closer to their team and athletes than pro sports teams depending on the situation.
This is just the beginning for NIL sponsorship as the NCAA, states, and colleges build more uniform rules and regulations surrounding NIL rights. Right now, laws vary across the U.S., leading to some hesitation from athletes, agents, administrators, and companies regarding executing transactions that could impact athlete eligibility down the road.
While there is confusion, NIL deals are still flowing fast. That said, once rules are more straightforward, the market will explode.
To date, 95% of OpenSponsorship’s deals are with U.S.-based athletes. However, the company expects to export to Europe and other regions soon. For now, the company focuses on pro sports and college sports in the U.S.
I expect the company to lean heavily into the college market as NIL opens. At the same time, they’ll likely use recently raised funds to start integrating more features and education components to their services. Education is vital moving forward for all stakeholders as the market’s rules and regulations remain confusing.
To support its growth and integrations, the company raised $4 million in a Seed Round in October 2021 and has raised $5.2 million in total. Investors include Philadelphia 76ers owner David Blitzer, Eric Stern and executives from the WWE and Excel Sports Management. Former NBA All-Star Baron Davies also invests in the company.
In addition to education, I expect the company to invest in new products, verticals, sales, and marketing to further cement itself in the ever-growing market of sports marketing marketplaces.
Who will win the race?
Only time will tell.
Thank you for reading. Have a great day, and we’ll talk next week!
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Kendal
Question of the Day
Would you use a platform like OpenSponsorship for your company’s marketing?
Would you use a platform like OpenSponsorship for your brand as an athlete?
Games of the Week
NBA
Tues, February 1: Miami Heat @ Toronto Raptors at 7:30 p.m. (E.T.)
Tues, February 1: Brooklyn Nets @ Phoenix Suns at 10:00 p.m. (E.T.)
NHL
Tues, February 1: Florida Panthers @ New York Rangers at 7:00 p.m. (E.T.)
Tues, February 1: Washington Capitals @ Pittsburgh Penguins at 7:00 p.m. (E.T.)
NFL
Sun, February 6: The Pro Bowl: AFC @ NFC at 3:00 p.m. (E.T.)
Concacaf World Cup Qualifiers
Wed, February 2: Canada @ El Salvador at 9:00 p.m. (E.T.)
Wed, February 2: Honduras @ U.S.A. at 7:30 p.m. (E.T.)