The news that Leinster and the R.D.S. are in the market for a naming rights partner is evidence of both, the economic recovery and, the almost universal acceptance of this form of sponsorship. The first naming rights deal to reverberate in this market was, arguably, that of The O2 in London. By 2009 Dublin had Aviva Stadium, not to mention its own O2. The trend continued somewhat during the recession but the current up swing in the economy – both domestically and globally – ensures the market is ripe for more partnerships of this nature. In Ireland there are now more than ten naming rights partnerships, with more to follow.
Bord Gáis Energy Theatre
Irish Independent Park
Kingspan Breffni Park
Netwatch Cullen Park
Elvery’s MacHale Park
Glennon Brothers Pearse Park
Innovate Wexford Park
Irish International TV Stadium
At the time of writing we estimate the Irish market – that is the cumulative naming rights fee – to be in the region of €8.5 million per annum. The majority of this figure includes the Aviva Stadium, 3Arena and, now, SSE Arena. With considerable sums being paid for the right to associate with venues, it is interesting to ask, why do sponsors engage in this form of marketing and is it worth it?
The value of naming rights partnership is unique to each sponsor. The strength of this form of sponsorship is the ability it has to address diverse business objectives. Across the world, companies engage naming rights partnerships to drive value to their businesses in many different ways – how that value is achieved depends entirely on the objectives and the strategy employed to meet those objectives. A comprehensive understanding and appreciation of the venue heritage and local community is also paramount for sponsors to creatively interpret the value that exists in these opportunities.
The five most common sponsor objectives for naming rights partnerships
At Livewire we define naming rights by two categories: badged and engaged. Attaching a brand name to a stadium or venue will deliver positive outcomes for a sponsor however this badged approach is an inefficient use of rights as it does not fully appreciate the totality of the opportunity for both sponsors and rights holders.
We believe, for naming rights partnerships to be most effective, it is important that the rights holder and sponsor embrace a fully engaged approach, backed with ancillary rights. This approach allows a rights holder to sell a ‘creative package’ that is better placed to sustain a long-term partnership that ultimately leads to renewal.
Naming rights partnerships are a common feature in most markets; none more so than in the USA, where the practice can be traced back to the 1960s. Analysis of over 140 current deals paints a clear picture of the most active business sectors engaged in the international market. The financial sector is the clear leader with 36% of the market, followed by telecoms with 13%.
Indeed, this trend is reflected in Ireland where the two largest partnerships involve Aviva and Three. In commoditised and undifferentiated categories like financials and telecommunications, brand strength is a key factor for determining success. Naming rights can provide businesses with a powerful statement of brand stature. The best examples of which, clearly demonstrate how this stature is enhanced with an engaged strategy.
Stadium naming rights offer global companies an opportunity to quickly establish a base, via a strong local landmark, in a new market. By associating with a national stadium in the heart of Dublin, Aviva has been able to establish a ‘home’ for the brand not to mention a place of corporate pride for employees and partners via an emotive association with both international sports teams. At the time of the deal, the Aviva brand was suffering as a result of the Hibernian take over and consequent redundancies. In an attempt to further this emotive link, Aviva has developed a grass roots sports activation programme that extends to communities across Ireland. The strategy is working; Aviva enjoys high awareness and visibility but also strong brand sentiment scores around areas including purchase intent and long term affinity.
Three took over the naming rights of the Point Depot from O2 last year. Associating with Ireland’s leading entertainment venue not only provides Three with strong brand presence but also an opportunity to reward existing customers via a loyalty programme. Launched earlier this year, 3Plus offers customers a range of benefits with the objective of enhancing customer affinity and therefore preventing ‘churn.’ By implementing an engaged strategy Three hopes to retain customers and win at the point of sale.
In summary, the positive economic environment means that the timing is ripe for new naming rights partnerships. This category of sponsorship has the ability to address multiple objectives for a range of business sectors. However, as with other forms of sponsorship, stakeholders will only maximise the return on investment if taking an engaged approach. As a result, we expect to see more and more sponsors engage venues with this form of partnership over the coming months.