👋 Hey, it’s Alex. Welcome back to Sponcon Sports, my weekly newsletter dedicated to sponsored content strategy in the sports industry!

The Australian Open reintroduced its AO Adventure experience on Roblox in 2024, following last year’s success with over 14.5 million visits. This season's offering includes a collaboration with ESPN.

Upon entering AO Adventure, visitors immediately engage in the ESPN Super Set Showdown tennis courts. Here, users can play tennis, earning prizes for their avatars while enjoying simulated commentary from ESPN's humanoids, Ace and Courtney.

Every time I come across such stories, I think to myself, 'we should be doing that.' Fortunately, I discovered Metaverse Marcom, a newsletter by Stephen Dypiangco that guides marketers, developers, and agencies on innovation, strategy, and marketing on Roblox.

In Monday's edition, the newsletter answered the million-dollar question: Should your brand/IP be on Roblox? It's a quick and informative read. You should check it out.

In Today’s Edition:

• How To Price Social Media Sponcon Properly 💰️ 

• The Eagles Crack The Code For Sponsored Sleep Content 💤 

• Liverpool and Carlsberg Ink Another Win 🔏 

🏊️ DEEP DIVE
11 Key Pricing Factors for Social Media Sponcon

There are two approaches to pricing sponsored social media content that I’ve seen and heard commonly used in the sports industry. Both fall short of the proper valuation of those digital assets.

The first approach utilizes a tiered package system that increases in price based on the number of posts, the type of tagging, and the level of brand integration.

It doesn’t work because more posts, tagging, and or brand integration do not equal more value. We need a system that better reflects how success is measured by your partner at the end of the season.

The second approach leans on CPM, which is a step in the right direction, but it also falls short of proper valuation because it doesn’t account for engagement and creative needs (production, editing, etc) which are huge reasons why digital partnerships matter in the first place. Sponcon is not just a media buy with a fixed CPM.

There are 11 pricing factors I use for social media sponcon, and they can be broken down into four key categories: performance, costs, margin, and environmental.

These factors will help you:

• Increase revenue from sponsored social media content.

• Increase trust with your content and creative teams knowing their hard work is valued properly.

• Move away from the notion that content can be a throw-in for a partnership.

Let’s dive in!

Performance

We should place a price on social media sponcon based on past or estimated performance.

Pro Tip - This is why tagging content is so important. It allows you to pull past data quickly to inform pricing.

• Impressions (CPM): CPM is commonly used as a pricing metric and it should be. In most cases, this is the top KPI partners want from sponsored content.

• Engagement (CPE): CPE needs to be paired with CPM to extract sponcon’s true value.

Engagement is one of the most crucial reasons why sponsored content matters in sports partnerships. Unlike its counterparts in the arena or stadium, sponsored content is signage you can touch. Engagement directly indicates that fans have interacted with your brand, in contrast to impressions. Impressions can be challenging to measure accurately through TV ratings and on social media, it doesn’t guarantee that 100% of a post is on the screen when it appears in fans' feeds.

Work with your performance marketing team to establish the CPM and CPE for pricing, which can be defined as a range. The goal is to identify the cost a partner would incur in the marketplace for obtaining equivalent impressions and engagements. Opt for the high end of the range, not to inflate partner costs, but to reflect the inherent value of being associated with your brand and the capability to target a more qualified, cold audience.

Cost

What do you have to spend to bring the sponcon to life?

• Paid Media: To boost content or to run ads to a targeted audience.

• Vendors: To pay for outsourcing any work.

• Talent: To pay players, coaches, staff, influencers, or creators for this project (where applicable).

• Owned: The time and effort your content and creative teams put into this project.

Owned costs don’t show up on your P&L, but it’s the most overlooked factor when determining the value of sponcon.

Work with the head of your creative team to determine the owned cost. Act as if your partner was hiring your team as an agency. Estimate the number of hours needed to complete the project and break down each staff member’s “hourly rate” that will be involved in the project.

That owned cost will come into play in our next set of factors.

Margin

• Actual: This is up to your team. How much do you want to profit after costs? I’ve seen this anywhere from the 65% to 80% range.

• Internal: This is where you layer in the owned costs mentioned above. The goal is to have this margin at least 50% - but it’s up to your team to set the number.

For instance, if we charge a partner $75K for a three-part custom content series, and we are aware of $25K in costs, there is a 67% actual profit margin. Following discussions with the creative and content teams, we discover $15K in owned costs, reflecting a 47% internal profit margin. To achieve at least a 50% internal profit margin, we should consider increasing the price to at least $80K.

While calculating owned costs may be more time-consuming initially, the process becomes much quicker after the first time. The most customized level of content should ideally constitute only about 5% to 10% of the sponsored content produced per season. Evaluating owned costs provides a valuable perspective on whether labor-intensive projects are worth the investment.

It's crucial to remember that your content and creative teams play a supportive role in almost every department of your organization. Devoting more time to partnerships reduces the time they can allocate to work for other departments.

Environmental

The remaining three factors are true of any partnership asset.

• Partnership Term: The length of a partnership impacts flexibility on price.

• Testing/Team Support: When any department's internal team has an initiative they want to launch as a case study or test, they may be willing to sell it at a reduced margin or even just to cover costs.

• Supply and Demand: Perceived value based on available inventory or a competitive partner category.

If you're entering a one-year deal as the season is about to begin, you might consider accepting a lower rate for a turnkey digital asset to secure additional revenue. Conversely, for a more challenging project in the same scenario, you may opt for a premium charge, especially if the deliverable is close to the start of the season. In the case of a long-term deal, it's essential to avoid undervaluation to ensure the pricing remains appropriate throughout the entire agreement.

In terms of supply and demand, game day content tends to be in higher demand than off-day content and is typically the first to be sold. As game day assets become available, ensure that you set the right price floor for these opportunities.

This principle extends to competitive partner categories as well. If there is significant competition within a particular partner category, make sure to charge at the higher end of the range, especially for something you know their competitor may be interested in.

💼 CASE STUDY
Sponsored Content of the Week

The Philadelphia Eagles nailed this sponsored content video in partnership with Sleep Number.

Making engaging content for a brand focused on rest and or recovery is a tough task. It’s something I’ve personally had trouble solving.

The problem is that fans don’t want to see a whole post dedicated to the subject, and it’s very easy to cross the line into ad-territory if talent speaks too long about the benefits of good sleep/rest/recovery.

The Eagles produced “A Week in the Life of an NFL Player”, an 11-minute all-access piece focused on right tackle Lane Johnson.

The video takes you through a full week of football, showcasing Lane’s daily approach to rest, recovery, and the ramp-up for the following week’s game.

It drove an impressive 335K+ views! There were many elements to success here:

• Access: Fans got to see a week’s worth of moments TV cameras don’t capture.

• Relevance: Johnson is not only a popular player among Eagles fans, but he also plays arguably the most physically demanding position in the sport.

• Education: We learned so much from this piece about a game week from a player’s POV and about Lane himself, like that It’s important to lift heaviest the day after a game, Lane uses a 110-pound roller on his legs, and an “off day” is much more active than you imagine.

• Balance: Sleep Number was mentioned twice, for 15 seconds at a time. The first time focused on mattress customization and the second focused on using data from the app. Any longer and a viewer may have tuned out.

• Channel Alignment: A long-form video was made for YouTube and the results speak for themselves.

This was the only video of its kind the Eagles produced for Sleep Number and that’s the right approach.

There are only so many stories you can tell about rest and recovery. Increasing the output per season beyond one, long-form video would be pushing it, especially in a multi-year partnership.

But for those thinking “Just one video is enough?”, let’s paint a clearer picture.

In a partnership with a brand in this space, here’s my ideal structure:

• One, long-form all-access video with moments speaking to the benefits of the product to run on YouTube.

• Select clips from the piece will be used to promote the video on at least two social channels as determined by the social team. Clips will have logo inclusion and tagging, but will not feature the product “testimonial” moments.

• Three, fifteen-second clips to be filmed and edited by the team featuring the talent (player, coach, training staff) to be used on the partner’s owned and operated channels and on team channels via paid social media (or website/app pre-roll ads).

• One high-frequency content series to give the partner a consistent presence on team channels (e.g. Season of Dreams, Bounce Back Performance)

• One sweepstakes to drive leads promoting a sleepover at a team facility (LOVED this concept from McLaren x Hilton) or simply “joining” the team for a road game (covers travel, hotel, tickets, etc).

To our conversation earlier about pricing, the all-access piece will have high owned costs and should be factored heavily into its value.

🔍 SPONCONSPIRATION
Steal These Ideas

Strong product integration here from the Denver Nuggets in Cold Guessing presented by Ball Corporation. Ball Corp’s Aluminum Cups were utilized for a Pepsi soda taste taste.

Really smart of the Arsenal content team to film action at pitch level to showcase how Google Pixel can capture great video.

I love how the Los Angeles Chargers used the first card of an Instagram carousel as a table of contents for their top 10 offensive plays of the season. It helps their followers go right to the play(s) they want to see.

Shout out to Liverpool! I was so impressed with their Carlsberg tattoo-themed partnership renewal announcement. It turns out they’re carrying that theme into a content series called, Inked, featuring the stories behind players’ tattoos.

The Toronto Raptors All-Access show, Open Gym presented by Bell, continues to show why it’s one of the best in the business. This clip revealed that Raptors coach Darko Rajakovic ran his opening play out of his late friend Dejan Milojevic’s playbook - the team scored on it.

🚨 ICYMI
What To Watch For

Rink Racer: Maple Leafs Sports & Entertainment created a new way to engage fans. In between periods at Maple Leafs home games, the video board at Scotiabank Arena displays a QR code that, when scanned, directs users to a web address where they can participate in an interactive gaming experience projected onto the rink surface.

Moments In Time: Brian Gainor breaks down the power of tentpole moments and why they’re a great way for organizations to drive awareness, generate revenue, and sustain fan interest.

Seeing Stars: Utah Jazz G-League affiliate, the Salt Lake City Stars, hosted an NBA Paint Night where they wore jerseys designed in collaboration with NBA Paint.

Penalty Box Antics: Florida Panthers AHL Affiliate, the Charlotte Checkers, put opponents in a fridge (icebox) via the jumbotron at home games. Could be a great idea for a trigger promotion. For example - if your opponent gets 4 penalty minutes in the third period all fans win a refrigerated or frozen item from your grocery store partner. Or maybe they’re entered into a sweeps to win a new refrigerator.

TikTok Update: TikTok is testing 30-minute videos [h/t Matt Navarra]. If it were me, I’d take my top-performing YouTube content and give it a shot on TikTok. Curious if 16×9 videos would work versus needing to edit that content to 9×16.