Digital technology is unlocking unprecedented opportunities for growth in the sports industry, offering the potential to draw fans closer through innovative and customised experiences. To capitalise on this opportunity, however, digital will need to be embedded in every aspect of the business, transforming people, processes and technology.
There is no question that technology has transformed, and will continue to transform, businesses across all industries, radically altering both the customer experience and the inner workings of organisations. The sports industry, in particular, is undergoing rapid upheaval and digital technology is unlocking unprecedented opportunities for growth. In order to fully capitalise on those opportunities, however, sports organisations will likely need a digital overhaul. “Doing digital” is not enough: They will have to embed digital in every aspect of the business, transforming people, processes and technology.
Going through any kind of organisational transformation is not to be taken lightly. But given the significant opportunities that exist for sports organisations, the undertaking is well-worth considering. These opportunities fall into four categories.
Technology is playing a larger role than ever in the lives of fans, opening the way for sports organisations to create new, innovative customer experiences. Partnering with broadcasters and new distribution platforms can give fans the experiences they want and capture viewership across multiple devices, including mobile.
The rise of the smartphone and the tablet may have contributed to an erosion in live game attendance, as more people switch to live streaming. Attendance for the National Football League (NFL) and Major League Baseball (MLB) is below 2007 levels, while both National Hockey League (NHL) and National Basketball Association (NBA) attendance has declined since the 2012-2013 season.1 At the same time, over-the-top (OTT) platforms are emerging as the new engine for growth: While the NFL has seen a drop in TV ratings, fans streaming NFL games increased 25 percent in 2017.2
Sports organisations need to strategically leverage digital media to build direct connections with fans. One way is to partner with broadcasters to master content across multiple channels, which also allows for a wealth of real-time marketing opportunities. Ultimately, digital optimisation of content across platforms will help broaden content reach for sports organisation.
Many sports fans are no longer interested in the game alone–they crave the kind of exclusive and shareable experiences that can be amplified by technology. Sports organisations could grow stadium attendance by using immersive technologies such as augmented and virtual reality to create an intensely exciting viewing experience. They can also increase engagement by leveraging loyalty and customer relationship management data to tailor experiences to individual fan preferences.
Fans are interacting with media more than ever before–between 2014 and 2016, audio consumption, TV viewership and application usage increased across the board.3 Couple this with the fact that sports fans are increasingly receptive to personalised engagement, and therein lies a world of opportunity. Targeted advertisements are reported to be twice as effective on average as non-targeted ads: 60 per cent of millennials would willingly share their data for coupons or promotions, and 71 per cent of consumers would rather see ads focused on their interests.4
Digital analytics allow for a better understanding of what excites fans, giving sponsors insight into what types of ads and engagement models work for individual audiences. Digital tools can also provide sponsors with more information about fans so that they can tailor the timing, content and delivery of messaging for greater effectiveness.
In a world where big data predominates, sports organisations can mine fans’ data to better understand their habits, preferences and demographics, ultimately unlocking new revenue streams by reaching fans in innovative ways—for example, by adding new services to existing offerings. They can also use data to improve core business operations, build and solidify partner relationships and even develop entirely new business models.
But perhaps even more compelling is the direct monetisation of anonymised data through external products and solutions. In fact, today, one third of all companies are commercialising or sharing their data to create new revenue streams.5 Ways that sports organisations can enter the game include:
Navigating digital change in the sports industryDownload the PDF
Becoming truly digital starts with defining your digital ambition. Consider the following:
Sports enterprises undergoing a digital transformation should think through what digital capabilities they need and how to use them effectively to change the three organisational cornerstones—people, process and technology.
In order to build digital capabilities, sports organisations need to not only integrate digital talent but also give their employees digital skillsets through ongoing training. This will help them view problem solving through a digital lens.
Digital transformation involves the reexamination of traditional business processes and realigning them to support the digital capabilities needed to achieve efficiencies and unlock value.
Enterprise technology must enable operational efficiencies and help the organisation engage more closely with fans and customers. Transformative digital technologies range from predictive modeling that can forecast consumer trends to e-commerce platforms that can open up new revenue streams.
Digital transformation involves the reexamination of traditional business processes and realigning them to support the digital capabilities needed to achieve efficiencies and unlock value.
Enterprise technology must enable operational efficiencies and help the organisation engage more closely with fans and customers. Transformative digital technologies range from predictive modelling that can forecast consumer trends to e-commerce platforms that can open up new revenue streams.
A successful digital transformation relies on several design principles that can be used to guide decision-making.
Today’s consumers are in a constant state of connectivity. In response, organisations must think of ways to leverage that connectivity to deliver a seamless brand experience. For example, as customers increasingly opt for on-line engagement, digital marketing is gaining ascendancy as the context for all marketing.6 Digital enterprises use their copious streams of data to map where consumers will be on every step of their purchasing path, learn what appeals to them and finally design marketing touchpoints throughout the customer journey.
Becoming a digital enterprise also means harnessing technology to simplify operations, identify process bottlenecks and minimise manual work.7 Furthermore, using software as a replacement for manual processes allows business to automatically collect data that can be used to better understand performance, cost drivers and sources of risk.8
The customer sits at the centre of the digital enterprise. Perhaps nowhere is this more important than in sports, where the customer’s desire to own their experience unlocks myriad opportunities for value creation. Using digital technology to hand customers the reins will help drive long-term loyalty and spread awareness through word of mouth.
Don’t try to do everything at once. A digital transformation is an iterative process and is continually evolving. A phased implementation allows employees, corporate partners and fans to gradually embrace offerings as the enterprise becomes more digitally mature. The key is to lay the groundwork so that digital initiatives can scale up and the business can quickly launch, learn and iterate.
Start with a minimal viable product (MVP) or smaller-scale digital initiatives to show proof of concept and secure buy-in throughout the organisation. As people in the organisation see the success from these initiatives begin to scale, it will be easier to get everyone on board for larger initiatives.
Becoming truly digital starts with defining your digital ambition. Consider the following:
Despite the opportunities, sports organisations may run into a number of stumbling blocks in each of the transformation areas.
1 “MLB Attendance Report – 2018,” ESPN, 2018, http://www.espn.com/mlb/attendance; “NFL Attendance – 2017”, ESPN, 2017, http://www.espn.com/nfl/attendance/_/year/2017; “NHL Attendance Report – 2017-18”, ESPN, 2018, http://www.espn.com/nhl/attendance; “NBA Attendance Report – 2018,” ESPN, 2018, http://www.espn.com/nba/attendance
2 Capon, Gareth. “How social and OTT platforms are changing sport consumption,” Digital Sport, 5 December 2017, https://digitalsport.co/how-social-and-ott-platforms-are-changing-sports-consumption
3 Sikowitz, Sarah. “Media consumption increase,” Forrester, 6 October 2016, https://www.forrester.com/report/Vendor+Landscape+Media+Buying+Agencies/-/E-RES135576
4 Abramovich, Giselle. “Ad Targeting,“ CMO, 16 July 2014, https://www.cmo.com/features/articles/2014/7/15/mind_blowing_stats_ad_targeting.html#gs.StEChvY
5 Belissent, Jennifer.“Data Commercialization” Forrester, 7 June 2017, https://www.forrester.com/report/Data+Commercialization+A+CIOs+Guide+To+Taking+Data+To+Market/-/E-RES138131
6 “CMO Spend Survey 2016-2017,” Gartner, 2017, http://gartnerformarketers.com/CMOspend
7 Kerschberg, Ben. “How Digital Disrupts Operations, Business Processes And Customer Experience,” Forbes, 1 March 2017, https://www.forbes.com/sites/benkerschberg/2017/03/01/how-digital-disrupts-operations-and-business-processes-as-well-as-customer-experience/#7756614a5466
8 Fernandes, Louella and Rob Bamforth. “Digital Transformation,” Quocirca, 2016, https://www.konicaminolta.eu/fileadmin/content/eu/Business_Solutions/Business_Services/Konica_Minolta_Quocirca_Document_Workflow_April_2016_Final_Summary_Report.pdf
Embarking on the digital transformation journey requires a deep understanding of current capabilities, as well a vision for the future that will determine how capabilities, processes, organizational structure, and technology will need to change. As sports organizations become comfortable with life as digital enterprises, they will not only draw closer to their fans, but may also find it easier to create innovative and customized experiences that will both broaden and strengthen their customer base.
The USTA’s goals are to promote, develop, and grow the game of tennis in the US. So they came to us to help transform their digital ecosystem, increasing connectivity and engagement between the organization and players at all levels. Learn more about how we’re teaming with the USTA to attract the next generation of players and fans.
The authors would like to thank Connor Sage, Kat Harwood, George Ward, and Zarah Mohamed for their insights and invaluable contributions to this research.