The numbers game: How Repucom is redefining sports marketing research

22 December 2014 | Posted in Quick-Fire Questions | By Michael Long | Contact the author

The numbers game: How Repucom is redefining sports marketing research

Repucom is the global leader in the field of sports marketing research. With a client base that reads like a who’s who of the world’s leading teams, brands, rights holders, agencies and broadcasters, the company is at the forefront of one of the fastest growing and increasingly sophisticated sectors in sport.

As another year of growth draws to a close, Repucom chief executive Paul Smith sheds light on where the future of sports marketing research lies and how 2015 is shaping up for the sector's leading company.

What has life been like since RSMG Insights unified its three sports research companies under a single Repucom banner?

RSMG Insights was really just a convenience brand for the fact that we brought Repucom and Sport+Markt together. It was never intended to become a long term brand in that context; it was always intended just to be a vehicle with which we brought the businesses together at that time. It was important that we allowed the businesses to operate uniquely, to give us time to look at how to bring the businesses together effectively. Ultimately that was the plan which we executed in April of 2013. It was an orderly process to do that and it’s been very successful for us. It’s allowed us to create a much more unified approach in regards to execution within the marketplace, particularly in Europe. Really there was no change in strategy globally outside of Europe. Beyond that it’s been very successful for us.

Our brand tracking is showing that we’ve increased awareness of the Repucom brand globally, within our sector – we’re not talking about the broad consumer. Our own brand awareness has increased from 23 per cent to 69 per cent in that 18 month period. That, in its own right, is a success for us. But importantly its not only brand awareness; it’s also the underlying message that we’re delivering in regards to our clients, in regards to our strategic outcomes that we’re planning for the business. Its increased awareness of what we do, how we do it, and who does it for them, so to speak. So in all respects it’s been very successful for us, we’re very happy with it.

What has life been like? It’s just made life busier. The business is growing dramatically. We put 20 per cent growth on last year; we’re running at about 24 per cent growth this year across the business globally. So when you reflect on the year 2014, we’re very, very happy with the progress we’ve made.

What’s new in terms of services that you’re offering, specifically in the digital space?

Much of what we’re doing is, I wouldn’t say it’s a repackaging process for us but in many, many respects what we’re getting better at is redefining and our delivery platforms to clients are improving. Our client base is much more diverse, and we’re actually effectively delivering a wider view of the more diverse range of services we provide. In that respect, it’s an important development for us to be becoming much more adept at delivering this wider range of services.

Consulting is a part of our business that’s growing in importance, and that’s led by Glen Lovett, who has recently moved to New York to be with us in the US. We’ve been on a real hiring binge in that regard, bringing a lot of talented people into the business on the consulting side. Michael Lynch, the ex head of Visa’s sponsorship who is now head of our US Consulting Practice: that speaks volumes to the calibre of the people that are joining the company now and speaks to the potency of our product offering in that regard.

The digital and social side is obviously a very important part of the industry make-up. I think that the sports industry is still getting its arms around it all – not only from the research perspective but also from a commercial perspective – how is digital and social going to top lay out commercially?. Where we’re at right now is there is a circumstance where we’re all aware of it and, again I speak from the industry-wide perspective - rights holders, brands, etc - everyone is trying to unlock the potential of it. But what hasn’t been unlocked at this point in time is the revenue side of it. It’s very much seen as a marketing tool and as a communication platform but what is the potential of it from a revenue perspective? From our side, all the work we’ve been doing in the last 18 months and what we plan to do in 2015 is to heavily focus on understanding the valuation model as it relates to digital and social. We’ve been working very closely with a couple of key clients in terms of road testing and proving that model and we’re very confident that we now have it in place. We’re making a concerted push in 2015 in that regard.

Bringing a rational and a trusted valuation methodology to the social and digital sphere is going to highlight the potential value of it. And look, it’s a long way right now from linear, from that standard television product, in terms of valuation; it’s still a long way away in terms of the relative value that is being contributed but that will change. When you consider today that many, many companies are spending half, if not more, of their marketing budget on digital and social in general terms, then you realise there is only upside in the digital and social equation for sport. Ironically, social particularly is the perfect marriage for sport. Sport is the perfect vehicle for social; it’s so real, it’s so visceral, it’s so immediate. It just totally lends itself to sport because so much sport goes on everyday and it continues to provide that content for social. It’s just the perfect marriage and we see huge upside for the industry once it unlocks the value equation.

How far away is Repucom, or any other company in the industry, from unlocking that equation? Is there ever an easy solution?

If there was an easy solution, I’d be swimming in a guitar-shaped pool right now! Look, there is an answer – there always is. It’s just a collision course between the need and the opportunity, so it’ll ultimately play out. It’s a long-term strategy and it’s a long-term platform, and we’re going to be there at that intersection when it occurs. How far away is it? We have clients in the United States, an NBA team that we work with, and they are at this point where on one hand they’ve got sponsors that believe that social should be free – like, ‘why don’t we just do this together?’ – and others that will throw money at them all day for it. That’s the diversity of approach right now where some brands particularly see it as a leverage tool and others see it as a marketing and investment opportunity that they can exploit and generate value. I think that amplifies the wider perspective around social, where there is that diversity around the understanding of the benefit of social as a tool. Therefore much of what we will do and much of what many people will do in the industry is to help develop the understanding: understand how to better use it, how to better exploit it and how to drive value from it.

When you reach that point then the commercialisation is a no-brainer; it’ll happen anyway. As I said, it’s a process and that’s the investment we make and we continue to make in our business across many areas. We’re very proud of the fact that we go into the marketplace on the basis that we make the investment upfront, off our own bat. It’s not a client-led development; it’s a strategically-led development in our business.

What is FanDNA, how does it work, and how does it differ compared to other prediction services on the market?

FanDNA is one of those areas where we’ve made significant investment. We hired a global head of research, Mike Wragg who is based out of our London office. Mike was tasked with the responsibility to develop and provide us with an informed view of the strategic direction we need to take consumer research. Traditionally Repucom has been known as a media analytics agency and the heritage of our business in consumer research came through Sport+Markt, which for 25 years has been a longstanding participant in consumer research and a leading agency in that sense. But there comes a point when we’ve got to make sure we’re ahead of the curve with regards to how we’re taking our developments to market. And so consumer research, I felt, was an area where we were doing a good job, but it was a very custom project platform for clients that were longstanding users of our services. But how do we get out there in that leadership mode in consumer research?

In that regard, that was the task that Mike was charged with and his approach reflects itself in FanDNA. Mike saw an opportunity. He felt that – and I think there’s a lot of merit in this and this has been proven by the reaction we’re getting from clients right now – traditionally consumer research has been pointed towards opinion and recall etc, and humans - you and me and everyone else around us – are pretty poor at predicting their behaviour. They’re pretty poor at suggesting what they will do; they’ll talk about their opinions and they’re good at framing their opinions but they’re very poor at predicting their behaviour. And so FanDNA is fundamentally designed to develop a very unique view of how sponsorship impacts people’s behaviour. It groups and clusters the consumers into a series of behavioural categories and then allows us to segment sponsorship platforms, events and sports or whatever it may be, and segment that fan base along the lines of their DNA or their behavioural approach.

Anything that allows brands and rights holders to better understand and better define the impact that a sponsorship will have in a particular sector or in a particular group of people only helps move the needle in terms of better understanding of the benefit from a sponsorship. So really the fundamental difference is about defining a behavioural segmentation as opposed to an attitudinal segmentation.

When we embarked upon the foundation research, we had no idea whether this prognosis or this view was going to be proven correct or not. Mike had developed this with our researchers to test a hypothesis so again, at our own risk and our investment we spent a lot of money this year building this research globally. We were nervous about whether this hypothesis would be proven to be correct. We tested this and then we used independent agencies to provide us with a factor and a cluster analysis of the findings so that we were able to independently evaluate and prove the hypothesis. As a result of that we have been really, really delighted with the outcomes and the way this is framing up for us. Its going to become a very innovative platform in 2015 and beyond for us.

Repucom now works with every major sports league in India. How important is the Indian market to Repucom and how do you expect the sports industry there to evolve in the coming years?

It’s very important for us. We opened our first office in India in 2007 so this is not just a recent occurrence for us; we’ve been there a relative long time. In 2009 we actually opened our first production facility as well, so we view India as a key resource pool for us. From a production perspective we have now around 800 staff in our production facility in Bangalore. We have a 52,000 square foot facility there; it’s a wholly owned operation for us. So India has always been a very important place for us. Fortune favours the brave and in that regard we were in india before the advent of the IPL – obviously the IPL was a groundbreaking sports model and I think it points to the innovation that can exist in markets like India.

The IPL is a phenomenal success, and we were there at the outset and it did reshape our business in India. That’s certainly driven the growth of our business in India, for sure. Obviously it’s well documented: the potential of the India market, the huge emerging middle class there with financial resources that are creating demand. It’s an economic opportunity for anyone. And I think when you look across the world from a single country perspective it’s one of the last great frontiers for consumerism. And sport really fits perfectly into that. It still remains a market where there are some challenges and we see that in sport; there have been a few false starts on some sports platforms but that’s the nature of the market there and it’ll evolve.

As for the future for us, we take very long-term views to these things. We feel that, for us to put ourselves out there as a global leader, you’ve got to be true in that sense and be present in global markets. We’ve been on the ground in India for a long time and we’ll be on the ground in India for a long time to come. What the market will look like in five years’ time, that’s anyone’s guess. But what we believe though is that sport will continue to be a strong marketing platform for brands, both Indian brands and international brands that want to take a presence in India. It’s always been a cricket market and it always will be a cricket market, but it’s that diversity of sports platforms that is interesting. I think the ISL is inevitably going to be a success but there are physical resources, pitches, stadia, etc that need development and investment. We see that across the world; in these emerging markets those things take time. But there are always these overnight successes that took ten years, ironically.

Where is sports marketing research in general going? What’s exciting you most in your sector right now?

I think the really interesting and exciting thing for us is both the hunger, in a demand sense, but also the ability that we’re seeing in the industry generally – not the research industry but our client base – its becoming so much more sophisticated in terms of using information, data and research. I’d characterise it by saying sports marketing is becoming an information-led strategy. We’ve got a significant number of clients today that are framing their strategies and framing their proposals and framing their approach [in that way], particularly from a rights holder perspective.

Rights holders have traditionally couched their offer in the passion and the emotion and the brand association in sport, and today our clients are becoming far more sophisticated in using the information we provide them with as a tool and a leverage point in terms of creating and expanding their relationships with their sponsors. That, to me, is transformational, and it’s not something we’ve orchestrated at all. We’ve literally been in that sense just doing what we’ve been doing, but what we’re seeing is this gravitation towards the data area of the model. That’s exciting.

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