Tuesday, 26 January 2016

Our Fans, Your Customers

Social media was abuzz last week with Facebook's launch of its Sports Stadium. Facebook admits it's in its early stages of development but is anyone surprised they've cottoned on to the commercial value of sports fans?

Of course we are not surprised, Facebook is a smart, commercially-focussed business which long ago recognised the value of data aggregation. Traditional, linear platforms have been fragmenting for years, making already-elusive audiences even harder to connect with than ever.
Sports fans are also receptive to communications from their favourite team or player and by creating a space for communities to come together around their favourite interests - especially around events - gives brands a ready-made and engaged audience with whom to communicate.

It should be great for everyone: fans, sponsors ... and of course Facebook. There is one group who are missing out though, a group which has been slow to recognise the value of data and who, by launching Facebook pages are gift-wrapping their fanbase for Facebook to monetise: the teams themselves. They may well be fans of that team, but they're definitely Facebook's customers.

Facebook (and all other social media platforms) make their money by aggregating audiences, segmenting them and selling them to those brands for whom more traditional means of marketing have become less efficient. All Facebook needs are customers to aggregate. In the headlong rush to "engage", those communities that should be owned by the clubs have been handed over to third parties who collect the data and then commercialise it with no revenge share.

The same principle applies to any commercial negotiation: if you don't "own" that customer relationship then you are at a disadvantage. The new Aston Villa chairman Steve Hollis was shouted down at last week's AGM when he referred to the fans as customers but he was right (though perhaps unwise to make the distinction to that audience) and customers are the fundamental basis of any business. Facebook have recognised it.

I suspect that subscription TV which underpins the sports revenue model will soon be put under pressure from D2C distribution and it can be absolutely guaranteed that the likely players - Amazon, Google, Apple, Netflix and maybe even Facebook - will all know more about sport's customers than the sport does. Sport's slow adoption of marketing and technology is leaving a lot of value on the table.

We are moving into an age where the world's fastest moving companies are data-led content businesses. There is still a huge value to live content because it is just that - "live". To extract the maximum value from that content sport needs to start thinking and behaving like those media companies. Why gift wrap your prime assets for someone else to exploit?