Chatting with Neil...
Many weeks ago, I sat down with Neil Horowitz to talk all things #sportsbiz and Aussie Rules football. It's dated in terms of where we're at today and the reality of the sporting environment around the world, but it was a brilliant chat with lots of insight passed both ways. Below is an overview from Neil himself, with a link to have a listen.
Written by Neil Horowitz on Wednesday 25 March. Original posting here.
How the Australian Football League is Staying Strong by Applying Fundamental Business Principles to Sport.
It's easy to get seduced by the sexiness of the sports biz. There are the incredible athletes, the exciting games, the huge crowds, the TV productions; even those working for a team or a league can take for granted that a crowd of 16,000 or even 50,000 can be deemed a disaster, depending on the sport. But the truth is that it is a lot more 'business' than 'sports;' and the sports biz can be analyzed and strategized with business principles.
That's the mindset Oli Shawyer has taken in his role as Marketing Lead for the Australian Football League. The league, which has been around in some form for over 100 years, faces many of the same challenges as its American counterparts, as fan habits change, new distractions compete with sport, and the way sports are viewed as a leisure activity overall is evolving with each generation. These challenges are particularly salient in the states Shawyer oversees in his role — Queensland and New South Wales — where Aussie rules football and the AFL doesn't have the same generational legacy as other regions in the country.
As Shawyer and his colleagues look to help the league thrive, they're balancing the day-to-day goals of selling tickets and driving TV viewership, while also heeding the need to cultivate the fans of the future. They know that TV ratings and attendance have a mutual relationship, with both typically moving up and down together, but those can't be the only metrics that guide their strategy. Success in the long-term comes to serving all parts of the marketing funnel.
"The danger is if you solely are focusing on that week-to-week proposition [of attendance and ratings]...is that the funnel to fill that week-to-week proposition becomes smaller and smaller because there's been nothing burning in the background to drive the longer term focus," said Shawyer," which is going to ensure that you don't run out of people to fill that bottom of the funnel attendance piece."
There needs to be multiple levels of marketing firing to ensure fans will keep coming today, and generations will cycle in and develop more fans in the future. They need to do all that while keeping the fans they have today, increasingly enticed with other entertainment options, whether it's Netflix or a night out at a bar or club, or any number of alternatives in between. And it's this environment in which Shawyer and the AFL benefit from approaching their business, sport, like any other business and considering fundamental marketing principles to achieve their goals. Fans are customers at the end of the day, and when they invest money and time in the sport, it's because they feel they're getting proper value back for that expenditure.
“The reality is everybody has needs and everybody has wants and whether or not you're a sport or a bank at the end of the day, people are going to consume your product if it services a needs of theirs," said Shawyer, who spent time in the advertising and agency world before making his way to sport. "Whilst the elements of sport can often be probably a little bit more grandeur by way of sense of belonging or self-actualization, sense of identity — there are always those things like 'I just want to have a good time, so this looks it's the best choice for having a good time in Sydney tonight.'”
The need for sports to provide value for fans of varying avidity levels and generational traits is equal parts economical and emotional. So as teams and leagues think about ticket sales and (as season tickets are known and developed in Australia) membership, it's important to analyze those propositions for fans in economic and marketing terms. The products offered by sport may have different appeal for different audiences and the products must evolve over time, because the rest of the world is constantly evolving, too. That's especially true in the regions of Australia where AFL fandom is not as hereditary, where it's much more of a proactive decision to invest oneself into becoming and being a fan of AFL and a AFL club.
“The membership proposition takes a really different angle (in New South Wales and Queensland, less traditional markets); as I said there are still those that will buy the full season membership, but it has elevated the need to continuously evolve what the membership proposition means," explained Shawyer. "Whether or not that be from a value perspective...and the added benefit to what it means to be a member, whether that be through accessibility, whether be through price..."
As important (and valuable for revenue) that membership is, however, it can't be the sole goal and focus of AFL's marketing. It may be the bottom of the funnel for some fans, but the better analogy for the wide swath of the populace that can be some sort of AFL fan is like a car lot. Not every interested person that comes on the lot is going to be buy the six-figure Lamborghini. Some are better suited to the mid-level car and still some may have bought a car from the lot 10 years ago and aren't in the market, but they mention the dealership to any friends in the market for a car. The value equation for sports fans is not a linear slope ending at season tickets / membership. Shawyer takes this enlightened view into his role with AFL, appreciating the need to keep current fans investing where they are, while introducing new fans, because while members contribute a lot to the revenue pie on a per capita basis, it's the masses that make up the majority.
“I think the reality is that we have to be okay that most people aren't going to increase their level of investment or level of engagement, and our job at the very minimum (is) ensure that they're maintaining their level of investment and level of commitment year on year," Shawyer said. “It's very easy to get caught up in thinking that the person that goes to every home game is your most important fan. From a visibility perspective, particularly when it comes to the broadcast element (and) having a full stadium, that is hugely valuable..."
"But the person that comes to one game is just as valuable because there's gonna be many many more people that are going to come to one game. So the overarching mass of those one-gamers combined is hugely important."
The innovations of recent decades have allowed teams to connect to fans in more diverse ways, while enabling them to reach fans all around the world. As technology and platforms continue to evolve, teams and leagues are creating more opportunities for fans to engage and different ways for fans to invest in the team. It's not the one-size fits all fan experience of generations past.
Explained Shawyer: “It's really important, particularly as the evolution of digital and technology and social media continues to grow, that we're finding ways to allow people to access the club, the co., the game, the elements of that — in a way that keeps them wanting to consume, keeps them wanting to part with their dollars, whether it be for a scarf or a digital subscription to watch the game live. The levels of consumption and the varying degrees are so important."
The power and value of sports, as an economic and cultural engine, has been demonstrated amidst the Coronavirus outbreak, affecting leagues and fans around the globe. Different fans miss it for different reasons, and other individuals are perhaps finding their hearts, minds, and wallets gravitating elsewhere in its absence. We all hope the sports biz comes back as strong as ever and fans will continue to place value in participating in it, in whatever way best suits them. I'll give Oli Shawyer the last word because while the sports biz is very much a business, it's a helluva special.
"Sports legitimately has the power to change and impact people's lives so positively, and I think that's really something very special to be a part of. And being able to work within that and leverage it for the good, and for the happiness and belonging that can bring — I think that's pretty special."