How brands rationalise their purpose investments: Sport For Good Playbook part two
Part one of this series looked at what brands must consider from the outset as they embark on their sports sustainability journey. As the experts explained, for any strategy to be truly effective, resources and investment should be channelled towards causes that are genuinely material to the brand in question. Brands must also take a holistic view of their sport for good strategies, aligning their investments with broader company objectives relating to environmental, social and governance (ESG) factors whilst monitoring their progress against global standards and targets.
There is no denying that establishing a comprehensive strategy takes time, commitment and collaboration among internal and external stakeholders, but in truth declaring lofty goals is the easy part. What really matters is the subsequent action, not the initial statement of intent – and, of course, being able to prove that sports-focused purpose investments drive tangible growth across the triple bottom line.
So how can brands rationalise their investments? What metrics should they measure and report internally to determine and communicate the success of their sports partnerships? And is it possible to draw a direct link between purpose and profit?
The business benefits of purpose marketing
In business, commercial growth and sustainability have often been seen as separate things. Even today, many executives view sustainability as too complex or costly to implement, while some believe initiatives designed to help organisations become more sustainable simply aren’t profit-generating. Such myths abound, particularly in sport where short-term profitability and immediate results are paramount, yet a growing number of C-suite decision-makers are beginning to realise how sustainability can create long-term and measurable value for their business.
Whether they are targeted towards environmental responsibility or social impact, it is clear that the business benefits of purpose investments are both direct and indirect. Purpose-led marketing and communications can help sharpen a brand’s messaging and ensure it stands out from others in the market. That differentiated positioning not only helps fuel less tangible qualities like brand appeal, but it can also raise advocacy scores and, ultimately, boost sales. Similarly corporate activism, while potentially polarising, has been proven to drive consumer affinity and loyalty in many instances, enabling brands to carve out greater market share.
Research suggests companies with higher ratings for ESG factors financially outperform comparable businesses with lower ones, and are far more likely to be viewed more favourably by consumers. As such, investors are increasingly taking notice of sustainability-related performance data; according to an EY survey conducted in 2018, 90 per cent of global institutional investors revise investments if companies do not at least consider ESG criteria within their business model.
Whatever a company’s values and purpose, there are myriad ways to determine the extent to which sustainability contributes to business success. While there is no industry standard framework – objectives differ greatly, after all – many brands have developed their own methodologies for measuring its impact on company growth, with certain metrics and KPIs identified and monitored as a means of striving towards overarching strategic objectives.
Consumer products giant Unilever, for example, tracks more traditional performance metrics like social media impressions to determine the success of its purpose-led brand campaigns, but it also invests in consumer research to understand how those campaigns affect purchasing decisions and overall brand affinity. That process of information-gathering helps establish causal links between purpose and brand or business performance.
Indeed, such research has led Unilever to determine that its sustainable living brands – which it defines as those that ‘integrate sustainability not only into their purpose – in other words their marketing platform – but also into their product’ – grew 50 per cent faster than the rest of its business and delivered more than 60 per cent of the company’s growth in 2016.
Make no apologies for financial motives
Linking the purpose of a business to the future of the planet and its people can help strengthen emotional connections with customers, especially if delivered through an authentic and engaging marketing campaign. But simply championing a mission doesn’t pay the bills.
Rationalising purpose investments through financial justification is an imperative for any for-profit business – and not only because doing so satisfies the finance director. Ultimately, given effective sustainability strategies should benefit the long-term health of the company and not just the planet, no brand marketer should apologise for seeing their investments through the prism of profit.
Even the most virtuous of virtuous cycles must start somewhere. After all, the more money a company generates, the more it can invest in taking action and supporting good causes further down the line.
Writing in an article published in February, shortly after his company’s inclusion in the inaugural Laureus Sport For Good Index last November, Ball Corporation president and chief executive Dan Fisher explained that most brands no longer see sports partnerships primarily as a way to sell more products. Consumer demand for more purposeful brands and more eco-friendly products is driving a greater focus on sustainability, he noted, and sports properties have an important role to play because they harbour ‘the power to be true vehicles for change’.
Ball Corp supplies its products, such as infinitely recyclable aluminium cups, to sports organisations including the Los Angeles Rams and Climate Pledge Arena, helping major teams and venues to meet their sustainability targets. But it is not a charity. Sure, its stated aim is to educate and inspire legions of event-goers to be more sustainable in their everyday lives and encourage others, not least the teams or brands they support, to behave in the same way. Yet that aim is rooted in sound business logic: promoting more sustainable practices will only broaden adoption of the very products Ball Corp produces, thereby driving revenue growth and boosting its own bottom line.
Proving the value of purpose investments can be a challenge as some benefits, such as an improved reputation among consumers and other stakeholders, are indirect. But it is nevertheless an important means of securing internal buy-in from managers who might have other priorities. Quantifying what can be quantified and spending time on rigorous reporting, supported by financial data and articulated in the language of business, is key in that regard.
In any case, while scepticism around sustainability might exist within even the most committed businesses, internal resistance can be overcome through incentivisation. A growing number of companies are linking executive pay to ESG metrics, with clearly defined targets and KPIs used to track progress. As such, any campaign or activation that supports ESG objectives, including purpose-led brand partnerships and sport for good initiatives, will likely be viewed more favourably when seen in that context.
There is also a case to be made for making sustainability-related incentives a non-negotiable component of any partnerships. Given that sustainability performance is fast becoming an increasingly important consideration within business-to-business relationships, brands can offset risk and save money in the short term by building certain performance incentives into their partnership agreements. Doing so ensures clear alignment with the company’s corporate strategy and creates a hook to activate around as the partnership evolves.
As Dan Reading, the head of sustainability at Right Formula and one of the judges for this year’s Laureus Sport For Good Index, explained in a recent interview with SportsPro: “In this space ‘profit’ can seem like a dirty word. However, from a brand perspective, we aim to cultivate purpose to drive profit, and this is critical to drive investment in this area.”
Uniting sporting purpose with company values
Though 23 years old, cloud-based CRM specialist Salesforce only ventured into sports marketing in early 2021. Like many companies, its aim is to use its sports investments as a means of educating and building awareness about its brand and product range, particularly among business decision-makers, but there is also a significant purpose-marketing component within every one of its partnerships.
“Salesforce, from the very beginning, was founded as a values-based company,” explains Adam Forrest, the San Francisco-based firm’s senior vice president of global brand and sports marketing. “From the very beginning we’ve had a 1-1-1 model, which means one per cent of profits, one per cent of product and one per cent of people’s time are donated back to non-profits, to help communities grow, and really ingrained in the values Salesforce has, which are customer success, innovation, equality, sustainability and trust.”
Today, Salesforce’s sports partnership portfolio includes headline deals with Team USA and the Los Angeles 2028 Olympic and Paralympic Games, as well as separate tie-ups with the national Olympic bodies of Great Britain and Germany. It is also in the first season of a five-year global sponsorship agreement with Formula One worth a reported UK£100 million (US$130 million) overall.
As a B2B software provider starting out in sport from scratch, Salesforce rationalises its sports marketing investments differently to many B2C brands that tend to measure success by how much revenue they can drive directly through any given partnership. To use Forrest’s words, there is no “perfect ROI model” for a company like Salesforce, or any company for that matter. While business growth is an important motivation, he says, the success of its partnerships is determined by tracking things like awareness levels and affinity among existing and prospective customers.
Yet there are other purpose-related considerations, too. Salesforce is working with Formula One, for instance, to help the series achieve its goal of net zero emissions by 2030. At a time when climate change has been cited by chief executives as the top risk to their organisation’s growth, the company’s Net Zero Cloud product enables Formula One to constantly monitor its carbon emissions and identify ways of reducing its environmental impact.
Meanwhile, as part of its work in the Olympic movement, Salesforce is helping athletes to develop skills and build careers after their competitive days are over, while it also supports various community initiatives in tandem with its sports partners.
In January, for example, Salesforce donated US$1 million to The Partnership for Los Angeles Schools as a means of advancing equity in under-resourced schools across the Los Angeles area. That donation was made as part of its support for the legacy objectives of LA28 and, specifically, its commitment to addressing educational inequity in the host city. It also tied into a broader strategic giving programme that has seen the company donate more than US$145 million in grants to schools and education non-profits across the US to date.
“Everything that we do is grounded in who we are and what we stand for,” says Forrest.
Allianz used its sponsorship of Bayern Munich’s women’s team to highlight the ‘All Are United’ initiative
Another major international brand using its sports partnerships to support broader ESG objectives is Allianz, which featured among 29 companies in the inaugural Laureus Sport For Good Index. Like Salesforce, the German insurer is a significant backer of the Olympic and Paralympic movements thanks to its worldwide partnerships with the International Olympic Committee (IOC) and International Paralympic Committee (IPC), while it also maintains high-profile sponsorship deals in mainstream sports like soccer, golf and motorsport.
According to Daniela Bauer, the global head of partnerships at Allianz, the company’s international partnerships portfolio is based on brand objectives and a strategy which includes sustainability at its core. “We proudly collaborate with our partners to promote our diversity and inclusion,” says Bauer. “One such initiative is the ‘All Are United’ campaign with the FC Bayern Women’s team at Allianz Arena.”
That campaign was expanded earlier this year to promote a fundraiser campaign launched by the United Nations to support girls and women fleeing the Ukraine war. Promotional activities centred around FC Bayern’s home match against Paris Saint-Germain in the Uefa Women’s Champions League in March.
“It was the first FC Bayern women’s match to be played in the Allianz Arena – a milestone for us at Allianz being a host and long-term partner of the team,” says Bauer. “This special occasion was a perfect start for our campaign. For this historic match and all following games in the Uefa Champions League this year, we forfeited our logo on the front of the FC Bayern women player’s jerseys for this important message of ‘All Are United’.”
As Bauer explains, Allianz measures the performance of such initiatives in various ways. As well as tracking standard metrics such as exposure, reach and engagement on a monthly basis, the company conducts an annual return on marketing investment (ROMI) analysis in which it tracks key ROI and ROO indicators. That yearly analysis includes a brand advocacy study designed to measure, among other things, the social and environmental consciousness, reputation potential and actual impact of each partnership.
“We focus on activating around causes that matter to us,” says Bauer. “Our latest example is the MoveNow programme where we commit to move people of the next generation across the globe through 24 initiatives in the upcoming months until the Olympic and Paralympic Games Paris 2024. We are implementing this purpose-led initiative across our sponsorship portfolio with the aim of getting the next generation moving today – so that they are ready tomorrow.
“One initiative is taking place this month, with more than 100 participants from the Young Leaders Forum at the European Championships Munich 2022 taking part in a Hackathon organised by Allianz to create initiatives to get young people back into sport.”
Further reading
Profits with purpose: How organizing for sustainability can benefit the bottom line (McKinsey)
Why sustainability has become a corporate imperative (EY Global)
This is the second instalment of a five-part series outlining how brands can create and implement a fit-for-purpose sports sustainability strategy. To read part one, click here. The next three parts will focus on the following:
- Communicate – how to amplify a clear and compelling message
- Mobilise – how to inspire and activate your community
- Report – how to measure and report impact against objectives