Five Thoughts on Fan Engagement Tech – Part 1
Last edition went in deep on gamification, which sets us up perfectly to transition to today’s topic: fan engagement.
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Back to fan engagement. The Enterprise Solutions team has spent significant time thinking about the future of fan engagement technology given EngageMint’s core offerings around customer experience. Over the past two months, we’ve spoken with over 40 companies with fan engagement platforms or products. The below are some of my thoughts from those conversations.
Let’s dive in…
1) Collectively We Need To Be Smarter About How We Talk About Engagement
Oftentimes, vanity metrics such as followers, likes, comments, views, etc. are used as placeholders for value when it comes to engagement. Since these metrics are widely available and easy to track, much of the sports industry defaults to this data. The problem is these measures don’t always tell the whole story.
Put differently, not all likes or not all followers are created equal. If you’re running a marketing campaign, would you rather have 10K shares on social and generate $10K of revenue or 1K shares on social and generate $100K of revenue?
As a rule of thumb, the larger the reach the more valuable. However, when you factor in the effectiveness of reaching your target demographic and alignment with organizational goals (for example, direct sales > awareness), going viral should not always be the goal.
The good news? Digital tools have become more robust, given the emergence of artificial intelligence and machine learning. The fan engagement companies that provide the most value will continuously adapt how they measure engagement and not simply rely on those early generation internet metrics (likes, views, etc.).
2) Is There a Fan Engagement Bubble?
Lately when I haven’t been scouring Twitter for the latest sports news, I’ve been reading the book, A Random Walk Down Wall Street. One chapter goes in depth on the largest speculative asset bubbles in history, including the internet bubble. Leading up to this bubble, non-digital businesses were changing their names to include web-oriented designations like dot.com or dotnet to take advantage of higher valuation multiples. And the strategy worked for awhile….until the bubble burst.
Why do I bring the internet bubble up? Well, it seems like every company is slapping “fan engagement platform” to describe itself even if that terminology doesn’t adequately describe its products or services. A quick search through our growing Enterprise Solutions database of sports tech companies yields nearly 100 companies having a description including one of ‘fan engagement,’ ‘fan experience’ or ‘engagement platform.’
For example, we’ve looked into some companies that provide in-venue digital displays. How do they label themselves? Fan Engagement Platforms. Technically not untrue since fans engage with digital displays but if I’m in marketing at a college athletic department evaluating fan engagement strategies, I probably don’t have the authority to recommend a new in-stadium digital display.
So are we in a full-on fan engagement bubble? Probably not the appropriate terminology. But I would say the uptick in companies focused on “fan engagement” is real and sadly unsustainable.
3) The Business Model For Fan Engagement Companies Is Overly Reliant on Sponsors
Obviously there’s a cost for any sports property to plug in a new fan engagement technology. But when we talk with fan engagement companies, they argue a sponsor will easily cover the cost. That’s logical; however, it doesn’t make for an easy sales process.
What do I mean? Let’s say I was the decision maker in an athletic department and Start-up X pitched me a free-to-play game costing $20K that will not only double in-app engagement but also create $50K of sponsorable inventory. Even if I take the doubling of engagement as fact with a tangible benefit to my fans, I can’t take the $50K of sponsorship revenue for granted without having to jump through some hoops.
To realize that revenue, I would have to revisit my current sponsor portfolio and gauge interest in the new asset. If no existing sponsor is willing to spend more for an unproven asset, I may then need to find a new sponsor and they don’t grow on trees. Given sponsor relationships would be managed by a different department or a third party rights-holder, there are now four parties required to reach a successful outcome (Gaming Start-up, Me in Marketing, Sponsorships Sales, Brand / Sponsor). The complexity to reach a deal compounds as the number of parties increases.
If I agree in principle with the free-to-play game but can’t get a new sponsor and my sponsorship team on board, I’ve simply created a cost center with no clear path to ROI.
4) Fan Engagement Is Worthless Without Data Collection and Data Analysis
If you are not collecting information on your fans while engaging them, your organization is missing out. This includes an inability to understand if adjustments to features are required (i.e., something causing bounce rate) and inability to monetize active fans down the road.
Now, most fan engagement companies I’ve spoken with understand the value of capturing data and providing back-end analytics to their clients. The problem though is knowing how to act on that data to drive operations. Too much data can result in paralysis.
There’s also the privacy issue from data collection, clearly a regulatory priority between GDPR in Europe and the California Consumer Protection Law. However, recent research shows people are willing to provide non-essential personal information if it leads to more desirable personalized experiences. Thus, the ultimate winners creating fan engagement technology will leverage the data collected to provide the most personalization.
5) Give Me A Company That Stands Out
Sure. Let’s talk about CUE Audio, which is not only fascinating from a technology perspective but also has a smart business model.
First the technology. CUE patented technology that collects data through sound and turns phone speakers into audio beacons. For in-person events, CUE will create an inaudible audio file to play over a team’s speaker. Phones recognize the trigger and give CUE access to play video or content through the phone. No wifi, cell service or bluetooth is required, important for older venues with poor connectivity.
Additionally, when the pandemic kept fans from attending events live, CUE innovated, building a new sync feature which allows videos or content to be pushed to fans anywhere across the globe (though requiring a connection).
You may be asking where does the fan engagement component fit in? Well, CUE’s most popular product is an experiential light show that has been activated at hundreds of sporting events across the pro and college ranks. It’s a cool, immersive experience where fans become part of the show by using their phones. Memorable and unique? Check and check.
The company does much more than light shows but since I want to keep this short, check out the company website for more use cases.
Besides their game changing technology, CUE separates itself from other fan engagement technologies on the business side for multiple reasons:
- Whereas I mentioned an industry over reliance on sponsors above, CUE often goes to market with a sponsor, having partnered with the major soft drink partners when pitching several teams.
- Standard contracts usually span the length of a season, not an annual period, showing a willingness to work around the client’s schedule.
- The technology can integrate directly into an existing mobile app and become a traffic driver (downloads of team apps for attendees spike before an event). Relying on a separate CUE audio app would create an unnecessary friction to adoption.
- CUE continues adding features, providing upsell opportunities for them and new experiences for fans. During the pandemic, a couple universities used CUE’s trivia module to engage fans from home during the week. (Yes I know I bashed trivia as stale and undifferentiated in the gamification edition but with CUE you can upload corresponding videos, making it more of an interactive experience).
That’s all for now. Until next time,
The next newsletter topic will be The Gen Z Problem
Do you disagree with these takes? Let me know via email (email@example.com). And if you’re in the process of evaluating fan engagement technologies, shoot me a note. The EngageMint Partners team would love to hear your thought process.
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