Sports Organizations Using Machine Learning Technology to Drive Sponsorship Revenues

The sports industry has begun to place a greater emphasis on data capture and the use of analytics over the past decade - particularly as it relates to on-field performance, but while sports has become big business, Adam Grossman (founder Block Six Analytics aka B6A) suggests from an economic and financial perspective - in terms of understanding concepts like asset valuation, cash-flow and regression - it remains behind the times. To help bring the industry up to speed, Grossman developed a sponsorship evaluation platform that values sports assets in the same manner that venture capitalists, private equity firms and investment banks look at investment opportunities. Using machine learning technology (think: natural language processing, computer vision), B6A's proprietary sponsorship model translates traditional fit and engagement benchmarks into probabilistic revenue growth metrics. Over the last 10 months, more than a dozen pro sports organizations have begun using Block Six technology - as opposed to relying on antiquated metrics like CPM - to drive sponsorship revenues.

Howie Long-Short: Sellers of sports sponsorships naturally seek brand partners that are demographically aligned. While most teams and media entities have historically managed to gather insights on their own organization, the challenge has always been capturing that of potential partners; the demographic data needed to ensure audience alignment, so that both parties can achieve their goals. Grossman explained that those on the sales side use the insights B6A provides to find new sponsors and to demonstrate their audience is a good fit for [a particular] brand. It should be noted that while were focused on rights holders, B6A also works with corporate partners investing in sports; typically, Fortune 500 companies who use the software to ensure theyre spending their marketing dollars efficiently.

Detailed knowledge about ones own audience can also be beneficial from an engagement perspective. Grossman explained that sports organizations have historically struggled to translate brand metrics into revenue metrics, but if [a seller] can prove that they have the right audience [for a buyer], that the audience is interested in the [prospective partner's] company and in their product(s) and that the seller will publish content that drives engagement and awareness [for the buyer] within the target demo, [they can say with a level of confidence that they are] maximizing the probability of increasing revenues. Statistically speaking (at least according to the way B6A measures lift in brand perception), there is significant correlation between engagement, sentiment, awareness of a brand and revenue growth.

Block Six was kind enough to run a complimentary analysis on thousands of posts attributed to followers of JohnWallStreets Twitter account to demonstrate how the platform's findings could be used. The report they turned over indicated that even in comparison to the golf companies and brands like Amazon and Apple, [JWS] disproportionately reaches a more educated and higher income audience; in fact, from an education perspective, JWS has the most educated following [analyzed to date]. While we know that a significant number of league commissioners, team owners and c-level team/league, media and agency executives read the newsletter daily, from an aggregate perspective, the data shows that JWS content is reaching a much wide range of senior leaders across the business world. Thats particularly valuable information to have as we continue in our search for the right title sponsor. To date, JWS sales efforts have been focused on service companies that seek to reach sports most influential decision makers, but the data born out of the B6A study shows that any business targeting highly educated, high-income earners should be pursued.

Taking it a step further, the psychographic observations gained reflect that technology and gambling are two topics that the JWS audience is particularly interested in. To date, JWS has not targeted brands in either field (technology due to a lack of time/resources, gambling because we incorrectly assumed they would be solely focused on consumer acquisition), but Grossman suggests that we should be as the data indicates businesses within those two sectors are natural advertisers for the brand.

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