The Industry Column – 17th April

Peter McNeile, Director of Sponsorship, Cheltenham Racecourse, talks to SportIndustry.biz about the expansion of virtual brands in jump racing.

Last year, a report from KeyNote concluded that the UK sports sponsorship market would see robust growth over the next 3 years, reaching a market value of £1.9bn by 2015. Based upon my own experience, I am certain that this growth will be driven by an increase in demand for sponsorship opportunities among virtual brands.

This is, undoubtedly, a reflection of their increased importance within our economy. While the high street is facing real challenges, many virtual brands – or virtual channels of traditional brands – are still seeing revenue growth. This is the case with Cheltenham itself; our online merchandise shop and mail order catalogue now account for half of our total merchandise sales, when previously most merchandise would have been bought at the racecourse. 

Typically, the virtual brands we see at Cheltenham are a combination of online brands and corporate or product brands that don’t have a significant high street presence. The key issue for these organisations is making their proposition more tangible when often they are selling intangible goods and services – and what better way than an involvement in one of the most physical and exhilarating of sports? They want to make a personal connection with their existing and potential customers – what better venue than a racecourse where thousands of people come together for the shared excitement of watching each race, and in between have plenty of time to mingle and browse? 

Bookmakers are traditional sponsors of horseracing, but even in this sector most companies are seeing more rapid growth in their online (internet or mobile) channels than in their high street retail outlets – so this is the business channel they promote through their sponsorship. Similarly, traditional media sponsors – like the Racing Post and News International – are using horseracing to promote their online presence, as fewer consumers read physical newspapers or magazines. 

Even highly tangible products like Aga ranges have found a real benefit in becoming involved in horseracing. Aga developed a strategy of attending point to point race meetings in order to reach out to potential customers because its lack of a high street presence meant that most interaction with the brand was remote. And in terms of food and beverage brands, Glenfarclas is a predominantly on-trade whiskey brand that is only available in bars and restaurants and through a limited number of specialist retailers. It uses its presence at Cheltenham to generate greater awareness and tasting of the whiskey, ideally leading the consumer to ask for Glenfarclas when they next visit a bar or restaurant. 

If some virtual brands use racing sponsorship to raise awareness, others use their sponsorship as an immediate call to action. From the late 1990’s a brand was likely to use the format of “brandname.com” on a sponsorship banner to increase awareness of their website, but that did not necessarily translate into customer activity. Today’s virtual brands encourage consumers to download their mobile applications on the spot, by using a format of “download_brandname_app.com” on their promotional materials. The most focused brands deploy staff at the racecourse to help customers download the application and interact with it immediately. 

A good example of this is StanJames.com, a Cheltenham sponsor building an increasingly high profile. StanJames.com, a Gibraltar-based mobile and Internet betting specialist, uses its sponsorship to give consumers the opportunity to have their picture taken with the Champion Hurdle Trophy. While the customer waits for their free photo to be printed, StanJames.com staff offer to help them set up an account with free or matched funds to trial the service. It’s a clever strategy to build awareness and generate action within a very short period of time. 

The virtual brands you see at Cheltenham have both the motivation and the budget to integrate sports sponsorship into their marketing mix. They understand the unique position held by Cheltenham as a centre of sporting excellence and they want some of that Cheltenham stardust. 

For our part, Cheltenham has significantly improved Wifi coverage across the racecourse in order to facilitate the latest mobile app-based experiential activity. We have also become more proactive in suggesting how virtual and tangible brands can extend their sponsorship activity to create a tangible connection with their customers. It’s just part of an ongoing strategy to help our sponsors become more innovative in using their presence to deliver measurable business results.

For more information, go to www.jump-racing.com