The Business Of Sports Marketing

Darren Werner  00:08

Growing up, it was a dream job of mine always to work at the NBA. I never really proactively chased it. Never thought it was possible.

Dr Juliet Bourke  00:16

This is Darren Werner.

Darren Werner  00:17

I was in the telco space… Creating a new app for Australia's newest stadium over in Perth really connected me to the world of sport. That really helped to create that opportunity for me to apply for the job at the NBA.

Dr Juliet Bourke  00:32

Darren cut his teeth as the Partner Success Manager in the USA’s National Basketball Association, driving viewership and subscribers to their digital platform. And now, he's the Head of Marketing at Kayo Sports.

Kayo is an Australian sports streaming service showing live events and replays across a wide range of sports. But in 2024, when sports events have to compete with everything from on-demand film and TV streaming to entertainment on social media apps like Instagram and YouTube, how does Kayo cut through?

Darren Werner  01:07

There's a new wave of channel mix for marketers and business leaders to be abreast of. So, whether that's people consuming podcasts or going to YouTube for key information or leaning on the trusted word of content creators and influencers who influence their day-to-day behaviour – what they consume, what they watch, what they pay for – is really critical. And I think as a business leader, staying up to date with these cultural trends, because they're moving that quickly, is absolutely important.

Dr Juliet Bourke  01:40

So how does Darren and his marketing team convert casual viewers to superfans? And how do they boost their audience in new markets or with emerging sports?

I'm Dr. Juliet Bourke, a Professor of Practice at the School of Management and Governance at the UNSW Business School. You're listening to The Business Of.

Darren, take me right back to 101, how is sports marketing different from other forms of marketing?

Darren Werner  02:11

I really see them as two very similar things and it's more around the ecosystem that you're marketing to. You know, you could replace sports with other terms – whether it's finance, fashion, culture – and really it's the practices around that and what you’re marketing that is different. So, I don't see them as two different things, I just think that the way you go to market and the way you build your strategies around that is what's different. At the end of the day, sports is your product. And that's where you're marketing.

Dr Juliet Bourke  02:46

Sports as a product though, the product is people and people are complex. So just thinking about that, you know, how do you manage those player profiles?

Darren Werner  02:57

Through my experience I’ve been able to work with very different personalities within the sporting space and I think what has been key there is understanding that sports athletes are just people at the end of the day and building trust and building a likeness to them is really critical. When you're working directly with them, it's important to understand what their drivers are and how best to get as much as you can out of them to appeal to the audience that you're talking to. And I think on the flip side, it's understanding ‘What are your objectives through these athletes that you're trying to achieve?’. We build up athletes and entertainers as these superstars, and it's only as good as the story that you create around them that's going to get you that far.

Dr Juliet Bourke  03:47

So these stars, these superstars, and we have superstars on our executive teams as well, right? But you have them on the pitch, you know, playing a game, and they don't always behave the way you expect. How do you navigate that fan experience?

Darren Werner  04:01

I think that's the beauty of sports and the beauty of the stories that you can tell around sports. There's a realness to that and that's what audiences get drawn into. They don't want to see an athlete being amazing every single time, they want to ride the highs and they want to ride the lows equally. So I think drawing the audience in through those low moments can actually end up benefiting, what you're trying to achieve after. I think the content around that that you create is really important in driving those deep emotional connections with the audience so that, you know, that you can take them on that journey with you. The world of sports and the world of entertainment, do an amazing job and that's the opportunity on how you can be creative in telling those stories to hook in not just your rusted-on audience but new eyeballs that can come on the ride with you.

Dr Juliet Bourke  04:57

Yeah, I get what you're saying about the journey and I think about that as a leader talking about themselves, not just the highs, not just their successes, but also their low points.

Darren Werner  05:06

Absolutely. I think some of the mentors that I've learned so much from in my career have taken me through their experiences and I've learned so much from them, in a similar way that we look at these sporting idols on the court or on the pitch. So, there's a lot to unpack from all those learnings and people don't want to just hear the good stuff they want to learn through the pain.

Dr Juliet Bourke  05:32

Is there a player that you still remember that you went through the high, the low, the high again, that stays in your mind?

Darren Werner  05:39

I think one of the biggest global superstars at the moment is the NBA’s LeBron James. You've really seen him grow up on the world stage. Whether that's been him professionally on the basketball court or outside as he develops as a business mogul. Most recently, his son was actually drafted into the same team that he plays for, a real full-circle moment for him and NBA fans around the world. But along that journey, he's had amazing moments at the peak, really at the top of the mountain, but also, both on the court and off the court, some moments that have been filled with controversy that has turned fans away from him but also brought in a new generation of fans. And you can see the stickiness of fans throughout the time and over the last 20 years, really ride that wave with him and learn so much from what he's done.

Dr Juliet Bourke  06:48

So what do you do as a marketer in those low moments to make sure that people still stay with him?

Darren Werner  06:55

I think not being afraid to run where the wind blows. Because, you know, some of these low moments are what people are there for, they are hooked in by the drama that you see unfold. Whether it's on the court or off the court, whether it’s rumors circling on social media or around it. And I think as sports you need to embrace some of those low moments. You've seen that over the last few years in a sport like F1, where a new generation of fans came off the back of Netflix's Drive To Survive series, which really focused on hooking people in through deep engagement of understanding those human stories.

So, if you put the helmets and you put the fast cars to the side people have been enthralled by ‘Who is that person sitting in the car? What are some of their stories? Where have they come from? Who do they hate on the track? Who do they love on the track?’ and seeing those relationships and stories unfold. What Netflix and what the F1 has done amazingly through content is tell these stories and hook people in to continue to follow that story over several seasons.

Darren Werner  08:19

I think what that allows is that, even if you have not the most exciting season, it’s just hook people in that they're going to stick it out for the long run knowing that just around that corner there's more drama to unfold.

Dr Juliet Bourke  08:32

So, when you were working for the NBA in Hong Kong, you were dealing with different markets. And so you're marketing NBA in different contexts. How do you do that? How do you approach same product, different markets?

Darren Werner  08:46

It is the same product, but the way people consume it can be different across these markets. Each of the markets across Asia that we were working on had its nuances that were really important for us to profile, what the audience look like and what the opportunity was. I think what's key there is understanding where each market is at its lifecycle stage. In this situation, it's ‘Where was Japan, Indonesia, Philippines, Korea, in their basketball evolution from a fandom perspective?’. So, if you take Japan for example, huge population of over 100 million people but basketball is not one of the favourite sports there. So it's approaching that sport in that market with the lens to understand what will it take to drive fandom up and reach a bigger audience to get them to consume more. And what that consumption looks like really does vary by market. So, the way that you can communicate to people in those markets and the key social media platforms really vary. If you look at Japan, for example, the top social platform at the time was Twitter, versus a country like Indonesia, there’s a real prominence of the social platform called Line there at the moment. And you compare that to Australia, which one of the key markets there, a really advanced market from a revenue perspective, where the opportunities there were so vastly different and advanced in terms of the social media metrics and applications that we could talk to fans in those markets were.

Dr Juliet Bourke  10:28

So is it just differences in channel to market? That's the only difference in how you communicate in? Whether it's Japan, Indonesia, China…

Darren Werner  10:38

Really understanding what the key cultural nuances in those markets and the audience profiles were really key for us. So, a market like Philippines, the second biggest basketball fandom market outside of the US, was an amazing example here where consumers would really look to watch basketball on TV, on free to air TV and in some cases pay TV, but the appetite to pay to purchase, because it wasn't part of audience behaviour, was limited. So the opportunity in that market, for example, was how do we drive our direct-to-consumer product and encourage people say ‘Hey, you know, this is a product worth paying for’, versus on the flip side Australia with a really high domestic income and propensity to spend are more willing to spend on a product that exists. So you know, really worlds apart examples, but really how the go to market changed based on those factors.

Dr Juliet Bourke  11:39

So are you going to give us the answer? What is the magic here? What was the difference? How did you get people to pay for it in, for example, Indonesia?

Darren Werner  11:48

Yeah, we really looked at different tactical ways that we could hook people in and with a market like that scale was a key factor. So, looking at introductory ways that we could offer the product for free or at a heavily discounted rate at the start of the season really paid dividends. We also looked at how can we customize the product to provide local relevance. So as an example, commentary in Bahasa in Indonesian to appeal to that local market, providing original programming shows that would appeal to the local base, were key factors that really encouraged people to try a new way of consuming the product.

Dr Juliet Bourke  12:31

Alright, so your current role as head of marketing for Kayo Sports, and you're responsible for promoting all kinds of sports now, it's not just basketball. Does your approach to marketing change, depending on the code?

Darren Werner  12:43

Absolutely. Every different sport is at a different stage in its journey and appealing to the Australian fan base. So you're rusted on big sports like AFL, NRL and cricket, three of the biggest sports in the country that have real legacies behind them. The job on sports like those is how do we appeal to that next generation of fans and the more casual fans who, you know, may not be sitting down on their couch on a Saturday and Sunday and not moving from and just watching hours on hours. Versus new sports like UFC, so mixed martial arts, which is becoming increasingly popular for the younger generation of fans coming through. And the way that they're being introduced to sports like this is not traditionally like we have previously seen through print media as an example, but through the online space through YouTube, through social and being exposed to new sports like that. A really great example here is netball. In the new worlds of having Netball on Kayo, previously on a free-to-air network, now netball fans who are a real passionate stronghold base have to pay to watch some of the content. 50% of it sits in front of the paywall but the rest is, so it's how do you educate the netball audience that this is content worth paying for and really showing the benefits of having it on a streaming service like Kayo.

Dr Juliet Bourke  14:11

Let me just press on that one a little bit harder, because I think you've introduced commentary here around gender, right? What has changed since the Matildas in relation to your product offering?

Darren Werner  14:22

I think the entire country has absolutely jumped on the Matildas bandwagon and sports as an industry has benefited from it. The eyeballs that we are seeing on not just women's sports but also men's sports on our platform has really exponentially accelerated since that key moment in our national sports history. And I think that the fact that football and women's football continues to grow is absolutely benefiting sports like netball, AFLW and some other sports that, you know, are really known for having that female presence.

Dr Juliet Bourke  15:02

So if I just put that into business language or sort of business frame on it – when you introduce a new product how does that disrupt your existing product set? Is it for good? Do you actually expand your offering for everyone? Or do you cannibalize?

Darren Werner  15:16

I think with the emergence of some key sporting properties, whether it be the UFC, the world's fastest growing sport at the moment, or F1, you know, a new generation of fans who have come off the back of the success of Drive To Survive, that really presents us and streaming services and opportunity to not just appeal to the fans that are watching that specific sport but look at look-alike audience. People might be flicking on to another sport that piques their interest or see that we have netball on platform, you know, which there's a myth around that that it's predominantly watched by females but the data that we see is that it's actually a really strong growth and a lot of people, a lot of men, in the household are watching and coming in and those tentpole moments throughout the season, whether it be a grand final, and when there's drama on the court that really helps boost viewership and drives those new eyeballs.

Dr Juliet Bourke  16:14

That's an interesting comment there that, you know, people perceive that it's women watching women and men watching men, can you just open that up a little bit more?

Darren Werner  16:23

We have over 1.3 million subscribers on Kayo and what we continue to learn is that there's a really mixed audience demographic that do watch different sports on Kayo. And when you, you know, push, we have the flexibility to personalize the experience that you can watch when you're coming onto our platform and through audience insights we might be able to, you know, say ‘Hey, this is a big event that's coming up, like a netball grand final that we think that is important for our entire ecosystem to be exposed to’ so when we push that out to you at a critical moment or something might have happened in a game that's amazing, we send you a push notification with five minutes to go in the game before it heads into overtime. Aussies love their sports and that gives you a new reason just to taste test it. If we see success with those taste testers we’ll continue to go out to them with similar offerings and try hook them in and take them through that funnel from getting them from a casual fan over to a fanatic over time.

Dr Juliet Bourke  17:30

So how do you capture the attention of those casual fans then?

Darren Werner  17:35

The key word there is attention and people's attention span has changed. Not everyone can sit down, you know, and watch sport for two to three hours so it's really important that streaming services just like Kayo have evolved their offering to provide snackable formats and condensed versions. So one of our most popular formats on platform is Kayo Minis, which is a shortened 15 to 20 minute version across sports, such as your F1. So especially when it's not in our fantastic timezone really late at night and European time zones, driving enthusiasts or your Drive To Survive, fans can jump on Kayo in a morning whilst eating their brekkie and really dive into a Kayo Mini.

Dr Juliet Bourke  18:23

Services like Kayo aim to enhance the fan experience. But can watching a match from home ever really replicate a live atmosphere? Professor Barney Tan’s not so sure. But the digital experience has its own advantages too…

Professor Barney Tan  18:37

So I think we're seeing, at least in the field of marketing, that there's an integration between the offline and traditional channels with the online channels and what's happening on new media like social media. Well with this integration, what we're seeing is the unlocking of opportunities to actually create richer, more interactive experiences for sports fans and this also then gives us more opportunities in terms of personalizing our marketing. So for example, you could imagine a scenario where you're watching sports and you can actually use QR codes that appear in the broadcast that you can scan, which can direct fans to perhaps certain forms of content, online content, or can direct you to a social media feed that allows you to discuss what's happening on the field. So these sorts of channels, right, actually gives you the ability to bring fans into the game, create a more immersive experience for the fans as the game is unfolding. Another thing that omni-channel marketing in the context of sports opens up is the opportunity for real-time engagement. So with sports marketing, attention and the demand for the consumption of sports content, they tend to be very focused and they would spike especially during a live game. So it's a life event. So the excitement and immediacy of these live games can then be leveraged, right? So you can, for example, provide them with real time updates, you can have social media interactions that unfold live, you could even have in stadium promotions, to create a very dynamic experience a very immersive and interactive experience for the audience. So also with sports marketing, and especially with the integration of new media, community building becomes all the more important because you would understand that sports makes fans very tribal. So there is a very strong sense of community, there's a sense of belonging. So this communal aspect can be further amplified with omni-channel marketing, right, because you can create shared experiences across multiple different platforms. So with social media in person events, you can encourage fan interactions across multiple channels and all of that will be mutually reinforcing to create a even greater sense of loyalty towards your favorite sports person or sports team. So this integration of offline and traditional channels with online channels actually gives us the ability to connect with them. And of course the integration also means that we can make better use of the increasing ‘datafication’ of sports. So like, for example, a fan that watches sports online, they can zoom in to maybe a video feed of a specific player, perhaps they can click on something and the live stats of the player that's relevant to his or her gameplay, right, during a match, all of that can be displayed. So what we are seeing is that, you know, with the current technologies that we have, we are able to get and extract a lot more data out of what's happening as sports is being played. And what this gives us is not just the ability to market better to the fans, but also to help the sports person or the sports team on the field to improve their performances live. So like, for example, in the context of Formula One racing, right, we can basically use predictive analytics, and you know, use data on, for example, the weather, the temperature, to basically help us predict when would be the best time to pit stop and change tires. And that will give the team competing an edge. Is your star player, for example, underperforming during a game and maybe the stats are showing it? Perhaps you could use those live stats to decide when or if to pull your star player off the field. So we can use technology like that to make sports even better, right, to optimize sports performance.

Dr Juliet Bourke  22:40

Just think, you know, we've covered a number of things today which have business implications, and one of them was this sort of adaptation to the way that people consume information. What are the other lessons for business leaders about how to adapt?

Darren Werner  22:54

I think the evolving trends across culture is really key to stay on top of. And I think in a marketing world, what we've seen is that print media has evolved over time and there's a new wave of this channel mix for marketers and business leaders to be abreast of. So whether that's people consuming podcasts or going to YouTube for key information or leaning on the trusted word of content creators and influencers who influenced their day-to-day behaviour – what they consume, what they watch, what they pay for – is really critical. And I think as a business leader, staying up to date with these cultural trends, because they're moving that quickly, is absolutely important.

Dr Juliet Bourke  23:42

And what is it for you? What's your next evolution? Your next keeping up to date with the cultural trends?

Darren Werner  23:48

I am absolutely drawn by the creativity that you see across the podcast space and the likes of the biggest companies in the world. One that really resonates with me is WWE - World Wrestling. Like, who would have thought that a sport and entertainment product growing up that I used to watch 20 years ago is as relevant or even more relevant today than it was.

I use them as a great case study for me on how I should continue to evolve in my career. They've partnered up with some of the biggest names in the podcasting space, whether it be Pat McAfee, who they brought on as a commentator an ex-NFL player who absolutely talks to that younger generation of audience, or signing a WWE superstar like Logan Paul, who is the founder behind one of the fastest growing consumer products in Prime Energy Drink. If a company like that can continue to stay with the times I need to keep my pulse on what's happening in the world at the same time.

Dr Juliet Bourke  24:56

What is it that you think about now going forward in terms of the channels that you use to make sure that you are staying connected to the next fan base? The next growth in market.

Darren Werner  25:06

I think the channel mix has fundamentally changed and what we're seeing is that these new growth platforms are emerging and becoming incredibly, increasingly important to that mix. Whether that be the growth of podcasts, especially in Australia, in almost replacing long-form versions of content. Where people may have traditionally read in print media or newspapers, they're looking to consume that digitally through podcasts, which presents amazing branding opportunities, sponsorship opportunities, as well as a beautiful mix when you mix podcasts with the growth of social media. So you'll see some of the top content creators within Australia, especially within that sporting space, produce podcasts but then also pump out some of their best hits on social almost in real-time to capture their audience not just through audio, but also when they're browsing through their news feed. YouTube is a absolutely critical channel in that mix in connecting with that new generation, but these are all complementary to what we know as that traditional marketing mix. So when you view that all as a 360 model, that's where I see the media landscape and the marketing landscape of today.

Dr Juliet Bourke  26:26

Have you got a tip for us? What's the emerging? What are you keeping your eye on that that's going to be the next part of the ecosystem?

Darren Werner  26:34

I think we've seen this almost battle in the digital world of all these various streaming services, social media platforms and I think over the next five years there will be one or two that die off and there'll be one or two that really rise to the top. The big players that we're seeing in the space from Netflix in leaning into live sports, starting to dabble in that space, you know, recently that they had F1 drivers the day before their race having a celebrity golf tournament, really has put shockwaves through the market to say ‘Hey, Netflix are really here to play within that sports scene’. Another great example is they're looking to put on the biggest boxing match ever in history with Mike Tyson, one of the greatest boxers of all time versus a YouTube sensation in Jake Paul, which will not be a pay-per-view event, but the millions, hundreds of millions of Netflix subscribers will have the ability to watch. So I think watch this space.

Dr Juliet Bourke  27:45

If you're interested in hearing more about the world of sports marketing, you will love my interview with advertising expert Dee Madigan. She explains how important the Matildas football team has been for sports marketing in Australia. You can find the link to that episode in the show notes.