Montetize fan engagement in sports: How to make money
[FREE digital sponsorship simulator]
How do you monetize fan engagement and estimate the digital commercial potential of your existing fanbase?
Offering your sponsor’s extended return on their sponsorship investment is in todays life really important for succeeding in a digital sports age.
But how do you actually make money on new digital campaigns and sponsorship deals?
Fan engagement apps have become a vital part of more and more sports clubs as driver of fan engagement and to create a deeper connection with your fans. But have you ever considered if it is possible to earn money on your valuable fan engagement data?
This reflects the growing recognition of the value that digital media can bring to the sports industry. So, what are you waiting on? Let’s just get going!
In this blog post, we will give you an extended overview and ideas on how you can succeed in turning fan engagement data into new digital revenue.
Apps have become an integral part of our daily lives, with the average smartphone user spending approximately 4.5 hours a day on apps worldwide.
From communication and entertainment to shopping and education, apps offer a wide range of functionalities.
In this comprehensive guide, we’ll delve into various app monetization models and help you identify the one that aligns best with your business goals.
We’ll also discuss how you can estimate your potential revenue on new commercial sponsorship deals. And also gives you some insights into how you can monetize and define the value of your digital inventory with our “FREE digital sponsorship simulator”.
Monetize Fan engagement Apps with different models
Fan engagement app – as a media platform:
One of the most popular methods for app monetization is providing your app as an advertising platform.
Advertisers are eager to pay apps to display their ads within the app, making it a lucrative option, particularly when your fan app has a substantial user base.
It’s essential to strike a balance between ads and user experience, as an excessive number of ads can alienate users, while too few may result in lower revenue.
Furthermore, you have the possibility to leverage very high click through rate(CTR) on your banners compared to other traditional media platforms. You are as a rightsholder or sports club enriched with a very loyal and passionate fan base, often with a higher acceptance of commercial messages.
Want to try our FREE Digital sponsorship simulator?
Simply complete the form to begin estimating your sponsorship potential by leveraging your fanbase.
If you are not used to calculate on the revenue based on number of impressions on your sponsorships deals, then don’t worry we will here give you the right calculation to estimate the potential revenue from banner ads.
From other digital platforms you might be used to evaluate based on Cost per mile(CPM). Which is the standard metric Meta, Google and other advertising platforms calculating the cost of the exact number of impressions shown in their advertising platforms.
To estimate ad revenue, consider factors such as the number of active users, number of banner impressions, ad frequency.
To measure fan app potential the revenue from banners will normally be measured in Revenue Per Mille or RPM. The exact number for RPM can be difficult to define because it depends on your audience. But a good way to work with the valuation on sponsorships based on digital impressions is to conclude on a minimum RPM and thereby use that as a guideline for agreeing on sponsorship deals. It could be around 5€ as a good baseline but try to compare your price setting with average CPM prices for advertising on Facebook, Instagram, and display.
You can use the formula to calculate the estimated potential based on app impressions:
Ad impressions / 1000 x Revenue Per Mille.
Gamification: Digital campaigns for fans
In today’s digital marketing landscape, gamification has become a pivotal tool for many companies. It resonates with people’s innate desire to engage in gaming, making it particularly well-suited for the sports industry. In a domain where terms like games, competition, scores, and battles are commonplace, gamification seamlessly integrates.
Our experience has shown that incorporating gamification elements can transform a seemingly challenging commercial message into an enjoyable and interactive gaming experience. This approach works exceptionally well for enhancing sponsorship activations, bridging the gap between traditional marketing and engaging entertainment.
Gamification elements in the sports industry could consist of a broad range of game types, but we would like to give you some examples here:
- Man of the match
- Match quiz
- Player of the month
- Goal of the month
- Legends quiz
- Guess the lineup
- Set your five-aside favorite team
- Set your dream team
- Match-Worn auction
- Live-event games
- Scratch cards, Wheel of fortune etc.
Digital Sponsorships agreements
Sponsorships and partnerships in sports can provide significant income streams, especially for sports organizations, athletes, and events.
As a sports organization, you are properly used to working with traditional sponsorships.
But are you still stuck in the old-school bronze, silver, and gold sponsorship packages?
The sports and entertainment economy is changing. Long gone is the legacy focus on season tickets, popcorn, and generic sponsor deals.
The world of sports and entertainment is evolving faster than ever, and it’s time to adapt!
Now, it’s all about relevant, extended, and data-driven interactions: People, data, and business. Connected in a mutual desire to get closer to whatever makes them tick.
You cannot anymore only rely on selling more VIP tickets or shirt sponsorship deals. In a digital age sponsors and marketing specialists require more. They want to know the fans of the club even more; they want to engage and communicate with them on digital platforms like a fan engagement app.
By collaborating with other businesses to promote their products or services within your app, you can create a win-win scenario.
Ensure that the partnership aligns with your app’s purpose and adds value to your users. It could be by engaging with the users in different digital concepts like Man of the Match, Player of the Month, Legend-quiz, etc.
The most important thing when working with digital sponsorships is to be creative and try to conceptualize a digital sponsorship concept that could be rolled out for different industries. Try to build your sponsorship concept in standardized packages but with the possibility to scale up in flexible solutions.
On some of our clients, we see them working in a “Champions League model”, where you have 4-6 category sponsors within the app, owning certain digital app concepts and visibility in certain areas.
Example of a digital category sponsor package:
- Visibility on the load screen
- Owning areas within the app; for example stats area – provided by… XXX partner
- Banner ads on defined areas – linking to partners’ website
- Concept ownership example – Man of the match presented by XX
- GIVEAWAYS – Fan exclusive vouchers or VIP moments for most-engaged fans
- 4 x lead generation campaigns pr. Season
Try to define which elements should be included in your sponsorship packages and explore how you could bring value to your commercial partners in new and engaging ways.
To price set the category or sponsorship packages above it depends a lot on the size of your fanbase and the number of active users. Sometimes the sponsorship packages will be included in overall agreements for example with premium sponsors and sometimes it will be seen as a perfect upsell to new or existing partners.
Also keep in mind that broadening the campaigns and concept across other channels like Social media, website, email, etc. to distribute the concepts and campaigns happening within the app will of course add additional value and exposure for the sponsors. Remember to keep in mind how you will distribute the concept when finalizing the exact sponsorship deals.
Estimate sponsorship revenue by considering the number of sponsorships and their individual values. So based on how much you evaluate your packages, they will offer you a certain amount of revenue. In our free commercial sponsorship simulator, we have listed some different commercial elements that could be integrated into category deals but can also be evaluated separately. We have created a standard calculation on category sponsorship based on the number of users, and percentage of them activated and multiplied with a Many Digital metric on the commercial value pr. app user based on our existing client’s usage of digital inventory.
Premium fans – subscription-based model:
Another way of generating revenue for your app users is to differentiate the content and premium features available for paid users. It involves offering users access to exclusive content or features within the app for a recurring fee. It’s common in apps that provide ongoing value, such as news or streaming services.
A nice premium feature could be exclusive ClubTV, which gives premium fans the possibility to see players-documentary before others, streaming of training matches, Youth games, Exclusive stats, Premium fans events, meet and greet, VIP merchandise sale campaigns, free tickets, Loyalty points etc.
There are a lot of possibilities to give your fans more exclusive advantages and there is a potential to charge the fans a monthly subscription fee if the offer is exclusive enough and gives them nice and exclusive features. Think about how your club offers can be more exclusive and how you can make the most loyal fans willing to pay for it.
An app is a great platform to manage and control the premium features and segments based on their membership program.
To estimate subscription revenue, consider the number of subscribers and the monthly subscription fee.
Total subscription revenue = Number of subscribers x Monthly subscription fee.
Loyalty fan app in sports
Loyalty fan apps encourage user loyalty which also can be an intriguing way to generate revenue in your fan engagement app. By offering discounts, coupons, or other incentives as rewards for the fans loyalty, the app will be seen as a revenue driver for conversion on behalf of their loyalty.
Thereby you need to have a functional loyalty system build-in your app solution and thereby use it to stimulate and activate their behavior. It could be triggered by sponsorship agreements where sponsors “buy” the rights to own the loyalty program maybe for a season. And thereby give away relevant vouchers or coupons based on the fan’s loyalty. Fx gives away 30 30-day streaming subscriptions to watch all the club’s games on relevant streaming services. Which will be targeted against all users who have reached loyalty stage 1, if you reach stage 2 you will get 60 days of free streaming services etc.
But it could also be a more club-based loyalty program where each stage in the loyalty gives you a higher “saving” on the merchandise sale end of the season each year. And thereby you stimulate the fans to generate more revenue in your merchandise shop. It could also give the fans access to exclusive fan/club events with a fixed discount.
The loyalty program has a lot of potential if used correctly. But we see that many clubs fail to succeed in this, because of the complexity a loyalty program could cause. But we suggest that you conceptualize a concept that is easy to understand and that gives you immediate income from sponsors or from more sales in beverages, merchandise, or tickets.
To estimate revenue, consider the number of active users and the value of the rewards you offer.
Total loyalty revenue = Loyalty app users x Average Revenue Per User x Customer relationship in years.
And thereby be able to calculate the Customer lifetime value(CLV) of a loyal fan. To calculate on this from a starting point you need to start with some overall assumptions on your existing user base.
How to get started with monetizing fan engagement?
Fan engagement apps offer numerous avenues for businesses to generate revenue. You just need to figure out which models work the best for your company. To unveil the full potential, also will require the right data infrastructure and technical architecture. To reach the full potential you need to have platforms that give you the possibility to set up different campaigns, manage loyalty, and use gamification to build digital engagement campaigns that bring extended commercial value to your sponsors.
At Many Digital we have built around an open-source API-focused infrastructure that easily connects the dots in your overall digital eco-system. Besides our white-label fan app, where the rightsholders collect invaluable first-party data on their fans, we have built a user-friendly back-office/commercial engine. Hereby we give the rightsholders and sports clubs a simple and effective solution where they can manage sponsors, analyze, and measure performance but also set up and activate sponsorship campaigns in their digital eco-system. This also gives them the opportunity to segment and target fans based on their behavior, loyalty stage, age, gender, etc.
With that in hand, you as a football club or rightsholder will be able to build a digital media platform where you are fully in control. And not being dependent on the big tech giant’s algorithms like Meta, Google, and Apple.