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Agencies risk being ‘cut out’ from sports marketing as brands and players ditch ‘middlemen’

Agencies face being increasingly left out in the cold during major advertising deals between sports stars and brands, R/GA’s global social lead has warned.

Kyle Bunch, the Texas-based managing director of social at R/GA, claimed agencies are seeing a number of “horrifying” deals take place directly between advertisers and international athletes as both become more empowered by social media and technology.

Bunch: “If you’re looking at some of the top athletes to work with, you need to look at different compensation models than just your three-year endorsement deal”

Speaking during Mumbrella’s Sports Marketing Summit in Australia, Bunch argued there needed to be a rethink of how brands remunerate their sporting star ambassadors, claiming “a big splashy sponsorship contract” may no longer be enough.

He said: “Some of the bigger name athletes are becoming media properties in their own rights. [NBA star] LeBron [James] has built up a platform called Uninterrupted.

“He did something really impressive with Uber around the time Donald Trump and politicians were coming hard against athletes. They put together a really simple idea: they had a reporter driving like an Uber driver, Kevin Durant and LeBron on the backseat talking about what’s going on politically in America right now. No agency involved; no media intermediaries. Just LeBron’s media working with advertisers, going straight to consumers.

“On the one hand that’s great, on the other hand for agencies, that’s a little horrifying when they’re being cut out.”

“Bayer Munich has taken control of its digital future: it has a 65-person team that’s doing everything from creating content for consumption and content direct for advertisers, again in many cases cutting out a lot of us in that agency world.”

When asked by Mumbrella what agencies could do to overcome being axed as “middlemen”, Bunch said: “The first place to start is to quantify the true business – how are we serving the goals, not just getting these sometimes vanity metrics of awareness and broad exposure.

“One of things I’ve been looking at from LeBron is should these agencies formalise relationships with these top-tier athletes out there? Someone like R/GA spinning out a boutique agency dedicated to sports – in concert with players like LeBron or Kevin Durant, where they start to be the creative leadership or lightning rod. If you want something, they can look at how to propel it.

“The other thing to look at is how athletes are becoming investors and partners. LeBron took an equity in Beats By Dre [headphones], Under Armour signed [NFL player] Tom Brady and gave him a share in the company.

“If you’re looking at some of the top athletes to work with, you need to look at different compensation models than just your three-year endorsement deal or big splashy sponsorship contract.”

Despite these fears, Bunch was enthused by the recent deal signed between the AFL Players’ Association and Telstra in Australia, whereby they launched an online platform for players to directly publish digital content to the public.

“A lot of us in the United States were really intrigued by being able to tap into that player energy and using it to directly engage with fans,” he said.  “This is something we would kill for with a lot of American leagues.”

Regarding his own agency’s efforts to stay in the meeting room, he added: “We are working with the Major League Soccer and start-ups to help evolve the game, on the field, off the field, in-stadium, watching at home. This is the major investment to stay ahead.”

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