Multi-sided platforms & the future of #fanengagement

At its heart, fan engagement is about providing fans with the opportunity to express themselves in a manner that strengthens their emotional bond with a sports property as well as their sense of identification with a wider group of peers sharing their passion.

Data and technology are the two forces shaping fan engagement today (a point supported by the nature of many discussions at IEG’s 33rd annual sponsorship conference). It is no coincidence that data and technology are also shaping the broader internet economy.

These two forces are driving companies such as Airbnb, Google, Apple, Facebook, YouTube, Uber and Alibaba. These so-called multi-sided platforms (MSPs) create value for two or more participant groups. A typical two-sided platform involves producers on one side (creating “offerings”) and consumers on the other. For example, Airbnb unites rental property owners with prospective tenants.

Platforms_MSP model

MSPs maximise interactions between the platform and its participants and their success is based upon network effects. They become more attractive to participants the more people on all sides that use them (e.g. the more rental properties that are listed on Airbnb the more attractive the platform is to prospective tenants and vice versa).

Their communities of producers and consumers and the rich data collected from all sides are the biggest assets of MSPs. The rapid pace of technological development is reducing the need for these tech-driven businesses to have physical infrastructure (e.g. Airbnb own no properties for let).

MSPs – a utopian view of the future of fan engagement?

MSPs represent an intriguing, if not a utopian view of fan engagement in the future. What better for a sports property than to capture all of the interactions (and valuable data) it has with its fans and third party “producers” (e.g. of content, Apps, games, sweepstakes etc) on its own platform?

While building and managing a MSP is probably unrealistic for many sports properties (not least since failure rates are high), almost all are highly dependent upon third party MSPs (such as Facebook, You Tube, Google, Sina Weibo etc) for their fan engagement activities (many MSPs such as Visa and Sony Playstation are active in sports sponsorship). Therefore, at a minimum it is critical for sports properties to understand what makes the MSP model so successful .

Fan engagement platform strategies

The matrix below plots four broad (digital) fan engagement platform options available to sports properties (they are not mutually exclusive). The right-hand side of the matrix remains largely uncharted territory.

Platforms_FE MSP model

  • Shared MSP

For those sports properties without the necessary scale of fan interactions but possessing the technological capabilities (or resources to acquire them), there is an opportunity to collaborate with other sports organisations to create scale (the “shared MSP” route shown above).

For example, Under Armour appear to be betting big on the MSP model. They have built a growing MSP centred on their UA Record App (supported by a reported USD700 million spend on acquiring three fitness Apps) that unites fitness enthusiasts with fitness tracking devices and Apps. They have opened the platform to competitor devices in the knowledge that network effects (and the promise of increased levels of customer data) can be more valuable than short-term sales benefits gained from excluding competitors from the platform.

  • Own MSP

Sports properties with the necessary fan interactions and technological capabilities (or resources to acquire them) are best placed to consider creating their own MSP. For example, FIBA’s 3×3 Planet concept brings together basketball players and 3×3 competition organisers, collecting data via a mobile App and competition management system.

Sports properties with long-term, exclusive media and marketing contracts will undoubtedly find it more difficult to create platforms that are sufficiently open to third party producers to achieve the scale necessary to create network effects.

  • Third party MSP

Most major sports properties leverage existing “Third party MSPs” (such as Facebook or Twitter) as their primary digital fan engagement platform. They occupy the role of producer on these platforms, which in this context (as per the Van Alstyne, Parker and Choudary model above), is defined as the party making an offer of some kind to the platforms consumers.

  • Own (closed) platform

In some cases, sports properties have created their own (closed) platforms (e.g. the Real Madrid App, developed with Microsoft, or MLB Fans, developed with Vixlet) where they are the sole or dominant producer. While this option is clearly more complex and potentially attractive than relying on a third party MSP, the examples mentioned above each rely on one dominant producer (i.e. Real Madrid and MLB / MLB franchises respectively) and don’t benefit from network effects (and thus are not MSPs).

However, this is an interesting option (and less complex than a MSP) and enables sports properties with large fan bases to secure full access to the data generated by fan interactions on the platform. These platforms can also be a good starting point from which to build capabilities and ultimately evolve into a MSP (and benefit from collecting far richer data).

MSPs strengthening their role as “producers” of sports content

Experience has shown that it is crucial for MSP owners to avoid or carefully restrict being a producer if it dilutes the value created for their community of producers (Facebook has been a master at not crossing this line). However, in the sports business, we now see many of the MSPs upon which sports properties rely, acquiring marquee content rights either directly (e.g. Twitter and NFL Thursday Night Football) or via sub-licensing deals (e.g. Snapchat reportedly accessing Olympic content via NBC).

While there are clearly many benefits for sports properties to grant content rights to the likes of Twitter or Snapchat, sport properties need to be cognisant of the impact doing so may have on their own fan engagement activities implemented on these platforms.

Understand MSPs to better understand your fan engagement strategy

Decisions on fan engagement platforms must be taken in view of your fan engagement and wider marketing and commercial objectives. In reality, creating a MSP to engage fans that benefits from network effects and generates rich data sets is likely out of reach for many sports properties.

Nevertheless, the ubiquity and influence of MSPs in sport and their interest in playing a role as producers and strengthening their offers to sports fans necessitates, at a minimum, that sports properties understand how they function.

 

About the author of this post:

David is a Chartered Marketer with more than 15 years’ experience in international sports marketing roles. You can follow David on twitter @davidgfowler or connect on LinkedIn at ch.linkedin.com/in/davidgfowler.

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