Five Reasons Why Digital Marketing is Essential for Japan's Sports Industry

[Figure 1]

Figure 1 shows a symbolic example of what has been happening in the sports market in recent years.

First, the influence of globalization is evident in the trend toward massive market expansion. For example, the Premier League secured a broadcasting rights deal worth $11 billion over four years, representing approximately three times the contract value seen at the start of the 2010s.

On the other hand, the overwhelmingly significant impact sports programming has on media like television and social media has also become clear. The majority of the most-watched television programs worldwide are sports broadcasts.

This unprecedented business scale demands more efficient PDCA cycles, making digital data analysis indispensable. Furthermore, leveraging sports' high media influence in the digital realm should naturally yield significant advertising and promotional results.

Reason 2

All stakeholders now create content

[Figure 2]

Content holders, athletes, users (sports fans), sponsors, broadcasters, and all other stakeholders involved in sports are increasingly creating their own content.

For example, athletes use social media to communicate with fans, and sponsors develop high-quality content and associated campaigns to build relationships with users. Content from various stakeholders is being published across digital channels.

By leveraging marketing to connect this digital content, we can deliver a richer experience to fans.

Reason 3

The Rise of OTT May Transform Broadcast Rights and Broadcasting Models

[Figure 3]

OTT (Over The Top) refers to "companies other than telecommunications carriers" that provide audio, video content, and other services over the internet. Think of services like Netflix, Hulu, or DAZN—that should make it easier to understand.

As explained in [Reason ①], broadcasting and sports are a natural fit. If OTT services start acquiring sports content broadcasting rights, the day when "watching sports on OTT via digital devices" becomes commonplace may not be far off.

Reason ④

Fan engagement will become data-driven

[Figure 4]

As watching sports via OTT becomes more common than it is now, it will become possible to centrally acquire "viewing information tied to fan IDs" – something that was difficult to achieve with television.

Not only OTT, but as contact points between fans and sports expand across digital channels, it will likely become possible to also capture fans' "online behavioral data" and "real-world attendance information."

This opens the potential to directly sell broadcast content, tickets, and merchandise based on user viewing, behavioral, and attendance data along with attribute data. It also enables the development of new advertising menus and even ventures into new business as a data provider.

Several professional sports teams and governing bodies in Europe and the US are already leveraging digital marketing tools to collect extensive data and begin translating it into tangible benefits.

For example, the NBA's Miami Heat team utilizes Oracle's marketing tool "Eloqua" to achieve the following:

• Fan development through personalized communication
• Automation of digital campaigns
• Customized movie clips for each customer
• Driving season ticket sales

These initiatives have driven the team's season ticket renewal rate to an astonishing 97%.

Moving forward, the sports industry will undoubtedly see increased adoption of systems like marketing automation and DMPs (Data Management Platforms). This will enable centralized management of diverse user viewing, behavioral, and purchasing data. Marketing based on this data will become increasingly prevalent.

Reason ⑤

Increased Accountability in Sports Sponsorship

As explained in [Reason ①], the scale of sports sponsorship has reached unprecedented levels. Simultaneously, there is an increasing demand to clearly demonstrate the "return on investment" of sports sponsorship.

However, precisely because the real thrill lies in enjoying the excitement of the live experience, explaining this is extremely difficult. Demonstrating "effectiveness" with concrete numbers requires digital marketing expertise.

Furthermore, beyond the traditional compensation of "brand and product name exposure" secured through sports sponsorship, there is now a growing demand for delivering clear marketing benefits and collaborating on new services. Here too, digital marketing presents both potential and necessity.

The Significant Growth Potential in Japan's Sports Market

Next, let's turn our attention to Japan.

While Japan has a thriving sports culture, it seems to be failing to fully leverage the potential of sports compared to "soccer in Europe" or "baseball and basketball in America."

After interviewing representatives from several Japanese sports organizations, teams, and sponsors, I identified three common areas for growth in Japanese sports, specifically regarding the spectator experience. These are shown in Figure 5 below.

[Figure 5]

Room for Improvement ①

Lack of established mechanisms to guide potential fans to their "first spectator experience"

According to interviews the author conducted with J.League officials, "Japan has nearly 30 million potential soccer fans, but only about 3 million of them visit a soccer stadium even once a year."

1.Despite being a country with a population of 200 million and professional soccer teams in numerous prefectures, the fact that only 3 million people attend J.League matches annually does seem somewhat disappointing. However, it also indicates that spectator attendance could still be significantly increased if a system to guide potential fans to their first match were established.

Room for Growth ②

Trial Fans Not Converting to Regular Attendees

[Figure 6]

 

Figure 6 is a graph created by the author showing the number of people who watch a certain sport per year, based on a survey asking spectators of a particular sport how many times they watched it last year. The most significant problem evident from this graph is that "trial fans (first-time spectators) who watched once a year do not go on to watch a second or third time."

In other words, if we can successfully implement "mechanisms to guide trial fans to their next viewing experience," this too will lead to increased spectator attendance.

Room for Growth ③

Failure to enhance hospitality/experience for core fans

Figure 6 also reveals another point: "A significant number of core fans who attend very frequently exist." However, we do not have an accurate understanding of "Who exactly is attending how many times?"

So, what specific actions should Japan's sports industry take? A major clue lies in

・The most common reason for attending a game for the first time is "being invited by family or friends (who are already fans)"

This data is significant. One sports organization has even coined the term "invite and be invited. "

Building on this insight, what can we achieve with digital power? This series will present the strategy and concrete actions to make it happen.