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TikTok: The race is on to monetise Gen Z

The video-sharing platform has become a valuable tool for rights holders such as the NFL, aiming to engage with Gen Z. However, TikTok’s recent collaboration with L’Oréal suggests that in the future, it could move beyond engagement and help to monetise this demographic.

Photo Source: The Hustle
For the past couple of years, sport has viewed TikTok as a platform on which it can increase engagement among younger viewers. From a deal with the NFL, to more recent partnerships with Wimbledon and 2020 UEFA European Championships, sports teams have become more and more open to embracing the platform.  
And it’s clear why. 
According to Whistle Wise, over half of Gen Z would rather look at sports memes and social media accounts than watch a full sports game live. As such, it should come as no surprise that TikTok was the most downloaded app of the year in 2020.
However, TikTok could soon become a platform that goes further than simply helping sports teams engage with this younger generation. It could help to monetise them, too. 
Last week, L’Oréal announced that it had partnered with TikTok on a pilot commerce feature, enabling consumers in the UK to purchase it’s Garnier and NYX Professional Make-Up products directly via the app.
L’Oréal’s latest foray is informed by what’s happening in China. In 2019, social commerce made up 11.6% of retail e-commerce sales in the country at $186.04 billion (for context, the corresponding figure in the US was $19.42 billion over the same period).
Following on from livestreaming and live shopping, social commerce is believed to be the “next frontier” among retailers, and it’s likely that sports rights holders will also want to follow suit. 
Interestingly, it also sees TikTok position themselves as an entertainment platform rather than a social network. As such, we may seem them begin to compete more against the likes of Amazon and Rakuten than Facebook and Instagram. 
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Photo Source: GIPHY
Firstly, I think it is important to clarify that, no, Ronaldo didn't wipe $4 billion off the stock price of Coca-Cola. Don't just take my word for it though, here's an in-depth analysis by the wonderful Brendan Coffey at Sportico. 

That said, 'Bottlegate', has certainly sparked a lot of opinion across the industry.

The move has led to Uefa contacting national federations to tell teams to avoid actions that could affect tournament sponsors (each of whom have paid around $30m to endorse the competition). However, no penalties have been imposed on players. 

That is, Murad Ahmed writes for the FT, a "reflection of the changing power balance at the top of the world’s biggest sports." 

"Highly paid athletes appear more willing to challenge the media and marketing deals struck by the leagues and competitions they play in, if those financial imperatives clash with their own carefully tailored corporate image or sincerely-held beliefs."

However, it does also highlight a few issues, at least in my mind.  

While the the shift of power from governing body to athlete is (somewhat) justified, it poses an interesting question as to how monies is distributed in future. 

As England manager, Gareth Southgate, rightfully points out. "I think there are lots of sponsors in sport and the impact of their money helps sport to function. Without those companies investing it's difficult to provide the facilities that we need." 

It will be really interesting to see how governing bodies react - and what solution is found. If sponsors move direct to source (i.e. athlete partnerships), it could leave national federations without the means to fund grassroots programs. 

P.S. Surely Coca-Cola can find better ways to activate their partnerships with Uefa? They, and the other commercial partners, must be jealous of Volkswagen.
Here's a few of the top articles that I've come across this week. I hope you enjoy!
Photo Source: Tennishead
Governance and Finance
  • Wimbledon will be allowed to have a full crowd of 15,000 at Centre Court for the men's and women's finals next month, a year after the tournament was canceled entirely because of the coronavirus pandemic.
  • The New Zealand weightlifter Laurel Hubbard is set to make history and headlines, plus a considerable amount of controversy, after being confirmed as the first transgender athlete to ever compete at the Olympic Games.
  • In a ruling that could help push changes in college athletics, the Supreme Court unanimously ruled that the NCAA can’t enforce certain rules limiting the education-related benefits that colleges offer athletes.
Photo Source: Inside The Games
Sponsorship and Marketing
  • Customer relationship management company Salesforce has signed a seven-year deal with the Los Angeles 2028 Olympics and Paralympics, providing a digital service for fans and athletes.
  • Valencia become first club to promote fan tokens on shirts in deal. The Spanish soccer club’s $VCF token will replace Bwin's logo from start of next season.
  • Zwift has announced it will become the presenting sponsor of the women’s Tour de France on a four-year partnership beginning in 2022. 
Photo Source: Sportico (AP/ ULRIK PEDERSEN)
Broadcast and Media
  • A group of nine European soccer leagues, including the top domestic leagues in Denmark, Switzerland and Norway, are pooling their international media rights in the hopes that selling a larger centralised package will bring more eyeballs and more revenue.
  • Bookmaker Paddy Power is making a landmark move into longform content by writing its own sitcom, entitled 'The VAR Room', to be broadcasted on terrestrial TV and streaming services. 
  • Brands have reached record levels of content, representing a 300% increase in brand activity on the OneFootball platform during the 2020 UEFA European Championships.
Photo Source: F1
Welcome to the the Sports Pundit Networking Series. The aim is to promote Sports Pundit readers and foster a greater community across the newsletter. For the latest edition, I caught up with Jamie Corr, Managing Director of Sports for Hill+Knowlton Strategies.
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