..... when we are listening to our instructor, I generally am sitting down on the floor and Jacks knows he's "released" from working. So he can sniff the floor if he wants. He generally flips on his back and rolls around and smiles up at me while I scratch his belly. Or I keep him occupied a little by play "tap-tap" games on the floor. Or I'm roughing him up a little and playing with him while listening. Or sometimes lately he kinda naps out there and I let him.
When it's time to get up and work again, I just give a reminding tug on the leash and he knows the "ignore everything but me" rule is back on.
With Bertie it's a work in progress, because he's pretty much a baby and learning everything... but I'm handling him the same way. If he's sniffing while I'm walking with him, I'm going to reach down to gently squeeze his nose (like you would squeeze a baby's nose) and tell him "no sniff".
It's not that much different than when I'm on the side with people I train with. Our dogs all grew up together and like saying "hi" and so forth. That behavior is OK when they are not working. When we are working and giving them commands, they know what the rules are.
Now if the training floor is set up like a ring and we are actually going in formally for a run (like fun match or we are doing run throughs), then from the time I enter the ring until the point we leave the ring, I'm using all of the cues I can to let Jacks know that we are working. That's tone of voice, posture, commands, etc....
So I guess what I'm saying is that - if your dog is a sniffer, it's not a HUGE deal. Just make sure they don't do it when you are working. Having a good "no sniff" command and correction will help polish that up.