There’s something very appealing about sponsorship, just as there’s something deeply enjoyable about sport, film and fame. It feeds our vanity to rub shoulders with the successful, especially if somehow or another you get to feel you ‘own’ a bit of them. What follows warns you about letting the heart overrule the head. Sponsorship is a marketing tool that must be handled with circumspection and professionalism.
How sponsorship works
Money. You pay money to own (or co-own) the rights to a player, car, horse, event, series or whatever. You can sponsor almost anything. When you get sponsorship right it can work incredibly well for you. You get the association of being linked to a winner and, if you are lucky, you may have a wonderful brand ambassador. Or you can waste a lot of money … Well, which is it?
Expect to double the cost of sponsorship rights on marketing them. Exploit your sponsorship fully or don’t do it at all.
Why sponsorship is growing so fast
Sponsorship, the pundits said, was economy-dependent, more likely to be used in the good times. Yet in the USA between 2009 and 2011 expenditure will have actually grown from $16.5 billion to an expected $18 billion, whilst global expenditure grew 5 per cent to just under $50 billion in 2010 and was expected to grow again in 2011 to a level just under 10 per cent of the value of global advertising. So sponsorship is big business.
What’s driving sponsorship against the odds is the money being poured into sport (especially by the ‘super-rich’, the allure of the really big events, the Olympics, World Cup, World Series and the Golf Majors), the overall growth of global sports (sports coverage on the media), and the excitement sponsorship can bring to leaders, staff, customers and consumers alike.
At the top end of sport, investment will increase, coverage and technology will get cleverer and sponsorship will follow.
At the lower-cost end of things the sun is also shining
Not all sponsorship is hugely expensive – especially if it’s local or niche. Sometimes putting money into, say, a local golf event or a golfer to entertain your golf-loving customers can pay dividends. Getting to spend hours of quality time with important customers is a really sensible investment if you do it with style and a sense of passion. So, too, may an investment in a cause-related event motivate young talent in your business or younger customers who are concerned about certain issues.
Avoid controversy. Avoid people who are on a mission to convert. Your ultimate aim is to sell more of your product at the lowest possible cost, not to be an altruist and put your company’s money to charitable ends. Always think about what you want to achieve.
But if you are going to sponsor a charity, check them out through the Charity Commission, speak to other sponsors and insist on meeting the CEO and chair of trustees. Judge whether they could speak convincingly and amusingly to your key customers. Study their accounts. Judge how important you’d be to them.
Journalist Kenneth Hein claimed Red Bull was Austria’s biggest export since Arnold Schwarzenegger. It’s bigger, Kenneth, much bigger and touching more lives. The brand sells over three billion cans a year and, substantially through sponsorship, has woven its way into the life of the young and the daring. No one has ever owned so much high-energy sport.
From BMX (‘The Red Bull Fighters’) to air races, windsurfing, snowboarding, breakdancing and cliff diving, record-setting Red Bull has stood for success and for adrenalin. Its slogan ‘Red Bull gives you wings’ gives it bragging rights in any sport where speed counts. It’s even in a video game, ‘Worms 3D’, where drinking Red Bull gives the worms the ability to move faster.
As in its distribution strategy, where it’s preferred to own dedicated, new, young distribution set-ups rather than multi-franchised professional outfits, Red Bull has used sponsorship in a uniquely aggressive way to build its presence with the people most likely to buy into the values of the brand and to get the notice of a wider audience.
Now a huge global brand, it’s spread those Red Bull wings and was again in 2011 the huge success in Formula One, with Vettel and Weber. The advertising value-equivalent they get from Formula One was estimated at £220 million in 2010, when it received almost a quarter of the total received by all the teams. Red Bull Racing is wholly owned by the drinks company and made a £2.8 million pre-tax profit in 2010, with 75 per cent of this down to F1 and other projects contributing the remainder. Not too many companies make so big an ROI from their marketing spend. I wish Red Bull were running the global economy.
Red Bull teaches us how to do sponsorship with energy and conviction.
Study their smaller sponsorships such as breakdancing, to see how they get the fan base to be the sales force, and how building communities that spread their wings under the auspices of Red Bull works so well. Their success is about being smart, not being rich.
This is another fine mess you’ve got me into
The trouble is too many sponsorship decisions are made rather informally at chairman or CEO level, leaving the poor marketing people to sweep up the debris of a glamorous dinner party conversation that led to a good-idea-at-the-time investment decision, but is simply not thought through. If this has happened you have little choice but to make the best of it and, whatever you do, try to ensure you merchandise the sponsorship as brilliantly as you can. Do the following:
- Make it look as though it is thought through (‘post-rationalisation’ is the most valuable marketing tool a company can have).
- Make sure the sponsored body becomes very visible to staff and their families; aim to grow a huge grassroots ‘sales force’.
- Make it seem involving to all your major stakeholders – suppliers, customers and local media – never underestimate how much you can get out of them by treating them as important partners in the enterprise.
Warm up your key opinion-makers; don’t embark on a sponsorship and then neglect it or starve it of funds.
Learn the lessons from others:
- Brighton and Hove Albion’s main sponsor, (impressively) binding club and community in close embrace, is BrightonandHoveJobs.com.
- Barclays Cycle Hire is an enormous success in London, now with 6000 bikes and 400 docking stations and more than 4 million journeys or so to date. It costs £5 million a year for a five-year period (just under 20 per cent of the total cost). The bikes look great, they’re everywhere and the concept is going to fully fund its annual cost. London is happy, bikers look very happy, Barclays should be ecstatic.
- However, sometimes things go wrong. The Tiger Woods saga was a sad story of sponsors walking away as his personal soap opera unfolded. Gillette, Gatorade, Accenture, AT&T, Golf Digest and Tag Heuer all deserted him; Nike and EA Sports stuck by him. I rather preferred them for putting loyalty first. I suspect (and hope) they will come out the winners.
It was Karen Earl, chair of the European Sponsorship Association, who said:
‘Sport is extremely engaging and it can give a human face to industry.’
No more so than in rugby, where Brains Beer renewed their sponsorship with the Welsh Rugby Union team. So far so good, but it’s rendered brilliant for all concerned by the very close support and participation the team gets from Katherine Jenkins and Charlotte Church. They are a brilliant, sexy duo – very Welsh and very enthusiastic.
Branded entertainment
Branded entertainment is sponsored TV or film. Soap operas were originally called that because they were sponsored by Procter & Gamble, makers of – soap. This world is being reinvented with new focus. Sir Martin Sorrell for one, and his is the loudest voice in marketing services, believes that sponsoring films and TV series is going to be the next big thing. The buzz phrases are ‘content partnership’ and ‘entertainment brands’. Think about what Disney did by turning a theme park ride into a global brand with Pirates of the Caribbean.
‘The age of using adverts as a megaphone to yell at people and irritate them is coming to an end. If you are smart and have a message to get across you have to do it in a way that’s agreeable, sensitive and welcome.’
(Ed Warren, a creative executive at Mother Advertising Agency)
This is not product placement
Product placement used to get bad press, as it seemed to be overdone and overt in James Bond films and Coronation Street. Ofcom seemed to turn a blind eye. But branded entertainment is something more exciting. Think of your ‘brand’ as the ‘executive producer’. Think of the next local pantomime written with your brand in mind. Imagine Cinderella being sponsored by a shoe brand. Timberland brings you Cinderella in ‘the shoe that really fits’.
They’re already at it in droves
It started in 2001 with BMW Films doing The Hire, a series of acclaimed shorts. Now all the big names are getting in on this: Coca-Cola’s ‘Stepping Stones’ programme for people with learning difficulties on NBC; P&G on the American version of The Apprentice; and Amex, Budweiser, Toyota and Ford are all in there. In the UK we have the Nokia Green Room – a music TV show on Channel 4.
Fay Weldon wrote a novel, The Bulgari Connection; Somers Town was an award-winning film into which Eurostar pumped £500,000; and Pot Noodle: The Musical, featuring events from their commercials, appeared at the Edinburgh Fringe.
The problem is selling to the smart consumers of today
‘Advertisers are realising that if they create their own content they don’t need to pay for ad space, they have greater control over how their brand is portrayed and ideally they create a more in-depth and involving interaction between consumer and brand.’
(Nick Chapman, brand strategy director at Venables, Bell and Partners in San Francisco)
‘Brands tend to want to be shiny and positive, while people generally prefer entertainment about complicated people doing stupid or dirty things to each other.’ (Nick Chapman again).
Today’s marketing work needs to be authentic and edgy. Bland is dire.
This is new territory. In the future, advertising agencies are going to work with producers on content, making brands the new patrons of great movies and shows. It’s going to mean that money to do great work will be available.
In the brilliant world of marketing we are going to create ‘brand architects’ who will spend their time working out precisely what their brand is and what their brand is not and how the perfect fit with a film, series, play or TV event can be constructed. And, unlike in the past, the associations are going to be subtle and interwoven, not crude. The issues are going to be understanding exactly what emotional territory you want to occupy and how available it can be made. This won’t mean a lot to an average marketer at the moment, except (being an intelligent marketer) they should be speculating what it could mean. So watch this space and imagine Guinness: The Epic in Black, The Samsung Opera and so on.
Big brands need big ideas. This area is one of innovation … and courage is needed.
All brands need affordable ideas too. Any brilliant marketer is going to track what the big brands are doing here and see what works. I can’t wait to see the ‘Orvis Fishing’ programme or the ‘Callaway Golf Heroes’.
When brands help create best sellers it’s time to watch out. The acid test will be when a big brand helps create a top-rating TV series. Then we’ll see Hollywood and Wall Street get very, very friendly with each other. When a Heinz gets credited with inventing the next Simpsons the world will have moved on.
Thinking carefully and thinking small
Sponsorship can sometimes be a surprisingly good-value activity if, in a B2B situation, whatever it is that you sponsor allows you to entertain customers and their wives well.
One basic rule will always apply. Can you make it look fresh, creative and strongly branded? Can you own it?
An ad in a theatre programme seems almost always a waste of time. However, ownership of one performance, with you standing up at the beginning and saying who you are and why you’re backing it, may be a great deal. Just don’t be sold because you feel sorry for the swimmer running out of funds, or the golfer struggling to make it.
Be hard-nosed. Will it be good for your business? Would something else be better?
In global terms sponsorship is growing because it links brands with pleasurable activity and reaches people in a good mood. If this works for you on a small scale think hard about it, but don’t let the pleasure element confuse the rational decision-maker.
Sponsorship can be one of the early casualties in a budget cut (witness Honda and Formula One), so make sure the economic case for doing it is cast iron. Do not simply be taken in by an opportunity to associate yourself with your favourite sport or charity. Remember they want your money. Remember you want sales.
There are now so many new opportunities. Things you could never believe you could sponsor are now potentially available, from news programmes to all forms of entertainment. Top Gear is now a global brand in its own right. The world of marketing opportunity is wide open.
If you do decide to go for a sponsorship package for good cost reasons, one of which may be that this will increase your opportunities to develop your business relationship with some major customers, then that’s a justification to go ahead. But whether it’s a big or a small sponsorship, ensure that you maximise:
- Your branding.
- Your importance to the sponsor’s marketing.
- Use of and exploitation rights of their key players – players and management.
- The guaranteed engagement of the sponsor with people in your company.
- Frequent (monthly) reviews of activity and its effect on your business.
Sponsorship is often a decision lightly taken and poorly seen through. Don’t underestimate how much of your time it will take. But if you want to do it and can justify it on cost and impact grounds then really go for it – energy and enthusiasm will see you through. But one word of advice. Today’s consumer is very smart so don’t ever do anything tacky or inappropriate – you won’t get away with it.
Key questions to ask yourself
Sponsorship is expensive. Think hard before getting involved in something that takes your time and gives back less than it should. Most sponsorship programmes that are disappointing are like that because no one admits or knows how much commitment successful sponsorship requires. Answer these questions honestly and you will make a better decision.
- What is the key marketing issue? Is it brand awareness? Is it about making your brand, product or company seem more important than it is? Is it a consumer or a trade issue? Is it a global, national or local issue? Be clear about all of this first.
- Why are you thinking about sponsorship?
- When you evaluate the option in terms of ticking off the following, does it still make sense?
- Appeal to target market?
- Appeal to trade customers?
- Appeal to staff?
- Compares well with other options in terms of cost per person reached and in terms of influence and impact?
- How much is the most you can afford to invest? Sponsorship can be very expensive. And remember you need to double at least the sponsorship cost to cover the marketing of it.
- Is this association going to improve the reputation of your brand?
- Does the sponsorship fit with your strategy?
- What ideas will make this sponsorship really different and exciting?
- Are you clear about the personalities of the people you are sponsoring? Could they be brilliant brand ambassadors?