Event Sponsorship

Notes
GUIDE TO SPONSORSHIPS
By IEG

Advertising is the direct promotion of a company through space or
airtime bought for that specific purpose. Advertising is a quantitative
medium, sold and evaluated in terms of cost per thousand.
Sponsorship, on the other hand, is a qualitative medium; it promotes a
company in association with the sponsee

Effective marketing is no longer tied to eyeballs, but rather to
heartstrings. Whether it’s through sports or entertainment, arts or
causes, companies are carving out ownable emotional territories
by tethering their products and services to the issues, events and
organizations their customers care about most.
Sponsorship does not replace the need for advertising. The benefits
sponsorship offers are quite different from those produced by
measured media.

Sponsorship, on the other hand, provides opportunities for embedded
advertising, a fail-safe delivery system where messages are incorporated
right into the action.
Sponsorship, which allies companies with community responsibility and
improved quality of life, is precisely the kind of statement consumers will
respond to. Increasing need for two-way communication
In response to the fragmentation of the mass market and mass media,
companies are looking for alternative methods to communicate sales
messages.
Sponsorship, which is the most direct channel of communication, is
tailor-made for this environment. It reaches people in an environment
that matches their lifestyle rather than intrudes upon it. It is not a passive
monologue that interrupts a TV show, or comes as a piece of mail that
needs to be dealt with. Sponsorship speaks to the public, not at them,
creating opportunities for two-way dialogue.
Companies do not use sponsorship to replace advertising, public
relations or sales promotion. The benefits sponsorship offers are quite
different, and the medium works best as part of an integrated marketing
communications effort that includes the use of all marketing methods.
Below, IEG analysts identify the most common reasons companies use
sponsorship.
Increase brand loyalty
Create awareness & visibility
Change/reinforce image
Drive retail traffic
Drive sales
Sample/display brand attributes
Sponsorship allows companies to showcase products., Entertain clients
Narrowcasting
Recruit/retain employee
Merchandising opportunities, Differentiate product from competitors

Sponsorships offer companies a competitive selling advantage because it offers opportunities for category exclusivity and can be used as a platform for creating currency with customers
Combat larger ad budgets of competitors
The cost-effectiveness of sponsorship relative to traditional media
advertising allows smaller companies to compete with the giants of their
industry.

The era of the mass audience is gone.
Sponsorship allows companies to hone
in on a niche audience without any waste.
The customer is always first: Sponsorship will not work if it is imposed
on an audience. Sponsors and properties must help audiences look
beyond the obvious trappings of sponsorship, such as perimeter
signage, to the value-added benefits sponsors are bringing. It must
be communicated to fans and audiences that, as a result of the
sponsorship, they are getting events that would not otherwise visit
their market, more affordable ticket prices, enhanced programming
or some other tangible benefit. To make an impact, it is key that the
sponsor is seen as bringing something to the event. The activity must
be perceived as being provided by the brand rather than simply
Cosponsors are potential partners for each other. Networking within
this group can be highly profitable. For example, a candy maker that
was a primary sponsor of a yacht racing team liquidated its entire fee
with a product sale to one of the team’s smaller cosponsors, an oil
company. The confectioner transferred a portion of its sponsor benefits
package to the oil company to clinch the sale of its candy as a giveaway
with a tank of gas.
Working with a cosponsor can vastly extend the reach of a company’s
promotions without increasing cost.

Media tie-ins
Media partners help extend sponsor visibility in many ways.

LEVERAGING PARTNERSHIPS TO GO
BEYOND RATIONAL TO EMOTIONAL
Reprinted from IEG Sponsorship Report
More than one speaker at IEG’s annual sponsorship conference alluded
to the fact that marketing communications has too often meant a
company telling consumers and other stakeholders what its brand is,
what it stands for and how they should feel about it.
To reach today’s consumers, brands must demonstrate what they are
rather than say what they are, which is one of the many reasons why
sponsorship is such an effective medium.

But the act of sponsoring is no longer enough either. What a company
sponsors and how it activates those sponsorships must engage the
target audience on an emotional level if the partnership is to achieve
brand loyalty and other desired behaviors.
Below, some key takeaways about how sponsors are closing the loop
and ensuring their partnerships resonate with the intended audience.
Be authentic. In a promotional partnership, being authentic translates
to the corporate marketer being true to its partner’s brand and its
relationship with its audience, said Rita Bargerhuff, vice president of
marketing for 7-Eleven, Inc.
And that sometimes involves taking a risk, she noted. In deciding
last year to conduct a national tie-in with The Simpsons Movie that
included re-branding some of its convenience stores to become actual
representations of the Kwik-E-Mart in the cartoon, the chain was
associating with the negative stereotypes of c-stores and their owners
at which The Simpsons good-naturedly pokes fun.
Measuring media coverage
This approach calls for placing a dollar value on publicity. First, document
the number of seconds of TV and radio coverage, as well as column
inches in print. Then determine the cost to purchase a like amount of
advertising. In assigning values, some sponsors use the rate card, while
others use qualitative objectives. For example, Cartier values mention in
Town & Country higher than People.
FROM MARKET SHARE INCREASES
TO IMPROVED IMAGES, SPONSORSHIP
DELIVERS RETURN
Reprinted from IEG Sponsorship Report
Speakers representing sponsors at IEG’s annual sponsorship conference
reported a wide variety of positive returns on their objectives from
organization, venue, sports, music and other partnerships. Below, a
sample of the results achieved:
The Procter & Gamble Co. saw its Secret deodorant’s market share
among cheerleaders increase by 30 points within six months of signing
a partnership with cheerleading camps, competitions and organizations
run by Varsity Brands, Inc.
“That is a crazy result to be able to achieve, and it is certainly not
one we are getting with traditional media,” said Dave Knox, P&G
brand manager, who forged the deal when he was the company’s teen
external relations manager.

Sponsorship, the fastest growing form of marketing, is unregulated in
the U.S. No guidelines for agency standards and practices exist;
those involved in the industry have had to establish their own business
principles. As a result, practices vary considerably from one agency
to another.
In today’s challenging sponsorship sales environment, properties need
to do all they can to add value to packages for prospective and existing
partners.
But according to a number of sponsors contacted by IEG SR, far too
many properties still miss the boat when it comes to a key way of
creating additional value: facilitating cross-promotions among their
sponsors.
Sponsors’ have long had appreciation and respect for properties that
proactively brainstorm and help to facilitate cross-promotions, and the
demand for such assistance has only grown higher in today’s budget
challenging environment.
“As rights fees continue to escalate, we are able to make our activation
budget go a lot further if we can spread the costs among other
likeminded partners,” said US Bancorp corporate sponsorship manager
Dennis Bash, who oversees sponsorships in 14 states in the western
portion of the bank’s 24-state footprint.
WHY SPONSORSHIPS FAIL
Up until the late 1980s, the CEO Syndrome – when a company sponsors
yacht racing because a top executive likes yachting – was the primary
cause of ineffective sponsorships.
While sponsorship decision-making is still not totally immune to
this kind of subjectivity, growing accountability to stockholders
and stakeholders has resulted in a more professional approach to
sponsorship.
Today, far more complex reasons are usually behind sponsorship
programs that run amok. The most common ones are detailed below:
Greenwashing. Don’t sponsor green unless you are green.
Sponsorships are coming under increasing scrutiny and those
perceived as PR ploys will backfire. Whether it is an environmental tie
or a tie to sports, unless a sponsor is genuinely seen to be enabling
a recipient organization, the strength of feeling that is engendered
can very easily turn against the company, as it will be seen merely as
exploiting a situation.
Signing the check and dropping the ball. Sponsorship is rarely an
efficient buy for companies expecting the pay-off to come through
on-site visibility; on a cost-per-thousand basis, the return is not there.

Due diligence overlooked. Knowing what you are not getting is often
as important as knowing what you are getting. For example, does the
sanctioning body you are about to sign with control marketing rights to
the events it sanctions? How about the athletes that compete in them?
Does league sponsorship include marketing rights to teams?
What are the legalities and liabilities
associated with the property?
Property hopping. One-year commitments are generally of dubious
benefit. Creating a link between a sponsor and a property is rarely
accomplished overnight. Also, the learning curve in sponsorship is
longer than other media, and sponsors usually do not know how to fully
maximize an involvement with a particular property in the first year.
Too many little sponsorships. It is generally much more effective to
build equity by concentrating sponsorship funds than by spreading
them around. This can take the form of multiple lower- and middle-level
packages within a single property type or buying top-level packages at
one or two properties.
Insufficient staffing. Even turnkey packages require additional staff
time for everything from hosting clients on site to approving artwork
with sponsor ID.
Competition for trade participation by cosponsors. When
companies whose products are sold through the same distribution
channel sponsor the same property, impact is often diluted. Sponsors
ing themselves competing with each other for retail participation and
undermining the value of each other’s offers in the consumer’s mind.
Both sponsors and properties need to consider not only exclusivity
within a product category but also the number of cosponsors with the
same sales outlets.
Failure to sell internally.
Findings of a five-year study conducted by Indian tire manufacturer
The aggregate findings of the surveys were that on three of the four
objectives sponsorship had a positive long-term effect that was greater
than advertising’s. Product image was the only objective impacted
more by advertising than sponsors.
Attributes where sponsorship’s efficiency over advertising has been
demonstrated include its ability to build:
Credibility. Sponsors typically receive official product designation
and rights to use the sponsee’s marks and logo on packaging, etc.

Imagery/Association. By stating that it is an official sponsor, the sponsoring
brand can be linked immediately to a known set of image qualities,
e.g., public-service oriented (sponsor of a local parks program);
environmentally responsible (World Wildlife Fund); world-class
performance (Olympic Games); artistic excellence (Chicago Symphony
Orchestra); durability (New York City Marathon); category dominance
(National Football League); etc. The company’s advertising does not
have to work as hard to create image qualities for the brand and the
consumer is more likely to be receptive to the transference of qualities
than to their creation in advertising.
Prestige. Only a handful of companies can afford to advertise on
the most prestigious media broadcasts. But with sponsorship, even
a mega-event like the Super Bowl is affordable to smaller and local
brands. That’s because companies with smaller budgets can sponsor
subordinate events within a major one. Small-budget sponsors can also
sponsor a lesser-known event and work with the producer to make it a
major one.
Internal morale. Unlike an ad buy, employees can be directly involved
with a company’s sponsorships

Why it’s easier to stay with advertising
Despite its many advantages over measured media, the process
of buying, managing and measuring sponsorship is far more time-
consuming, complex and risky. Among the eficiencies that advertising
offers that sponsorship does not are:
Standardization. With advertising media, what’s delivered is
consistent, e.g., all broadcast media deliver time; all print outlets offer
space. Sponsorship beneits, on the other hand, vary radically from
one property to another. With sponsorship, two properties in identical
markets might deliver the exact same audience and numbers, yet offer
entirely different benefits, e.g., pro-am spots vs. title of a stage, making
it virtually impossible to compare like and like.
Evaluation. Flawed as it is, cost-per-thousand is a universally accepted
measure providing advertisers built-in evaluations of their media buys.
Measuring sponsorship’s impact takes a dedicated effort and entails an
additional cost.

Turnkey Ad buys do not require an additional spend for effectiveness. The opposite is true of sponsorship, where companies looking for a
pay-off solely through their visibility during the event usually will be
disappointed.
Make-good. With advertising, if ratings or circulation are lower than
projected, additional time or space can be provided by the media as
compensation. With sponsorship, where the seller often controls just
one property and has no access to a year-round inventory, this is rarely
the case.