Successful sponsorships

An article on sports sponsorship by the banks appeared in the Times last Friday. What I expected to be a tirade against chief executives enjoying hospitality at the tax-payers expense turned out to be a very balanced piece by Ashling O'Connor on the benefits that sponsorship brings to the sponsor and sport at all levels. A link can be found at the end of this post.

The article coincided with a meeting that I was at yesterday with marketers in the professional services industry. There we discussed how to get the most out of sponsorships.

The problems faced by some members of the group are by no means unique: a portfolio of small, largely client-driven sponsorships with no cohesive link tying them together, the absence of an effective plan to get value from the sponsorships and intangible benefits making the return difficult to prove.

There are a number of guiding principles for using sponsorship effectively.

Let's start at the beginning - is it a sponsorship?

Many imposters masquerade under the heading of ‘sponsorship’: donations to charity and tactical payments to oil the wheels of client relationships are among the most common. Let’s be clear - these aren’t sponsorships. A sponsorship is something that is entered into in the expectation of a commercial return. Anything else should be recognised for what it is and not taken from the marketing budget!

What is the strategy the real strategy?

A sponsorship should always be entered into as part of a wider business strategy. Too often a sponsorship is agreed and then a strategy of sorts is formed around it. Vodafone has a strategy to become one of the most recognised brands in the world. Sponsorships of Man Utd, The Derby, the England cricket team and McLaren Mercedes have all been part of this bigger corporate strategy. Vodafone didn’t sponsor the assets first and then decide how it might use them.

Have clear objectives

Typically the objective will be:
- Brand awareness
- Hospitality
- Brand positioning
Be clear from the outset what your objectives are and then think how the potential sponsorship can be made to meet them.

Work in partnership, be creative and be fair

Think creatively and work in partnership with the owner of the asset to develop a package that meets everybody’s needs. Don’t just settle for a standard package: great sponsorships are created, not bought.

And aim for a win:win. The holder of the cash is usually in the most powerful position, particularly in the current climate, but negotiating to drive the owner of the asset into the floor is rarely a recipe for success.

Invest to leverage

Writing the cheque and hoping that it will magically turn into a quantifiable return is like hoping the tooth fairy will arrive in the night. You need a plan and you need a budget to support it. A common rule of thumb is to match the financial amount of the sponsorship with an equivalent amount of expenditure on leverage activities.

Think hard and work with the owner of the asset to make sure that every ounce of value is being extracted. Areas to look at include:

PR create a plan for press releases not just when the sponsorship is signed, but throughout the life of the agreement.
Websites profile the sponsorship on your website and make sure the sponsored party clearly identifies your business as a sponsor on theirs. Is a separate micro-site justified?
Marketing collateral - integrate the sponsorship into your brochures, direct marketing and advertising. Use the imagery and the values that your sponsorship communicates to create cut-through and brand preference.
Access to data does the sponsored party have a database of its own that you can market your products and services to?
Hospitality what opportunities are provided or can be created for client and prospect hospitality?
Event branding take every opportunity to get as much branding up at events as possible. Think about the obvious and then the not so obvious - and don’t be intimated if you’re not the lead sponsor. A creative marketer can steal the thunder of a lead sponsor by lateral thinking and simply having the audacity to ask.
Staff engagement a really successful sponsorship will work well internally as well as externally. Look for scope for staff incentives, motivational talks or for members of staff to become involved with the sponsored activity. The sponsorship should feature regularly in internal communications.

Measuring the return on investment

The return on the investment is likely to be derived from the leverage activities, not the sponsorship itself. Measurement options include:
- Advertising value equivalent of PR coverage
- Number of clients and prospects entertained (with data on new business wins if your systems are sophisticated enough)
- Returns on marketing campaigns geared to the sponsorship
- Market research to measure movements in brand awareness, understanding and preference.

To attribute an individual sale to a sponsorship is often very difficult. This doesn’t make sponsorship an illegitimate part of the marketing mix. Marketing is about an integrated set of activities linked to a common goal and a well planned and well executed sponsorship can be one of the most sophisticated and effective tools in the box.

Bail out the banks and invest in sport - Ashling O'Connor October 31 2008