The END of Sponsorship Marketing?

Thankfully, we have seen the end of the populism trend of bashing every company that had a sponsorship, ran client hospitality or rewarded its employees for working hard. I understand the sentiment that people cannot walk away rich for failing or manipulating the markets. But, where accountability exists and results can be demonstrated, I support most any activity that makes solid business sense.

Clearly sponsorship took it on the chin for a while in 2009, with auto makers and financial services firms as leading sponsors, it is hardly a surprise. Other industries have been affected too, but in a less public way. Their shareholders and industry watchers are rightly asking about the contribution and investments in sponsorship.

Let’s be honest, spending in sports & sponsorship grew explosively from the late 1980’s until 2007. It was a great period to be in property and rights sales, as brands fell over themselves to match competitors and gain advantage. Look at the growth in sports, leagues, teams and networks, nearly uncontrolled. Yes, much of this is related to the growth of media and the need for content. It also reflects the increasing fractionalization of the market and niche interests.

But just like real estate and Wall Street, there was an extreme case of exuberant optimism running amok. I say this based on the continuing din in the industry regarding metrics and ROI. Given the noise, it is clear that many brands engaged in sponsorship are using a compass and sextant in a GPS world. To me it is not about the magical ‘black box’ everyone is waiting for. Rather, it is about sponsorship managers rolling up their sleeves and engaging with marketing peers to decipher what matters and how to account for it – as simple as that. (Clearly it is not THAT simple – but most make it far too complicated and hard)

Returning to my argument for the day; Sponsorship will continue to be a viable and important marketing tool. Why? Simply because when it is done well, there is no more effective way to reach, influence and move customers through the relationship cycle – faster and with more commitment. The intersection of a brand, a sport and consumer passions is hard to beat.

Now it will never be the same as the ‘90s, and thank goodness. We will see a more measured, strategic and smart application in marketing plans. Properties will be better prepared to aid partners in proving the value and may take on accountability, too.

If you were Saturn and looking for a way to convince the market of the engineering expertise, sophistication and durability of your cars, would you look to an ad campaign, viral web, social web or sponsorship of a racing team? Probably some of each, but only by taking your cars onto the track will demonstrate those qualities and truly bring the brand to life.

Five Things ALL Sponsors Must Do -- NOW!

Very few people had anticipated the current economic situation, with long term economic and commercial implications remaining uncertain. For sponsorship professionals, this is a time of real challenge and opportunity.

Corporate sponsorships have always been viewed in a certain different light than other marketing investments. Because of the large financial commitments and some ‘squishy’ results reporting, there is potential for them to be lumped into the category of “Corporate Largess & Transparency” along with private jets, large bonuses and executive perks.

It is the role of the managers responsible for these relationships to take charge and be proactive in conducting analysis and report to senior management. Woe to the individual who waits for the cuts to hit them, only to scramble in haste to implement a budget number forced upon them.

In light of the cut backs announced at many leading properties and announcements of corporate partners ending or shrinking their relationships, the value of a deal signed years ago may be markedly less, as leagues end expansion plans; new venues are slowed or halted and properties cut staff.

There are several fundamental, yet critical actions that should be undertaken, if you have not already done so. Sophisticated sponsorship marketers regularly complete these steps, but if you have not, now is an especially important time to be prepared and ready to discuss the rationale, value and contribution of the sponsorship portfolio.

1. Understand the 2009 corporate and brand strategies, objectives and tactical plans.
1. Have priorities shifted?
2. What are the key metrics and targets?
3. How is the activation budget impacted?
4. What is the likelihood of success?

2. Review your sponsorship portfolio relative to the new strategies, economic order, customer mood and investor sentiment
1. How does the current sponsorship portfolio and plan match up?
2. Are changes needed to realign with the revised priorities?
3. Where would you invest or cut spending?

3. Review all sponsor agreements for:
1. Assets
2. Deliverables
3. Options to renegotiate or exit

4. Schedule a meeting with senior representatives of each property relationship, for a direct, frank and open conversation:
1. Corporate or brand plans, target audience change and channel or retailer impacts of economy.
2. Ask about the impacts and changes for the property – growth or investment plans, resources and assets

5. Develop a sponsorship plan and recommendation for marketing or brand executives
1. Updated activation plans, budget, measurement plan and projected results for investment spending
2. Property relationships for maintenance spending
3. Properties targeted that should be ended