By Ian Thompson
A few weeks ago I had lunch with an old client, friend and member of the European Sponsorship Association board. Aside from having a general conversation about life and the grim state of the UK; we got into a detailed chat about the state of sponsorship.
Two key areas kept coming up:
1. That brands continue to make basic errors when it comes to sponsorship, and
2. The lack of evolution in sponsorship strategy, insight and evaluation.
Pretty obviously these issues are related. If you have less of point 2, you end up with more of point 1.
But why, in 2023, are we still flagging such simplistic and obvious concerns?
We concluded that sponsorship practitioners continue, somewhat inevitably, to place their own interests ahead of wider sector development –just has they have for the last 30 years.
The status-quo, we felt, will remain unless we have a catastrophic recession where brands significantly reduce spend and the sector is forced to react OR (and let’s hope this view prevails!) brands start to demand genuine and robust evidence that a sponsorship investment will deliver quantifiable brand and business outcomes.
The problem for brands, in the meantime, is that they are often faced with a practitioner that has a vested interest and little evidence. Resulting in investment decisions based on assumption and wishful thinking which ultimately leads to disappointment and wastage.
Which is truly depressing. Because evidence shows that sponsorship can be one of the most valuable marketing asset for brands. Allowing them to engage with audiences authentically and via areas of genuine interest to them.
In an attempt to help brands optimise their sponsorship investments and avoid some basic (and costly) errors when it comes to sponsorship here are 5 observations and recommendations:
1. The AUDIENCE (i.e: the fans and followers of the entity being sponsored)
Put simply – the audience of the entity being sponsored is what you buy access to when you become a sponsor.
You have no right to their attention or engagement or love. But you have purchased the opportunity to try and tell them a story.
Remember, this audience is not one big homogenous lump. It’s made up of different people and backgrounds, who all have differing motivations, involvement and levels of emotional connection with the entity you sponsor.
As such they can be motivated to engage via different messages, offers and content. To reach them effectively may require multiple or differing routes e.g: social channels, databases, at venues, broadcast etc...
But the one thing they all have in common, is that they care about the entity (to a greater or lesser extent) and NOT the sponsor.
Recommendation: Understand and segment these audiences and figure out how to catch their attention and engage them. Do this in advance of signing the contract to ensure you purchase the right assets.
2. OBJECTIVES (they must be realistic and achievable)
Sponsorship is capable of building brand equity and driving sales. However, these outcomes are not available to all brands, all of the time. There are multiple factors that impact performance.
Just because you’re a sponsor don’t expect people (including fans) to notice you or your communications. It takes effort and hard work to engage with audiences and earn their appreciation.
Brand equity outcomes are typically based around likability / positivity, affinity and consideration.
Recommendation: Understand the factors that affect performance. Set specific objectives for each audience segment. Consider how, and to what extent, you will achieve your objectives within your proposed budget before you sign the contract.
3. AMPLIFY & LEVERAGE
As an uninvited guest to the party, brands must tread carefully if they are to ingratiate themselves with the audience.
Expecting to achieve desired outcomes with minimal amplification or leverage, is naive and massively misguided. Yet all too common.
All sponsorships require amplification – even those where the brand is famous and has a strong and understandable connection with the sponsored entity.
Brands that are less well known and/or don’t have a strong connection, will require a significant leverage budget merely to catch attention, explain why they are there and to achieve some relevance.
Recommendation: Amplification and other leverage activities should be tailored towards the different audience segments. Activities must be relevant if they’re to build a connection and engage the audience. You must secure sufficient activation budget in advance of signing the contract.
4. CONTRACT
If you have followed the above recommendations, you’ll have a clearer strategy and understand the assets that will add most value.
This will enable you to negotiate an agreement that will work for your specific requirements.
Prior to signing, consider the opportunity cost. In other words - how much would it cost to achieve the same result via a different route?
Recommendation: Do not, under any circumstance, think that signing a multi-year contract without a break clause is a sign of commitment. It’s not –it’s sign of stupidity!
5. MEASUREMENT & EVALUATION (M&E)
M&E is a vital component of sponsorship. Identifying, understanding and improving performance should be the goal. Adopt an open mindset and consider M&E an investment, not a cost.
‘Proving’ performance via media valuation calculations must be avoided. These do not correlate to outcomes and are misleading.
Finally, please do not compare brand metrics for people aware of the sponsorship against those who are not aware. This methodology always produces a positive result which will not reflect true performance – remember Rosser Reeves (further on Rosser Reaves here in a previous UP post).
Recommendation: Plan your M&E programme upfront, conduct it independently, assess all outputs, look to identify strengths & weaknesses, measure brand outcomes/affects amongst audience segments in a brand category context. Invest sufficient budget (up to 5%) AND act on the results and evidence.
I hope you find the above useful. The recommendations have proven themselves time and again over the years and are still relevant today. In fact, I’ve had conversations this year with two brands that would have significantly benefited from them before signing their contracts!