By Ian Thompson
(Concise Oxford Dictionary: Cinch = a sure thing, a certainty, an easy task)
It appears that if you’re a sporting rights owner on the lookout for a new partner, it might just have been a cinch over the last 18 months.
The largesse of two relatively new car trading platforms seems to know no bounds as they splash the cash on sports sponsorship to the tune of c.$75m pa (my estimate).
Here’s the latest list of the sporting entities benefitting from the bank of Cazoo and Cinch: Aston Villa FC, ECB (England teams & The Hundred), Everton FC, The EFL, The European Tour, The LTA, The Jockey Club, Northampton Saints, Professional Darts, Rugby League World Cup, Scottish Premiership & Leagues, Tottenham Hotspur FC, Welsh Rugby Union and World Snooker.
This is serious money for a couple of new brands as they take on the established used car market. Especially when you consider just how few cars they actually have to sell. For example, if you were looking for a Peugeot 208 from 2016 or newer, you’d only find 20 on Cazoo and three on Cinch. In comparison, established retailer Evans Halshaw has 117, and over 8000 are listed Autotrader (at time of writing).
They’re asking for significant returns from their sponsorship investment – particularly if they’re looking to achieve brand equity growth and sales amongst us, the car buying public.
Evidence suggests that labelling multiple assets and expecting the magic to happen is wishful thinking, not strategic.
There are too many cases where brands have failed to convert sponsorship investments into some form of tangible outcome, for example the FIFA world cup sponsor that didn’t shift a single equity measure pre/post; the insurance company that achieved less than 1% of anticipated sales or even the hearing aid manufacturer that people confused for a bicycle brand!
Sponsorship doesn’t work for all brands all of the time.
Sponsorship is not the simple attention grabbing tool that some hope for. Sponsorship isn’t some panacea to all of a brands marketing problems.
In short sponsorship is not a cinch!
However, for these two businesses, their sponsorships may already have offered a return. These investments may have paid dividends to the tune of multiple £bn’s.
I’m not referring to some nonsensical media or adverting valuation. I’m referring to capital raising and IPO valuations.
Their sponsorships have boosted the profile of both entities. They’re evidence of ambition and a have created a perception (I can’t comment on the reality) of genuine stature and potential. As such the sponsorships may well have contributed, in part, to Cazoo’s recent Wall Street IPO valuation of $7bn (not bad for a company only 18 months old) and Cinch’s recent £1bn capital raising.
For Cazoo and Cinch sponsorship may well have been a cinch! Just don’t expect them to continue to expand their sponsorship portfolios. And please, don’t assume that this approach will work for your brand!