Sponsorship resurges in the Marketing Mix

Sponsorship, once a symbol of corporate excess and indulgence, is resurgent as marketers find a new place for it within the marketing mix.

As sports fans will be all too aware, many leading companies and brands are pulling out of their sponsorship deals with major sporting events, high-profile teams and sports stars as they look to shore up their marketing budgets. Prominent sponsorship deals such as Honda’s Formula 1 racing team, Vodafone’s long relationship with the English Cricket Board and the Derby, and GM’s endorsement deal with Tiger Woods are just a few of the notable examples of the lucrative partnerships that have bitten the dust as embattled companies rein in their marketing spend.

The hundreds of column inches given over to these tales of woe has created the impression that the golden age of the sponsorship deal has been dealt a severe blow by the Credit Crunch. However, while many of these multi-million pound sponsorship deals are drying up, there is surging interest among marketers to find new sponsorship vehicles. This has seen the integration of brands that are not natural competitors, but nonetheless share the same target audience. Thomas Cook has just signed up to sponsor Kiss FM’s Saturday night ‘Kissalicious’ show, their very first media spend on their Club 18-30 brand in four years.  The Co-operative is the new sponsor of the next instalment of the High School Musical franchise, their second deal with a Disney-owned series.

 Why include sponsorship in the marketing mix?

Sponsorship is a powerful way to engage with consumers. At a time when people are constantly marketed to through an increasing number of channels, engagement is vital for marketers to get their message across to their target audiences. Sponsorship is a medium which can facilitate this by creating tangible ‘touchpoints’ for the consumer to come into contact with and interact with a brand. Entering into a sponsor partnership can give a brand access to a space outside the reach of regular marketing channels, as well as create unique touchpoint opportunities through which to build brand awareness.

 Sponsoring a sporting spectacle, team or cultural event is also a way to foster within the target audience positive feelings towards a brand. Aligning a brand with something about which the target audience feels passionate can serve to create goodwill. It is an age old fact that people tend to favour others who like the same things as they do; this dynamic is no less true when it comes to forming a relationship between brand and audience.

This engagement between brand and audience is vital to engendering ‘receptivity’ in consumers, which is especially useful for a company trying to launch a new product or break into a new market. Even if a brand has been successfully established in one field, it can still find it difficult to penetrate a new market because of a lack of audience familiarity. Through sponsorship, the target audience can be ‘primed’ to be receptive to the brand, which means that they will be more likely to pay attention to specific marketing messages. 

Finding the right sponsorship deal

Sponsorship is usually classed as an ‘above the line’ activity because of its mass engagement between a brand and a broad audience. However, while the essential marketing principles of sponsorship are common to every sponsorship deal, marketers are now unlocking its ability to deliver the benefits normally associated with ‘below the line’ marketing channels. Traditionally, the grand sponsorship deal was as much about the kudos of being seen to be a patron of prestigious sports and arts spectacles, as it was an exercise in engagement. Nowadays, finding the right sponsorship vehicle, as opposed to the most illustrious, is vital for measurability and demonstrating ROI.

Integrating sponsorship into the marketing mix means that the targeting strategy behind a sponsorship programme should be no different to that for any other form of direct marketing campaign. Outside of sport and entertainment, marketers are now turning their attention to sponsoring non-traditional vehicles that lack a broad public profile, but are nonetheless the right medium for reaching their exact target market. Recent sponsorship deals we have done for the Direct Marketing Association (UK) (DMA) with sponsors Royal Mail, ITV, Equifax, VisitScotland and other major brands, show how effective these partnerships can be.

For example, Equifax, a global leader in credit and business information, recently signed a deal to become the official data sponsor of the DMA to promote its ‘Heart of Data Intelligence’ campaign to the UK marketing industry. As many of the DMA’s 900 corporate members are prime users and suppliers of data, this was the exact market Equifax wanted to target. The sponsorship deal has enabled Equifax to engage with its target market through having a strong brand presence at the DMA’s 2009 and 2010 DMA Awards, regional and networking events, data-focused seminars, conferences and symposia, and the Young Spark Award organised by DMA Scotland. Equifax has integrated this sponsorship into its marketing campaign and reach potential customers in ways that are not possible through other channels.

As this partnership shows, sponsorship is a versatile marketing channel that is well suited to B2B brands, not just B2C brands. While sport and the arts may be the first sponsorship vehicles that come to mind, there are many more opportunities available for the marketer to consider. Sponsorship can actually work better for B2B brands than B2C as there is more flexibility to the relationship and the audience is highly targeted.  If you have not yet thought about integrating sponsorship into your marketing mix, or felt it wasn’t useful to your type of business, take a look at your current market and what your competitors are doing – it may surprise you.

Professional Associations in their search for Sponsorship Sterling

Sponsorship is growing rapidly in professional associations.  No matter the prime objective of the particular trade body, whether they represent shipping companies or small digital businesses, they all share in common the predicament of shrinking revenue streams from membership fees.

Professional associations used to be key in growing and developing brands.  However, with the ever present flow of information, documents, best practice guides, white papers, and social networks available for free, membership benefits are now less vital to business success.  This puts professional associations in a very difficult situation.  They have less revenue to provide membership value, and yet are faced with current members demanding more value from their membership.  An almost impossible task.

In the past, events tended to be the second main source of revenue for professional associations, with delegate tickets far exceeding the supplementary sponsorship income.  However, in a time where free events are occurring daily and webinars are streamed from around the globe directly into people’s homes, even this ‘secondary’ form of income is finding difficulty in meeting targets.

Furthermore, our current economic climate continues to add strain professional associations are already feeling.  Budgets are being scruitinised and marketing directors are prioritising gauranteed and tangible ROI before writing any marketing expenses.

As a result, professional associations have had to start finding new ways of providing value to their members, which is the reason we are finding an increasing number of sponsorship proposals and opportunities available.  Sponsorship has therefore become a key revenue stream for many professional associations, for it reaches both revenue and engagement objectives.

The changes have also greatly affected the Direct Marketing Association – Europe’s largest trade body in the marketing and communications sector.  Chris Combemale, executive director, claims that sponsorship is now crucial to the mission of the DMA.  He commented, “Through the additional revenue of sponsorship, we can expand the number of professional services we provide, as well as the number of insight and networking events we offer.  These activities are integral to our purpose of promoting the business interests of our members and driving the growth of the direct marketing industry.  Of course, through pairing our sponsor partners with suitably themed platforms we ensure maximum relevance and mutual benefit to their target market.”

Although these sponsorship proposals are on the rise with professional associations, there are nonetheless pros and cons to integrating the two successfully:

Pros

  1. Value for the Professional Association: Sponsorship revenue amongst professional associations accounts for a large portion of total sponsorship revenue.  Whilst perhaps not as newsworthy as larger sporting events such as the World Cup, it significantly increases funding for many not-for-profit organisations, enabling them to continue to grow in the future.  Implementing a successful sponsorship department can thus help to create a sustainable organisation.
  2. Value for Members: Sponsorship not only provides a new revenue stream, but it also provides values for your current members.  A basic key benefit to membership is the networking opportunities and brand awareness professional associations can provide.  Sponsorship goes beyond this basic benefit and provides engagement with the members through tangible touchpoints, enabled through sponsorship activation.  Providing sponsorship opportunities provides value to your members by helping them to reach their current marketing objectives.
  3. Value for the Audience: Sponsors add significant value to the events and programmes that they support.  This is especially true with professional associations as they tend not to be as forward thinking as brand companies due to a lack of resource and funds.  By having a sponsor involved, the professional association has the ability to utilise some of the sponsor’s resources and create a more exciting event for the attendees.

Cons

  1. Lack of Resource: Sponsorship is not just a sales pitch.  It requires strategic thinking in developing the programme as well as significant resource in account management.  Successful sponsorship only occurs when there is a partnership built between both the sponsor and the rights owner.  This can only be built through communication and a very solid understanding of the other’s objectives.  Typically, professional associations are under resourced.  This means that while sponsorship may be initiated, it is often unable for it to be sustained.  This can then create bad blood between the professional association and its members, a result of which may be that the rights owner is pressured to refund the sponsorship money in order to maintain goodwill.  In such a situation, it would appear the professional association would have been better off not partaking in the sponsorship deal in the first place.
  2. Lack of Understanding by Members: For professionals outside the world of sponsorship, it can be very difficult to understand its benefits.  Particularly in a world where Marketing Directors are under pressure to deliver leads and guaranteed ROI.  Sponsorship can thus seem very intangible – in which case, even the best sponsorship proposal cannot compete against pay-per-click advertising.
  3. Lack of Expertise: Sponsorship is complex, and needs to be strategically developed in order to work with all parties successfully.  Professional associations rarely have this experience in-house, making it difficult to manage and develop.  Fortunately, there are blogs, forums and websites dedicated to explaining sponsorship benefits, however none of these can surpass having sponsorship experience at hand.

Some key questions professional associations need to ask themselves before undertaking a significant sponsorship programme would be:

  • Find out if sponsorship is right for you.   Do you have the resource and time to dedicate to developing this into your organisation?
  • Understand your members and what they want – will members be upset if they are financially unable to take up some of these new sponsorship opportunities?
  • Do you have an audience that is large or niche enough to build an asset from?
  • Do you have in-house sponsorship experience or do you know of a sponsorship agency that can help?

Sponsorship is a fantastic way to bring additional value to professional associations, particularly in this current economic climate.  However, you need to be very careful in its implementation and development in order to create sponsorship that is sustainable, as well as successful.