Leverage vs. Rights: The Evolution of Sponsorship Spend
19th July, 2012
A weekend showcasing two of this year’s biggest boxing showdowns has prompted a blog looking further into sponsorship’s very own rights holder rivalry: the niche underdog versus the undisputed mass appeal property.
As sponsorship history goes, the large-scale established property has always been the primary choice for bigger brands to use as a marketing platform with such rights holders offering more exposure, better hospitality and a more expansive opportunity for activation than the smaller properties out there. However, brands are beginning to adopt a new approach by increasingly taking the power in their own hands via focusing investment towards leverage. No brand has received more success in this area of marketing than Red Bull. By taking ownership of smaller, less mainstream, properties from breakdancing to cliff-diving, the energy drink has been able to take control of brand messaging; completely tailoring their sponsorship, and the property, towards the values of their target demographic. With such success in publicising their presence within the actions sports arena, the brand has even gone one step further with the creation of Red Bull Media House, a platform allowing for extended communication of exclusive Red Bull content across TV, mobile, digital and print.
Where once it was a typical Haye vs. Chisora situation, where all bets and confidence were placed within the bigger name, brands are opening up to the concept of taking the side of the underdog, using their own financial and marketing resources to aggressively infiltrate the market, creating a more Garcia vs. Khan type scenario.
Despite 22% of global sponsors only investing in pure sponsorship rights with no leverage, the ratio of activation investment compared to rights currently stands at an all-time high of 1.7:1. So what is the reasoning behind brands shifting investment towards leveraging their sponsorships? Quite simply, when executed properly, activation spend is inextricably linked to return on investment. The more relevant a brand can make itself to an audience’s personal interests, the more likely the audience is going to buy into the concept. By working its way into the lifestyle fabric of a key demographic, a brand will naturally become the preferred choice among the numerous options available to the consumer.
As an energy drink, Red Bull has created a brand image that personifies stimulation and rebellion, pushing the boundaries in everything they do and showcasing the product’s core function on a truly emotional level. This innovative approach has in turn ensured that the original energy drink has continued to dominate the market, with competitors from Monster to Relentless all playing catch-up to Red Bull’s 42% market share – a true testament to the benefits of sponsorship leverage.