How To Get Sponsors Working For Your Business 4th August, 2014

The sponsorship industry is changing.  The opportunities are endless and ways of engaging are ever increasing.  And yet, the sponsorship industry still remains fairly static.  Since inception, the typical transaction includes rights holders trading ‘space’ to sponsors for money.  Everyone seems pretty happy.  But is everyone getting the most out of the relationship?  With ROI crucial to good business, I’d question whether everyone is getting as much return for the investment that is being put into the sponsorships created.

But money talks and quite rightly, rights holders utilise sponsorship to drive revenue.  However, sponsorship can do so much more.  When done cleverly, sponsorship can open business avenues and new profit centres rights holders wouldn’t have been able to create by themselves.

But it needs a rights holder who is willing to look at the bigger picture with an ambition to think outside of the box commercially.

Rather than just chasing money for logo placement, rights holders need to identify what their ideal ambition is for incorporating sponsorship revenue within their commercial objectives.  For many B2B events, it’s about attracting leading consumer brand names to their event.  For music festivals, it’s about differentiation and adding value to the festival experience.  For sport, it’s getting fans to engage with the team beyond the pitch.  Sponsorship does all these things, but it doesn’t happen overnight.

Many rights holders fail to realise that they have to consider their sponsorship ambitions in a series of steps.  Just like growing any business, in order to reach the end goal there are milestones of achievement – each one built upon success of the other.  A good sponsorship strategy should be developed in the same way – with the long view in mind including phases that drive to deliver objectives beyond the financial.

And even if money really is the only objective (although if you dig deep enough, this is rarely the case), you need to create phases which will allow you to continue building value in order to increase revenue year on year.

So how do you go about building a sponsorship strategy that does all this and more?

  1. Figure out if you have ambitions beyond money.  And if you do, find out if sponsorship can help you reach them.
  2. If you cannot offer a strong proposition to the sponsors you really want, carve out areas of rights that you can provide on a reduced rights fee or for free while still maintaining your core sponsors.  This allows you to negotiate with the right sponsors that can deliver on some of your long-term ambitions while still ensuring your financial targets can be met by the usual suspects.
  3. Talk with your current sponsors about your ambitions and find out how they can play a role in achieving them.
  4. Partner with sponsors whose long-term goals and objectives are aligned with your own.
  5. Stop thinking transactional.  Get creative.

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.