What are the tricks that guarantee a bang for your donated buck? By Tim Pegler
Cast your mind back a few years and, more often than not, being a sponsor meant offering primary school students 10 for each lap of the footy oval, or 20 per book for a library fund-raiser readathon. Not any more. Sponsorship is big business. Even primary schools look to the corporate sector for the sort of funding that will render sausage sizzles and lamington drives redundant.
On every athlete at every event, and in every commercial break during the television coverage, the logos of official sponsors were like moths around a flame.
Along with ensuring that your company gets the most out of its sponsorship, ensure that outsiders do not undermine your investment and steal your thunder.
Take the Sydney 2000 Olympics as an example of how far the sponsorship business has evolved. On every athlete at every event and in every commercial break during the television coverage, the logos of official sponsors were like moths around a flame. Speaking of flames, the Olympic Torch Relay was brought to you by AMP. When the torch took to the air it flew with Ansett, the official Olympic airline. In the sponsorship market, world-class negotiators were doing it faster, higher and stronger well before Cathy Freeman set the cauldron alight.
What, then, are the golden rules of sponsoring and the goals you should set in place before putting your company name on the line? Just what are the tricks that guarantee a bang for your donated buck? Ask the experts and they will tell you the first “must” is to know your product and the market you want to conquer.
The executive director of the Advertising Federation of Australia, Lesley Brydon, says that if a sponsorship deal is not strategically and logically aligned with your business goals, then your dollars are going down the drain. “If you want to get value out of a sponsorship, there is no point in giving money to something because you think it is a good cause or because you like it,” she says. “That sounds callous, I know, but if you can see some compatibility with your business goals, then you are able to build on it in a much more effective way.”
The general manager of public affairs at Mayne group, Jeannette McLoughlin, says that, although philanthropic donations signify corporate leadership and may bring benefits, the commercial sponsorship market is all about results. “With sponsorship, you are really looking for an outcome,” she says.
Following a company-wide rebranding exercise in the past six months that brought the many transport and medical divisions of Mayne Nickless under one logo, Mayne became the sponsor of the Australian Football League team Carlton this season. McLoughlin says that Carlton was simply a good commercial fit for her company.
Mayne is a Melbourne-based, national company with a proud history. Carlton is Melbourne-based, part of a national sporting competition, and has a proud history as one of the league’s most successful and widely supported teams. And the new Mayne logo, a bold red circle with the company name in white lettering, is spectacularly visible on the navy-blue Carlton guernseys.
“Through the fact that Carlton participates in the most popular national sporting code, we bring our brand to the forefront by that association.” McLoughlin says. “We looked at how the logo would look on the guernsey, [stadium] signage and so on, and it has worked well for us.”
Strategically, it was also important that Mayne showed its strength by opting to be a big sponsor, rather than subsidiary one. “As a major corporation, Mayne needed to take a strong position,” McLoughlin says. “I think you are better off doing one thing in a significant way when you really want the profile, than taking a less dominant position.
The chief executive of 2001 Goodwill Games Brisbane Limited, Campbell Rose, says that doing your homework is the first step in making sponsorship work for you. “Sponsorship is a very, very powerful and cost-effective way of delivering your corporate and commercial objectives. But you have to find the right property that matches the objectives and commercial outcomes you want to achieve.”
Rose says a classic example of getting sponsorship right was the involvement of Mercedes-Benz in the 1998 Presidents Cup golf tournament in Melbourne.
Mercedes had recently released its new M-Class four-wheel drive in Australia and there was a waiting list nationwide for the vehicle. The Presidents Cup pits the best golfers from the US against a rest-of-the-world team and the Mercedes sponsorship deal involved providing courtesy cars. A long line of silver M-Class vehicles assigned to the elite of the golf world made a statement that the new model was worth any wait.
Rose says the sponsorship virtually drove the right customers to Mercedes dealers. “It was a costly investment for Mercedes, let’s not make any bones about that. But, in terms of its cost-effectiveness, they would have spent a lot more money on TV and never achieved the same immediate market awareness because it would have been a scattergun approach and would not necessarily have got to the right target markets.”
Advertise your sponsorship
A second key to driving your sponsorship dollar further is to integrate your investment in a wider marketing campaign. There is an oft-quoted rule that you need to spend double your sponsorship investment on telling people about your sponsorship. Simply put, there is not much point sponsoring if you do not get recognition for it, and flow-through benefits for your business. Advertising that your company has an association with a particular event or organisation increases the chances of enhancing your commercial reputation.
Expert opinions vary on whether spending double on advertising is enough or over the top. The Advertising Federation, unsurprisingly, strongly endorses spending to support your sponsorship. Indeed, Brydon goes as far as to warn that failure to do so could be wasting your money.
Brydon says that both Westpac Olympic sponsorships succeeded in part because of a fully integrated package. The bank sponsored individual Australian athletes in a variety of disciplines, including the 1500-metres swimmer Grant Hackett. In the lead-up to the games, bank branches were decorated with black and white images of athletes and motivational quotes from them. During the games, the sponsorships were supported with memorable television commercials depicting the athletes parents attempting to emulate their children’s sporting prowess and giving up, saying “I don’t know how he/she does it”. The message, delivered in a light-hearted fashion, was that Westpac helps people to accomplish extraordinary things.
With the Goodwill Games having recently signed 18 sponsors of the calibre of Carlton and United Breweries, Qantas, Village Roadshow and Konica, Rose says the idea of simply spending double on advertising your sponsorship is antiquated. “That’s the old rules and the rules of the days when the market was a lot less savvy. Some people think you have to spend up to five times as much.”
Rose says the level of spending required on advertising will partly depend on the deal struck with event organisers and what sponsor promotions they are offering.
He says that although details are commercial-in-confidence, organisers of the Goodwill Games have in some cases spent substantially more than they have earned in delivering the sponsorship. “It’s to our advantage and the sponsors,” Rose says. It is all about a mutually beneficial deal between the sponsor and the sponsored.
McLoughlin says the Mayne logo on footballers guernseys guarantees exposure for the brand, so any additional spending in support of the sponsorship is about reminding people of the association between club and company. She gives the example of the Easter blockbuster match between Carlton and Essendon, billed as “The Mayne Event” as a way of building in more advantage from the sponsorship. A radio promotion offering the cheer squad’s banner, and the chance to toss the coin at the start of the game, took up the Mayne Event theme. The game was watched by a crowd of more than 70,000 and attracted a huge television audience.
Beyond the logo
Following on from the sponsorship rules of knowing your business goals, finding an appropriate fit for them and developing an integrated marketing strategy, it is important for the sponsor to strive for more from their investment than a logo placed on an athlete’s outfit or a stadium wall. Mayne’s link to Carlton, for instance, creates opportunities for entertaining corporate clients at matches.
At many Australian companies in the lead-up to the Olympics, staff incentives linked to sponsorships included Olympic tickets and the chance to meet athletes at corporate events as rewards for excellence.
Along with ensuring that your company gets the most out of its sponsorship, another important element is to ensure that outsiders do not undermine your investment and steal your thunder. This “ambush marketing” occurs when a second company conducts its own campaign and devalues or nullifies the efforts of an official sponsor.
The Olympics provided a controversial example when Australia’s two main airlines went head to head. Ansett was the official airline partner to the Sydney 2000 Olympics. But the rival Qantas sponsored athletes and revamped its beautiful I Still Call Australia Home television advertisement in time for it to be played during the Olympics telecast. Qantas had secured enough ad spots to ensure that its message was prominent. Industry observers believe that the effect of Ansett’s sponsorship was considerably diminished.
Brydon says ambush marketers need to be wary of the Trade Practices Act and should also bear in mind old-fashioned ethics. “If what companies are doing is seen to be unethical or unfair by the consumer, it could backfire.” she says. “On the one hand they could be seen as being clever and they may win but the potential downside is that they may be seen as unethical, and they could brush up against the law.”
Rose says the Brisbane games are in the fortunate, perhaps unique, situation of being able to prevent ambush marketing. As a non-profit organisation owned by AOL Time Warner, the Goodwill Games do not have to answer to controlling bodies such as the International Olympic Committee and could afford to be choosy about selecting sponsors.
Having this level of control enabled the Goodwill Games organisers to offer sponsors a package that would have other event organisers salivating. What Rose refers to as the “sponsorship value chain” covers all signage at venues, in the athletes village, on the field of play or on competitors bibs. Only sponsors products will be available at hospitality and catering facilities. Key athletes are available for sponsors promotional activities.
Links to Turner Broadcasting Services in the US and the Nine Network in Australia also mean that Games organisers can guarantee there will not be any nasty surprises during broadcast commercial breaks. In other words, Queensland beer drinkers may be loyal to XXXX but they will see beer commercials only for CUB products during the telecast.
Perhaps the most novel aspect of the Games package is “presentation rights”. Rather than the familiar scene at the Olympics where a little-known and usually aged sporting official presents the medals, in Brisbane four people will win a chance to place a gold medal around an athlete’s neck in a Crown lager “Crown the Champion” promotion. Rose says the fact that the Goodwill Games offered unique opportunities and guaranteed exclusivity attracted blue-chip sponsors seeking global exposure. Each sponsor had to buy the entire value-chain package but could tailor it to its specific needs.
Rose says all sponsors should demand integrity of those with whom they deal. The price and benefits of a sponsorship should be set in stone, and there should be no mates deals to the detriment of other partners. He believes that in the post-Olympic sponsorship market people expect nothing less.
Different perspectives: the sponsor versus the sponsored
For all the footy clubs, primary schools, country agricultural shows and community groups hungry for sponsorships, Mike Turner’s Critical Funds: Sponsorships in Australia and How to Get Them should be compulsory reading.
Turner worked at Carlton and United Breweries for 20 years. He was sponsorship and events manager for eight years, then left to manage his own consultancy. In his book he lets those trawling for funds into the mindset of those with money to spend.
He says an estimated $700 million is spent on sponsorship every year in Australia, and sponsors expect maximum returns. People seeking contributions should do their homework and be able to explain what opportunity they are offering, what support they are seeking and what benefits will flow from a deal.
Event organisers should consider the types of companies that are a logical “fit” for their event or group and create a target list. They should then audit and value their marketable assets, which, for a sporting club, may mean everything from clubrooms to uniforms.
Turner also tells how to establish a sponsor hierarchy that creates different levels of packages; from those that may fund a new oval through to the supplier of free pies for social nights.
Campbell Rose, chief executive of 2001 Goodwill Games and an experienced event manager, looks at sponsorship from the opposite perspective. He says that, when deciding on a sponsorship strategy for the Goodwill Games, his team opted not to draw up a hierarchical target list covering every element of an event but to offer one integrated package. “If you have a robust product offering with integrity you don’t need to break things down to that level because, if you are doing that, you are trying to sell the saucepan with bonus sharp knives, and so on.”
Rose advises event organisers to aim for fewer sponsors of higher value rather than many of lesser value. He says that having many sponsors is a recipe for a “logo fest” and disputes. Sponsors are used to a “snake oil” approach from event organisers so, integrity of product and attitude will always be respected.
Very big business indeed
Companies around the world spend an estimated $US3 billion on sponsorship of community and cultural events. Carlsberg sponsors the European Cup, Philip Morris backs the Houston Grand Opera, and Stella Artois has the Australian Film Institute’s European Film Festival.
Corporations are omnipresent and no cultural icon is immune to it. AFL footballs now sport the Volkswagen logo, Greg Norman tees off at the Heineken Classic, Tiger Woods has a sponsorship deal with Nike that is reported to be as much as $US20 million, and AFL teams play in the CUB premiership season.
Economist and management thinker Jeremy Rifkin sees this as a big shift in the role of marketing, from selling the product to selling the experience. Snippets of meaning from popular culture are used to package products in a way that elicits an emotional response. Nike, therefore, does not so much sell products as the experience of what it is like to be in those shoes or outfits. When people buy products from the Body Shop, they buy the experience of opposing exploitation of the Developing World and cruelty to animals.
Rifkin says that the next wave for lifestyle and event marketing initiatives will involve grass-roots community events and activities. The reason is simple: they are closer to the lives of potential customers. The rise of neighborhood and community festivals is an obvious stamping ground for companies that want to make sure they are visible.
“Advanced capitalism …. is no longer just about the manufacture of goods or the performance of services or even the exchange of information, but rather the creation of elaborate cultural productions,” he says.