To sponsor or not to sponsor?

Dean Wilson, UK MD at Active International, says sponsorship needs to be refreshed and maybe even re-branded in order to prosper in today’s marketplace…

To sponsor or not to sponsor? This will be a question that many marketers struggle with in 2012 and beyond as the media market continues to change at an alarming pace against a backdrop of challenging economic times.

It was marketing pioneer, John Wanamaker, who famously said “half the money I spend on advertising is wasted. I just don’t know which half”. In our increasingly datacentric and accountable age this is no longer an option. Undertaking sponsorship either because it is a good last minute deal or a “gut feel” is fast becoming a distant memory of a simpler time.

Also remember that in today’s marketplace all media channels are required to work harder, faster and smarter than ever before. The future lies in being personal and personalised. It also lies in high standards of measurement and performance. However, for an industry that has no ratecard, no benchmark and no standard measurement systems, the answer to the question becomes increasingly complex.

It’s been proven that sponsorship can make brands famous. Chosen well, sponsorship helps big brands engage with audiences with more intimate conversations and enables small brands to cut through the clutter and punch above their weight. Well thought out sponsorship can anchor a brand to a consumer with a vice like grip. However, if executed badly it can be a quick and easy way for a brand to damage its reputation. Examples of hijacked properties with little relevance or salience are easy to find.

Marketers need to approach sponsorship with their eyes wide open and be able to answer with conviction why, what, how, and perhaps most importantly for how long? In a media climate that celebrates innovation sponsorship is well placed to prosper but it needs to rebrand itself.

Increased understanding and expertise has undoubtedly been a key factor in the ascent of sponsorship and there is confidence that this will continue across 2012, because it’s a bumper year for all things sponsorship, both on a global and local level. 2012 is a “maxi-quadrennial” year (for those in the know) with a line up including the London Olympics, the European Football Championships, and the Queen’s Jubilee.

Also, against a five year media market increase of just 1.1% sponsorship has grown by 15.4%, although signs of a slowdown are appearing with a 2012 forecast of just 1.2% growth.

Committing to a sponsorship requires significant resource either in time, money, or both. Over 55 brands have committed to London 2012 at a spend of £700 million and the 11 kilometre Diamond Jubilee Parade and Pageant in the Park are estimated to be costing in excess of £10 million – the majority of which is to be recouped through sponsorship.

Tough times call for tough measures. With the UK potentially heading towards a double dip recession businesses of all shapes and sizes are favouring hard as opposed to soft success metrics. This is impacting not only marketing budgets but marketing and media selection. Media channels that prosper in tough times are those that can be, and are measured. The power of sponsorship lies in the implicit and emotional reactions it can develop. So, it’s time this channel stood up to be counted.

The good news is that the sponsorship market is increasingly sophisticated; a playground for innovation, creativity and integration. One of the best examples is undoubtedly Red Bull; a brand who not only understands the rules of the game, but has built their brand through a commitment to sponsorship. Red Bull’s clever strategy is to sponsor extreme sports that tie in with its brand values of re-vitalising body and mind, and increasing performance, concentration and energy levels. Red Bull sponsors X-Fighters, Air Race, Cliff Diving, Crashed Ice; all bringing to life the “Red Bull gives you wings” strategy and aiding annual global sales of over three billion cans.

Sponsorship success is also evident in a very different energy provider, British Gas. Commencing in 2009 their “Powering British Swimming” is considered the largest, longest and most extensive association with swimming ever witnessed. By “owning” swimming at both a professional and amateur level British Gas initiatives include Pools 4 Schools, free family events and endorsing and sponsoring athletes. Holistic, integrated and harmonious, their strategic partnership with swimming is a perfect blueprint of how to get sponsorship right.

For many brands there’s no question that sponsorship is and is set to be a very important media – one that can drive mutually rewarding strategic partnerships. However, the channel needs to be refreshed and maybe even re-branded in order to prosper in today’s marketplace to attract more disciples who fully understand the ménage à trois between sponsor, property and customer.

Sources: TWSM, Sportcal, Arts and Business, Mintel, IFM Sports Marketing Surveys, Business Week