The Marketing Manager's Yearbook 2006
Content
Sponsorship Comes of Age
Nigel Currie
Chairman, European Sponsorship Association (ESA)
Director of Sports Marketing Agency, GEM Group
As marketing disciplines go, sponsorship is still relatively young.
It has, of course, been around for years and has been evident in a number
of different guises. However it is only really in the last ten years
or so that marketers have started to look in detail at what this discipline
can actually deliver beyond awareness and exposure, most specifically
in terms of sales for their companies and brands.
What the smart marketers are now discovering is that sponsorship has
a unique ability to deliver a range of opportunities. Most exponents
of sponsorship have still only really scratched the surface of what
it has to offer. Traditional marketing activity still dominates the
thinking of most marketers and leads them to adopt a safety first approach
- 'I'll sort out my advertising and everything else will fall into place
after that.'
One of the major reasons for this is due to the history behind the
sponsorship industry, how it developed, its perception, and some long
established misconceptions. The word sponsorship itself has a lot to
answer for. To many people it conjures up thoughts of philanthropy and
altruism. Individuals still seek 'sponsorship' to compete in a marathon
or some other sort of fund-raising activity. Those 'sponsoring' the
individual generally part with some cash but receive nothing in return
- apart from a feeling of self-satisfaction that they have contributed
to a worthwhile (normally charitable) cause.
Defining the Benefits of Sponsorship
However, in the commercial marketing world sponsorship has become
something very different. Sponsorship is basically, 'a commercial partnership
between two parties designed to benefit both'. Anyone who has anything
to do with sponsorship needs to remember this at all times. Many rights
holders are still much too beholden to their sponsors, treating them
as some sort of rich and wonderful benefactor rather than a genuine
commercial partner.
Major companies can of course use sponsorship in other ways, and in
the 1960s and 1970s the big oil companies in particular identified sponsorship
as a way in which they could present the image of their company in as
positive a light as possible. 'Insurance sponsorship' was born and several
major oil companies in particular embarked on a series of environmental
sponsorships. These sponsorship programmes, coupled with some extremely
clever and creative PR, enabled the sponsors to position themselves
as environmental white knights protecting the planet and our future.
This came at a time when there was increasing awareness and criticism
of the damage being done to our natural environment and these companies
were more to blame for this than anyone.
This is just one example of how early adopters of the discipline used
sponsorship tactically to address a particular problem they faced. There
are many other such examples, but what was significant about these early
environmental sponsorships was that they used other more established
marketing disciplines such as advertising and PR to maximise the impact
of their sponsorship programmes, supplementing the lack of significant
levels of natural media coverage.
Sport and the Media
Around this time, sport was beginning to command an increasing share
of media coverage. Several sponsorship programmes were established which
went on to become outstanding examples of how to establish an association
between a brand and an event. Gillette's sponsorship of cricket's new
one-day knock out tournament began in 1963. Some 15 years later Cornhill
was to embark on a highly successful partnership with English Test cricket,
which enabled it to seriously challenge its much bigger, more established
and better funded competitors in the insurance market. Both Whitbreadcrumb
and Mackeson embarked on major sponsorship associations in horseracing
which delivered outstanding levels of awareness over a period of more
than 30 years. The tobacco companies piled money into sponsorship programmes
in motor racing and then identified a whole range of new television
sports with which they were desperate to attach their brands. Snooker,
cricket, golf, darts and bowls all benefited enormously from the sponsorship
boom and even away from sport a publication called the Guinness Book
of Records became recognised the world over.
As media coverage of sport grew dramatically during this period so
too did the awareness levels and returns for sponsors. The rights holders
and sporting governing bodies were very happy and the sponsors were
constantly finding new ways of improving their branding and exposure
and generally further improving the returns on their investments. Television
also saw the added benefits that sponsors could bring to an event and
a massive new vehicle for commercial exposure, the BBC, was opened up.
Evolution and Success
However, as with all marketing disciplines things change. Factors such
as new market conditions, legislation, proliferation of the media and
increased expectations from marketers and their brands have all affected
sponsorship. As tobacco money has been forced out of the market so other
product sectors have increased their commitment to sponsorship. The
drinks industry, financial services and mobile communications are now
the major players in sponsorship and they have all come to the fore
in developing a host of new ways to maximise their returns from their
involvement in sponsorship programmes.
The most significant development in recent years has been the realisation
and acceptance by marketers that by committing extra funds and resource
to their sponsorship programmes they can not only increase their brand
awareness and recognition levels, they can actually sell more of their
products and services. Nothing excites the average marketing director
more than the prospect of selling more of his or her products and services,
and any marketing tool that can move the consumer from awareness through
the various steps necessary to actually buy is likely to feature very
high on their priority list.
In terms of growth, sponsorship has consistently outperformed all other
marketing disciplines. The sponsorship industry in the UK is now worth
in the region of £900 million per annum with sport delivering
more than two-thirds of this figure. Across Europe the figure for sponsorship
spends is just over £5 billion per annum. What these figures don't
show are the increased levels of support from promotional, advertising
and PR budgets, which are now being committed to enable even more benefit
to be extracted from sponsorship programmes.
Global Events and the Impact of Sponsorship
2004 was another huge year for sponsorship as major companies competed
with each other to be involved and dominate events such as The Olympics
and Euro 2004. The 2004 Olympics in Athens in particular gives a perfect
example of how sponsorship as a discipline has moved on. This event
attracted US $1.1 billion in sponsorship and yet did not allow any of
the sponsors to receive on screen exposure. There were several different
tiers of sponsors involved in the Olympics, beginning with the 11 top
sponsors who each contributed around US $60 million over a period which
covers one summer and one winter Olympic Games. There are also host
sponsors, which the host country is able to market to as well as individual
national sponsors. Because of the lack of branding at Olympic events,
sponsors involved have led the way in developing support programmes
designed to use every possible marketing technique plus a few new ones
to leverage their programmes. Marketing giants such as Visa, Coca-Cola,
McDonalds, Samsung, Swatch, Kodak and Panasonic have all become experts
at adapting and maximising the benefits they receive through their Olympic
sponsorships.
The steady menu of opportunities that sport in particular is able to
offer will continue to fuel the sponsorship industry. While the major
global events tend to operate on four year cycles, major continental
and national events amply fill any 'gaps'. This enables the widest possible
range of opportunities for companies to become heavily involved in sponsorship
programmes at all levels.
The success of the Athens Olympics and the opportunities they presented
for the sponsors were outstanding. However the commercial opportunities
presented by Beijing in 2008 will take the Olympic sponsorship programme
to new and previously unreachable heights. In terms of organisation
and infrastructure Athens was almost 'lapped' by the Beijing Games,
the preparations for which were so far advanced that the BOA actually
told them to slow down. This level of preparation has been replicated
at the commercial level where already several major national sponsors
have committed sponsorship fees significantly in excess of what will
be paid by the top sponsors to take advantage of the opportunities that
will be offered by the 2008 Games.
The massive Chinese economy is an essential target for global companies
and nearly all the top sponsors have agreements that will include the
Beijing Games. In addition to their commitment, companies such as China
Mobile, Bank of China, General Electric, Swatch and Volkswagen are already
signed up as national sponsors and are preparing to use the association
to improve their market share in China.
This type of upsurge in sponsorship activity will further help the
development of sponsorship and move it further up the marketing food
chain. But it is not just at a global level that major agreements are
being signed. Arsenal has recently signed a £100 million agreement
with Emirates Airline for shirt and stadium rights, which will run for
15 years. Other sponsors are also increasingly looking to secure agreements
that will enable them to develop programmes that will focus on the long
term. Using the awareness levels that only sponsorship can deliver,
they will be concentrating on leveraging these associations to provide
genuine opportunities to sell their products and services. Sponsorship
has certainly come a long way, but make no mistake, as a marketing discipline
it has only just started.
The European Sponsorship Association (ESA)
The European Sponsorship Association (ESA) is the voice of the sponsorship
industry across Europe. It was formed in 2003 from the Institute of
Sports Sponsorship (ISS) and the European Sponsorship Consultants Association
(ESCA). It is made up of the leading sponsors, consultants, rights holders,
suppliers and professional bodies working within the sponsorship industry.
Social and networking opportunities are also key elements of ESA's work.
ESA also works closely with educational establishments developing career
programmes and professional qualifications.
