Sponsorship is one area of marketing which has been particularly strong this year. While the summer saw the sponsorship circus of the Olympics, spend in this area has been rising all over Asia.
According to IVcast, a survey that tracks sponsorship deals, spend in Asia has grown by 55 per cent in 2008, following a 63.5 per cent increase last year. Such rates of expansion are far higher than the global average of 13 per cent.
According to IVcast, a survey that tracks sponsorship deals, spend in Asia has grown by 55 per cent in 2008, following a 63.5 per cent increase last year. Such rates of expansion are far higher than the global average of 13 per cent.
The sponsorship industry in the West has done a good job of selling itself as a strategic option to clients - an opportunity to use the power of sport or the arts to engage with consumers that can be linked in with other marketing activity.
But in Asia, many feel sponsorship is separate from the rest of the marketing plan. Ravi Kiran, Southeast and South Asia CEO of Starcom agrees: “Except for big events like the Olympics, cricket and Formula One, in most cases companies have two broad reasons to sponsor an event. Either the CEO likes a sport or it is liked by his peers. Most CEOs tend to like golf, racing and polo and if the brand is B2B then it will help. But if it’s a consumer brand then such sponsorship will not benefit much.”
Kiran gives the example of Indian millionaire Vijay Mallya, chairman of United Breweries Group and Kingfisher Airlines, who regularly sponsors golf and polo because of his personal interest in the sports. Ben Heyhoe Flint, general manager of sports and entertainment at Ogilvy Action says that the “CEO syndrome” is still a problem: “Sometimes such sponsorships could be a good idea but it has to be proven through research and empirical evidence.”
The Hong Kong Open golf tournament, held earlier this month, attracted sponsors including UBS, Emirates and PCCW. Edwin Lau Wing Chu, VP Greater China at Emirates and a golfing fan, says that a major attraction of the deal is the free tickets.
“We have a list of VIPs, frequent fliers and top business partners. We know what they like. If they like tennis, we invite them to see tennis. We also invite people to play with the pros on a golf course. Then they can tell people ‘I was there’ and show them the pictures. It makes them feel important. This is only possible through sponsorship.”
However, he argues that for Emirates, the chance to reach a high-end audience is still cost-effective.
“If I compare the exposure of an ad to that of an event, with golf umbrellas and a marquee on the 18th hole, the value is much greater.”
The goal of using sponsorships for free entertainment to clients is not completely rejected by experts in the industry. Dan Parr, account director at Brand Rapport, says: “If your objective is client entertainment then giving your client a money-cannot-buy experience could be a powerful relationship-building tool. If sponsors can justify this expenditure to their shareholders then I don’t see an issue.”
A sign that sponsorship strategies in Asia require work is the low activation budgets. In most cases experts recommend that brands should spend the same amount promoting a tie-up as they do securing the rights. Another common complaint among agencies is that sponsorships are often seen as a tactical way to increase sales.
“There are far too many one-offs, where a brand invests in a sponsorship for one year but decides not to invest the next year,” says Flint.
For Flint, the use of sponsorship for client entertainment remains a tactical approach; sponsorship remains divorced from the rest of the marketing strategy. But as expenditure increases, so will the pressure to get it right.
“When you sponsor an event you should have a stake in it,” says Flint. “You should to get the emotional output and intangibles that come with sponsoring an event.”
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