For the past few years, sponsorship has been one of the media industry’s big growth areas. From 2004 to 2008, spend grew at double-digit percentage rates, and in Asia is now worth about US$10 billion.
The onset of the downturn, however, has raised serious questions about what is still widely perceived as a ‘soft’ marketing channel when it comes to tracking effectiveness.
The onset of the downturn, however, has raised serious questions about what is still widely perceived as a ‘soft’ marketing channel when it comes to tracking effectiveness.
A string of sponsorship deals has been cancelled in recent months (see box). The automotive and banking sectors which previously invested heavily in sponsorship have been hit hardest by the recession - some financial firms have even been denounced in the press for ‘wasteful’ sponsorships. With both sectors showing few signs of bouncing back, does this mean sponsorship is in trouble?
Not necessarily. While Mike Jackson, MD of MEC Access, admits that “those in it for the wrong reasons are being found out,” he argues that “there is a real opportunity” for brands in sectors such as FMCG and telecoms to enter the sector and deliver effective campaigns around properties.
Adrian New, senior VP of group sales and marketing at World Sports Group (WSG) argues that sponsorship has suffered less than TV and print. New gives the example of WSG, which has taken on seven new sponsors for its events this year and lost only two. “In reality, even more brands have stayed with their sponsorships, but they don’t make the news.”
Ben Heyhoe Flint, international director for Asia at Repucom International, agrees that “less robust sponsorships are being hit hard because they can’t justify a sponsor’s investment, while strong platforms are generally weathering the storm.”
The UEFA Champions League, which concluded last week, is arguably one such platform against which sponsors are able to deliver effective campaigns. Last year Heineken signed up for a new sponsorship deal with the football tournament, and activation included the Star Final event held in Krabi in Thailand, and a Trophy Tour in South Asia.
Hans Erik Tuijt, brand activation manager at Heineken International, says that the brand undertakes research to measure the effects of sponsorship on brand image, usage and awareness. “As we invest significantly in researching the effectiveness of our sponsorship we obviously do not believe it is a soft discipline. Heineken’s standpoint is that an event should match and preferably enhance Heineken’s brand and company value.”
New says that tracking sponsorships is similar to measuring other channels, and brands can measure brand awareness, preference, market share and sales. The key is upfront investment to set up tracking measures to evaluate performance. For big consumer brands, sponsorships that can be extended online or into retail can be particularly measurable.
“In general, the brands that I see carrying out measurement are the same ones that renew their sponsorships year after year as they see the broad value an effective sponsorship can deliver,” says New.
What’s more, Jackson argues that sponsorship perks such as free tickets can play a valuable role if they are used either for business-to-business purposes (entertaining suppliers, for example), or for consumer promotions that can be extended into retail and used to boost sales. “Too often, the problem we’ve got is that the objectives are post-rationalised once the deal is done,” he adds.
The benefits of this approach run beyond justifying the expenditure to the board. Sponsorships generally last three years, so tracking effectiveness from day one can allow adjustments to be made after a year. Having some idea of the property’s actual value can also play a part when it comes to renegotiating the rights.
It sounds impressive in theory, but sports marketing executives admit there is a fair way to go in practice, both to convince clients to spend the money required on top of purchasing rights, and to convince rightsholders to offer the necessary support to brands.
There is also the issue of convincing the public. “The press have picked up on sponsorship because it seems an extravagant waste of money,” adds Jackson. “We as an industry have to respond.”
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