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P.Dehlsen
A successful sponsorship involves a company to approach with a strategy
Introduction Sponsorship is a form of marketing activity wherein, at its simplest, one organisation contributes to the costs of another organisation’s event in return for a benefit. Sponsorship can be very big business nowadays such as in the Olympic Games or it can be at a local level. But no matter how much money is involved there are key factors involved in a successful sponsorship campaign. This paper identifies those key factors underpinning strategy and examines several sponsorships to assess the efficacy of the strategy.
Source: http://www.sponsormap.com
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The Value of Brand Building The importance of brand building is a relatively new phenomena. According to Lesley Craig and Lindsay Moore (Craig et al. 2002) it was not until the late 1990’s and the ‘new economy’, that intangible assets such as brand became ‘capital’ that could be leveraged for a new source of income. Building on brand is therefore important and sponsorship is one method of getting the brand image in front of an audience. Perusal of any televised football event will show team-members apparel emblazoned with a sponsor’s logo (assuming sponsorship for the purpose of this paper) and the televised event means that the brand image will be seen by large numbers of viewers. Thus the value of the sponsorship can be reasonably determined by reference to the estimated audience size. Simply, the bigger the audience the more the sponsorship is worth.
Source: http://www.brightonsc.org.au
Key Objectives of a Sponsorship A key objective for a sponsor is therefore to have its brand in front of the audience. The benefits of this include image enhancement through exposure of name or logo, increased sales, positive publicity, increased business and consumer relationships, promotion of the corporate good citizen and greater exposure to the marketplace through bigger or different audiences. And, for the sponsored, goals and benefits include financial injections, product or service assistance, increased credibility, greater media coverage, enhanced workplace and public relations (Friedman 2004 and 2007; also Pope 2000, Table 1).
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Risks of sponsorship can include perceptions of impropriety, conflict of interest, undue influence and cronyism, potential embarrassment from inappropriate partnerships, unclear or breached terms of agreement, accounting and taxation difficulties through revenue projection uncertainties, undervaluation of sponsorship and poor return on investment (Australian National Audit Office (ANAO)). For an example of the illegal use of public monies in a government sponsorship program and which contributed to the end of the 12 year reign in government by the Canadian Liberal Party see Wikipedia – ‘Sponsorgate’ (Wikipedia).
Source: sponsormap.com
Strategy In order to bring these goals to fruition, and avoid risk, a strategy is required and, accordingly, success will be dependant on ‘the ability to deliver on the strategy’ (KLMINC 2011a). That lofty goals and ideals appear reasonable on paper they are in practice quite difficult to achieve. It is noted that ‘Many new executives, and even those long within the executive ranks, are unsure how to properly engage in strategic thinking’ (KLMINC 2011b). Before embarking on a sponsorship program, an organisation should consider such matters as what they do, who their customers are and what type of marketing strategy will be the most effective for the organisation. Having satisfied itself that a sponsorship will be effective an organisation can then set about formulating a strategy. ‘A first step in sponsorship effectiveness is the correct identification of a firm as a sponsor.’ (Pope 2000). Far from being a simple matter, ‘correct identification’ will
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involve due diligence and risk assessment (as outlined above) and should not be a decision based solely on whim or fancy. The plan or strategy document will address matters such as;
Benefits to parties
Risk management
Ethical and moral standards
Marketing
Administration arrangements including human resources
Financial and accounting considerations and arrangements including management of funds
Restrictions and quality standards
Legal issues including contractual matters and intellectual property rights
Reporting, evaluation and assessment
(See ANAO2012, Friedman)
Source: events.leagueofblackwomen.org
Of course not all sponsorship events will require extensive planning and preparation but even small one-off events will benefit from by giving due consideration to the above and having some form of plan in place. It was commented by Pope in 2000 that many sponsorships under three years duration failed to have adequate, if any, plans and evaluation methods in place (Pope 2000). Further, research by Amis, Slack and Berrett also notes that successful sponsorships were an ‘intrinsic part’ of the overall marketing plan of an organisation whereas failed sponsorships had been
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entered into in a ‘piecemeal’ fashion with little thought directed to marketing (Amis et al 1999). There are any number of reasons why a sponsorship might fail but some common reasons include:
Not understanding that the sponsorship is driven by consumers needs,
Choosing the wrong sponsorship,
Poor resource allocation,
Failure to perform adequate due diligence,
Paying for rights fees and doing nothing with the sponsorship,
Misunderstanding the relationship between the different stakeholders,
Sponsorship jumping or too much time with the same sponsorship,
Insufficient marketing diversity,
Failing to secure trade interest and support in the sponsorship,
Not understanding that an event takes time to build and grow,
Failure to evaluate or specifically measure ROI.
(Reynolds 2004, Sports Nexus 2009).
Sponsorships When choosing a sponsorship it is not necessary for sponsor and sponsee to be in directly related industries. For example, while sports shoe manufacturers Nike and Adidas sponsorship of sporting events can be seen to be directly related ie sports people wear sports shoes during the event, a Telstra or Vodafone sponsorship of the same event is not as clear. What is relevant in this situation though, is audience demographic. Simply put, people who watch sport are very likely to buy telephones or subscribe to networks. Different measures of success can be seen in this
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example. On the one hand Nike and Adidas is successful in terms of brand building by having top athletes wear the shoes, whereas on the other hand Telstra and Vodafone may be more successful in terms of sales, as more money is likely to be spent on communications rather than sports shoe-ware. Choice of sponsorship will therefore depend on what goals are important for an organisation. Management consultants KLM Inc. argue that ‘a successful brand needs to stand for something that actually matters’ (KLMINC 2011c). Standing for something that actually matters also touches on ethical and moral considerations and the associated risks. Voukefalas Picture 1
Source: Gawker.com In tough economic times attracting the right sponsor will involve a degree of creativity. Struggling Greek amateur football team, Voukefalas, depends on 67-yearold madam Soula Alevridou for survival. The team plays at football games wearing jerseys emblazoned with the logos of two local brothels, "Villa Erotica" and "Soula's
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House of History". The team also reportedly receive unspecified in-kind and in-house benefits for successful competitions (Berman 2012). Although there is no legal impediment to such a sponsorship in Australia (and Greece), it is quite likely to attract moral arguments and criticisms based on religious, cultural and feminist issues. While the teams’ financial difficulties may have been alleviated in the short term, in the long run it may be a less than satisfactory sponsorship given the ethical and moral arguments. It is questionable what message the team intends to give the spectator and is a core issue alongside risk management and relationships between stakeholders that may, or may not, have been thoroughly considered.
Source: execdigital.com
Space Jump In August 2012 Felix Baumgartner took the heroic plunge from space and in the process broke a number of records. Images of the jump were beamed across more than 40 networks in 50 countries around the world in addition to social media channels (Clancy 2012). The event was manufactured by Red Bull, whose logo could be seen on Felix’s helmet, spacesuit, parachute, support team clothing and mission control amongst other places. Additional marketing includes a plethora of hats, t-shirts, jackets, Christmas cards, toys etc (Red Bull Shop 2012). The importance of the event cannot be underestimated and has been reported as not just the ‘Space Jump’ but the ‘Red Bull Space Jump’, one of the most ‘buzzed’ about events of the year (Heitner 2012). According to Ben Sturner, President and CEO of Leverage Agency “the Red Bull Stratos was one of the greatest marketing stunts by Red Bull, and perhaps the
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greatest marketing stunt of all time” (Heitner 2012). The company doesn’t simply sponsor events in a traditional sense but creates events and content around those events plus product distribution and media management through its media business Red Bull Media House (Clancy 2012). Clancy reports that Red Bull positions itself as ‘a young, thrill seeking organisation that creates extremely dangerous events’ and that these thrill seeking type events are designed to appeal to young adults rather than children or teenagers (Clancy 2012). Although the immediate audience may be young adults it is submitted the Red Bull Media House is well aware that today’s children and teenagers are tomorrow’s young adults and that fact is integral to the marketing strategy. The Red Bull Space jump is a good example of the time involved in bringing a major event to fruition. The event was over 5 years in preparation and the jump lasted less than 20 minutes. It goes without saying that a major event such as this requires close co-ordination and co-operation between partners and reference to a very detailed strategy. Regarding financials, Red Bull is a privately owned company and therefore it is unclear how much was spent on the jump. Some executives estimate that after the jump Red Bull company could be worth over 5 billion pounds (Clancy 2012). Whatever the financial investment it seems clear from the reports that the returns, at least on branding, have already been very satisfactory (Clancy 2012, Smith 2012, Boies 2012, Heitner 2012). From a social media point of view success can be gauged more readily from recorded page views, ‘like’ numbers, tweet mentions and other social media performance indicators. Red Bull Stratos event is reported to have generated over 2.6 million social media mentions on the day alone (Boies 2012). Graph 1 shows the level of interest on Twitter where users have tweeted with the most popular hashtags.
Graph 1, Twitter Hash Mentions
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Source: Boies 2012
The Red Bull Stratos homepage also records the public approval rating where, at the time of writing (7 December 2012), Facebook ‘likes’ are 837,000 and Tweets over 28,000. By 16 December 2012 Facebook ‘likes’ had risen to 842,000 (www.redbullstratos.com): A significant increase. The actual page views could be much higher than these figures and would be available to the company via Google analytics. However, these bald figures alone do not address a questions such as ‘how the event has improved the company’s image?’ To answer this and other less tangible questions, more complex methods of evaluation are required (see sponsormap.com 2012). Figure 2: Stratos Homepage
Source: http://www.redbullstratos.com/
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It is clear that in order for Red Bull to bring to fruition five years of work, break world records, do what no person has done before, contribute to scientific understanding and achieve high levels of social media comment, a very sound sponsorship strategy has been put in place with due regard to the minimum factors outlined earlier. Conclusion A successful sponsorship depends on many factors, including those identified in this paper, which need be co-ordinated by a carefully crafted strategy. And, the higher the stakes in the sponsorship, the more attention must be given to the detailed strategy plan. A failed sponsorship in contrast, can be distinguished by reference to one or more factors that have either not been implemented or poorly implemented. Depending on the goals, measures of success can be gauged through numbers recording sales figures, audience size and media ‘hits’ but evaluation of brand awareness and goodwill, although not impossible to determine, will require more complex evaluation methods. A good indication of successful sponsorship and brand awareness is however, when the public continue to talk about an event long after the event, which it is submitted will be the case for the Red Bull Space Jump.
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EDED 20447 Assignment 2 Bibliography Andrews, J 2012, Missed opportunity for McDonald’s, viewed 3 December 2012, http://www.sponsorship.com/About-IEG/Sponsorship-Blogs/Jim-Andrews/November2012/Missed-Opportunity-for-McDonald-s.aspx Amis J, Slack T & Berrett T, (1999) "Sport sponsorship as distinctive competence", European Journal of Marketing, Vol. 33 Iss: 3/4, pp.250 – 272, viewed 11 December 2012, http://www.emeraldinsight.com/journals.htm?articleid=853594&show=abstract Australian National Audit Office, ANAO n.d., viewed 7 December 2012, http://www.anao.gov.au/uploads/documents/Management_of_Corporate_Sponsorshi p.pdf Berman, T 2012, A Greek soccer team is now sponsored by local brothels, viewed 9 December 2012, http://gawker.com/5952727/a-greek-soccer-team-is-nowsponsored-by-local-brothels Boies, J 2012, How Red Bull Stratos successfully soared across social media, viewed 10 December 2012, http://blogs.salesforce.com/company/2012/10/how-redbull-stratos-successfully-soared-across-social-media.html Beeman, D 2009, Sponsorship Insights: Developing new sponsorship strategies in challenging times, viewed 29 November 2012, http://sponsorshipconsulting.blogspot.com.au/2009/01/developing-new-sponsorshipstrategies.html Bigman, D 2012, Big risk, big reward: Felix Baumgartner and Red Bull deserve all the marketing buzz they get, viewed 5 December 2012, http://www.forbes.com/sites/danbigman/2012/10/14/big-risk-big-reward-felixbaumgartner-and-red-bull-deserve-all-the-marketing-buzz-they-can-get/ Clancy, R 2012, Red Bull “worth £5bn” after Felix Baumgartner skydive, Telegraph, viewed 5 December 2012, http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/leisure/9609231 /Red-Bull-worth-5bn-after-Felix-Baumgartner-skydive.html Craig, L & Moore, L 2007, Intangible assets, intellectual capital or property? It does make a difference, viewed 6 December 2012, http://klminc.com/branding_brandstrategy/intangible-assets-intellectual-capital-or-property-it-does-make-a-difference Cutler, D 2012, Corporate sponsorship, viewed 5 December 2012, http://fulltext.ausport.gov.au/fulltext/1999/cjsm/v3n3/cutler33.htm Fuel 4 Arts homepage, n.d., viewed 28 November 2012, http://fuel4arts.com/ Friedman, S 2004, Sponsorship: A key to powerful marketing, viewed 12 December 2012, http://www.marcommwise.com/article.phtml?id=792
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