Sponsorships are getting more commercial and it is good news

Posted on
June 25, 2019
Sponsorship is now increasingly justified through more commercial means and this is making it easier for businesses to rationalise the relevance of this powerful tool within the marketing mix.
Whilst media value generated via brand exposure through live events and content will continue to be a base measure for some time, rights holders are gradually understanding the need to be more savvy to the needs of their potential partners to demonstrate tangible commercial return alongside the softer brand impacts measures.
As brands better understand the multi-faceted benefits of strategic sponsorships and brand partnerships, return on investment (ROI) actually becomes easier to quantify. The key is to clearly understand the objectives you are looking to achieve.
If we look at the four different areas where sponsorships can create an impact for businesses we can see the different ways in which value is quantified.

BRAND

Brand exposure and audience reach has traditionally been the key driver for brands to get involved in sponsorship however the measurement is arguably the least robust. Businesses have effectively treated sponsorship as a platform to reach a defined audience and applied an Advertiser Value Equivalent (AVE) media value to it: the results are often tenuous and reliant upon interpretation. There will always be a place for brand exposure through sponsorship. Rights holders, in order to unlock greater fees, are constantly under pressure to secure less developed (but highly profitable) businesses who want simple brand exposure. Think of the unknown Asian businesses or betting brands using The Premier League as an awareness platform.
There are of course more detailed evaluation metrics for sponsorships on a brand level such as ‘brand affinity scores’ or ‘propensity to purchase’ however as with brand awareness, in a period where businesses are tightening their marketing budgets, these softer measures are often only evaluated by larger businesses who fully appreciate the importance of brand building.
In more and more cases we are seeing how businesses understand that sponsorships can support other areas of their organisation namely across their own corporate or brand communications, directly supporting their sales activity, or supporting their internal business challenges.


COMMUNICATIONS

The really successful partnerships that cut-through with consumers are where brands are adopting and adapting content from their partnerships across their marketing communications. A brand’s association with a rights holder acts as a proof point to their brand or product. A good example of this is with Rolex, which utilises its tennis and golf content to elevate and differentiate itself from its competitors. Rolex has consistently partnered with the most premium and prestigious sporting events and ambassadors over a long period of time and these exclusive events and global stars are used across the brands’ above and below the line output. From a product showcase point of view, automotive manufacturers are increasingly using content from Formula 1 or Formula E to showcase the performance, innovation or sustainability credentials.

SALES

There is no doubt that sponsorships are now able to generate direct revenue and create new business opportunities through lead generation. Traditionally, hospitality at events was intended to tick the ‘business networking’ box but as the sporting and entertainment worlds have grown there has been more commercial rationale to integrate businesses further with rights holders. A brand like DHL is able to generate significant revenue through its involvement as a logistics partner across motorsport using its expertise to deliver a service. Similarly, Formula E’s interest as a sponsorship property exists predominantly as a B2B platform for likeminded technological businesses which share the common goal of investing in clean energy solutions way beyond sport and, ultimately, to do business.

CORPORATE

Perhaps the least recognised areas that sponsorship can support are the corporate and internal needs of a business. An association with a sporting property has the ability to elevate a business on a corporate level and galvanise a work force globally. AkzoNobel’s involvement in the Volvo Ocean Race was intended to support their brand needs and support their B2B sales objectives but perhaps the greatest impact was felt across its workforce. A global sporting event showcasing values of teamwork, leadership and endeavour galvanised its workforce globally behind a common goal – the results of this activity against other internal communications initiatives were indisputable. This is a huge opportunity for businesses of all sizes and geographical spread.


IN SUMMARY

It is the businesses that fully understand the opportunities that sponsorship enables which will get the most from their investment and it is the rights holders that best understand their target sponsors and create solutions that address the needs of the businesses – be they brand, communications, sales or corporate needs – which will have the most success in generating commercial income.
The more experienced brands become at measuring their results, building a bank of data intelligence and adjusting their sponsorship activity over the course of the opportunity, the more adept they will become at harnessing sponsorships effectively.
If you need any assistance in shaping your sponsorship strategy or optimising your commercial proposition, get in touch – jamestoller@mallory-group.com

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Posted on
June 25, 2019
in
Agency Expertise
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