WEDNESDAY 23 MAR 2011 1:06 PM
DOES CORPORATE SPONSORSHIP MEASURE UP?
With budgets squeezed and lavish spending frowned upon, companies are having to think hard about whether corporate sponsorship can help them to meet business objectives. Fortunately, there’s plenty of creativity at the cutting edge of engagement. Neil Gibbons reports
What do Castrol and football have in common? Good question. In 2007, the brand had had no association with the sport and no obvious need to create one. Synergies were hard to spot.
But on signing up to become a sponsor of the Euro 2008 tournament, it became clear that Castrol had struck up a partnership that met several objectives.
Increased brand awareness was one, while customex`x`r and employee engagement was also made possible through a major hospitality programme. But the most creative initiative was the Castrol Index, an analysis of football data aimed at fans, which helped to flag up the Castrol brand values of innovation and technology.
In a post-recession landscape, lavishing money on corporate sponsorship can be hard to justify, especially when a wary public and weary shareholders interpret it as expensive vanity or unnecessary indulgence. But brands like Castrol are finding more thoughtful and innovative ways to make corporate engagement work.
For all the misery it caused, the recession does seem to have been responsible for a sharpening of minds, as those involved in corporate partnerships were forced to think harder about how they could wring value from corporate sponsorship.
“The recession has without doubt shaped the sponsorship landscape,” says Ian Budd, senior associate of Burson-Marsteller’s Total Sponsorship practice. “For too long, a company’s choice of sponsorship property was seen to be largely down to the whim of its chairman. If we have one thing to thank the recession for, it’s that brands now have a more robust and focused approach to their sponsorship strategies.”
While not dead, these “chairman’s whim sponsorships” are mercifully in decline, says Pippa Collett, managing director of Sponsorship Consulting. And while she doesn’t attribute new sponsorship behaviour to the economic downturn, she does regard the recession as a catalyst that has accelerated trends already emerging.
Primary among these, she says, is increased scrutiny on investment returns which she says has focused attention on the shareholder imperative. “Change is driven by increased professionalism amongst those responsible for corporate sponsorship investments, a clearer line of sight between sponsorship and the bottom line or balance sheet, and a more coherent appreciation of the power of sponsorship to deliver against stakeholder objectives.”
For Anthony Scammell, associate director of Hill & Knowlton’s Sports Marketing and Sponsorship practice, it’s the last of these that’s become more important. While financial prudence has increased – “There’s now even more emphasis on buying what you need and using what you buy” – he argues modern corporate sponsorship is defined by ensuring a return on objectives rather than return on investment.
“The interesting about the recession is that it made companies look at partnering and sponsorships in even more detail. The recession forced them to look for a sounder rationale. That’s a good thing for the industry. Sponsorship had become a stick the media used to beat big corporations with.”
Look at RBS. Under intense pressure after a public bailout, questions were bound to be asked about its continued sponsorship of the Six Nations rugby tournament. But the bank cleverly used the sponsorship as a platform to rehabilitate its image.
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Partnerships that work
• HSBC’s programme of cultural sponsorships in London. They reflect the HSBC message of the world’s local bank in BRIC growth markets. “It is a classic case study in 21st century sponsorship,” says Pippa Collett of Sponsorship Consulting.
• Brakes Group and Fareshare. “A classic example of win-win-win”, says Collett. “Brakes saves money by not sending so much to landfill, Fareshare is able to help more customers and customers are able to eat.”
• Phillips and the National Theatre. “Phillips gets an iconic operation through which it can demonstrate its energy-saving credentials in the B2B arena, and the NT saves energy on lighting and makes itself more attractive to potential ticket purchasers,” says Collett.
• Tottenham Hotspur. An example of a rights-holder taking an innovative approach to maximising revenues from shirt sponsors, says Total Sponsorship’s Ian Budd. The club divided its prime sponsorship asset between Autonomy (Premier League matches) and Investec (domestic and European cup competitions). “Spurs’ exciting Champions League run has made what may have been deemed a precarious partnership appear outstanding value for Investec, while the attacking, vibrant performances of Harry Redknapp’s side will undoubtedly have pleased Autonomy,” says Budd.
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“Their messaging has changed, the tone is different,” says Scammell. “They’ve taken out ads in the back pages of pages of papers, emphasising that they’re changing.”
Essentially, this is what separates modern sponsorship from the chairman’s whim – an awareness of precisely what the partnership is designed to achieve and an acceptance, according to Jonathan McCallum, business director of OgilvyAction, that the real job starts once the deal is signed.
“The lesson for corporate sponsors is that this is no longer just a branding exercise,” he says. “It’s a viable means of delivering ROI, an objective that’s even more critical in a cash-strapped economy. In practice, this means creating a credible partnership and levering the sponsorship assets to link them intrinsically back into the brand ethos.”
This increasingly strategic approach to sponsorship manifests itself in several ways, but heightens the importance of constructing a partnership that stands up to scrutiny – for both partners. “It has resulted in a key shift in how some of these partnership deals are constructed, moving towards a deeper contractual relationship,” says McCallum. “But the old rule of credibility – signing up to a believable partnership – still holds true, as does the need to interact with the target audience through engaging experiences.”
When choosing the right properties with which to align the brand, companies want opportunities that cut through the melee of similar sponsorship.
Scammell and his team at Hill & Knowlton work with Carling on its association with football – and he describes the brand as “pioneers” when it comes to achieving the maximum benefit. Carling has sponsored the League Cup since 2003 and is currently in year 2 of its third three-year sponsorship term. It was the first ever sponsor of the FA Premiership back in 1993 and continued that partnership until 2001.
Negotiating for the rights to the Carling Cup, it secured an unusually valuable package. “The final is 100% clean [which means no other sponsor or advertiser can display any branding in the stadium],” says Scammell. “There’s a huge benefit to that as it’s helped to add to the brand personality. And to enhance the experience, when the final was played at Cardiff’s Millennium Stadium, Carling gave all corporate tickets back to the fans, and called it the Fans’ Final.”
More and more brands are doing likewise – thinking carefully about which associations will work best in the knowledge that the fortunes of the rights holder can reflect on the sponsoring organisation. As Ian Budd says: “The partnership decisions made by companies through the recession also extended to consideration of which specific properties would deliver the required return. Success breeding success is nothing new, but the downturn gives this added meaning. Teams and personalities that are successful will continue to attract investment, but where success deserts them, so will corporate support.”
He points to the impact of England’s failure at the World Cup. After the Nationwide Building Society ended its association with the England team, the FA struggled to fnd a new sponsor. “The brand was damaged by a lack of success and showed that at a time of increasing focus on return on investment, what happens on the pitch is all-important,” he says. “Popularity alone would no longer be enough.
So it seems that, increasingly these days, sponsoring companies are seeking more than a property to act as a clothes horse for the corporate brand. It’s engagement they’re looking for.
“More than just slapping a logo on an event, which has been the practice of old, businesses really need to invest in creating powerful brand experiences that brings something more to the party,” says Cembre Knight, director of Pulse Group. “As corporate sponsorship becomes more competitive, providing powerful experiences for clients to take inspiration and new skills from is more important. Demonstrating value in corporate sponsorship is not only crucial for companies to secure budgets, but also for guests to justify valuable time out the office.”
Encouragingly, Knight believes there is an understanding that corporate engagement must deliver tangible benefits “and provide more than just a jolly for staff, clients and prospects”.
She adds: “Businesses must identify the objective and desired response from the activity. With clear objectives and outcomes, they can then look at which partnerships will really help them to meet their goals.”
It’s also a question of where these agreements should live – and which channels are the best ways of communicating the partnership. Predictably, it’s social media – with its capacity to foster communities through dialogue – that is coming to the fore. Budd describes the growth of digital as the “one silver lining in the dark clouds” of the economic downturn. The explosion in the use of social media has, he says, created new opportunities for brands to not only engage with but to “monetise their fan base”.
McCallum agrees, arguing that rise of social and mobile media has been “the most prominent driver, changing sponsorship activation plans forever.”
It seems the channels through which engaging experiences are delivered are evolving at pace.
“In the past, sponsorship has been activated through traditional channels such as PR, promotions, advertising, hospitality and merchandise,” he says. “Now the trend is towards digital platforms, from themed websites to sharing videos of live event experiences on file-sharing sites such as YouTube to build communities and lend further credibility to brand associations.
“The main benefit that this escalation of social media and digital platforms has created is tangible reach. The fans that can’t attend an event can now feel much closer to it and be a part of the experience.”
The recession may have shrunk budgets and dampened the appetite for extensive corporate sponsorship agreements – but if nothing else it’s breathed fresh creativity into the way corporations seek to engage with audiences.
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We first
Branding consultant Simon Mainwaring is author of ‘We First: How Brands and Consumers Use Social Media to Build a Better World’. He believes that corporate sponsorship has changed in response to the will of consumers.
“Corporate sponsorship has been subsumed by a ‘we first’ partnership between brands and consumers,” he says. “As consumers have become producers, distributors, curators and critics, they have assumed co-authorship of brand narratives. As such, the function of corporate sponsorship has shifted. In a ‘we first’ social business marketplace, brands must be the chief celebrants of their communities, not its celebrity. In so doing their role is to unite with the target audience around shared values, and to enable brands and consumers to partner in creating meaningful change.”
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The Corporate Engagement Awards 2011 is Europe’s only dedicated celebration of corporate partnerships, sponsorship and philanthropy. For entry details, visit:communicatemagazine.co.uk/corporateengagement
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