Sponsorship is one of the fastest-growing marketing disciplines in the UK. It can be the hook upon which a host of other activity can be hung. It drives advertising campaigns, creates reams of media coverage and can even help build new areas of business for brand owners. Sponsorship, in short, is an excellent way to get your brand noticed.
Sport, music, film and the arts are areas that make a connection with consumers way beyond even the most emotive product categories. Think BMW, and engineering and sleek looks might spring to mind. But think Virgin, and your mind might hark back to that festival you went to last year, and all the associations come flooding back.
The most popular events attract huge crowds and are effective targeting tools, creating a useful conduit for companies seeking to reach particular groups of people. But using such emotional equity for your own purposes is a sensitive subject and the fit must be right. Trample over someone's passions or intrude into a delicate relationship, and you won't be forgiven and may even be mocked.
Karen Earl, managing director of Karen Earl Sponsorship, says every would-be sponsor must approach any proposal carefully at the beginning of the process. 'You need to make sure that you know what you want to achieve and how you are going to make it work before you buy the rights,' she says. 'How else will you know what they are worth? There must be a clear business case for the sponsorship.'
This process goes beyond estimating the value of brand exposure. The appeal of sponsorship lies in its flexibility to be leveraged across a range of marketing platforms - and you should be thinking about how you can maximise these opportunities.
Coca-Cola provides a good example. As the most famous brand in the world, its £15m sponsorship of the Football League must do more than just generate media exposure. The rights allow Coca-Cola to use platforms such as online, digital and user-generated content to talk direct to its customers. The sponsorship is the starting point of an ongoing conversation between the brand and a large and influential constituency: English football fans. One neat initiative offers fans the chance to win a £250,000 transfer kitty for their club.
As the uses of sponsorship broaden, the contract between sponsor and rights holder becomes more complex. Traditional elements such as branding opportunities, hospitality and ticketing remain in place. However, sponsors are demanding greater flexibility to use a property in areas such as retail point of sale, digital marketing or even staff motivation and training.
The people responsible for sponsorship must therefore liaise closely with other areas of the business to fully flesh out the possibilities. 'When it comes to evaluating a sponsorship, wastage is often a major concern,' says Steve Martin, chief executive of M&C Saatchi Sponsorship, who estimates that about 75% of the value of rights are wasted. 'The feedback asks why the marketing department bought it. If you had asked the right questions to the right people within your own business beforehand, it is a problem you could avoid'.
With mass TV audiences seemingly a thing of the past - in 1998, 250 programmes were watched by more than 15m people in the UK; by 2004, this figure had fallen to four, according to MindShare - sponsorship has become one of the few ways to reach a big, diverse audience.
Sadly for brands, this has come at a price, with the cost of rights to major sporting events rising rapidly. FIFA, for example, has sold its top-line partnerships for the period up to the 2014 World Cup for between £150m and £220m. Meanwhile, over the next year, the London Organising Committee of the Olympic Games (LOCOG) will seek up to £100m from each of its major sponsors.
The reason prices are rising to this extent is the simplest rule of economics: supply and demand. Despite inflated figures, more and more brands are seeking to associate with these events, creating the danger of clutter. Take the 2006 World Cup as an example. This summer's festival of football was supported by 15 top-line sponsors. Can you name them all? More to the point, can you name any of them?
Likewise, what does £100m buy you these days? Seasoned sponsorship veterans are looking at LOCOG's offer with eyebrows raised. What will London 2012's sponsors be able to do to stand out, given that they will wait in line behind the International Olympic Committee's own roster of TOP partners, which includes Coca-Cola, General Electric, Johnson & Johnson and McDonald's.
Perhaps the answer lies not in being big, but in being clever. Siemens recently signed a deal with the UK's rowing team. Rowing is always a high-profile sport come the Olympics and is popular on these shores, given our past successes, yet the tie-up cost the electronics company only a fraction of a LOCOG deal. Expect all manner of media coverage over the next few years, all bearing the presence of Siemens, basking in the role of good corporate citizen.
This example illustrates that there is still space in the sports market to make a real splash if you manage to choose the right property. 'Creativity makes the difference and underlines the personality of your brand,' says Peter Walshe, brand director of Millward Brown. 'How else will you stand out and create a unique link to your brand?'
The music industry offers several benefits to potential sponsors. The price point is generally lower than sports, reflecting its comparatively modest media exposure. It is also an area largely free of the restrictions imposed by the more established holders of sports rights. Moreover, for the more committed, music offers greater opportunities for event creation, ensuring complete control over the presentation of the brand.
This summer's festivals offered an experiential dimension to the ongoing music sponsorship strategies employed by major telecoms, beer and soft-drinks brands that have dominated the music marketing landscape in recent years.
Consumer-led trend
The mobile phone can be festival-goers' most valuable item, allowing them to buy tickets, locate friends in the crowd and demand band encores. The impact of online and mobile ticketing has been startling. Between 1999 and 2004, the value of the UK market for outdoor music events grew by 29% to £613m, and Mintel estimates that this could rise to £836m by the end of the decade.
There is thus a clear fit for mobile-phone brands with music, and they have moved fast to take advantage of this trend. One example is Vodafone's sponsorship of TBA, a series of six semi-secret outdoor gigs streamed instantly to mobile phones and rolled into advertiser-funded programming on Channel 4.
'Brands must seek to enhance the event and therefore have a genuine reason for being there,' says Adrian Pettett, director of brand entertainment agency Cake. 'The best brands add value to the festival-goers' experience. When a brand gets this right, it enjoys an incredibly rewarding platform from which to promote the brand to a very specific target audience.'
The burgeoning involvement of technology brands in festivals is illustrated by the calendar of music events, which includes the O2 Wireless Festival, Virgin's V festival and the Nokia Isle of Wight Festival. Tiscali and AOL also both sponsored smaller events this year. In many cases, brand awareness is not the ultimate goal. Sponsors value the chance to showcase their technology and to offer exclusive content to their customers, which provides a potential revenue stream across several media.
It is clear that sponsorship is evolving quickly, in line with changes in media consumption. The best sponsors are shaping the future of the industry, moving beyond the traditional 'boards, boxes and tickets' model. To join them in standing out from the crowd, you will need to use the media channels and formats elected by consumers, rather than what is easiest, given the sponsorship rights package. To justify its place in your marketing mix, sponsorship must be made to pay its way.
CASE STUDY - ORANGE PLAYLIST
Orange Playlist is an advertiser-funded music and entertainment programme that recently ran for a second series. The first series ran for 26 episodes between September 2004 and March 2005. It was recommissioned in October 2005 to run until the end of April 2006. Launched simultaneously on ITV and Viacom, a weekly episode is broadcast 14 times across five channels (ITV1, ITV2, VH1, VH2 and TMF).
In a market in which there is increasing pressure on revenue derived from phone calls and text messages, the development of multimedia services is critical to Orange's growth.
Music is emerging as a major potential revenue stream for mobile networks, and encouraging a youth audience to view Orange as a credible source for downloading music was a challenge from a brand and commercial perspective.
Intelligent sponsorship, by way of branded content, was the chosen route to connect with consumers - creating a new music TV show to position Orange and mobile technology at the heart of the viewing experience.
Orange Playlist was developed in partnership between Orange (the sponsor), ITV (the channel) and Initial, which is part of Endemol UK (the producer). Brand-entertainment agency Cake worked on behalf of Orange.
The show was developed to give Orange some ownership of the booming download culture. The show features pop charts, which reflect up-to-the-minute consumer trends in downloading music, particularly of ringtones and full-length tracks, via mobile phones.
The integration of the brand with the programme content, the signing of high-profile presenters including DJ Lauren Laverne, who fronted the first series, and former Top of the Pops presenter Jayne Middlemiss to present the second series, as well as regular appearances from popular celebrities, has helped position Orange Playlist as the UK's number one music show on TV.
The first series consistently delivered more than 1m viewers, with a high of 1.7m. The show's average share of the 16- to 34-year-old target audience was 13%. Series two achieved a high rating of 2.1m and a peak audience share of 22.5%.
Since Orange Playlist was launched, the mobile-phone company has risen from being the network least associated with music downloading to being the second most commonly cited by consumers.
The programme has generated editorial content that would have cost more than £636,000 in advertising. It has also led to a 25% rise in the number of new customers downloading full-length tracks via the Orange handset WAP service (Orange Music Player), as well as a 46% increase in the total number of weekly downloads.
Exclusive Orange Playlist preview clips are consistently among the most in-demand video downloads from the Orange World portal.
SPONSORSHIP DOS AND DON'TS
Do identify your key objectives. Are they media exposure and brand awareness, hospitality, goodwill and sales generation, PR or brand positioning?
Do ensure the contract with the rights-holder meets the objectives. Invest in a legal specialist to work on it.
Do involve personnel from your marketing, sales, corporate affairs and PR departments in your business plan.
Do invest in research and evaluation to assess the sponsorship's impact.
Do develop a relationship with the governing body or rights holder. Aim to work together as partners.
Don't undertake a sponsorship programme unless you have enough money to cover the legal work, hospitality, PR, promotion, and in-house/agency support team.
Don't lose focus of your objectives. Avoid being seduced by the sexiness of sponsorship or by working with high-profile events and celebrities. It is primarily a business relationship.
Don't just pay the money and run. Ensure an activation team is in place either in-house or at an external consultancy.
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