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For all the money spent on acquiring sports sponsorship rights in

the past few years (see box, page 26), there is still scepticism about

the medium's effectiveness.

While the press can take some of the blame, by reporting low audience

recall figures for televised events as if it were the only measure of a

sponsorship's value, there are many examples of sponsorships that fail

simply because clients don't know how to exploit them properly.

The pitfalls are numerous. But most major gaffes fall into five

categories: failure to establish objectives at the outset; choosing the

wrong property; failing to integrate the property into the overall

marketing programme; not setting aside a big enough budget to exploit

title rights effectively; and failing to take account of what the

competition is already doing.

Failing to establish objectives or choosing the wrong sport may seem

like basic errors, but it is easy to be seduced by glamorous events.

Alan James, managing director of Hill & Knowlton's sponsorship division,

says: "The chairman's whim is not as common as it was five years ago.

But we try to establish the client's real motivation for a sponsorship

as early as possible."

According to James, the first step in helping a client is to conduct a

sponsorship audit. This will analyse the performance of the company's

existing portfolio, spell out objectives and identify the audience the

client is seeking to reach. H&K then seeks out sponsorship

opportunities, while also summarising what rivals are doing and how they

might respond.

James stresses the importance of forming a steering group that cuts

across all parts of the business involved in exploiting a

sponsorship.

"Sponsorship is a creative platform that works best when leveraged

through related disciplines such as PR, design, sales promotion,

above-the-line advertising, online and hospitality," he says. "You need

people across the business who will champion the work or it can be

marginalised."

Giles Morgan, deputy managing director at independent consultancy

Craigie Taylor International, which has worked with Vodafone on a number

of high-profile sponsorships (see box), agrees that people throughout

the company need to be involved with the deal. "You need to know whether

the company is planning a strategic shift that might affect the

sponsorship," he says.

"If you buy the rights to a property, you must ask whether it is

flexible enough to adapt to a merger or rebranding scenario."

One of the toughest decisions to make for the client is knowing where to

look for advice. They face a bewildering array of options, including ad

agencies, media buyers, PR companies, independent sponsorship

consultancies and rights holders.

There are also hybrid companies such as Octagon Marketing, which is part

of ad giant Interpublic, but also operates in the sports marketing

sector as a consultant and a rights broker.

James says H&K offers clients a number of advantages. "As part of WPP,

which also owns sponsorship consultancy Premiere, we have access to

specialists across a range of marketing sectors when it is time to

implement a strategy.

"We don't sell sponsorship rights, so clients can be sure of our

objectivity. We never try to sell them something that isn't right for

their brand."

Finding impartial advice

The potential for a conflict of interest is often used as a stick with

which to beat Octagon, which is now an aggressive sports-rights

broker.

Matthew Osman, associate director at sponsorship consultancy

Redmandarin, says: "The big money in sponsorship is in selling rights,

so the market is full of agencies skilled at convincing you their

opportunity is right. We recommend that a client employs impartial and

informed advice, clarifying the interests of any agency before getting

involved."

In practice, the issue does not seem to be harming Octagon, whose client

roster at last year's Euro 2000 football competition included Hyundai

and MasterCard - companies it will also work for at the 2002 World

Cup.

In addition, it is working on behalf of Zurich in Rugby Union, Stella

Artois in tennis, Energiser in international athletics and NatWest in

cricket.

Octagon's president, Alasdair Ritchie, says that as part of IPG, his

firm has access to talented teams across a range of disciplines. In

addition, he has constructed a network of offices to service global

clients.

This expansion has involved acquisitions or partnerships in Korea (joint

host of the 2002 World Cup), Greece (host of the 2004 Olympics), South

Africa (probable host of the 2010 World Cup), Singapore and most

European markets. "We can do a global audit quicker, cheaper and in more

detail than any of our rivals."

Barrie Gill, vice-chairman of the UK's first publicly quoted sports

marketing group, CSS-Stellar, agrees with Ritchie that there is no

serious conflict between consulting and selling. "We've been doing it

for more than 20 years without any problems. Selling rights gives us

superb marketing intelligence on what rights are available at any given

time."

That said, Gill objects to ad agencies advising on sponsorship.

"Agencies don't understand sponsorship and are not in a position to give

objective advice," he says. "Sponsorship requires specialist knowledge

and contacts. I wouldn't try to make ads and ad agencies shouldn't try

to identify sponsorship opportunities."

For Gill, this extends to agency groupings such as WPP or IPG that seek

to bolt on sponsorship expertise. "There are two dangers," he says. "The

first is that sponsorship will play second fiddle to advertising. The

second is that the sponsorship unit will be restricted where there is

potential for conflict with the parent group's advertising clients."

But Ritchie is swift to reject such claims. "The only adman among

Octagon's 65 staff is me. The rest are sports, entertainment and

sponsorship specialists. Clients make decisions based on market

intelligence and data - and the combination of IPG and Octagon gives

them that."

This pro-ad agency assessment is shared by M&C Saatchi Sponsorship

managing director Matthew Patten, who cut his teeth at sponsorship

consultancy Orbit before it merged into Octagon.

"Clients feel comfortable with agencies they already work with or know

by reputation. Big ad agencies employ talented people who are good at

handling big pieces of business," he says.

Independent advice

Gill says clients who choose the independent route should contact the

European Sponsorship Consultants Association (ESCA), which can give

advice on the strengths and specialisms of its member agencies.

Morgan, whose firm, Craigie Taylor International, is a member of the

ESCA, shares some of Gill's emphasis on independence, but above all

stresses the importance of referral.

"You can find talented teams within lots of different organisations. My

advice would be to brief a number of companies that have been

recommended to you or that you know have driven successful sponsorships.

Then select one to do a sponsorship audit."

The size of the budget is a key consideration and, for some clients, the

global armoury employed by Octagon might seem like overkill.

By contrast, some independent consultancies can help clients test the

water before pitching a more aggressive sponsorship programme.

In broadcast sports sponsorships, access to event-based exploitation

rights is sacrificed in favour of a heavy media component.

Although it would be wrong to regard broadcast sponsorship tie-ups, such

as Coke and ITV's Premier League highlights, simply as an airtime buy,

the importance of the media component in such deals explains why most

leading media buyers have set up sponsorship arms.

Among the best-known are PHD Drum and Tempus-owned Total Sponsorship,

but MindShare, Zenith, Carat and MediaCom also employ big-hitters in

broadcast sponsorship. MindShare was instrumental in Ford's recent

decision to renew its relationship with Sky Sports.

The key to working with a media buyer is to ensure it has the skills to

exploit the sponsorship through different channels.

In the case of Ford and Sky, the deal makes Ford exclusive broadcast

sponsor for FA Premier League coverage as well as live coverage of

Scottish international football, Scottish league and cup football,

Republic of Ireland international football, international rugby union

and the US PGA Tour golf. Ford also gains a presence on sports news

channel SkySports.comTV, SkySports.com and SkyDigital's live interactive

sports coverage.

Any media buyer that really wants to make a sponsorship sweat should

also identify other ways in which to work with the media owner, such as

fantasy leagues in newspapers, as well as non-media activity that may

complement the core deal.

Andy Westlake, managing director of Total Sponsorship, says: "As part of

the Tempus Group, which also owns CIA Medianetwork, Outrider and The

Added Value Company, we are well-informed about media and have a

sophisticated research base, which strengthens our proposition."

A key consideration when picking an agency is to avoid firms with a

limited range of ideas. Football and Formula One are attractive sports,

but they are also cluttered. Unless you are a brand prepared to invest

heavily to ensure cut-through, there might be better ways to spend your

money.

And agencies should be brave enough to kick out a sponsorship if it is

the wrong choice, says Osman. "Falling TV audiences for many major

events, spiralling rights fees and sponsor clutter mean sport may not be

right at all. We believe entertainment and popular culture are important

new growth areas for sponsorship."

Within sports sponsorship, it is worth checking out agencies with proven

specialisms. Karen Earl and Craigie Taylor International boast strong

credentials in sailing - a potent marketing tool that has done wonders

for Kingfisher recently.

And then there are agencies such as Chilli, a leader in freesports

(surfing, snowboarding, windsurfing, skateboarding) agency. Chilli

communications director Shaun Whatling says freesports can act as a

bedrock of a major communications strategy.

According to Whatling, freesport's strength is that it attracts a

different audience psychographic to mainstream sports. Although

predominantly perceived as being about youth, says Whatling, "its real

strength is that it appeals to independently minded people who are more

interested in self-realisation than competitive team activities. If

that's a message you want to instill in your brand, then freesports is a

flexible and uncluttered way of achieving it."

The number of people actively engaged in freesports - or passively

interested in the lifestyle it represents - is also big, says Whatling.

"There isn't as much TV as for mainstream sports, but the viral impact

of freesports is immense."

He cites Sony PlayStation as an example of a mainstream brand that

kicked off its brand-building programme with freesports before bolting

on media awareness builders such as soccer. Freesports also underpinned

the reinvention of the downmarket Casio name through its role in

marketing the G-Shock watch brand.

Genuine support

Whatling says any brand can use freesports to drive its proposition as

long as it doesn't appear phony to the target audience.

This is a message applicable to all sports. Barclaycard, the new sponsor

of the Premier League, must not only overcome the legacy factor of

previous Premiership backer Carling and the impact of Coke's broadcast

sponsorship deal with ITV, it must also persuade fans it is serious

about football.

While it may be cluttered, the soccer market does offer opportunities to

reach audiences in novel, cost-effective ways. Nationwide has done a

good job in this respect by supporting the smaller clubs that make up

the lower leagues, while Newcastle Brown Ale, as sponsor of Newcastle

United, has also made local support marketing a key part of its

activity.

And Rivals.net, an online network that links soccer club web sites

produced by fans, has built a database of about 120,000 regular

visitors, who it sends e-mails and online newsletters.

Despite the plethora of agencies and sponsorship opportunities, some

clients are brave enough to go without external expertise. Indeed, Coke

felt it had enough in-house expertise to hold its own in its dealings

with Granada over ITV highlights. M&C Saatchi's Patten says this direct

negotiation is the biggest challenge facing agencies.

Ritchie agrees, saying the abundance of unsold sponsorship opportunities

in the market suggests too many agencies do not yet do enough to

convince clients of their worth.

And according to Redmandarin's Osman, answering question marks that

remain over the way sponsorships are measured must be made a priority.

"The lack of measurement of the impact of sponsorship," he says, "is

restricting the medium's credibility."

HOW VODAFONE ADDED TO ITS GLOBAL REACH

Vodafone's sponsorship properties include Manchester United, the

Australian Rugby Union team and Ferrari, a portfolio that helps

communicate a notion of global excellence even as the telecoms firm's

share price drops through the floor. There is a good chance that this

brand image will stick until Vodafone's fortunes turn the corner along

with the rest of its sector.

Vodafone got into the medium in a low-key way when it started to sponsor

the Epsom Derby in the mid-90s. As it grew, it added the English Cricket

Team before surging to the front-rank of sponsors with its Manchester

United deal - valued at £30m over four years. Throughout the

process, it has used Craigie Taylor International to implement its UK

strategy.

Global media exposure in key markets has been a key consideration in all

of Vodafone's deals. As Manchester United toured Asia with its new

stars, Vodafone lapped up coverage both in the Far East and the UK.

During the recent British Lions tour of Australia, it achieved more

exposure on Aussie shirts, and in Ferrari, it has bought one of the most

potent of all sporting brands - with TV exposure in more than 200

countries.

The company is also using its partnership with Manchester United to test

mobile telephony-based services through the team's fan base by giving

them the chance to listen in on the action away from the stadium.

Effective exploitation of a sponsorship requires clear communication

across all areas of group activity. Although Vodafone built its

portfolio on a piecemeal, territory by territory basis, it has now

formed a centralised sponsorship strategy team in Germany, which

interacts with local teams in key markets. The aim is to ensure all its

markets are exploiting partnerships to the best of their abilities.

VALUE OF SPORTS SPONSORSHIPS

SPONSOR PROPERTY PRICE AGENCY*

(pounds)

Orange Arrows F1 team 70m over three yrs CSS-Stellar

Barclaycard Premier League 48m over three yrs n/a

Coke Premier League 50m over three yrs n/a

highlights on ITV

Vodafone Manchester United 30m over four yrs Craigie Taylor

International

AXA FA Cup 25m over four yrs n/a

MasterCard World Cup 2002 20m to 30m Octagon Mktg

Zurich Rugby Union 15m over three yrs Octagon Mktg

Nationwide Football League 12m over three yrs n/a

Npower English Test Cricket 11m over three yrs n/a

Norwich Union UK Athletics 10m over four yrs Total

Sponsorship

The Guardian Manchester Evening 2m n/a

News Commonwealth

Games

NTL British Lions in 1m Octagon Mktg

Australia

Norwich Union BT Global Challenge 500,000 Karen Earl

*Agencies named worked on the sports sponsorship deals, but did not

necessarily handle the whole strategy from concept to implementation