FIRST STEPS IN SPONSORSHIP: WHERE BRANDS TRIP UP

By Tom Gladstone

‘We think sponsorship could help support our business, brand and marketing strategies. Where do we start?’

Navigating the sponsorship landscape to find the right sponsorship is not a simple task. There are countless sponsorship thought pieces, blogs and webinars that talk through the theory of sponsorship strategy and selection, but it is when theory gets applied in practice that reality can bite. Whether brands are new to sponsorship or not, there are some consistent ‘trip hazards’ that we see time and time again.

‘Commissioning’ the right support

It starts with getting the right advice and engaging the ‘marketplace’ in a strategic manner. Too often brands seek advice from the sponsorship sales side, or agencies who offer brand consultancy while selling rights at the same time. When your adviser is being paid a commission by the other side of the table, you need to question the objectivity of their advice. When they’re taking commission and being paid a fee for the consultancy – ‘double dipping’ – you have to question their business ethics.

A recent survey by Gemba suggests that the industry is wise to the problem. 42% of sponsorship professionals see this conflict of interest as a serious problem and that figure jumps to over 50% for those who have been in the industry over 10 years. But new brands entering the space, who have had their head turned by an exciting sponsorship proposal landing in their inbox, may not be so tuned in.

This conflict of interest erodes value for the brand involved. If the ‘advisers’ are commissioning the deal, there is no incentive to negotiate down the transaction price of the deal. Bigger rights fee, bigger commission. But getting advice from a brand-side agency or consultant – with no mandate from the rightsholder to broker a deal – can create additional brand ‘upside’. Those working brand-side will often be engaged to help activate the partnership, which means they are invested in the long-term success of the deal, with mutually aligned skin in the game. Their incentive is helping negotiate a deal that works, not one that gets signed quickly.

Having an objective, independent brand-side adviser removes another common misstep from brands in sponsorship – marketplace misrepresentation. It is very common for brands to scope out the market by speaking to numerous sponsorship sales agencies. Finding out ‘what’s available’ may sound sensible and harmless, but mostly it results in chaos and confusion. Multiple sales agencies are often simultaneously approaching rightsholders claiming to represent a brand. The commission-based industry dynamics can create a messy feeding frenzy – the main menu item being an overly-generous slice of the brand’s sponsorship investment.

Valuing more than ‘values’

Read any sponsorship announcement press release or listen to any webinar about best practice sponsorship, and you’ll hear the importance of ‘an alignment of brand values’. It is one of the most over-used (and unhelpful) ‘crutches’ in sponsorship strategy. Community, heritage, integrity, teamwork, performance, excellence. Whatever the designated ‘values’, they are pretty interchangeable across most sporting passion points or properties and are an incredibly poor way to alight on (or validate) the right partnership.

Yes, brand ‘fit’ is at the heart of any strategically sound sponsorship, but it needs to go a lot deeper than ‘shared values’. Establishing the right fit is about identifying how to bring to life the brand positioning or proposition through the sponsorship. That could be a compelling narrative that uses the sponsorship to tell the brand story in a persuasive new way, or co-creating a new proposition with the rightsholder that gives the brand a unique way to land the brand point of view.

Too often that attempt at brand alignment happens after the deal. But it should be an essential component of the internal business case for investment and a guide to negotiation. Getting buy-in to the way a sponsorship will be activated, getting pre-deal approval on a core activation idea, and embedding the necessary contractual rights in the deal is key. One of the stand-out sponsorship moments from the Paris Olympics was Louis Vuitton’s gratuitous product placement / seamless product integration (delete as appropriate…) – an activation moment secured within the contract. The ‘create before you negotiate’ mantra is still a golden rule to ensure a partnership will be able to deliver brand fit.

The audience reality check

Ensuring enough of your target audience can be reached and engaged by a potential sponsorship is another pre-requisite for selection success. There is bountiful data, tools and analytics available to interrogate and substantiate an ‘audience fit’. But beware the big numbers. Sponsorships are renowned for selling themselves on their ability to connect with a significant fanbase at scale. While a sizeable ‘addressable audience’ may furnish a compelling business case, it isn’t always that ‘addressable’ in practice..

There’s no doubt sponsorship can give brands visibility at scale through branded inventory and exposure, which has meaningful value, particularly to new brands looking to establish name recognition at warp-speed. But sponsors are increasingly looking to sponsorship for deeper engagement with an audience. When you look beyond broadcast viewing numbers and delve into a rightsholder’s owned and operated channels (website, social channels, database/CRM) the addressable audience starts to diminish pretty rapidly.

You also need to factor in the sponsor’s ability to unlock the value of that audience, which is dependent on the extent of their sponsorship rights, such as the amount of website inventory, frequency of social posts, number of CRM pushes or a commitment to minimum number of impressions. Great that the rightsholder can connect you with a million fans, but not so great if you can only email them three times a year. Sponsorship selection needs to be based on that granular reality of the rightsholder’s first party data, and the level of access being granted to that data, not the vanity stats in a sponsorship sales prospectus.

Ultimately, the theory of sponsorship strategy and selection – being clear on objectives, brand fit and audience alignment – is a pre-requisite for success. But it needs to be supplemented with an understanding of how to apply it against the practical realities of the sponsorship industry.