The IEG Sponsorship Report estimated that marketers spent $19.8 billion on sponsorships in North America during 2013, with 70 percent going to sports; another 10 percent to entertainment tours and attractions; 4 percent to festivals, fairs, and annual events; 4 percent to the arts; 3 percent to associations and membership organizations; and 9 percent to cause marketing.65 Becoming part of a personally relevant moment in consumers’ lives through sponsored events and experiences can broaden and deepen a company’s or brand’s relationship with the target market.
Daily encounters with brands may also affect consumers’ brand attitudes and beliefs. Atmospheres are “packaged environments” that create or reinforce leanings toward product purchase. Law offices decorated with Oriental rugs and oak furniture communicate “stability” and “success.”66 A five-star hotel will use elegant chandeliers, marble columns, and other tangible signs of luxury.
1. EVENTS OBjECTIVES
Marketers report a number of reasons to sponsor events:
- To identify with a particular target market or lifestyle—Customers can be targeted geographically, demographically, psychographically, or behaviorally according to events. Old Spice sponsors college sports— including its college basketball Old Spice Classic in late November—to highlight product relevance and sample among its target audience of 16- to 24-year-old males.
- To increase salience of company or product name—Sponsorship offers sustained exposure for a brand, a necessary condition for reinforcing brand salience. Top-of-mind awareness for soccer World Cup sponsors Emirates, Hyundai, Kia, and Sony benefited from the repeated brand and ad exposure over the month-long tournament.
- To create or reinforce perceptions of key brand image associations—Events themselves have associations that help to create or reinforce brand associations.67 To toughen its image and appeal to the heartland, Toyota Tundra sponsors B.A.S.S. fishing tournaments and has sponsored Brooks & Dunn country music tours.
- To enhance corporate image—Sponsorship can improve perceptions that the company is likable and prestigious. Although Visa views its long-standing Olympic sponsorship as a means of enhancing international brand awareness and increasing usage and volume, it also engenders patriotic goodwill and taps into the emotional Olympic spirit.
- To create experiences and evoke feelings—The feelings engendered by an exciting or rewarding event may indirectly link to the brand. Audi models featured prominently in the 2010 blockbuster Iron Man 2, including main character Tony Stark’s personal R8 Spyder and the A8, Q5 and Q7 SUVs, and A3 hatchback. After a month-long marketing blitz, positive word of mouth doubled for the brand.68
- To express commitment to the community or on social issues—Cause-related marketing sponsors nonprofit organizations and charities. Firms such as Timberland, Stonyfield Farms, Home Depot, Starbucks, American Express, and Tom’s of Maine have made their support of causes an important cornerstone of their marketing programs.
- To entertain key clients or reward key employees—Many events include lavish hospitality tents and other special services or activities only for sponsors and their guests. These perks engender goodwill and establish valuable business contacts. From an employee perspective, events can also build participation and morale or serve as an incentive. BB&T Corp., a major banking and financial services player in the South and Southeast United States, used its NASCAR Busch Series sponsorship to entertain business customers and its minor league baseball sponsorship to generate excitement among employees.69
- To permit merchandising or promotional opportunities—Many marketers tie contests or sweepstakes, in-store merchandising, direct response, or other marketing activities with an event. Ford and Coca-Cola have used their sponsorship of the popular TV show American Idol in this way.
Despite these potential advantages, the result of an event can still be unpredictable and beyond the sponsor’s control. And although many consumers credit sponsors for providing the financial assistance to make an event possible, some may resent its commercialization.
2. MAJOR SPONSORSHIP DECISIONS
Making sponsorships successful requires choosing the appropriate events, designing the optimal sponsorship program, and measuring the effects of sponsorship.70
CHOOSING EVENTS Because of the number of sponsorship opportunities and their huge cost, many marketers are becoming more selective. The event must meet the marketing objectives and communication strategy defined for the brand. It must have sufficient awareness, possess the desired image, and be able to create the desired effects. The audience must match the target market and make favorable attributions for the sponsor’s engagement. An ideal event is also unique but not encumbered with many sponsors, lends itself to ancillary marketing activities, and reflects or enhances the sponsor’s brand or corporate image.71
DESIGNING SPONSORSHIP PROGRAMS Many marketers believe the marketing program accompanying an event sponsorship ultimately determines its success. At least two to three times the amount of the sponsorship expenditure should be spent on related marketing activities.
Event creation is a particularly important skill in publicizing fund-raising drives for nonprofit organizations. Fund-raisers have developed a large repertoire of special events, including anniversary celebrations, art exhibits, auctions, benefit evenings, book sales, cake sales, contests, dances, dinners, fairs, fashion shows, phonathons, rummage sales, tours, and walkathons.
More firms are now using their names to sponsor arenas, stadiums, and other venues that hold events, spending billions of dollars for naming rights to major North American sports facilities. But as with any sponsorship, the most important consideration is the additional marketing activities.
MEASURING SPONSORSHIP ACTIVITIES It’s a challenge to measure the success of events. “Marketing Memo: Measuring High-Performance Sponsorship Programs” offers some guidelines from industry experts IEG.
Supply-side methods for measuring an event’s success assess the media coverage, for example, the number of seconds the brand is clearly visible on a television screen or the column inches of press clippings that mention it. These potential “impressions” can translate into the dollar cost of actually advertising in the particular vehicle. Some industry consultants estimate that 30 seconds of logo exposure during a televised event can be worth 6 percent, 10 percent, or as much as 25 percent of a 30-second TV ad spot.
Although supply-side methods provide quantifiable measures, equating media coverage with advertising exposure ignores the content of the respective communications. The advertiser uses media space and time to communicate a strategically designed message. Media coverage and telecasts only expose the brand and don’t necessarily embellish its meaning in any direct way. Although some public relations professionals maintain that positive editorial coverage can be worth five to 10 times the equivalent advertising value, sponsorship rarely provides such favorable treatment.
The demand-side method identifies the sponsorship’s effect on consumers’ brand knowledge. Marketers can survey spectators to measure their recall of the event and their resulting attitudes and intentions toward the sponsor.
3. MARKETING MEMO Measuring High-Performance Sponsorship Programs
- Measure outcomes, not outputs. Focus on what a sponsorship actually produced rather than what a sponsor got or did—rather than focus on 5,000 people sampled at an event, how many of those people would be classified as members of the target market and what is the likely conversion rate between their trial and future behaviors?
- Define and benchmark objectives on the front end. Specific objectives help to identify what measures should be tracked. An objective of motivating the sales force and distributors suggests different measures than one of building brand image and key brand benefits. Contrast measures in terms of sponsorship effects and what might have happened if the sponsorship had not occurred.
- Measure return for each objective against prorated share of rights and activation fees. Rank and rate objectives by importance and allocate the total sponsorship budget against each of those objectives.
- Measure behavior. Conduct a thorough sales analysis to identify shifts in marketplace behavior as a result of the sponsorship.
- Apply the assumptions and ratios used by other departments within the company. Applying statistical methods used by other departments makes it easier to gain acceptance for any sponsorship analysis.
- Research the emotional identities of customers and measure the results of emotional connect. In what ways does a sponsorship psychologically affect consumers and facilitate and deepen long-term loyalty relationships?
- Identify group norms. How strong of a community exists around the sponsored event or participants? Are their formal groups that share interests that will be impacted by the sponsorship?
- Include cost savings in ROI calculat Contrast expenses that a firm has typically incurred in the past achieving a particular objective from those expenses allocated to achieve the objective as part of the sponsorship.
- Slice the data. Sponsorship affects market segments differently. Breaking down a target market into smaller segments can better identify sponsorship effects.
- Capture normative data. Develop a core set of evaluation criteria that can be applied across all different sponsorship programs.
Source: “Measuring High Performance Sponsorship Programs,” IEG Executive Brief, IEG Sponsorship Consulting, www.sponsorship.com, 2009.
4. CREATING EXPERIENCES
A large part of local, grassroots marketing is experiential marketing, which not only communicates features and benefits but also connects a product or service with unique and interesting experiences. “The idea is not to sell something, but to demonstrate how a brand can enrich a customer’s life.”72 Many firms are creating their own events and experiences to create consumer and media interest and involvement.
Consumers seem to appreciate that effort. In one survey, four of five respondents found participating in a live event was more engaging than all other forms of communication. The vast majority also felt experiential marketing gave them more information than other forms of communication and would make them more likely to tell others about the experience and be receptive to other marketing for the brand.73
Companies can even create a strong image by inviting prospects and customers to visit their headquarters and factories.74 Ben & Jerry’s, Boeing, Crayola, and Hershey’s all sponsor excellent company tours that draw millions of visitors a year. Hallmark, Kohler, and Beiersdorf (maker of NIVEA) have built corporate museums at or near their headquarters that display their history and the drama of producing and marketing their products. Many firms are also creating off-site product and brand experiences. There are the World of Coca-Cola in Atlanta and Las Vegas and M&M’s World in Times Square in New York City.
Source: Kotler Philip T., Keller Kevin Lane (2015), Marketing Management, Pearson; 15th Edition.