This article springboards off a great article by Francis Dumais, who identified six major variations of sponsorship portfolio strategy.
Francis took the term sponsorship strategy and applied it very legitimately to the strategic choice facing brands around how they choose to structure their sponsorship investment, across portfolios or single properties. Each of these alternatives represents a distinct strategic choice.
Francis is co-founder of Canadian sponsorship agency Elevent, The article was written back in 2015 but it’s still relevant – we’ve adapted his original list and ranked them in terms of popularity, according to our own experience.
Vertical integration
A strategy of vertical integration combines different assets within a specific platform, most typically in sport a combo of ambassador, pro team and grassroots sports but also possibly including leagues and stadia.
As an approach, it’s very strong – offering the credibility and profile of high profile and high visibility partnership; a grassroots platform to deliver broader community engagement and double down on authenticity; and a spokesperson to strengthen voice and personality. Difficult to beat and for this reason at the top of our list.
The Star
The star is in a different atmosphere : a single, high profile, high visibility, partnership, typically an event but potentially an ambassador, that shines brightly, potentially internationally. Its weakness, compared to a vertical strategy, is its limited window of relevance, hence activation.
But operationally it has advantages. Single events are far easier to integrate into business operations. They call upon event management skills that may already exist, they offer a finite window of disruption and they offer a healthy period of downtime for evaluation, reflection, giving the ability to refine and evolve year on year.
To quote Francis: a further major upside of the Star is delivering ‘a single activation platform and single message. This last point is crucial, as several points of contact and more than one message can create confusion’.
Proposition-led
The proposition-led strategy unites what may be a diverse sponsorship portfolio through the application of a consistent communication framework. Actual activation may differ but a shared strap line, positioning, language and visuals connect the different sponsorships and associate the brand with a consistent message and audience take-out.
In many ways, this is a highly pragmatic choice for business – allowing different geographies or divisions the freedom to select properties which work locally, and wrapping them up to deliver the same message. The challenge of course is to activate these potentially distinct properties.
Horizontal dominance
The easiest way to explain horizontal dominance Is to use the term platform. Like many terms in sponsorship, platform isn’t applied consistently across the industry. We use it to refer to a clearly defined content area – such as marathons, electronic dance music, or music venues for example. The strategy is simple : sponsor enough – and the best known – to ‘own’ the space.
Horizontal dominance ensures strong brand association with the platform – but It’s difficult to defend against brands who work to undermine the position with Investment In other levels of the vertical.
Ubiquity
Ubiquity is all about being everywhere, of course.
The driver for this strategy is primarily exposure, or to use Francis’s phrase ‘the theory of bombardment .. the idea is to maximize the points of contact with as many people as you can.’
You can do this the expensive way – as Huawei did with their European pitch invasion, you can find yourself in this situation because you don’t, in fact, have a strategy, but – but this route is often associated with smart procurement. Ideally, you take title in an anchor property and then secure lower tier rights which leverage that halo.
The best example of this from a UK perspective is Vitality, which built up a portfolio of relatively low cost relationships to give them a wide spread across UK sport.
Property creation
It’s quite easy to find, especially if you’re looking at a global audience, that you’re facing too many compromises and wastage to secure a global platform: beyond global brand awareness, it can be hard to find sponsorship properties which closely meet your geographic and touchpoint needs. In which case, you might look at creating your own platform.
Everyone looks at Red Bull for inspiration and, as we know, in retrospect everything looks easy. The reality is that very few businesses have the three magic ingredients required to do this: confidence, a clear audience focus and understanding – and the organisational structure required to make it happen. For every Red Bull, there are unfortunately a thousand brands who only see risk and uncertainty.
Is it sponsorship? Not by most definitions, but certainly by ours. All the ingredients are there, just in different proportions.
The beauty of this approach is the complete control the brand has over its image, its choice of target audience and any partners. To quote Francis again, ‘The brand enjoys total freedom by determining its own benefits, negotiating its own broadcast deals, choosing its own media partners and protecting itself against rising sponsorship costs.’
Despite these advantages, this approach demands significant investment, major internal resource, extraordinary customer insight, huge brand confidence and the willingness to learn and evolve the model – all major barriers to entry for most businesses. Which is why, despite its huge value, property creation is at the bottom of this list.
Sponsorship Portfolio Strategy
Of course, you don’t choose your sponsorship portfolio strategy from a catalogue – the approach emerges from business needs. And, as we said earlier, this is neither an exhaustive list, nor definitive. According to circumstance, brands will blend these to ensure the assets, the visibility and the protection they require.