The following article first appeared as the conclusion to the Redmandarin publication ‘Defining Sponsorship‘. It provides a clear analysis of the roots of what sponsorship and sound sponsorship strategy is all about and is helpful both for students and practitioners.
So where to start?
The only definition that’s readily available is from the European Sponsorship Association and this paints a compelling picture: rights, exchanged for money, delivering value for brands.
‘Any commercial agreement by which a sponsor, for the mutual benefit of the sponsor and sponsored party, contractually provides financing or other support in order to establish an association between the sponsor’s image, brands or products and a sponsorship property in return for rights to promote this association and/or for the granting of certain agreed direct or indirect benefits.’
Sounds legal. Mutual benefit, financing or other support, rights, association, direct or indirect benefits.
But the drafting sucks.
The same definition applies equally well to licensing. Or product placement. Or, for that matter, a straight media buy. The definition itself reveals much of our way of thinking about sponsorship, especially the lynchpin of ‘rights’. Rights, ex- changed for money, deliver value for sponsors. Precisely the paradigm for selling sponsorship.
TV rights, naming rights, image rights, usage rights, pouring rights, all have to be defined and understood. The ability to leverage partner assets is an essential and defining component of sponsorship. But rights have become the tail wagging the dog. Sponsorship’s claim to fame is the scale of rights payments. The cost of branding Man U’s shirt, the Ferrari F1 team, Dubai’s new airport or David Beckham’s new haircut is what drives coverage. The sponsorship economy.
This definition of sponsorship is the model as defined by the rights-sellers, who have a vested interest in the corporate world continuing to believe that sponsorship resides exclusively in the unsurpassable rights of the top and middle tier properties. The World Cup, Champion’s League, the Olympics and F1 downwards.
And it’s incredibly limited – and limiting. Not only does it fail to define sponsorship definitively, it misses the essence of sponsorship, the essence which, if managed well, makes sponsorship so unique and powerful.
So let’s shoot for something better. A priori, as it were.
sponsor : rights-holder ?
The first given in any sponsorship is a relationship, a relationship between two parties. Although the definition talks of sponsor and sponsored party, as an industry we tend to call them sponsor and rights-holder.
If, for the time being, we assume the word sponsor is a placeholder for a brand, what exactly is a rights- holder? Classically, we’re talking about a sporting organisation such as FIFA or a cultural institution such as the Berlin Philharmonic. But a rights-holder, intrinsically, is anyone in possession of any sort of IP or ‘rights’, which includes NGOs, community-based initiatives, governments, media owners, you, me and pretty well anything, including other brands.
When Simon Thompson talks of a partnership between Motorola and D&G, both very strong brands, he’s clearly talking of a relationship which is very different from the average sponsorship. But back in the late 90s, when Vans were managing their Triple Crown series – surf, BMX, moto X, skate etc – they were the rights-holder in an extensive web of brand relationships. Ferrari’s partnership with Shell goes back 50 years. The only question relevant to fans is not: which one is the rights-holder, but: how good is my experience of these partnerships?
The term rights-holder loses even more shape when we consider that most brands possess an equivalent, or stronger set of rights than most rights-holders. As Peter Franklin points out, Coke is serving over a billion portions of its products every day and its rights extend into relationships, media and commercially valuable IP in every country on the planet.
And conversely, rights-holders are brands as well, although, when it comes to consumer franchise, most sporting organisations don’t even register on the same scale as the brand brands.
So brands are automatically rights-holders – and rights-holders are of necessity brands. Where does that leave us?
In principle, partners.
the relationship
But if we accept that rights-holders are brands and brands are rights-holders, need that fundamentally affect the sponsor – rights-holder dynamic that exists in most sponsorships? The implicit configuration of one partner (the brand) needing to derive benefits; and the other partner (the rights-holder) providing the solution.
Absolutely. The very term rights-holder implies a buyer-seller relationship, but the truth is, the relationship does not need to involve money, providing it’s reciprocally beneficial. Rights-holders intrinsically need precisely the same things a brand does: brand equity, customer franchise, revenue. Although the industry has been configured for a sponsor to ‘provide financing’ to a sponsored party, this is neither a contingent, nor a defining characteristic.
I remember pitching to McDonalds back in the late 80s, on behalf of a not for profit. Even then, I was told, quite bluntly, that McDonalds owned more media than I could ever offer and that I would be lucky not to have to pay them to sponsor me. At the time it seemed the height of arrogance, but of course it was true. Rights fees are the big attraction of sponsorship, but for any rights-holder genuinely interested in developing a property, it is not necessarily the most im- portant contribution: brand media, association, promotion and IP can be of significantly greater value.
Although a power differential will often exist, at a brand-to-brand or brand-to-cause level, partnership is more genuinely the paradigm, but the sponsor – rights-holder relationship has long been fraught. Peter Wells even argues that ‘rights-holders get in the way’…
Despite positive intentions – Phillipe Le Floc’h talks of Heineken’s UCL trophy tour as an example of partnership at work and many brand contributors describe sponsorship clearly in terms of partnering – for most rights-holders, the idea of partnership doesn’t really extend beyond money plus.
The idea of a cashless association which builds a rights-holder proposition is … a rarity. When Barcelona FC put Unicef on its shirt, and Honda put the earth on its car, both were significant in the sense of rights-holders actively attempting to build their brands. Regardless of execution, both acts represent progressive thinking.
Conversely, many brands fail to commit, in earnest, to sponsorship. Rights fees are swallowed like a bitter pill, sweetened by the assumption that the rights will work their magic.
Either way, everyone loses, because the relationship only has meaning if viewed through the eyes of the consumer.
genuine value-add
The relationship has to deliver genuine value-add for consumers. Both parties carry a responsibility to manage consumer touch-points with a sponsorship and both parties are judged on the experience. Both parties need to be able to lay legitimate claim to enhancing the consumer experience. In order to deliver against brand potential, any sponsor, reverting briefly to that terminology, has to do something worthwhile.
Funding some events or institutions can be worthwhile in its own right. The sponsors of the Globe in London, for example, deserve thanks and loyalty in the Faris Yakob / Alain de Botton sense of having provided beneficent patronage. However, despite every fan survey conducted by the validation industry on behalf of rights-holders, which consistently report that consumers prefer brand marketing spend to be invested into sponsorship than other marketing activity – the gratitude model of sponsorship is largely a thing of the past. Tony Ponturo shares that Budweiser’s own research shows clear consumer resistance to badging.
For major financial entities such as Man U or FIFA, sponsor investment is at best an irrelevance for consumers. Andy Walsh argues for a clear fan benefit from sponsor funding and his position is well put. That’s not to say he’s necessarily right in how sponsor revenue should be deployed, but he represents a legitimate consumer perspective about how sponsorship revenue should be used. And increasing rights-holder profitability is not one of those uses.
So the relationship has to add genuine value in consumers’ perceptions for it to fulfil its potential – the old truism with a new vigour. After all, the brand is modelling its vision of consumers. If there is no real value to the sponsor’s presence, the brand is modelling itself as superfluous, disengaged, impersonal, aloof, take your pick.
Optimally, the sponsor will have a genuine role to play and products or services will be an integrated element of the experience. As Peter Franklin says for Coca-Cola: ‘there has to be a particular role for us to play.. something… unique for us ….to triangulate between our brand and the passion consumers have for the property’. Failing that, the sponsor can still demonstrate its values in the way it interacts with consumers. Sorry, people.
It’s easy for activation to remain token, tinkering around the edges rather than fundamentally addressing consumer experience. For brands which ignore this fundamental truth, sponsor- ship is likely to be damaging.
Because the very heart of sponsorship is about the brand.
brand play
At the heart of sponsorship has to be a brand play.
The slow tide of contemporary brand awareness which began in the 80s continues to rise, and is still infiltrating even B2B sectors which stubbornly resisted the brand concept; and with that the understanding that every single thing you do as a brand is an expression of your values.
Branding agencies help businesses to develop a clear brand proposition, and ensure coherent branding, internally and externally, through language, imagery, product, customer relations, employee relations, everything, because, from a holistic brand perspective, everything counts.
The same applies to sponsorship. Sponsorship offers brands the opportunity to model their values and promise in a fresh context. But it’s not just the property that carries the brand. It’s the tone of voice, the production values, the promotional mechanics, the activation concepts, the participation me- chanisms, the relationship gradient with consumers, everything.
Strategic sponsorship takes businesses into areas of life far removed from their norm. When Telefonica sponsors the Davis Cup, it’s because it wants to create an alternative strand of dia- logue with consumers. The reason it exposes itself in an alien environment is because this change of context offers the potential for greater prominence for its values, allowing consumers to appraise the brand afresh. Stripped from a com- mercial context, every action in a sponsorship context amplifies the brand dimension. In Martin Lindstrom’s words: sponsorship works when we are not aware of the signals being sent.
It is part of the fallacy of the power of association that the values of the rights-holder rub off on the brand. The sponsorship industry has always talked of ‘brand value transfer’ flowing towards the brand, but this is only a part of the story. Vodafone’s association with Lewis Hamilton only works because Vodafone walks and talks like a world leader. There is undoubtedly value transfer from Lewis Hamilton, but only if Vodafone acts like Vodafone. If 3 were the sponsor, Lewis Hamilton’s image would be the poorer. The sponsor is primarily responsible for the brand take-out by consumers.
As Kevin Roberts puts it: what does women’s tennis bring to Sony Ericsson in terms of involvement and enrichment or happiness or purpose to the base proposition?
It continues to surprise us that brands can labour over carefully and expensively crafted brand promises and customer propositions, which they apply coherently through traditional media. And yet, when they come to sponsorship, they sign off a rough value fit and a logo.
value fit
Values offer an essential filter for platform and property selection, of course: you don’t sponsor an individual if you’re about teamwork, obviously.
But in our experience, the industry still applies a very loose model of alignment between brand and rights-holder values, with fairly superficial profiling exercises calling out alignment, typically against generic values such as dynamic, passionate, professional, flexible etc.
These exercises typically also focus single mindedly on the ‘positive’ associations, ignoring the value dimensions of an association which aren’t quite so positive. Vodafone understands that, in order to communicate leadership, coming second is not an option.
Leaving to one side the basic criticism that the generic adjectives of the sort often used in these exercises are insufficient to really define a brand; and the disbelief that so many brands still hope to differentiate themselves by using such generic values – simple value alignment is not the end-point.
Any brand entering into sponsorship should only do so if it is absolutely clear that the association is capable of carrying either the brand proposition itself, or a close derivative.
For most brands whose products are not genuinely integrated into the delivery of Formula 1 – most of them – there is limited communications potential. If you win, it says: we’re a leader. If you don’t, it says: we’ve got a lot of money. Enough to burn.
‘Priceless’ is an example of where this is heading. The sense of priceless in MasterCard’s above the line is different from that in Mastercard’s sponsorships, but at least the sponsorships verbally support the brand proposition, which can be used to create parameter for activation. For the consumer, it is possible to see priceless running through all brand comms.
‘Red Bull gives you wings’ is even better: the tagline clearly shapes the DNA of all sponsorship, from local to global.
But that same easy-fit mentality that’s applied to values also gets applied to audience
passion?
In the clichéd sales parlance of sponsorship, we’re talking … passion. Passionate fans… of tennis, of footie, of F1. Salivating at the opportunity to buy sponsor products. Passion became the buzzword of the 90s and still hasn’t disappeared. Passion is implicitly what all fans feel about their favourite sport / team / personality. And ‘passion drivers’ is how Octagon frames its insight into the emotional world of the fan.
But the sales rhetoric is often the most passionate part. Again, it’s not difficult to understand why the word is so popularly linked to sponsor- ship – it’s another part of the sales paradigm. The promise that, through your sponsorship, you are going to claim the undivided loyalty of fans has been implicit from the early days. And it’s always been nonsense.
Fans of course can be passionate but, by and large, they’re the ones you avoid. The impact of Michael Jordan on Ade Adepitan is impressive, but unusual. People aren’t passionate about many things. You might be truly passionate about your football club but, boy, are you an exception. And if you’re not in a majority as a footie fan, you’re going to feel even lonelier if you’re passionate about tennis. Let alone women’s tennis.
The truth is, passion percentages don’t add up.
There aren’t enough subject-specific passionate people in the world to uphold the sponsorship model. Sailing in the UK, for example, claims a lifetime participation audience of 11% – that is, people who at one time in their lives have tried sailing. The percentage of Britons regularly sailing stands at 0.1%. The percentage of people who will follow sailing in the news – and really care about it – stands at less than Y%, So, unless you’re selling yachts, 1% of this market is worth two thirds of diddly squat.
Octagon’s passion drivers’ contribution is to acknowledge that consumers, people, have different kinds of relationships with their interests. But the passion driver framework is misleading. It suggests a line of passion running through all these diverse audiences, which really isn’t there. As passion. Sponsorship is not a shortcut to passion. Sponsorship is a shortcut to relevance.
no, relevance
The challenge brands face, as Peter Wells identifies, is to ensure their relevance to consumers. Some brands, such as Apple, manage this through their product offering. Some brands, such as Pot Noodle, manage this through attitude. Many businesses are visibly attempting to maintain their relevance at the moment by addressing their green credentials.
Every four years, the World Cup is incredibly relevant. And the great thing about the World Cup is that it’s growing more relevant. As society becomes more secular, the World Cup is occupying the space that religious festivals used to fill. Regard- less of how passionately you feel about football, you can’t fail to notice the holiday mood that covers the entire globe.
As individualism, as an ideal, reaches its apogee, we’re fascinated as a society by the insights we’re fed into the lives of celebrities; and the individual – as Simon Lowden and Nic Couchman argue – can offer broader relevance than most organisations.
Sponsorship offers a route to relevance by permitting an alternative entry point into the consumer’s world, where the brand has another opportunity to showcase itself and its values: ‘a contemporary feel’, in the words of David Aaker. An entry point apart from product. Because even when brands are brave enough to conduct brand-led ATL, product is never too far away. And, as Martin Lindstrom points out, consumer perceptions are filtered and tainted by the proximity of the sell.
It’s the eternal struggle of brands to remain relevant. But many sports actually have limited relevance. Content based on subject matter which has greater social and emotional relevance to consumers often offers brands more opportunities to interact with consumers on common ground.
Which is why the vision of contributors such as John Luff, David Butler, Giles Gibbons and Patrick Nally, surely one of the elders of the industry, will surely come to pass. This vision of brands committing to projects of social and community relevance aligns with the thoughts of Marc Gobé, Charlie Hiscocks and Sally Hancock, around the close identification of brands and audience interests. And when Kevin Roberts quotes David Ogilvy, and talks of fans being treated like morons, instead of people, he’s making precisely the same point.
evaluation, validation
The Coke paradigm of sponsorship, according to Steve Cumming, is relationships and assets: sponsorship facilitates relationships and provides assets, which offer brands additional benefit: TV exposure, pouring rights, customer data, CRM content, relationship-building opportunities and much, much more. David Wheldon gives a very clear example of why the TV exposure which accompanies a few sponsorships can be extremely valuable: for any brand entering into new markets, sponsorship can generate exceptional levels of awareness.
But the essence of sponsorship is not based on TV exposure, or assets. It’s based on relevance, and Kevin Roberts’ evaluation challenge to the industry, although it’s not new, remains very pertinent. It’s not about eyeballs.
Most sponsorship evaluations are exercises in validation. Most of the evaluation reports we’ve seen applied to our clients’ sponsorships don’t even distinguish between business objectives and campaign objectives. How well did we manage the campaign versus what contribution did the campaign actually make to the business? Obviously, it’s the client’s choice if they want to use such data to validate their marketing investment. But the price for keeping evaluation such a comfortable exercise can only be a loss of integrity and credibility, a failure to learn and a waste of investment.
Media value is just the worst offender in the battery of validation techniques. Worst because, for most brands, logo exposure per se brings marginal benefit; and because the emphasis EAV places on logo exposure obscures the value of emotional connection.
We have worked with the econometrics teams of enough businesses now to be able to demonstrate a clear link between revenue – be that acquisition, retention, uplift – and sponsorship to know that clear, transparent evaluation is possible. There are only two obstacles: lack of data, and laziness. Tirelessly curious, it’s difficult for us to conceive of a business too lazy to explore the impact of its marketing.
Vodafone track preference and ROI. Carlsberg measure direct sales. The point is, measurement is possible. And the correlation is generally positive. Sometimes surprisingly so.
sponsorship content
How then do we describe the actual stuff of sponsorship? Much sports sponsorship is event-led, but a refresher of Naomi Klein’s ‘No Logo’ reminds us that absolutely anything can be sponsored, so ‘form’ is not a starting point.
We could talk in terms of content. Content is popular at the moment: branded content, user generated content, exclusive content, the variations are endless. But we’re not talking downloadable digital imagery or sound, not even AFP. Instead, we’re talking within the context created by Peter Wells and Mark Earls: anything which stimulates social content, an interesting conversation.
It’s an analogy which many content-hungry brands should bear in mind. You could be mistaken for thinking that some brands have changed their business model into contentownership. Unless they have, the value of content is no more and no less than to enable conversations with customers.
The term IP is perhaps less confusing. Sponsorship IP can range from a tangible commercial property such as the Olympic Games, to a simple proposition; such as Nike’s Joga Bonito; and everything in between.
When Steve Cumming talks of IP in the context of Diageo, he cites Johnny Walker’s keep walking and anti-drink-driving activities, both differentiating IP positions. When Paul Meulendijk talks of an overarching theme, in the context of MasterCard, Priceless is intended to be the underlying IP which defines sponsorship content and activation.
So where does that IP stop and start? John Luff, Giles Gibbons, David Butler and Lesa Ukman all talk of sponsorship from a different perspective: sponsorship which has broader community relevance, sponsorship which does good. Is this sponsorship or corporate responsibility? From a business perspective, CR and sponsorship often sit in offices at opposite ends of the building.
The Body Shop’s campaign against domestic violence, back in the mid ‘90s, is an interesting case study: a campaign created by The Body Shop, it co-opted NGOs around the world to raise a subject skirted at the time even by government, and demonstrated very deep consumer insight – as well as immense brand confidence. Remember ‘No advertising’?
This would typically be labelled corporate responsibility, but in every respect it behaves like sponsorship – based on partnership, relevance, shared assets, consumer engagement and more.
The point is: sponsorship is truly platform-neutral.
two cheers
Redmandarin has always prided itself on being, not advocates for sponsorship, but advocates for good sponsorship. Good sponsorship, we believe, has the potential to build brands and drive marketing programmes.
And we’re not alone. A goodly number of contributors – from the brand side – are passionate about sponsorship. Curiously enough, they’re all ex-advertising, and their marketing evolution all follows a similar pattern: from cynic to zealot.
Trying to separate out the perception of brands such as Vodafone, Coca-Cola, Pepsi and Carlsberg from their sponsorship is impossible, it’s played such a fundamental role in communicating the brands. Take a look at Interbrand’s top 100 global brands and try again. And some sponsorship are genuinely business-transformational: association with the IOC helped elevate Visa and Samsung into global superbrands.
Denial of sponsorship’s potential is to deny a powerful marketing tool, and in some ways, an entire approach to marketing.
But this is only two cheers for sponsorship.
Along with Keld Strudahl, Charlie Hiscocks and Steve Cumming, we feel the word sponsorship itself creates bad associations. Ironic. Ironic that we’ve collectively mismanaged the sponsorship brand. The industry is repeatedly subject to the charge of being profligate, unaccountable and whimsical.
Blunt denial is not the answer: we have to ask ourselves why these associations exist.
If we, the sponsorship industry, are going to achieve the recognition for sponsorship it deserves, we need to lobby for higher standards of corporate governance. Who ultimately can authorise sponsorship? And what is the process required to ensure sponsorship is a strategic investment?
We need to acknowledge that some sponsorship – as much as advertising, sales promotion, DM – can be bad, wasteful, and profligate. Keld Strudahl’s stance of constant self-criticism is a path to self-awareness, something which sponsorship can run dangerously short of.
new model?
Patrick Nally leads the way again, with his clarity: the traditional, packaged rights model of sponsorship is dying.
The new model already exists of course. And has done for many years.
Red Bull proved beyond doubt that a clear positioning, a clear identification with audience and attitude can grow a brand sufficiently to build a strong franchise. Quiksilver, Billabong, Ripcurl and O’Neill did it in the 60s. Geoff Glendenning and Sony Playstation did the same in the mid 90s. The Body Shop did it for 20 years. Nike has long been exploring IP.
- a tight proposition for all events
- partnering the sports (often in the form of the leading exponents, rather than the governing bodies), to create events which have always been absolutely on the pulse of the sport
- amazing audience insight, understanding the aspirations of the stars of these new sports and helping to translate them into reality, creating a vastly enhanced experience for fans
- media exposure which assumed fragmentation from the outset and built itself, gradually, on truly unique visual content
- multiple small properties, run to a culturally well-defined DNA, with brand-owned events generally starting small scale, low risk, trialling new styles and disciplines
The old model is to buy an association and activate, assuming the association buys you the right to activate. The new model is to earn the association, recognising that all that sponsorship can provide – potentially – is a reason to believe. It is always the responsibility of the sponsor to deliver against that reason to believe. The new model of sponsorship works harder.
As Marc Gobé hammers home – it’s all about credibility, nothing else. And for all of Red Bull’s blatant self-promotion, its insight into the sports and their audiences always safeguarded more than enough credibility for the brand.
But the real ‘new model’ is far bigger.
Sponsorship is far from being just a channel, and it‘s more than a discipline. It‘s a mindset, an approach to marketing in its own right.
Intrinsically integrated, multi-channel, contentled, engaging 3-dimensionally with consumers to build brand engagement.
No wonder advertising‘s always been nervous.
towards re-definition
The old definition is increasingly ill-fitting, a memory, not a vision for the industry. It’s time for a new one. Or, at least, the discussion.
This definition is based on our attempt to discern what lies at the absolute heart of sponsorship. Of good sponsorship, in other words. There are plenty of deals which fit the old definition better than this one.
We just don’t think they live up to the promise of strategic.
© Redmandarin 2009
Perfect? No.
But for us, it feels much closer to the mark. The emphasis feels right.
It applies equally to the great history of sponsorship deals: Coca-Cola and the IOC, Shell and Ferrari, Horst Dassler and the creation of FIFA rights; as it does to the new era of brand-led sponsorships: Red Bull’s Flugtag / air race, Nike’s Joga Bonita.
Is this so very far from the ESA definition quoted at the beginning? Is this all just nitpicking? Yes and no. The basic ingredients of sponsorship can’t change: what’s important is the emphasis and priority given to each. This is bolognese with more meat and less tomatoes. More Caffe Nero, and less Starbucks. The nature, the intent and the focus of the relationship are more important than the number of partners, and what the transactional component of their relationship might (or might not) be.
