Introduction to Sponsorship: Concepts, Objectives, and Components Chapter 4 Introduction to Sponsorship: Concepts, Objectives, and Components McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

Sponsorship’s Role Another Promotional Tool for Marketers Sponsorship Should Have a Synergistic Effect on a Marketer’s Promotional Efforts Sponsorship Fits within the Promotional Mix Integrated Marketing Communications (IMC)

Integrated Marketing Communications (IMC) Plan Advertising Personal Selling Sales Promotion Public Relations / Publicity Sponsorship Key Is How They All Work in Harmony Sponsorship Is NOT Advertising

Evolution of Sponsorship Motives Early Sponsorships Were Ego-Driven CEO likes golf; company sponsors golf event Focus Shifted to Philanthropic Motives Sponsorship was a way to contribute to a cause Most Sponsorships Today Focus on ROI Sponsorship as an investment, not an expense

Advertising’s Advantages Persuasive Message Words and Images Used to Convey Ideas Standardization Everyone Receives an Identical Message Guaranteed Size of Audience Reached Circulation; TV Ratings; Radio Ratings

Advertising’s Advantages (Cont’d) Evaluation of Effectiveness Measures such as CPM Can Be Applied Measure the Impact on Sales Concept Testing Prior to Using Advertisement Turnkey May Be a Stand-Alone Tactic That Is Not Supported by Other Elements of the IMC

Sponsorship A Relationship between a Marketer and a Property in Which the Marketer Pays a Cash or In-Kind Fee in Return for Access to the Exploitable Commercial Potential Associated with the Property Many Types of Properties that Represent Sponsorship Opportunities for a Marketer

Sponsorship’s Advantages Credibility Image Prestige Internal Morale Sales Opportunities Access to Live Audience

Sponsorship Categories Sports Entertainment, Tours & Attractions Cause-Related Marketing Festival, Fairs & Annual Events The Arts Associations and Membership Organizations

Sponsorship Spending by Category (2008) Sports (69%) Entertainment, Tours & Attractions (10%) Cause-Related Marketing (9%) The Arts (5%) Festival, Fairs & Annual Events (4.5%) Associations and Membership Orgs (3%) * Rounding creates small statistical error (IEG)

Worldwide Sponsorship Spending Drop in Table 4.2 Here

Key Sponsorship Concepts Participants Sponsor – Party Seeking Association (Visa) Sponsee – Property Owner (e.g. FIFA) Linkages Self-Evident – adidas products used in event Strategic – Visa Credit Cards and FIFA have similar target markets

Key Sponsorship Concepts Leveraging – Must Support Sponsorship with Additional Strategic Elements (i.e. Event-Oriented Advertising) Ambush Marketing – Non-Sponsors often try to Create the Misperception among Consumers That They Are a Sponsor (Diminishes Value for the Actual Sponsor)

Re-Visit Types of Sponsorships Traditional Straight-forward Association Special Cases of Sponsorship Endorsements – Personality Sponsor Venue Naming Rights – Building Sponsor Licensing – Sponsorship Involving Trademark

Sponsorship Objectives Drive Sales Improve Image Create Greater Awareness Provide Hospitality Opportunities Enhance Employee Morale

Drive Sales Sustainable Competitive Advantage Via the Association with the Sponsee Visa over MasterCard (No presence at World Cup) Merchandising Opportunities Selling Coca-Cola Products at the Olympics Shape Consumer Attitudes Firestone after negative PR (Indy 500)

Drive Sales (cont’d) Overcome Advertising Restrictions Bans against Tobacco Advertising Cut Through Advertising Clutter Not Competing with Broadcast Advertising Reach Small Segments and Niches -Small specialized properties (local festival)

Improve Image Attain Positive PR Viewed as a Good Corporate Citizen Support Seen as Helping the Sponsee Viewed as a Good Corporate Citizen Contribution to a Popular Sponsee Especially for Causes or Local Events

Improve Image (Cont’d) Shape Consumer Attitudes Reach New Target Market Selected Property Portrays Different Image Philanthropy Donations Viewed Favorably by Public

Create Greater Awareness Increased Visibility Ability to Reach More Potential Customers Mass Reach to Introduce New Product Mass Reach to Inform of New Brand Name

Provide Hospitality Opportunities Entertain Customers, Prospects & Suppliers – Reinforce Relationships Opportunity to Attend Event Tickets; parking Provision of Various Amenities TV monitors, restrooms; premium seating

Enhance Employee Morale Entertain Employees Use of free tickets & hospitality areas Reward high performers Sense of Pride Feeling of “My company cares” Employee Involvement Feeling of “I’m part of the corporate team”

Importance of Objectives Drop in Table 4.5 Here

Sponsorship Components Category Exclusivity Signage Right to Use Event Trademarks and Logos Distribution Rights Hospitality Areas Complimentary Advertising Free Tickets

Sponsorship Components (Cont’d) Right to Purchase Additional Tickets Link on the Event Web Site (Sponsorship) Designation Inclusion in Event Promotions Access to Property Mailing List / Database Right of First Refusal

Category Exclusivity A Guarantee that the Sponsor’s Competitor Will Not Be Allowed to Become Involved with the Sponsee Pepsi-Cola is a Sponsor of the World Cup of Cricket. Category Exclusivity Provides Assurance that Coca-Cola Will Not Be Involved in Any Official Capacity

Signage Actual Signs Identifying and Promoting the Sponsor at the Event Venue Helps to Reinforce the Relationship in the Consumers’ Minds May Be Actual or Virtual Signage There is a Concern About Signage Clutter

Right to Use Event Trademarks and Logos Events Generally Have Terms and Symbols That Are Legally Protected It Is Illegal to Use These Intellectual Properties Without Permission of Owner Sponsors Use These in Advertising, on Packaging, and on Promotional Items

Distribution Rights Right to Use Event as a Distribution Outlet Distribution of Free Samples of Product at Event Venue Ability to Sell Products at Event Venue

Hospitality Areas Facilities to Entertain Selected Individuals On-Site Hospitality Luxury Suites Temporary Facilities Off-Site Hospitality Temporary or Leased Facilities

Complimentary Advertising “Free” Advertising for the Sponsor Often Paid as Part of Rights Fees Examples TV Advertisements Radio Advertisements Print ad in the Event Program Mentions by Announcers – PA or Media

Free Tickets Admission to the Sponsored Event Important for Events that Typically Sell Out May Vary According to Sponsorship Level High level sponsors receive more free tickets

Right to Purchase Additional Tickets Valuable for Sold Out Events May be Used Even When Free Tickets Are Not Provided to the Sponsor May be Bought at Discount if Event Is Not Expected to be Sold Out

Link on the Event Web Site The Ability for Visitors to the Event’s Web Site to Click on an Icon That Will Take Them to the Sponsor’s Web Site Check out the Web Site for FIFA and the World Cup of Soccer http://www.fifa.com/worldcup/organisation/partners/index.html

Designation How the Sponsor Can Refer to Itself in Its Own Marketing Efforts. Examples Include: Presenting Sponsor Title Sponsor Official Sponsor Marketing Partner Official Supplier Regional Supporter

Inclusion in Event Promotions The Event Is Likely to Promote Itself Through Traditional Media. It Is to the Sponsors’ Benefit to Be Identified in the Event’s Advertising and Marketing Efforts Helps to Reinforce the Relationship between the Sponsor and the Sponsee in the Minds of the Consumers

Access to Property Mailing List / Database Sponsor and Sponsee Likely Have Very Similar Target Markets Access to Sponsee’s List Will Provide Sponsor with Access to Potential Buyers Many Properties Have Lists of Ticket Buyers and Members of Fan Clubs

Right of First Refusal Current Sponsor Is Provided Opportunity to Renew Its Sponsorship for the Next Period Prior to the Solicitation of New Sponsors by the Sponsee Evaluate New Terms; Effectiveness of Existing Sponsorship; Potential Actions by Competitor if Sponsorship Is Terminated

Which Components Are Most Valuable? Drop in Table 4.7 Here

Controversial Issues Do Higher Prices Result from Sponsorship? Do Large Multinational Companies Have an Unfair Advantage? Sponsorships May Seem Illogical (No Fit) May Feature Unwholesome Products

Closing Capsule Sponsorship Has Emerged as a Key Element of Many Firms’ IMC Plans Sponsorship Spending Is Growing, But Only Accounted for Approximately $43.5 Billion (US) in 2008 Most Sponsorship Money Goes to Sports

Closing Capsule Sponsorships Should Benefit Both the Sponsor and the Sponsee – A Win-Win Partnership Sponsorship Components Should Be Considered Tools That Will Help the Sponsor Achieve Its Objectives Category Exclusivity and Venue Signage Are Viewed as the Most Important Components