4-1 Chapter 4 Sponsorship Objectives and Components McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved

4-2 Sponsorship Evolution Early sponsorships were ego-driven –CEO likes golf; company sponsors golf event Focus shifted to philanthropic motives –Sponsorship was way to donate to a cause Most sponsorships today focus on ROI –Sponsorship as investment, not an expense

4-3 Sponsorship Objectives Drive sales Improve image Create greater awareness Provide hospitality opportunities Enhance employee morale

4-4 Drive Sales Sustainable competitive advantage via association with the sponsee –Fuji over Kodak (No presence at World Cup) Merchandising opportunities –Selling Coca-Cola products at the Olympics Shape consumer attitudes –Firestone after negative PR (Indy 500)

4-5 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)

4-6 Improve Image Attain positive PR –Support seen as helping the sponsee Viewed as a good corporate citizen –Contribution to a popular sponsee –Especially for causes or local events

4-7 Improve Image (Cont’d) Shape consumer attitudes –Reach new target market –Selected property portrays different image Philanthropy –Donations viewed favorably by public

4-8 Create Greater Awareness Increased visibility –Ability to reach new target market –Mass reach to introduce new product –Mass reach to inform of new brand name

4-9 Provide Hospitality Opportunities Entertain customers, prospects and suppliers – Reinforce relationships Opportunity to attend event –Tickets; parking Provision of various amenities –TV monitors, restrooms; premium seating

4-10 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”

4-11 Importance of Objectives

4-12 Sponsorship Components Category exclusivity Signage Right to use event trademarks and logos Distribution rights Hospitality areas Complimentary advertising Free tickets

4-13 Sponsorship Components (Cont’d) Right to purchase additional tickets Link on event web site (Sponsorship) Designation Inclusion in event promotions Access to property mailing list / Database Right of first refusal

4-14 Category Exclusivity Guarantee that a sponsor’s competitor will not be allowed to become involved with the sponsee –Example: If Coca-Cola sponsors the World Cup of Cricket, then category exclusivity provides assurance that Pepsi-Cola will not be involved in any official capacity

4-15Signage Actual signs identifying and promoting the sponsor at the event venue Helps reinforce the relationship in consumers’ minds Signage may be actual or virtual Signage clutter a concern

4-16 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

4-17 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

4-18 Hospitality Areas Facilities to Entertain Selected Individuals On-Site Hospitality –Luxury Suites –Temporary Facilities Off-Site Hospitality –Temporary or Leased Facilities

4-19 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

4-20 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

4-21 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

4-22 Link on the Event Web Site The ability for Visitors to the Event Web Site to Click on an Icon That Will Take Them to the Sponsor’s Web Site Check out the Web Sites for the World Cups of Soccer and Cricket

4-23Designation 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

4-24 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

4-25 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 Buyer and Members of Fan Clubs

4-26 Right of First Refusal Current Sponsor Is Provided Opportunity to Renew It’s 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

4-27 Which Component Is Most Important

4-28 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 the most important components