11-1 Chapter 11 Sponsorship Foundation and Failure McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved

11-2Failure Failure - Different Meanings to People Failure: –Failed to Meet Expectations –Sponsors Chose Not to Renew Dilemma Is that Sponsors Often Choose Not to Renew Some Sponsorships that Have Met All of Their Expectations

11-3 Competitor Response Natural Response by Competition is to Attempt to Neutralize Any Differential Advantage Based Upon a Sponsorship Responses by Competitors: –Piracy or Ambush Marketing –Increases in Promotional Activities –Aggressive Changes in Marketing Mix

11-4 Sponsorships Fail When They Have a Poor Foundation Sponsorship Should Be: –Defined Need to understand what a sponsorship Is –An Appropriately Selected Communications Medium Fit the target market and communications goals –Objective Led Decision based on Organizational Goals

11-5 Sponsorships Fail When They Have a Poor Foundation Sponsorships Should Be: –Integrated Fits within the sponsor’s IMC plan –Effectively Screened Selected Based on Merits –Contracted Written contracts help to avoid surprises and to provide recourse in the case of non-compliance

11-6 Sponsorships Fail When They Have a Poor Foundation Sponsorships Should Be: –A Long-Term Commitment Ongoing serial sponsorship over time tends to be more effective than a “once-off” sponsorship –Protected from Ambush Both the sponsor and the sponsee should engage in activities that identify and provide protection from ambush marketing

11-7 Sponsorships Fail When They Have a Poor Foundation Sponsorships Should Be: –Leveraged Sponsor should recall that sponsorship is not a stand-alone promotional tool and invest an adequate level of resources for collateral support –Evaluated Marketer will not know if the sponsorship succeeded or failed if there is no attempt to measure the results

11-8 Other Reasons for Failure Decrease in Market Value –The Benefits Are Not Delivered, So the Sponsor Considers the Sponsorship to be Over-priced, but Sponsee Does Not Reduce the Price Accordingly –New Events at Lower Prices Drag Down the Market Value of Existing Events

11-9 Other Reasons for Failure Cost Becomes Prohibitive –Rights Fees Escalate because of Increased Demand as Events Prove to Be Effective –Prime Properties such as the Olympics and the World Cup of Soccer Have Dramatically Increased their Rights Fees over the Past Few Sponsorship Cycles

11-10 Other Reasons for Failure Change in Corporate Direction –Even When a Sponsorship Has Been Effective, the Sponsor May Decide to Pursue a different Marketing Strategy that Does Not Involve the Sponsorship in Question –Isuzu Terminated Its Sponsorship with the Celebrity Golf Challenge Solely because of Its Effort to Create a New Image for Isuzu

11-11 Other Reasons for Failure Property Hopping –The Sponsor Focuses on Short-Term Strategies that Result in the Movement across a Series of Sponsored Properties

11-12 Other Reasons for Failure Timing Considerations –Events Are Not Always Staged During the Same Time Period from Year to Year –A Sponsorship that Made Sense for an Event Held in July May Not Make as Much Sense When that Event Is Staged in May

11-13 Other Reasons for Failure Failure to Understand What Is Not Received –“Due Diligence Overlooked” – The Sponsor Expected Certain Plan Components that Were Not Specified in the Contract –The Sponsor Misunderstands Some Issue Sponsor Expected Broader Category Exclusivity Sponsor Expected Signage to be More Prominent

11-14 Other Reasons for Failure Greenwashing –Public and Media Scrutiny Arises in Regard to a Marketer’s Sponsorship of a Cause-Related or Environmental Property –IEG Caveat: “Don’t sponsor green unless you are green”

11-15 Other Reasons for Failure Over reliance on Small Sponsorships –Small, Grass Roots Sponsorships Typically Do Not Provide the Benefits Associated with Major Properties; This Reality Is Often Perceived to Be a Failure which Results in a Greater Propensity for Property Hopping

11-16 Other Reasons for Failure Failure to Sell Internally –Many People Who Have a Vested Interest in Using Company Resources Wisely Are Not Sold on the Benefits that the Sponsorship Has Provided –The Unconvinced May Want to Use Resources in Other Ways, So the Sponsorship Is Not Renewed

11-17 Other Reasons for Failure Failure to Deliver Sought Results –There Is a Deficit When Comparing the Actual Results to the Anticipated Results such that the Return on the Sponsorship Investment Is Deemed to Be Inadequate

11-18 Overview of Failure Some Failures Are Inevitable Learn from the Successes & the Failures

11-19 Examples of “Failure” Xerox & IOC –New Focus on “Other Customer-Facing Initiatives” Siemens & McLaren Mercedes F1 Team –F1 Racing Deemed to be Inconsistent with Siemens Image Reynolds Tobacco & NASCAR –New Laws Limited Ability to Promote and Leverage the Winston Brand of Cigarettes

11-20 Closing Capsule Some View Any Non-Renewal as Failure Some Successful Sponsorship Relationships Are Terminated by Satisfied Sponsors There Are Many Reasons for Failure Learn from Successes and from Failures