By Deb Mitchell
In recent months, the air show industry has been captivated more by rising fuel prices and the sagging economy than aerobatic artistry in the sky. Several shows have cancelled their 2008 events and identified loss of sponsorship revenue as the reason for their cancellation. These problems are very real to the ICAS members experiencing them. More generally, the entire air show community should be mindful of the potential impact that an economic downturn might have on our industry. But a closer look reveals that, while corporations are tightening their financial belts, air shows are not necessarily getting squeezed out as a whole.
At the macro level, corporations are reporting that they remain confident in the power of sponsorship. In fact, according to IEG, a consulting and training industry specializing in sponsorship, the average share of overall marketing budgets captured by sponsorship has hit a record high of 19.5 percent. Of the corporations surveyed by IEG, 56 percent reported that their return on investment from sponsorship is increasing.
“With a recession looming over their heads, expectations might be that a greater number of sponsors would be belt tightening,” reports IEG. “But their self-reporting on spending actually shows a slight increase in the number of sponsors who said their companies' spending would rise this year (40 percent as opposed to 38 percent in the '07 survey). Forty-one percent of sponsors were keeping budgets steady and 19 percent said they would spend less in '08.”
Likewise, at the air show-specific level, sponsorship remains an effective and cost-efficient tool for companies seeking to reach a well-educated, family audience in a relatively uncluttered atmosphere. In times of a sluggish economy, many organizations re-evaluate long standing partnerships to determine which ones are most effective at moving their business forward. Prairie Air Show Director Brett Krause says his event always seeks to over-deliver, but it’s especially important when times are difficult. “We can’t afford not to have them happy and do whatever it takes. We might even take a reduction in sponsorship one year with the hopes of keeping them and building the relationship in the long run.” Of course, you’ll want to think long and hard about reducing prices and do so only with the understanding that this is a short-term adjustment to a temporary problem.
Whether you’re an event or a performer, it’s essential to communicate with your sponsor to determine what new challenges they may be experiencing and how you can help alleviate any stressors. “The information you glean from these conversations may direct you to ‘tweak’ the benefits your sponsor receives. For instance, you may realize that a sponsor actually makes parts for the aircraft they’re sponsoring, and to them, a plant visit by the performer would be a huge morale boost for employees,” explains Dayton Air Show Director Brenda Kerfoot. If you’re already delivering on the measurables you outlined with the sponsorship in the beginning, small value added enhancements shows your willingness to work through the rough patches.
Events tend to fall into the trap of accepting donations and calling it a sponsorship when it’s really more of a philanthropic contribution rather than an indispensable marketing tool. In a struggling economy, air shows and performers must demonstrate that the sponsorship is an effective use of dwindling marketing dollars rather than an instrument for providing a “warm and fuzzy” feeling to the sponsor. In tough times, donations are among the first elective expenses to be cut, but productive marketing programs will survive that first search for optional items in the budget. If your sponsorship program offers those kinds of honest-to-goodness marketing benefits, now is the time to highlight that portion of your program. Of course, that won’t guarantee that your program will survive, but it will change the way that you or your event are evaluated.
For example, the Dr. Pepper sponsorship program run by ICAS in 2004 and 2005 met every metric outlined by the soft drink maker, but a new marketing director opted to redirect his organization’s marketing efforts in another direction. Pilot Michael Hunter found himself in a similar position, when his sponsor Accuchek decided not to renew his seven-year sponsorship of a portable blood monitor for diabetics despite a record year in sales and 20,000 patient interactions generated by the air show program. Hunter believes his biggest mistake was not sharing the tremendous results with a broader cross-section of the company’s management. “I allowed [individuals within the] company to micromanage the site selection and dates, which were not the air shows that I knew could give us the numbers and media [that the company had come to expect].”
His experience illustrates a critical point when working with sponsors in a more tepid economy. Educate the entire corporate marketing team about your success so that if your point of contact leaves the company, you don’t find yourself in a position where you’re essentially cold-calling a company with whom you’ve already had a successful relationship. Depending on the business, you may want to send copies of your fulfillment report to the owner or president of the company as well.
While some shows are feeling the sting of reduced corporate involvement, most shows are seeing strong advance ticket sales. Krause says “We’ve seen some things that are cause for concern like gas prices rising from $2.40 to nearly $4.00, but our ticket sales haven’t fallen off at all. Our online ticket sales are two times what we had when we hosted a jet team in 2004.”
Higher gas prices and affordable admission ultimately benefit ticket sales and sponsors as families look for family-friendly events closer to home. “Three years ago, we implemented a very economical family four-pack ticket package. We try to remind the press as well as potential spectators that we are mindful of families that need to stretch their dollars and have a package for them,” explains Dayton’s Kerfoot.
So is the sky falling in the air show industry? History shows that an economic slow down spurs invention, creative marketing, and new programs. Perhaps the air show industry will be the beneficiary of companies looking for smart, cost effective programs to stretch its marketing money. As far as Michael Hunter, he intends to fly through the sky rather than waiting for it to fall. He’s currently negotiating with several companies who share his vision and dream.