As I noted in my last post, because sponsorship is so much more visible than all other media, it is highly vulnerable to attack. Scottish politicians are having a field day tying the tragic closing of the Johnnie Walker bottling plant in Kilmarnock with the brand’s sponsorship of Formula One’s McLaren Mercedes team. The logic: F1 has fueled Johnnie Walker’s growth globally, rendering its home market insignificant and enabling Diageo to close the plant—along with a Glasgow distillery.
On the one hand U.S. officials say sponsorship is a waste of money and should be off-limits to recipients of TARP funds, while across the pond officials are asserting that sponsorship is so successful brands can ignore current customers in local markets and instead focus entirely on new markets abroad.
"£15 million of sponsorship sees the Johnnie Walker brand go from its origins in Kilmarnock to be drunk around the world," said Kilmarnock MSP Willie Coffey. On the eve of the German Grand Prix, he urged motorsports fans to sign an online petition to save the Johnnie Walker plant. “This weekend as Johnnie Walker is advertised to the world, it's the turn of Formula One fans to show their support." more
The U.K.’s Press Association news service sent out an article yesterday headlined “Stock Markets: Samsung Electronics Riding High on Back of Chelsea Deal.” Reading the piece left me with mixed emotions. I’m always happy to see sponsorship get credit for positive results, however there was not one shred of evidence that last week’s renewal of Samsung’s shirt sponsorship with the Barclays Premier League football club was the reason for the company’s share price rise. In fact, the only factual information provided in the article indicates that the recent gains are part of a trend of the last two months in which Samsung stock has “rocketed.”
Such flimsy reporting and writing infuriates me because it allows critics of sponsorship to point to such articles as proof that measures of sponsorship success are fluff. The good (factual!) news is that there is research that proves major sponsorship announcements do positively influence stock value. Read an IEG Sponsorship Report article on the research here.
The upshot is that Samsung’s Chelsea extension likely helped boost the stock price a few points higher than it otherwise would have risen this week, but an article that misleadingly credits the deal as the primary factor for shares reaching their yearly high doesn’t do anybody, including the sponsorship industry, any favors. more
Some good news for sponsorship: Compared to other forms of marketing, brand sponsorship experienced the greatest increase in levels of trust in the two years since the last Nielsen Global Online Consumer Survey of more than 25,000 Internet consumers from 50 countries. A full 64 percent of consumers surveyed in April said they trust brand sponsorship, up from 49 percent in April 2007.
Latin American consumers are most trusting of brand sponsorships, with 81 percent of both Colombians and Venezuelans, and 79 percent of Brazilians, trusting brand sponsorships. U.S. consumers came in 12th, with 72 percent trusting brand sponsorships. Sponsorships held the least sway among Swedes (33 percent), Latvians (36 percent) and Finns (38 percent).
Latin Americans appear to bring their positive feelings about sponsorship with them to the U.S. IEG research reveals that Latino consumers are among the most responsive audiences to sponsorship. more
With huge apologies to Bill Shakespeare, many muni marketing commentators out there seem to be saying: a road by any other name would sell a street.
Increasingly, the municipal marketing commentary I’m reading focuses on naming rights. Certainly some of that focus is warranted given the high-profile deals on the table right now (e.g., Barclays and New York’s MTA). Yet some of that concentration is because it makes a compellingly controversial image in readers’ minds to talk about “plastering” corporate names on public property—roads, parks, monuments, venues and public transportation.
We hear the inevitable NASCAR comparisons and the gasp-worthy insinuation that the very pavement of Main Street is for sale. more
The distinction between sponsorship evaluation, valuation and return on investment is often an area of confusion for my clients.
Evaluation is a continual and important part of any sponsorship. From a sponsor’s perspective, a partnership should initially be evaluated against other opportunities and should consider—among many factors—the sponsor’s objectives, audience, budget, geography, timing, fit with messaging, etc. Ongoing evaluation of the relationship should be done on a regular basis to ensure it continues to fit with a sponsor’s objectives, budget, etc. Evaluation is generally done on the sponsor side with information provided by the property in order to properly evaluate the opportunity. more
In my previous blog post, I discussed why it would be a good thing for sponsorship buyers and sellers to be more open about what is paid for deals—specifically that it would provide the industry with guideposts to determine the relative health of properties, property segments and the overall medium.
But there is a bigger reason why transparency—to the extent it doesn’t divulge proprietary, competitive information—would be extremely beneficial. And this is not just the opinion of a sponsorship journalist with a need to know. I first heard this argument espoused by Stuart Schwartz, a Coca-Cola executive in the ’90s who was heading up the company’s early efforts at establishing a model to measure value and return on investment.
Here is the argument: For sponsorship to benefit both parties, it should be an “efficient market,” which is defined as a market where purchases and sales result in even exchanges of value. One of the four characteristics of an efficient market is: Price information is widely and cheaply available to buyers. The sponsorship marketplace does not have that characteristic, and thus is not efficient. more
Something that many Americans like to do first thing in the morning is get a jolt of the latest headlines. Therefore, it was a sense of irony the first session of Tuesday’s IEG Sponsorship Conference dealt with media sponsorships. more
In the last keynote address of the day, Carlsberg’s Keld Strudahl explained why the company uses soccer as its core sponsorship platform. more
IEG’s Lesa Ukman and Millward Brown’s Ann Green gave a great presentation today on measuring sponsorship’s return on investment. more