Per a recent request of a couple of medical society CEOs, I am posting the letter we submitted to the Journal of the American Medical Association (JAMA) Editor back in April 2009. JAMA did not publish it, and I’ve been asked to make it available to the community. Would love to hear your thoughts. more
Category Exclusivity is defined by IEG as: the right of a sponsor to be the only company within its product or service category associated with the sponsored property.
So what does category exclusivity look like in practice?
In a “best case” scenario, a sponsor would have category exclusivity that extends throughout a property. For example, a naming rights sponsor for a venue would have category exclusivity that covers all sponsor benefits, extends to any third-party event sponsors, teams, venue tenants, vendors, and any broadcast or on-site advertisers. On the other end of the spectrum would be zero category exclusivity, meaning the property could have multiple sponsors within the same category.
A typical consumer target audience for an advertising or marketing campaign usually looks something like this: women, ages 25-54, with a household income $50,000+. The target geography is defined (e.g., national, top 20 DMA’s) and maybe there is something about household size, presence of children or stated ethnicity. For good measure, a target audience may also include some other sort of purchasing behavior, usage behavior, or other ownership criteria, such as “consumes soft drinks five times a week” or is a “heavy-user” of soft drinks.
As marketers we try to create a picture of our target audience by creating a lifestyle analysis or by developing some sort of “day in the life” exercise. I remember a particular time when I presented a media “day in the life/lifestyle” scenario to a client, only to have him protest the inclusion of the band U2 in the audience profile. He was certain that his target audience didn’t listen to U2. Besides the fact that U2 is super, super popular rock band, the scenario was meant to be directional, and honestly we didn’t have any really firm data to dispute or confirm the conclusion.
Amid all of the tribulations brought on by a bad economy, nonprofits and their corporate partners certainly don’t need one more. But recessions impact governments too, and can cause them to look long and hard for ways to generate additional revenue to replace tax dollars lost.
So it shouldn’t surprise that the U.S. government is raising the specter of taxing some sponsorship revenue. Specifically, the Congressional Budget Office issued a paper last month titled “Tax Preferences for Collegiate Sports,” which can be downloaded here (http://www.cbo.gov/doc.cfm?index=10055). The document suggests that Congress consider reclassifying certain types of income derived from athletic programs as subject to unrelated business income tax, including income from corporate sponsorship. The justification for doing so is predicated mostly on the commercial nature of sports programs at many universities and the loose connection between those programs and the schools’ educational mission (unrelated business) combined with the significant benefits that accrue to the sponsors.
Although the CBO’s suggestion has many logical underpinnings, there are a number of reasons why it should raise real concern among all nonprofits and their corporate partners. For those outside of colleges and universities who may view this paper as irrelevant to them, let us remind you that the movement to scrutinize all nonprofit sponsorship revenue in the ’90s began with a single examination into the sponsorship revenues of the Mobil Cotton Bowl college football game. A few members of Congress might very well read this latest report and seek to apply its reasoning to sponsorship activities of zoos, museums, charities, etc.
Last week I blogged that hospitals “are deciding whether they want to continue to sponsor sports teams and community events.” This got a few raised eyebrows from my colleagues, who know that hospitals and medical facilities are active sponsoring categories. You could even argue they are increasingly active—a quick search of our database turned up over 500 current U.S. deals where hospitals and medical centers are official sponsors.
My observation that we need to keep a close eye on decisions within this sponsoring category stems from the chatter I hear from hospital industry executives and what I can glean from the trade press. I am hearing that these expenditures are under increased scrutiny and slipping in priority as bigger issues may grab the attention and resources once used for sponsorships (and potentially marketing overall). The bigger issues—health care quality and patient safety, non-profit executive pay and charity care, to name a few—are real, yet they are inextricably tied to slippery factors like public perception and legislative agenda.
You’ve heard it before: anything that cannot be measured is discretionary. And any expenditure—including sponsorship—not shown to have a demonstrable impact on patient care could be vulnerable to the hospital budget axe. Certainly these sponsorships can and should be measured, and if they are the right kinds of sponsorship, they can and will have an appropriate and positive impact in the hospitals’ efforts to build substantive relationships with patients and communities. The failure to make those measurable connections is where this sponsorship activity is at risk. more
While the ongoing recession has forced banks, automotive and other types of companies to scale back their sponsorship spend, properties are finding more interest from one unexpected source: “sin” companies.
Beer, wine, casinos and other types of companies that market products with potential negative implications have recently gone gangbusters on sponsorship, aligning with everything from community festivals to nonprofits and college athletic programs. more
I listen to so much discourse about the evolution of sponsorship and how it has—and has not—come into its own. From a [official] status symbol to an agent of [financial, societal, experiential] change, the medium continues to mature to reflect the thinking of a new day.
Yet, in years, sponsorship is a relatively immature medium, so what do we want sponsorship to be when it grows up? Should we worry that it will lose its youthful energy? Or do we look forward to the day when it puts away childish things, such as those elements that allow sponsor and property a moment of shared swagger but drive no value for the audience?
I am working with groups and companies in a number of sponsorship sectors right now that are actively, vocally trying to figure out what's next. more
Despite the fact—or perhaps because—it’s one of the chickier chick flicks out there, Love Story is among my movie favorites. So it did not surprise me when the most famous line (“love means never having to say you’re sorry”) in its Oscar-nominated script flashed across my mind’s ear the other day. It did surprise me when it came to me in a sponsorship context.
I was in Kansas City, where I had the pleasure of participating in the Missouri Assn. of Convention & Visitor Bureaus (MACVB) Annual Meeting. One of my fellow presenters was Doug Price from DMAI (Destination Marketing Assn. Int’l), who spoke about trends and the future of destination marketing. Toward the end of his talk, Doug mentioned the advocacy efforts undertaken by the Seattle CVB and other cities (Indianapolis, etc.) to make the case for tourism—not just to prospective tourists, but specifically to local residents. I checked it out, and I found Seattle’s “Why Tourism Matters” campaign (www.whytourismmatters.org) to be an aspirational model for the case organizations need to make in support of—rather than in defense of—their marketing efforts. more
“Consumption philanthropy is not about change, but about business as usual,” writes Angela M. Eikenberry in her article “The Hidden Costs of Cause Marketing” published in the current edition of the Stanford Social Innovative Review. (You can find the full article here.)
The article suggests that the reality of cause marketing—which Eikenberry refers to as “consumption philanthropy”—whereby a certain percentage of a particular product purchase goes to a cause or charity, does not affect social change. In fact, it goes so far as to say that cause marketing does more harm than good.
While I most certainly agree that every person in this society should and could do more to truly affect social change, and that every corporation should and could do more to be truly socially responsible, I think it would be a huge mistake to completely dismiss cause marketing. more
In my work here at IEG, I get directly involved with many nonprofits, such as associations and museums, as they launch new sponsorship programs.
One interesting challenge that has developed in several instances is how a nonprofit should go about working with a board member who will be involved in approving the launch of a new program, but whose company also is a good prospect for sponsorship. Sound familiar?
Typically, the information you would provide board members involved in the approval process of a new sponsorship program is much different than the information you would present to prospects for buying the sponsorship. It’s not that there should be any secrets kept from potential sponsors—as transparent selling is needed now more than ever—but they are certainly two different conversations.