The Rise of the Sponsors
Posted: 8/5/2009 12:58:01 PM by
Carrie Urban Kapraun | with 0 comments
An unintentional underlying subject matter in some of my recent blog posts has been brands (sponsors) that have created their own interactive consumer programs/properties (sponsorship opportunities). These companies, instead of partnering with an existing organization, choose to forge their own way.
There is a long list of companies that have created their own experiential consumer programs. Red Bull is always a shining example when it comes to sponsor owned or created properties including Red Bull Racing, New York Red Bulls, Team Red Bull and Red Bull Flutag. Other companies that come to mind are Burton (Burton U.S. Open, Burton European Open), New Belgium Brewery (Tour de Fat), Nike (Nike + Human Race) and Virgin Mobile (Virgin Festival).
So, why are these companies creating their own programs?
Potential Benefits
We first need to consider the possible benefits of a sponsor created program. Foremost, a brand has greater control and a direct association with its own property. A company can create a program that wholly represents its brand promise and intimately involves its audience: a total brand experience. A brand is ensured that it will receive the highest level of recognition and its activation can be seamless. The likelihood of press coverage around the program can increase considerably.
It offers flexibility. A company can pick and choose the assets it wants and does not have a contractual obligation. A sponsor can tailor the experience to fit various local geographic regions, key sales periods, or evolving marketing objectives. Hopefully, there is a decreased likelihood that there will be a break down of communication or a lack of information sharing. Additionally, as it makes sense, a company with multiple brands can involve several of its brands in a single property.
Finally, there is the potential for the company to create an alternate revenue stream by selling sponsorship, or it could reward its partners with sponsorship benefits. A successful program can become synonymous with a brand, and can elevate it and establish consumer affinity by providing its audience with an opportunity for total brand immersion.
Potential Liabilities
Of course, with great reward comes great risk and expense. There can be a greater initial and ongoing monetary and labor investment on the part of a company and a company may not see returns for several years, or at all. A brand would likely need to hire additional staff or agencies to help create and manage the program and managing a large program can draw resources away from the core business.
Additionally, it takes a significant amount of time to develop and establish a program and there can be significant legal liability involved. If not well planned and executed there is a chance that a program could convey the wrong attributes, won’t connect with its consumers or has a direct negative effect on the brand. Also, if a company’s management decides that it no longer wants to support a program, there is potential for considerable consumer backlash.
Lastly, and most importantly, a brand does not initially have the benefit of borrowed association.
Companies such as Red Bull and Burton are closely associated with a lifestyle and their experiential properties bring it to life and allow them to continue to have a strong relationship with their consumers. The brands themselves have considerable equity and it would seem that these companies know their audience better than anyone else or are innovators within their space. Who knows snowboarders better than Burton? Who knows nutty people, all hopped up on caffeine, flying crazy contraptions better than Red Bull? So, Burton created events before most people knew what snowboarding was and Nike’s Human Race allowed Nike to showcase its Nike + technology on a grand scale that otherwise wouldn’t have been possible. In a previous blog, I discussed that sponsorship allows a brand to tap into the passions of a group of people, but in some cases the brand represents the passion.
Ultimately, it is important to note that although there are many companies that are creating their own properties, almost all of those companies are still “traditional” sponsors of multiple properties and I believe that will continue into the future. Many of these brands were partially built on “traditional” sponsorship and would not be in the position to create their own programs without it. However, if “traditional” properties want to remain relevant, they will need to continually innovate and adapt in order to keep up with sponsors.
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Filed under: events, local, selling, activation