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Will Short-term And Shared Deals Be The Death Of Sponsorship?

By Jim Andrews Jan 3, 2012

In the beginning, stadium naming rights agreements were largely 20-year commitments, with a few 10-year exceptions. The bulk of NASCAR team sponsorships were for a full season, and marketers signed on to sponsor every stop of a concert tour.

Today, we have Snapdragon Stadium—a 10-day naming rights agreement—race teams selling car sponsorship in five-race increments, and sponsors cherry-picking concert markets.

There are many reasons, from financial to promotional, why this fragmentation would seem to make sense for both properties and sponsors. For sponsors, their cash commitment is lower and flexibility higher. If corporate partners are only interested in such piecemeal deals, then properties are forced to deliver them if they want any revenue at all.

But this short-term thinking on the part of sponsors threatens to damage the entire sponsorship industry. Marketers are missing the point entirely that sponsorship is not a get-in, get-out medium. Treating sponsorship investments like spot TV buys will not work.

From all of the sponsorship measurement work done by my IEG Consulting colleagues, I can tell you that I have yet to see any short-term or piecemeal sponsorship that has earned a real return on investment. Can they create a little buzz and earn some exposure? Maybe, but that typically doesn’t justify even a reduced sponsorship fee.

And even those shallow “results” will be harder to come by as such fragmentation creates monstrous clutter. Can we really expect even the most diehard NASCAR fan to remember—let alone be loyal to—eight, ten or a dozen primary sponsors on his or her favorite driver’s car each year? Let’s be real.

Unfortunately, a lot of activity that currently passes for sponsorship is a fool’s game. With many sponsors willing to accept meaningless measures of “success,” this sponsorship economy can continue for a while, but ultimately will not be sustainable. Consumers will check out and the lowest common denominator— awareness numbers—will shrink to zero.

It is disheartening that so many sponsors are ignoring the example set by companies that excel at sponsorship. (For examples, check out IEG’s brand strategy paper “Invest, Don’t Buy: A Smarter Way to Sponsor.”)

What will it take to get the majority of sponsors thinking and acting in a manner their shareholders would like to see—being responsible managers of their brands and budgets?

More:

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Jim Andrews

About the Author

A 30-year sponsorship industry veteran, Jim is responsible for developing and sharing thought-leadership content based on ESP Properties’ groundbreaking work in the areas of sponsorship strategy, valuation, measurement, digital content, data-driven marketing and fan engagement.

In addition to identifying key trends and delivering his unique insights into the critical issues facing rightsholders and their commercial partners, Jim is the chairman of the Annual Sponsorship Conference, responsible for the program and speakers, as well as hosting and delivering the event’s opening address. He also is responsible for the company’s annual report and forecast of overall sponsorship spending, as well as its compilation of biggest spending companies and annual industry surveys.

A frequent media commentator and guest, Jim has been a featured speaker at hundreds of sports, entertainment and marketing conferences around the world.

 

Comments

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Mike Mahoney 1/11/2012 7:27 AM
Would generally agree short term is bad. The Snapdragon case may be different, this was abrand under the Qualcom umbrella, a long term sponsorship getting very little buzz. Snapdragon needed buzz among a mainly B2B audience for Qualcom and they probably geared most everything around this "event" and it may not have cost them much more in terms of investment.
 
Pippa Collett 1/4/2012 4:02 PM
So refreshing to see someone tackling this issue head-on, Jim. It's been on my mind as well in the light of recent Formula One motor racing and Premier League soccer deals this side of the pond.

I think these sponsors are totally missing the point - sponsorship works best when a deep and wide association is built up over a period of time and the sponsorship is used as a platform that binds a variety of marketing activities together.

For best results, sponsorship needs to be integrated across the marketing mix. As this often requires the breaking down of departmental silos, time and resources are required to bring about an optimal result. Most of these 'in and out' sponsors are wasting good marketing dollars, both through having to deploy the resources required for multiple tactical activations and for not allowing the time necessary for their so-called sponsorships to mature and bear the ripest fruit.

Of course there are times when tactical sponsorships do have a role to play but, whilst they may be a pragmatic solution on both sides in the current economic environment, prolonged interventions of this nature only suggest that these brands do not yet really understand sponsorship as a marketing discipline.
 

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