Big Sponsorships, Small Thinking
Posted: 10/29/2009 10:31:28 AM by
Jim Andrews | with 0 comments
Those of you who don’t subscribe to IEG Sponsorship Report (and in my obviously biased opinion, if you work in sponsorship, I think you should) missed a terrific one-on-one interview a few weeks ago with sponsorship veteran Dockery Clark.
The former Bank of America and MillerCoors sponsorship exec took sponsors to task for what she perceives as a trend to use the medium strictly to drive short-term, product-focused results instead of to build passion for brands.
Her observation about the declining importance of exclusivity was very telling in that regard, not to mention that it has been echoed in recent comments by Anheuser-Busch marketers, who have referred to some of their deals as “half exclusive.” (While I understand they probably mean exclusivity restricted to certain property components, the phrase is as ludicrous as saying, “sort of unique.”)
If sponsors are willing to forgo exclusivity, once considered a lynchpin of sponsorship, then they cannot expect to build brand equity.
I’m not convinced that the decision to pass on exclusivity is typically made for any reason other than trying to save money. And here I’m talking about big-time, big-dollar marketing-driven sponsorships, not deals with smaller properties. It comes as the result of a sponsor saying it cannot justify paying the fee a property is looking for, the property being unwilling to budge enough on price, and the sponsor looking to the alternative—which is to cut benefits out of the package to lower the cost.
In most other buyer/seller relationships, this would be viewed as backwards. In a rational market, if buyers think a product is over-priced, they don’t buy it, which forces the seller to lower the price to where it equals value to the buyer. Sponsors are unable to do that because the market for marquis sponsorships often is irrational. What makes it so? Other buyers who don’t—or don’t know how to—base their purchase decision on the actual value they will receive, who have no metrics for understanding what the sponsorship should deliver.
That’s why, as Dockery put it, “properties like emotional (not rational) buyers.” We hear from a lot of sponsors complaining about property inflation at the upper echelons of sponsorship, with the implication that the properties are to blame for asking for “outrageous” or “unjustifiable” fees. Instead of pointing their fingers in the property’s direction, those sponsors should look to their colleagues and competitors in other corporate marketing offices who have been paying those fees. The bright side of the economy’s impact on sponsorship budgets is that it may have forced some of those companies to act more rationally and helped to somewhat correct the market for major deals.
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Filed under: sports, trends, valuation, negotiating