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Drowning Sorrows: More Bad News for Sponsorship

By Lesa Ukman Jul 24, 2009

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." 

So who’s got it right? Is sponsorship the driver of global expansion or an abuse of taxpayer funds? Experience reveals both arguments are bunk. Sponsorship delivers ROI, but that return is almost entirely a function of how the rights are activated rather than of the sponsorship itself. F1 is not responsible for the plant closings. If F1 is contributing to growth as MSP Coffey asserts, dropping it will not create dollars to reopen the plants. Indeed, it could lead to more closings.

Another Diageo brand, Red Stripe beer, dropped its live music sponsorships in Jamaica—including title of Reggae Sumfest—to protest the hostility and violence of dancehall music towards the island’s LGBT population. Having done the right thing, Red Stripe is not only not being rewarded, it is being punished. Seems the beer is the target of a boycott by U.S. gay rights activists because it comes from Jamaica, “considered to be one of the most homophobic countries in the world.”

While missing the boat on Red Stripe, the LGBT community will find it hard not to support SKYY Vodka. The brand sponsors the STOP AIDS Project in San Francisco, Frameline33—San Francisco’s LGBT Film Festival, Equality California, Heritage of Pride in New York, amfAR—The Foundation for AIDS Research, AIDS Project Los Angeles and the LGBT Center in New York.

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Lesa Ukman

About the Author

Lesa Ukman is the founder and chief insights officer of IEG. With the launch of IEG Sponsorship Report in 1982, she created a publication that defined an industry now worth more than $53 billion. She continues to define new and better ways for companies to get closer to their customers through sponsorship, including her current pioneering work developing the new industry standard for measuring the results of sponsorship, offered through IEG’s ROI Services. Follow Lesa on Twitter!

 

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