Opinion
Assertions
2/23/09:
Interesting phenomenon: We have heard from a few
agencies that some of their larger sponsor clients are “
parking” research and activation money with the outside firms to
protect the funds from possible
budget slashing. The idea is the companies can’t cut money already spent, so the sponsorship point people are finding ways to issue checks to their agencies even without a current project underway–with a commitment from the recipient to
hold the money for a future assignment down the road.
We were surprised to hear last week that
ING had chosen to
drop its
title sponsorship of the
Renault Formula 1 team when its three-year deal expires at the end of the year. Although we expected pressure on the program following the Dutch government’s
bailout of ING to the tune of E
10 billion, we were surprised because just three months ago we heard ING’s head of marketing for the F1 program,
Isabelle Conner, discuss
how well it was performing. Specifically, she said, “We use an internal team rather than external marketing agencies to develop marketing campaigns for our global F1 sponsorship activity. The F1 sponsorship team, comprising marketing, internal communications, PR and events, helps provide a clear understanding of the opportunities F1 offers to connect more closely with customers. A central part of this is the appointment of F1 officers by the ING executive board. These senior staff members have special responsibility for driving F1 activation throughout their business. We also share knowledge where the businesses have developed successful campaigns in many markets, enabling other countries to quickly develop and roll out similar campaigns. By using our internal staff to develop and execute integrated marketing campaigns for their business and their customer base, in conjunction with a small central team who provide advice and evaluation, we are
successfully achieving the
business objectives of the sponsorship: to
grow ING’s global brand profile and
drive business.” Elsewhere, Conner was quoted as saying the sponsorship “is the
best thing that ever happened to ING…it’s strategic, it’s a growth driver, it’s a
revenue generator for us.” So what’s the story behind the decision? It’s possible the revenue generated was
not enough to fall to the
bottom line after all the spending on the program was considered. What seems to be happening, not just at ING, is the
economic crisis is finally
forcing companies to gain some
discipline around
sponsorship measurement. While a determination that a program was generating revenue may have been enough to satisfy some companies in the near past, today’s harsh reality is forcing them to ask the questions they should have been exploring all along, such as: Is this
incremental revenue?
Profitable revenue? Could we have generated more revenue by
spending elsewhere? If economic conditions finally persuade companies to get serious about measurement, it will end up as a
blessing for the industry, albeit in a very painful disguise.
Promoters of ’09
music tours have gotten off to a
good start securing sponsors despite the economy. In addition to the
Clorox deal with
Keith Urban’s tour,
Virgin Mobile USA will sponsor
Britney Spears’ tour that kicks off next month, while
JCPenney will sponsor this summer’s
Rascal Flatts tour on behalf of its
American Living clothing and home furnishings brand.
Jim Andrews