Opinion
2010 Could Be The Year Of The CPG In Sponsorship
2/19/10: I know the Chinese lunar calendar says it is the Year of the Tiger, but my more prosaic outlook says properties should be paying attention to packaged goods marketers these next few months, as they are primed to step up sponsorship and activation spending.
A few occurrences have led me to this conclusion. Most recently was news earlier this week that Kraft Foods plans to take some of the hundreds of millions of dollars in savings it expects to realize from its merger with Cadbury and invest them in “consumer spending,” according to CEO Irene Rosenfeld.
That additional spending would be on top of an increase in ’09 that saw the company allocate 7.2 percent of its net revenues to advertising and consumer spending. That percentage will increase this year as well, Rosenfeld said.
It’s high time that Kraft spent some of its marketing dollars on sponsorship and with new funds and perhaps some guidance from legacy Cadbury marketers who are more familiar with the medium than their Kraft counterparts, this is the year the company realizes the potential in sponsorship as a way to achieve short-term sales promotion goals and long-term brand affinities.
Similarly, Kellogg has announced its intention to boost ad spending this year, also on top of an increase from ’08 to ’09. The cereal and snack giant is estimated to have spent $1.1 billion globally on marketing last year, or nine percent of its global net revenues.
Kellogg, a longtime NASCAR team sponsor, as well as a former USOC and Komen for the Cure partner, is recognizing the importance of consumer interaction by tripling its investment in social media, COO John Bryant said in a presentation to analysts this week.
If the company is seeking relevant ways to capture “earned media” (as discussed in my last
column) it should recognize sponsorship’s ability to be a catalyst for driving positive buzz.
Finally, the fact that the supreme packaged goods marketer Procter & Gamble has put sponsorship front and center by signing and activating two major deals in the last six months with the NFL and the USOC will be a powerful incentive for other CPGs to at least reassess whether they also should step-up sponsorship efforts.
Properties should never underestimate the power of the me-too syndrome among marketers. I was reminded of this recently when talking to a well-placed source within a major consumer goods company who told me that the CEO had called the sponsorship staff to an urgent meeting to discuss 2010 initiatives for no other reason than the company’s major competitor had made an announcement about its plans.
Although “ability to copy others” is not one of the defining characteristics of a smart marketer—and as a reason for sponsorship may not be the best way to begin a long-term partnership—if it brings new dollars to properties, I’m all for it and I’m sure rightsholders will not turn their noses up at it!
Jim Andrews