Opinion
Platform Exclusivity: An Idea Whose Time Has Come
8/2/10: One concept that I’ve seen properties begin to adopt lately, and which could become a larger sponsorship sales trend, is platform exclusivity. The idea is that only one corporate partner is permitted to activate in a specified channel or manner, e.g., mobile-device marketing, in-store retail promotions, use of video content, ticket giveaways, etc.
Platform exclusivity has legs because in many cases it meets the needs of both rightsholder and sponsor, particularly in those instances when sponsors don’t require category exclusivity but still want a feeling of ownership and also separation from their competitors. The first time I came across the idea was a few years ago when the beer companies—particularly Miller and A-B—starting balking at the high price tags for exclusive deals with pro sports teams and worked with those properties to carve out platform, and in some cases sales channel, exclusivity.
For properties, not only does platform exclusivity allow multiple sales in categories previously limited to one partner, but also it reduces clutter for all sponsors and has real potential for improving sponsors’ results from their now exclusive activation programs, both of which increase the chances of renewal.
Whether this approach is right for a particular property will depend upon multiple characteristics and market position, and certainly for any rightsholder going down this path there are lots of details to negotiate to carve out different platform territories and avoid—as much as possible—overlap and conflicts, but for many the effort will likely prove worth it.
Formula 1: A Sponsorship Example Not To Be Followed
Much has been written and said about Bernie Ecclestone, the brilliant, mercurial puppet master who pulls the strings of the Formula 1 international racing circuit. While I am not expert enough in the details of F1’s business to join the polarized debate over whether he is the best or worst thing to happen to the sport—although I’m sure the answer as it always is in these cases is somewhere in the middle—I do believe he has made a major misstep in the sponsorship arena.
The short version of the story is that Ecclestone recently demanded that F1 teams remove all sponsor branding in their garage areas at F1 tracks (including from their haulers and other vehicles), arguing that all venue sponsor ID belongs to companies who have purchased trackside sponsorship and advertising through Allsport, the company F1 sold those rights to.
The point here is not about which party technically or legally has the right to promote their sponsors in the garage area—although Ecclestone’s position does seem absurd to me—but the destruction that can be done by such a take-no-prisoner approach. How does it benefit F1 to take away a major benefit from the sponsors who pay for its teams to race around the world?
This is short-term thinking at its worst, and while Ecclestone may be the most extreme culprit, he is not the only one on the sponsorship scene, be it in sports, causes, entertainment, etc.
As he has done in many other instances, Ecclestone ignores the fact that his sport—like many others—is predicated on a number of independent organizations with competing interests finding a way to cooperate so that they all may benefit.
Whether it is dividing sponsorship rights among constituent organizations, or negotiating a benefits package with a sponsor, the most successful rightsholders over the long term are those who heed the sage advice to leave the last nickel on the table. They understand that no matter how much power one side may appear to have, in the long run everyone must work together or the entire enterprise is doomed to fall apart.