Last generation sponsorships

During the 2nd African Experiential Marketing Summit held on 3 Septmeber, Kim Skildum-Reid from Power Sponsorship in Australia gave marketers plenty of food for thought about the way in which sponsorships are run.

Says Skildum-Reid: "Most sponsorship money in the world is completely wasted; it's not an investment that’s reaping real returns. When talking about experiential marketing, sponsorship is as good as it gets - if it's done right. You can use sponsorship as an incredible authentic experiential building experience."

Best practice sponsorship:
Brand life cycle - it goes on a bell curve. When you have a brand new brand, you need awareness.

• Infancy: Goal: create awareness
• Adolescence Goal: Build relevance
• Maturity: Goal: Build relationships
• Reinvention Goal: rebuild relevance

"Sponsorship for even mature brands tends to get stuck at the infancy stage. Let's be truthful, how many marketers would say that your sponsorships are about visibility? As far as I'm concerned, awareness and exposure are the swear words of sponsorships," says Skildum-Reid.

In 1991, a study was conducted about awareness - respondents were asked 'can you name all the sponsors of this event?' What it found was that even if they could name all the sponsors it didn’t change perceptions and behaviours. Studies since back up the study with the same results.

Skildum-Reid talked about the customer continuum - Start of the purchase cycle - become aware of the brand - understand relevance - try brand - add to repertoire - become loyal - advocate to others and back to the beginning.

"Experiential marketing imbues advocacy and sponsorship and does this better than anything else. With sponsorships, you're sponsoring something that people have decided they already care about so you’re building advocacy straight into it," says Skildum-Reid. She added that sponsorship benefits need to be negotiated and leverage plans put in place for every level of customer relationship.

New-look sponsors objectives
Consumer-centric:

• Customer/consumer needs first
• brand needs probably come third
• Internal buy-in is second.

Make ground by:

• demonstrating relevance
• demonstrating alignment with their beliefs, needs, concerns or self-definitions
• adding value to their relationships

Many objectives but they all come down to:

• changing target market perceptions
• changing target behaviours

"These two things, not dollar value return, should be the goals of sponsorship. If you find yourself directionless with a sponsor or sponsorship, get back to the bare bones again. Don’t be fussing about awareness, go straight to relevance," says Skildum-Reid.

Four generations of sponsorship - which generation are you?

First generations: exposure-driven

Exposure only proves that a brand exists:

• ego-driven
• does not change people's perceptions
• does not change people's behaviours
• inappropriate for all but very new brands.

Second generation: sales-driven

All about incremental sales:

• Measured solely in dollar ROI
• Profit in incremental sales vs cost of sponsorship
• if a sale cannot be traced directly to the sponsorship, it doesn’t count

Third Generation: objective-driven

Uses a sponsorship to achieve multiple marketing objectives:

• Long and short terms

This does work:

• thorough
• measureable

Selfish:

• all about your brand
• lacks heart

"Often times, you end up disrespecting the target market by disrespecting the experience around the events," says Skildum-Reid.

Fourth Generation: Market-driven

• Puts target market needs, wants, and interests first
• Ensures there are multiple, meaningful benefit for you target markets:
• treats them like people, not purchasers
• Win-win-win.

"It is no longer that the sponsor and sponsee wins. It is now sponsor, sponsee and target market win. When I say event experience - I don't mean just when they punch the ticket in and that it stops when they leave the event. The event experience is way beyond the bounds of an event. The experience of being a fan, art lover etc, does not end when the event ends. The event experience is much bigger and you could add so much value to this," says Skildum-Reid.

"The result: Last Generation Sponsorship: finally, sponsorship is focusing on the right things - the target market. And what we need to do is embrace it and learn how to use it," she adds.

So how does it work?

Recommendations

• Throw out the rulebook and get strategic:

sponsorship is about results, not history

• Get away from the sponsorship package mentality:

best practice does not rely on logos, tickets, hospitality and endorsement

• Stop 'supporting' sponsorship:

use sponsorship as a catalyst to make existing spends work harder

• Take a magic wand approach to leverage:

If you cold do anything to achieve your objectives and get that third win, what would you do?

• Measure what matters:

changes in behaviour - use your internal experts
changes in perception - model on your existing brand research
never ask questions about sponsorship!
You will leverage to your measurement strategy!

Article courtesy of Marketing Mix

Interview with Kim

Kim Skildum-Reid heads up Power Sponsorship and is one of the world’s top corporate sponsorship consultants, trainers, speakers, and authors, with 22 years experience across the US, Europe, Asia, the Middle East, and Australasia.
Kim will be presenting a keynote speech on Last Generation Sponsorship at the African Experiential Marketing Summit on 3 September 2008, in Johannesburg. Marketing Mix managed to catch up with her for an interview.

Marketing Mix: Why is sponsorship so important in the marketing mix?

Kim Skildum-Reid: While other media are essentially one-way communications, best practice has gone beyond that, and beyond two-way communications, to become a true collaboration with and reflection of the sponsor’s target market. It has a degree of relevance and resonance that no other marketing media has or could have.
The reasoning is that a best practice sponsor understands, honours, and respects their target markets’ event experience and seeks to add value to that experience in a range of ways, thus becoming a valued and appreciated part of an experience that target market cares about. Contrasting that with traditional sponsorship, which is largely based on wallpapering logos all over the events and organisation these target markets have decided they care about, and disrespecting that experience with intrusive promotions and branding – electronic signage right next to the pitch, anyone? – and the value of best practice sponsorship becomes crystal clear.

MMX: How do you 'measure' ROI on sponsorships?

KSR: The short answer is, ‘you don’t’. Of course, that doesn’t mean you don’t measure the results; it simply means that the results will never be accurately measured using some kind of arbitrary dollar-value ratio.
The operative term for best practice sponsors is ROO – or Return-on-Objectives. This approach leaves behind the old-school approach of logo counting, media equivalencies, impressions, ‘good corporate citizenship’, and my personal favourite, ‘the halo effect’ and all of the hot air that goes into putting some kind of dollar value on these areas, and focuses on measuring strictly against objectives.
Seriously, what does it matter if a million people saw your logo if not one of them changes their perception or behaviour around you brand? It doesn’t. Not at all. Best practice is all about measuring changes in perceptions and behaviours. This is accomplished using two strategies:
Using your internal experts – Your sales department has a myriad of ways to measure sales, incremental sales, reorders, promotional support at retail, merchandising, promotional participation, coupon redemptions, and many dozens more objective-driven, benchmarked indicators. So do your PR, HR, loyalty marketing, electronic marketing, media, and other departments. Let the experts set the objectives and let them measure. You will get figures that will stand up to scrutiny against your company’s accepted benchmarks.
Research existing questions – Invest in some good research, but don’t invent questions. Use a selection of the same question that you are asking in your ongoing or most recent target market research, and then ask those questions of people with varying degrees of involvement with the event and your leverage program (eg event attendees, watch it on television, fans of the team, promotional participants, people who signed up for your event-driven web content, etc). The results will give you apples-to-apples comparisons against perception indicators your company has already decided are important.
(If you would like more information on measurement, please read Kim’s blog www.powersponsorship.com/blog.aspx#132)

MMX: How should a marketer go about initiating and maintaining a sponsorship?

KSR: The most important thing, going in, is to know exactly what you plan to do with it – how you are going to leverage it to achieve your objectives – and have the buy-in to make that happen.
If you sort that out before negotiation, you will negotiate for more strategic benefits and will fly out of the starting gate with your leverage programs. Plus, it is much easier to manage a sponsorship and keep internal stakeholders committed to leverage when you have buy-in before the commitment.

MMX: How can you make a sponsorship work with regards to integrating it with traditional and non-traditional media, or should it be standalone?

KSR: Buying sponsorship and not integrating it across all, or at least some, of your other marketing activities is like buying a ladder and never using it. Sponsorship is an opportunity. Leverage creates the results, and leverage starts with integration.
The only benefit a sponsor will get if they don’t integrate it across other marketing activities is a big fat ego trip.

MMX: How do you make a sponsorship really work for your brand - are there key elements that must exist for example?

KSR: It’s all about leverage, baby!

When a sponsor invests in a sponsorship, they are investing in opportunity. Leverage is what a sponsor does with the sponsorship, and that is what provides the results. There are no hard-and-fast rules for what a leverage program should look like, but there certainly is a new order of priorities.
First priority: Target market needs
If you ignore, or worse yet, disrespect, a target market’s needs, the sponsorship will not work for your brand. Your first priority is to understand those needs, wants, and challenges and then devise ways that you can help the target market to get what they want. If getting tickets is going to be nearly impossible, can you get early ticketing for your customers? If the ground is hard at the event, can you loan people cushions to sit on? This isn’t rocket science, yet sponsors rarely get it right.
Second priority: Internal buy-in
You can’t integrate sponsorship across other marketing activities unless you get buy-in and active involvement from a range of internal decision-makers. If you don’t have buy-in, your sponsorship will be much less effective and cost a lot more to leverage.
Third priority: Brand needs
Brand needs aren’t third because they’re unimportant. They’re third because you won’t get your target markets to change their perceptions and behaviours (in other words, to do what your marketing is trying to make them do) unless you meet their needs first. And you won’t be effective at leverage unless you get buy in.
Brand needs are important, you just have two critical hurdles to get over before you will be able to address them.

MMX: With respect to the upcoming 2010 FIFA World Cup and the fact that ambush marketing (should be) clamped down on, is there any advice?

KSR: No ‘shoulds’. It is impossible to ‘clamp down’ on ambush marketing. You can clamp down on people using IP illegally and you can inconvenience people who inadvertently wear a t-shirt with a non-sponsor logo on it to a game, but that’s not ambush marketing.
Ambush marketing is legal and there are no laws that can be passed to stop a committed strategic ambusher from gaining a marketing advantage and hurting a sponsor.
Strategic ambush is not about pretending you’re a sponsor. Frankly, consumers don’t really care who is and isn’t the sponsor. What they care about is who is making the event experience better, easier, or more enjoyable for them. Who understands and respects their event experience. If an ambusher does a better job at adding value to the event experience – understanding that the event experience doesn’t just happen when you’re sitting in a stadium – they will be successful.
That said, ambush marketing is easy to control, but the World Cup and laws aren’t going to do it. The only ones who can stop ambushers are the sponsors themselves. If they ensure that their programs are fully leveraged and that those leverage programs have been developed in such a way that real, meaningful benefits flow to the target markets and that their event experience is valued and respected.
Sponsors who expect laws and events to protect them from ambush marketing need education and they need to raise their game. If they aren’t interested in that, they’re lazy and deserve to be ambushed.

Interview contributed by Marketing Mix