Hollis Sponsorship Bulletin

The recession hasn’t dampened the quality and creativity of the sponsorship industry’s work if this year’s Hollis Sponsorship Awards are anything to go by. Wins for the likes of Deloitte, Castrol, Npower, Vauxhall, Brains and Powerade were an indication of how the medium continues to play a pivotal role in marketing plans across a range of sectors.

The big winner on the night was WPP-owned consultancy MEC Access which scored an impressive six awards. On top of category wins for its work with Evian, Nicotinell, Specsavers and Morrisons, it walked off with the Sponsorship Of The Year and the Consultancy Of The Year Awards.

Other highlights included an award for London 2012 commercial chief Chris Townsend – which acknowledged his achievement in securing so much funding for the Olympics. Looking to the future, the Barrie Gill Award for Most Promising Young Executive went to SBI’s Hamilton Lowe.

Next week, the Hollis Bulletin will take a closer look at the Awards winners and shortlisted companies in a special report.

Barclaycard, which is best-known for its activities in sport sponsorship, has unveiled plans for a new sponsorship strategy which will strive to enhance consumers’ music experiences.

The strategic shift is being supported by a new partnership deal with Live Nation. This will allow Barclaycard to explore new approaches to payment in the music arena. According to the company, the upside for consumers will be improved customer experience and content-based incentives such tickets to gigs

As an example of its new approach, Barclaycard says it will be able to introduce cashless outlets to Live Nation festivals such as Hard Rock Calling, Download and Wireless. By providing festival-goers with a top-up contactless card, transactions at bars and food outlets will become quick and easy and the need for carrying cash will be reduced. In addition, the partnership with Live Nation means that Barclaycard can offer its customers special ticket access and entry to VIP areas.

Paul Troy, head of advertising and sponsorship at Barclaycard, said: “This new direction in Barclaycard’s sponsorship strategy is about really engaging with consumers and finding ways to provide them with extra benefits.  This deal will help them to enjoy their passion for music - whether that’s exclusive gigs or facilitating cashless outlets at festivals. We are very excited about the opportunities that Live Nation will present to us.”

Neil Thomas, creative & strategic director for Live Nation UK, said: “Live Nation can offer unrivalled and unique opportunities to connect artists and fans live music.  In seeking to always improve our customers’ experience, Barclaycard stood out as a superior partner in its sector to work with. We look forward to a relationship with Barclaycard that will offer new, innovative and accessible benefits to customers, artists and music fans.”

Stop press: As the Bulletin went to press, Barclaycard signed a four year deal to become title sponsor of The Mercury Prize.

Some people are just born lucky. No sooner had Richard Branson announced that Virgin Group is to sponsor Formula One new boys Brawn GP, than the team managed to pull off a stunning victory at the Australian Grand Prix. Not only that but the man to pass the chequered flag first was none other than Jensen Button, the forgotten man of British motor racing.

As a PR coup, it couldn’t have been a better weekend for Virgin. Fast in practice, the Brawn team went on to dominate the grid at the start of the race. Button then kept his nerve to lock out late challenges from Lewis Hamilton among others.

Branson thought long and hard about buying the Brawn team – which was owned by Honda until just before the start of the new season. When he decided against it, F1 powerbroker Bernie Ecclestone stepped in a helped facilitate a sponsorship deal.

Virgin is not planning to become title sponsor of the team. But with its logo on the car, there is still plenty of mileage for Virgin to leverage the relationship. The big question now is whether Brawn can keep up the good work. The next F1 Grand Prix will be held this weekend at Malaysia’s Sepang Circuit.

Volkswagen commercial vehicles is to sponsor Channel 4’s new Adventure on 4 strand – in a deal brokered by Mediacom. The one-year deal commences next week and will cover shows like Deadliest Catch and Into the Wild. The deal will give VW widespread exposure for its Caddy, Transporter and Crafter marques. Aside from the traditional range of benefits on TV, it will also have a presence on C4’s online platform 4OD.

Cider brand Magners has extended its sponsorship of the Magners League by two years. The new deal with Celtic Rugby means it will remain as title sponsor until May 2011.

The news comes as Magners attempts to reinvigorate its overall commercial performance. After storming to the top the cider sector a couple of years ago, it has seen sales slow. Part of the turnaround strategy will see Magners owner C&C launch a new variant called Magners Pear. Set to appear in May, the new sub-brand will be backed by a big marketing drive.

Meanwhile, the latest name to be touted as Manchester United’s next shirt sponsorship is Indian conglomerate Tata. Already active in F1, the company is now regarded as a front-runner to replace humbled insurance group AIG from next season. Tata, which operates across a number of industries, has been looking to globalize its brand for some time. However it is not the only brand to have been linked to United. Sahara and AirAsia have also been suggested in recent weeks – as has Prudential.

There has been a spate of stories in recent weeks about political scrutiny of financial service sponsorship deals. In the UK, the focus has been on RBS – active across a range of sports such as F1 and rugby union in recent years. In the US, the spotlight has been on Manchester United’s shirt sponsor AIG.

In the former case, the issue is shareholder value – with politicians using the benefit of hindsight to question the wisdom of the company’s strategy. In the latter, the issue is what happens when a commercial company is, in effect, nationalised. With AIG now US government-owned, there has been a call in some quarters for the insurer to withhold future payments to United (since it is now playing with taxpayer money).

How all of this will play out in political circles is still unclear. But even if it goes nowhere, it still raises a couple of commercial questions about how other brands might react.

The first is whether brands will get nervous about engaging in sponsorship because of the wider consumer perception of the medium. Currently, sports and arts sponsorship is being presented by the media and politicians as a kind of board-level perk – the corporate equivalent of politicians’ expenses. So what if the target market starts to think like this too?

Anyone working in the industry knows how unfair this simplistic view is – but is it is possible that brands will decide to stay away from sponsorship simply because of the threat of negative PR?  In the same way that bankers are being told to dress down by their bosses, will brands decide they need to be less showy. After all, they always have the alternative of advertising – which rarely attracts this negative publicity.

Let’s assume, at very least, that brands ask their consultancies this question – even if they don’t ultimately run from sponsorship, however. What might the industry suggest as a way of counteracting bad press? Well one obvious suggestion would be to give even more back at community level. If elite properties like F1 and the Premier League carry the risk of negative PR, then maybe the answer is even more grass roots activities – or properties like the Olympics which carry with them a sense of nation-building and social responsibility. If its endorsements, then maybe the premium will be on stars that are willing to get their hands dirty by interacting with the fanbase.

Possibly it’s also the right time to raise the research argument again. With the media spotlight shining on the industry, perhaps now is the time for brands to spend a little more time and effort on proving sponsorship return-on-investment. That could be backed up with a charm offensive on the press – in order to get the message across that sponsorship is a hard-working medium.

All in all, it’s not a time to sit back and whinge about how unfairly the sponsorship industry is treated. If people think the medium is an executive perk, then it’s up to brands and consultancies to rectify that through stakeholder engagement.

The decision to hire external resources to assist with delivering successful sponsorship programmes should be treated with no less rigour than any other service. 

For many, however, there is some apprehension about how to make the best selection as, like many other marketing services, quality suppliers can only be accurately measured based on results for a specific brand, often long after the agency selection process has been completed. 

Whilst past history may be an indicator, as with financial services, it is not necessarily a predictor of future success.  How then do you structure a selection process to maximise the chance that you will pick the right partner?

ESA has consulted with a number of marketing-related associations, including the Incorporated Society of British Advertisers and the Chartered Institute of Marketing.  Having created a draft process, ESA then requested input from a number of members to ensure that the final guidelines were tailored specifically to the needs and practices of the sponsorship industry.  It has therefore identified several steps that can be taken to avoid the worst pitfalls and increase the likelihood of a favourable outcome.

Whilst at first glance the agency selection process may seem long and resource-intensive, adopting a systematic approach to selecting external support will pay dividends in the long term.  That said, the extent to which the process is implemented in full will be a function of the value and priority put on the required service delivery.  Where the service requirements are high value with significant business impact, this process will enable the sponsor to have the best possible outcomes.  Of course, where the service requirement is limited in nature, it is possible to adopt a pragmatic approach to implementing the process. 

A full guidelines document is available for download from the ESA website www.sponsorship.org .  This covers the business case for employing external resources, identifying needs and gaining buy-in from all stakeholders before writing the brief and establishing agency selection criteria.  It then goes on to discuss methods for researching the market and selection methodologies.    Key considerations for running successful pitches are addressed including:

·        Number of candidates

·        Paying for pitches

·        Incumbent agencies

·        Preferred suppliers

·        Timetables

·        Meetings and minute taking

·        Access to members of the Decision Making Unit

·        Pitch day

·        Online procurement

·        Final negotiations

·        Contracts

Finally, there are some thoughts on how to manage the post-selection period, including informing unsuccessful parties and issuing press releases. 

Above all, parties should retain a sense of perspective.  Most clients choose the firm with whom they feel the best emotional fit and therefore it is critical that the selection process leaves enough time for key personnel on both sides to get to know each other. Ultimately, these relationships may prove invaluable at a later 

The ninth annual IEG/Performance Research Sponsorship Decision-makers Survey shows how US sponsors are being affected the staggering economy.

Fifty-one percent of the survey’s respondents said their companies’ spend on sponsorship fees will decrease this year from 2008 levels. Only 14 percent of sponsors plan to spend more, while 36 percent said their budgets would stay the same as last year.

Almost half of sponsors –47% –noted they were seeking to get out of some of their current sponsorships even though those deals were not currently up for renewal. One glimmer of hope emerged with the revelation that 60% of sponsors say they would consider signing first-time sponsorships in 2009.

The average percentage of overall marketing budgets claimed by sponsorship fell from a record high 19.5% to 17.6%, while the average amount spent on activation relative to rights fees slipped for the second straight year to US$1.40 for every US$1 spent on rights fees from US$1.50-to-US$1 in the 2008 survey.

Football manufacturer Molten has renewed its sponsorship of the Kent Football League up to December 2011. The sponsorship makes the KFL the first league in the UK to select the Molten VG-5000 AW, FIFA-approved orange ball as its official ball. Designed specifically for UK winters, the Molten VG-5000 AW has been manufactured so that the ball does not absorb water in wet conditions - meaning that its weight and shape remain constant. 

Following the news that team sponsor Apollo 2000 has gone into administration, Worcestershire County Cricket Club is seeking a replacement prior to the new season.

Club chief executive Mark Newton said: “While our thoughts must be with those who have lost their jobs in these difficult times, the situation does present an excellent opportunity for an organisation somewhere. We are in a fire sale situation - but we do have a major branding opportunity available. In 2008, our television exposure produced £60,000 worth of coverage alone - plus all the press coverage and goodwill that is created locally.”

Newton says the club’s commercial team is on the case: “We are notifying as many companies as we can. We realise these are difficult times but there may be somebody out there who is in a position to become involved.” Details of the team sponsorship are available at  www.wccc.co.uk.