SBJ/December 3 - 9, 2001/Opinion

Is sponsorship dying? It’s just got a bad cold

First the dot.com companies dropped perilously from the ranks of the stock market elite (and later into oblivion). Then came Sept. 11. Soon the economy was slumping and the "Chicken Littles" were dominating the news.

The sports industry has its share of doubting Thomases. Trade journal headlines recently trumpeted the loss of major NHL, NFL and Major League Baseball sponsors. Even NASCAR sponsors, a notoriously loyal bunch, were supposedly wavering. Inevitably, a plaintive cry resounded throughout the sports world: "Is sponsorship dying?"

As we approach 2002, I expect further retrenchment in the sponsorship industry. But I view this as a "correction" rather than a long-term trend. This correction will create more inventory, which will likely be less costly, making it more attractive to potential sponsors. With the turnaround that economists predict by the middle of 2002, I look for companies to increase their sponsorship spending, as they seek more creative methods of deploying their sponsorship dollars.

Some other reasons I'm bullish on sponsorship:

The definition of sponsorship properties is expanding. Sponsorship originally focused on sports events, teams, stadiums and arenas. Today, sponsorship is showing up in convention centers, amphitheaters, space rockets, IMAX movies, conference centers, shopping malls, casinos, college facilities, office buildings, concerts, festivals and even art museums.

There is greater emphasis on sponsorship accountability. Sponsors have become much more aggressive in seeking to understand the value they're getting from their sponsorship. This aggressiveness has translated into higher corporate expectations about how the property can help them achieve their objectives. It has also led to a greater appreciation of the importance of proper evaluation, delivery and reporting of sponsorship value by the property.

Improved sponsor-property cooperation. Sponsors and properties used to communicate solely during negotiations. Today, savvy properties are responding to the era of accountability by recognizing the importance of communicating with their sponsors. Through this communication they are learning how to tap the power of partnership — partnership between the sponsors and the property and partnerships among the sponsors themselves.

Greater focus on dynamic sponsorship. Sponsors are moving away from static sponsorship (such as merely hanging a sign on site) and embracing experiential sponsorship. This allows them to connect with their target audience by integrating their product or brand with an event through a unique experience.

For many companies, sponsorship is the most effective tool in the overall marketing mix.

As all businesspeople know, marketing is about making choices: What works best, display advertising, direct mail or hospitality? These are all useful marketing mediums. In many cases, however, there is another, more effective method: sponsorship.

The sponsorship message, reinforced by a whole raft of elements, is more personal and credible than a straight advertising pitch. And because it links with the "soul" of a prestigious property, emphasizing interactivity, it doesn't just say "hello" to the target audience; it actually reaches out and embraces them, breathing life into the marketing message and making it more accessible to the audience.

Dean Bonham is president of the Bonham Group Inc., a sports consulting firm in Denver.Þ

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