SBJ/April 25 - May 1, 2011/Opinion

Growth of sponsorship requires efficient use

How you see it

In Rick Burton and Norm O’Reilly’s article, “Understanding why sponsorship continues to grow,” (SportsBusiness Journal, Jan. 24-30) they clearly detail why sponsorship works as a brand marketing and business growth tactic. They detail the benefits that a sponsorship brings, predicting its growth as consumers’ attention — and their use of various media — gets more fragmented.

The recent announcement of Castrol’s sponsorship of the NFL clearly points to the growth Burton and O’Reilly predict: Castrol, a brand under parent company BP, will receive media avails across the NFL’s varied platforms, along with rights to the NFL’s intellectual property. This enables strong brand positioning and effective promotion, a much-needed effort for a BP-owned subsidiary, considering its recent troubles in the Gulf of Mexico.

Next, the Castrol NFL sponsorship will most likely include hospitality opportunities. Beyond the use of rights or general media inventory, it’s the effective and efficient use of the assets afforded to Castrol via the NFL sponsorship, commonly referred to as the activation, that can be a challenge. Being able to efficiently make use of these assets creates the opportunity to measure the return on the investment the sponsorship brings. This can be a difficult task, especially for larger organizations entering a new sponsorship. Given that the benefits of many sponsorship programs in sports are perishable inventory — like tickets — it becomes even more important for a sponsor to understand what is available, and to effectively manage the assets.

Another challenge is knowing which hospitality packages were used for measurement of the sponsorship: It’s well-documented that out-of-the office experiences foster greater relationships. Yet tickets often go unused due to lack of lead time, poor communication or faulty processes for requesting tickets and inviting guests. In fact, a PricewaterhouseCoopers study pointed to corporate entertainment and hospitality assets such as tickets and suites as the single greatest ROI increase opportunity among the asset classes studied. Surf the Web, and find many different measures of the level of waste for entertainment assets: One report lists that 43 percent of tickets from sports sponsorships go unused, another lists 20 percent as “wasted inventory.”

If a main use of sports sponsorship is corporate hospitality for building relationships, it’s imperative that the sponsor have controls and processes to ensure that the tickets and hospitality opportunities are used appropriately, and not just given out because they were available. Only with such monitors in place can a true measure of the return on investment be found.

In Burton and O’Reilly’s article, they point to the use of sponsorship, and its impending increase in North America, saying that sponsorship will see growth by a compounded annual growth rate of 5 percent in 2012 and 5.6 percent in 2013. Recognizing that using a sports sponsorship is a significant investment, having systems in place to ensure the proper activation, and use of the perishable inventory made available by the sponsorship, shouldn’t be ignored.

Michael Dittelman
White Plains, N.Y.

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