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SBJ/May 20-26, 2013/Opinion
Marriage counseling: Saving the property-sponsor relationship
Published May 20, 2013, Page 17
For years, the fact that client-side marketers had the dollars properties coveted led to immediate return of phone calls, as sponsorships have always been hard to find. The selling process is hard, but the property owners desired the relationships because they needed the incremental revenue and the promotion sponsors bring to the table.
But now, I am seeing a disturbing trend: Properties are not returning brand managers’ phone calls. When the properties do call back, they often schedule meetings for “a few weeks from now when things slow for us.” In one case, I witnessed a property owner look at a sponsor offer and scream, “They are trying to rip us off.” And rather than try to negotiate a mutually beneficial partnership, he simply passed on the opportunity to bring a powerful national marketer into his event.
I am becoming concerned that properties may not be interested in sponsors. Property stewards are asking, “Do I really need sponsors?” In some ways, it is a valid question to ask. Sponsorship requires properties to serve as account managers, and it is time-consuming for internal teams to activate. The kicker is that sponsorship revenue is becoming a smaller piece of the pie. Due to rising revenue from ticket sales and entry fees in participatory events, digital and media rights becoming more lucrative, and greater licensing opportunities, the sponsorship slice of the pie is smaller than ever. While that may sound responsible, this is high-risk thinking. Continuing down this path, there is a potential every stakeholder will lose — especially the most valuable stakeholder: the consumer. Consumers segment themselves into “sports fandoms.” Some align with emerging sports such as MMA, while others align themselves with “water cooler” sports: “Did you see the fourth quarter of the Mavericks game?” We tell our clients that the cliché is critical: The consumer is the ball, and never take your eye off the ball.
Sponsorship is a critical part of the marketing medium, and I hope smart property owners revert from apathetic to enthusiastic partners. Here’s why:
1. Consumer experience
Lost in the new thinking is the importance of the consumer experience. Business is about the consumer. A mobile phone station at the end of a marathon makes the property better, offers value to the consumer and allows a brand to be part of that consumer story at its highest passion point. Those long TV timeout promotions keep fans engaged. The experience is why some fans attend the game as opposed to watching on their 60-inch HDTV at home. Remove that sponsor, and the consumer experience loses a valuable benefit.
|Properties with friends like Pepsi are good company to keep.
Properties are brands, and brands keep good company. If a brand is friends with Visa, Pepsi, Budweiser and Campbell’s, that is good company to keep. Hello, NFL. Smart marketing programs build a brand. Partners promote the event and use the property’s trademark on packaging, on apparel and in media to drive those larger revenue parts such as ticket sales.
3. Media sales
As media becomes a more critical, and lucrative, part of the revenue pie, sponsorship deals should be packaged with media to raise the value of a property’s rights. This also helps drive up its media category as a whole, especially when category exclusivity or first right of refusal is given to sponsors.
4. Building a bench
Business changes. What is seen as not important today could be important tomorrow. Building a bench hedges against a weaker economy, slowing ticket sales and entries, or if a property just gets its pricing policy wrong. Sponsors allow a property to forecast its business without as much revenue fluctuation. See Yankee Stadium, for example. The revenue line from slowly selling front-row ticket sales can be offset by the influx of sponsorship deals.
5. Plug and Play
Activation does not have to tax a property’s organization. The key is for the property to build systems and processes that make sponsor obligations “plug and play.” Build a sponsor calendar so it can be routed internally to PR, legal and other departments. Plug into a template. Done. In polling major sports-spending brands, the NFL shines as having the best systems and processes to make things easier for sponsors. Yes, the Super Bowl site is selected several years in advance, the Pro Bowl is in the same city each year, and they have fewer games, but the internal office and teams are well-linked and make things easier on sponsor brands. These brands are more apt to renew.
So is the property-sponsorship model dead? No, but the relationship model may be dying.
The relationship is no longer just about the property and sponsor. At the center of the model is the consumer. The property needs to partner with sponsors to offer added value to the consumer, who is now the engine driving the machine. Using sponsorship to improve consumer experiences will ultimately make a property unique versus its competition, provide high-margin revenue, drive other slices of the pie such as tickets or ratings, and make that property into an enduring brand.
Dan Schorr (Dan@Start2FinishMarketing.com) is CEO of Start2Finish Marketing, a Boston-based consulting and experiential marketing shop that connects brands to active lifestyle consumers.