Announcements

Sponsorship that Works - Best Practice for Marketers

Warc, March 28, 2011

By Geoffrey Precourt

Lesa Ukman, Chairman of sponsorship consultant IEG, took the stage for her opening address to the 2011 Return on Investment: Sponsorship's Impact on Business conference in Chicago. The address included a series of bulleted mini-case-history reports flashed on a screen behind her.

They included:

• Whirlpool's sponsorship of a Reba McIntyre tour - which included meet and greets for salespeople at the top-performing Sears stores based on year-over-year growth during four weeks in July. It increased Whirlpool sales 47%, worth an extra $5.6 million.
• When Procter & Gamble brands run ads that are associated with a sponsorship, purchase intent increases an average of 30%. "It's the idea that brands are judged by the company they keep."
• The Nike+ Human Race 10k increased Nike website traffic by 80% and doubled membership in Nike+.
• Target's two-week campaign on Facebook, which asked consumers how to distribute $3 million among 10 non-profits, garnered 100,000 new fans and increased traffic to its profile page 5000%.
• Consumers who come to a Nationwide website via a NASCAR site are twice as likely to go through the process to receive a quote, and twice as likely to buy insurance.
• Every dollar that Bank of America spends sponsoring and activating pro golf events generates three dollars in measurable new business.

IEG, the American sponsorship specialist (and, since 2006, a division of WPP's GroupM) had attracted more than 1,100 attendees from a dozen countries. And the particular nature of their interest meant that they'd come to hear what Ukman called "outcomes, not outputs".

To demonstrate the medium's growth, the IEG chair stepped away from brief snippets of the past to some critical sponsorship figures for the future: With just two companies signed on (Brazil's second largest bank and a telecommunications company), the sponsorship spend for the 2016 Rio de Janeiro Olympics already "clearly is exceeding the total figure for 2012 in London". The investment in Rio sponsorships, she added, "will be many multiples of what's spent in London."

And, in turn, sponsorship has moved "from the fringe to the center of marketing programs. Coca-Cola, Pepsi, Nestle and Unilever all have increased their sponsorship spends." At Procter & Gamble, she said, the sponsorship spend has increased 200%. Even after aborted US government efforts to restrict sponsorships from the military and financial services, the Army says that sponsorships are its largest sources of leads. And financial services, according to IEG data analyses, has been the "most active" category in the last 12 months, with major programs undertaken by the likes of JPMorgan, Farmers Insurance and Wells Fargo.

"When sponsors can put their products and services next to things their audiences care about, they increase the attractiveness [of the brand] and that can change behavior," Ukman said. "Advances in neurosciences are changing our understanding on the need to engage with customers. Once we have the basics of food and shelter taken care of, our motives shift. People want to be part of something bigger than themselves."

This is where partnership comes in. "It gives meaning to purchasing decisions - especially the discretionary ones - by uniting customers and brands in a shared purpose. That purpose may be tied to a team, a cause, a band or an experience."

The theory is gaining critical marketing momentum. But, until metrics catch up with the practice, Ukman admitted, cautious marketers may be reluctant to engage in a science that offers no proven statistical underpinnings: "The demand for measurement services is skyrocketing. More corporate clients want to incorporate [sponsorship programs] into-media mix programs… But the prevailing measurement mentality - which simply transfers existing advertising metrics to sponsorship - is simply not equipped to measure the levels of engagement that purpose ignites."

Ukman, who launched the IEG Sponsorship Report in 1982, runs an organization that "works with nearly 5,000 clients each year, designing new and better ways to value, measure and maximize their participation in sports, arts, events, entertainment, affinity and cause marketing."

And, on the opening day of the IEG Sponsorship conference, she offered seven best practices for marketers looking for a return on their sponsorship investment:

1. Engage with innovation: "Brands are doing much more of the work that once was left to institutions…. The global appetite for sponsorships is massive." And marketers should use their sponsorships to assist the consumer. A company shouldn't call itself "the IT partner" of another enterprise; much more engaging is a label such as "creative partner".
2. Innovation is about "what", not "how": Ukman cited an Argentine bank that underwrote a football team by purchasing rights to its jerseys. "They left the jerseys completely free of a logo," effectively giving the space back to the people who really own the team - its supporters. The result? The number of new accounts tripled in three months.
3. Engage customers with rewards: Marketing to current customers is an integral part of sponsorship. "Retention offers the biggest upside," said the IEG chairman. Among the masters of such engagement: American Express, which has learned how to use a combination of old-time enticements (skybox seats at New York's Fashion Week) with new technology (Twitter feeds that enable brand loyalists all over the world to participate real-time in such events, with interviews with designers).
4. Operate in "perpetual beta": Learning must be an intuitive part of every sponsorship. Case in point: General Electric didn't go to the Vancouver Olympics looking to be an enterprise seller. But, when it realized that a siloed approach was not engaging prospects, it changed promotional streams and realized "$300 million in contracts". The "beta" mindset, she added, makes sense in ongoing sponsorships, when "activations may need refreshment. Revamp to make your program more engaging and more profitable."
5. Engage with future consumers: A new Coca-Cola music sponsorship "will take teens inside the creation of music", and AT&T has a visible role at Boy Scout Jamborees. "The initial return may not be as great," Ukman admitted, "but by 2020, a third of the US population will be younger than 18." And, the sooner marketers understand how to reach young audiences, the longer their payout will be. Similarly, as the American population becomes more Hispanic, Coors has increased its visibility to that audience through such programs as sponsorship of the Mexican National Football team.
6. Measure return for each objective against pro-rated share of rights and activation fees: Because sponsorships often have several goals, to determine the complete success of a program, the success/failure of meeting each object needs to be measured, ideally with quantifiable data.
7. Forget eyeballs, impressions and other outputs: According to Ukman, "The real return on sponsorship investments is all about outcomes: increased customer loyalty, employee retention, social capital and the ultimate metric - increased shareholder value."