Getting tuned in

The first television sponsorship was PowerGen’s association with ITV’s weather forecasts in 1990 and bearing in mind the British obsession with the weather, it seems highly appropriate.

That particular partnership is still going strong. In fact, the sun has shone on the sponsorship sector since companies realised the benefit of complementing traditional commercials with strategic “break-bumpers”.

The digital TV revolution has spawned a new generation of channels. These channels require 24-hour content and their owners are more than happy to commission advertiser-funded programming.

The estimated &£80m TV sponsorship market received a boost last October when the Independent Television Commission (ITC) agreed to relax its code and allow brands to show products and contact details, such as a website address, during programme credits. The ITC has, however, ensured that regulations remain in place to prevent the blatant use of sponsor credits as extra advertising time.

Change of heart

Clients that have previously shied away from the idea of programme sponsorship are beginning to consider it as a cost-effective alternative to advertising, particularly with regard to digital TV. The rising cost of airtime on terrestrial TV, fuelled by the demand for slots from dot-com and telecommunications companies, has not gone unnoticed. This is also true of ITV’s inability to generate as many large-volume audiences as it has in the past.

Brand managers are aware that in most homes, and particularly those with digital, satellite and cable TV, viewers are increasingly inclined to channel hop during the commercial breaks. Sponsorship’s close proximity to a programme’s editorial content makes it arguably more appealing. Industry research confirms that audiences are more likely to remember the name of a brand that sponsors a particular show than those that advertise during it.

Since 1996, Cadbury has enjoyed probably the most high-profile sponsorship as a result of its association with Coronation Street. The company says 86 per cent of consumers are aware of the link – a figure it claims is higher than for any other TV sponsorship.

The ITC’s own research reveals that any gripes the public may have about the volume of advertising on TV does not yet extend to sponsorship. Its latest survey The Public’s View, states that 59 per cent of respondents do not think there are too many sponsored programmes, against 26 per cent that feel there are; while three-quarters do not feel that their enjoyment of a programme is affected by sponsorship.

Such findings are good news for the burgeoning digital TV industry, which is keen for more clients to see the benefits of sponsorship as a way to reach niche – if usually considerably smaller – audiences.

This is certainly the view of Blair Krempel, co-founder and managing director of the UK’s largest sponsorship agency Sponsorvision, responsible for the Cadbury package as well as deals such as Cockburns Port’s link with Cold Feet, the Nivea Visage tie-up with Veronica’s Closet, and Soft & Gentle with She’s Gotta Have It. He says marketers have begun to take sponsorship more seriously in the last two years and that digital TV is definitely encouraging them to look at the medium more closely.

The ITC says there could eventually be as many as 200 extra channels available to British viewers. with this in mind, Krempel is confident that over the next five years sponsorship can increase its share of overall TV revenue from three per cent to seven per cent at the expense of advertising, which still accounts for 97 per cent of all spend.

Choice genre

“The growth in channels and the move towards more genre-specific TV will mean clients can sponsor programmes relevant to their brand and target market. Yet the same rules apply for terrestrial sponsorship. That means you must be strategic and develop sponsorships that can work alongside other marketing activity,” he says.

Krempel adds that sponsorship will never replace advertising. “They are different tools; one is a soft sell and the other a hard sell. Sponsorship is specific to one programme while advertising can target many.”

One satellite and digital broadcaster increasing its sponsorship revenue is MTV. It says its young audience is more marketing conscious than most and its viewers distrust commercialism. As a result, MTV tries to encourage the brands it links with to expand their sponsorship beyond purely an on-air association.

In 1999, Cadbury demonstrated how TV sponsorship should be used strategically. It complemented its association with Coronation Street, obviously designed to reach a mass market, with a deal to sponsor MTV’s flagship music video request show Select.

Strategic development

Cadbury wanted to make its brands more relevant to 12to 20-year-olds and the MTV campaign encompassed a number of activities. These included a variety of on-screen MTV billboards to promote Cadbury products, while 105 million chocolate bars were manufactured featuring the MTV logo with on-pack promotions carrying the strapline “Unwrap and Party”, used to stress Cadbury’s association with the music television channel. Prompted awareness that it was Cadbury which sponsored the Select slot rose by 42 per cent during the tracking period.

Cadbury marketing director, Mark Smith, says the company will develop its sponsorship strategy further as new digital channels are launched. “The main advantage of digital TV is that it allows us to focus on particular demographics more easily. Crunchie, for instance, is more popular with young males so we would target digital channels aimed at them,” he says.

MTV has negotiated other sponsorship deals with urban clothing brand Boxfresh, Braun, Carlsberg, eJay, Virgin Megastores, Solstis and Mastercard. A spokeswoman says clients are now realising they can reach a specific audience while also benefiting off-air through an association with MTV’s own brand values.

“We have MTV Base, which is the only dedicated channel for hip-hop music fans. Progress is being made in the sponsorship debate and the fact that our sales team no longer has to explain the concept of TV sponsorship to ad agencies demonstrates this clearly,” she says.

There is no doubt that sponsorship is fashionable at the moment, although some in the industry, such as the Media Planning Group’s head of broadcast Andrew Canter, fear for its future following the ITC announcement. “Now that products and contact details can be shown during programme credits, there is a danger that the market may become too cluttered and turn viewers off,” he says.

Nevertheless, sponsorship will remain an essential marketing tool to build brand relationships with consumers. Thus, clients considering entering the market for the first time must be sure that the programmes available for sponsorship are right for their particular brands.

Laurence Munday, joint managing director of DrumPHD part of the new PHD Group and responsible for the The Guardian’s sponsorship of Film Four and the Dulux Kids’ link the Cartoon Network, believes that clients are in a strong negotiating position with digital broadcasters. This is because their channels rely on generating more of their revenue from sponsorships, on-air promotions and competitions than from traditional advertising.

“My evidence is that digital TV companies are now viewing advertising and sponsorship as a package when they meet clients. They realise that many brands are considering sponsorship for the first time after years of feeling it was too restrictive,” says Munday.

Pushing the boundaries

Broadcasters say they are realistic about the scope for sponsorship revenue and they do not expect clients to suddenly raid their ad budgets for strategic sponsorships on digital channels.

Channel Four’s head of sponsorship, David Charlesworth, says: “It is my experience that clients that have sponsorship agreements in place with a channel usually increase their overall advertising with that network. Yet there are brands, such as health supplements which are restricted by what they can say in advertising so sponsorship is an attractive option.”

Like many in the industry, Charlesworth believes one of the factors that will help digital TV increase its share of this market is the limited number of programmes on terrestrial TV that are actually available for sponsorship.

Media buying agency Mediacom TMB is also aware of this problem and formed a sponsorship division in August to concentrate its efforts on finding clients suitable sponsorships, with programme series rather than one-off shows being the priority.

The division is headed by sponsorship director Paul Chard, who says that if a natural sponsorship link does not exist on a specific channel, there are numerous opportunities for brands to fund the production of new programmes because digital broadcasters crave content.

This is also true for terrestrial TV, of course. Mediacom TMB approached Granada Media Sales on behalf of its client jamjar.com, part of the Direct Line group, to see if there was a suitable programme for it to sponsor. As there was not, it agreed to fund the making of The Real Car Show which has already been broadcast in the North and London ITV regions.

The ITC code is strict on the editorial influence and promotion of a sponsor’s products within any advertiser-funded series and the commission is likely to focus on this area more closely as digital TV expands.

Jeff Hyams, managing director of media agency Zed, says he was not surprised the ITC code was relaxed because the Government is keen for business to support digital television. But he adds that there are ways around the ITC regulations. Zed organised Electrolux’s sponsorship of the Carlton Food Network and ITC rules meant Electrolux cookers could not be used in the shows, so it used other cooker brands from the group’s stable.

“Sponsorships works best if a brand can be associated with a particular channel or show over a long period. One problem we have seen on digital channels is that some programmes have changed sponsors too often, which can make it harder for consumers to relate to any link between the two brands,” he says.

Such a link is best demonstrated by PowerGen’s sponsorship of the ITV weather forecasts. The shortage of sponsorship opportunities and the growth in digital channels over the next few years is likely to see many more companies negotiating long-term deals. Clients want to secure a share of this expanding market and are realising that sponsorship is a valuable alternative to the conventional TV commercial.