Brands pay out millions of pounds for sponsorship deals, but stumping up the cash is no guarantee that their dreams, whether brand building, hospitality, media exposure or increasing sales, will be realised. However, some brands find themselves walking into a nightmare.
Sara Lee’s Sanex has found that to be the case after being forced to pull the plug on its five-year sponsorship of the Women’s Tennis Association (WTA) tour with two years left to go (MW last week). Sanex has been plagued by a variety of problems, including scant media recognition of its name, compounded by the fact that individual events on the tour have signed their own title sponsors. There is also speculation that the deal was not supported by local marketing departments and that Sanex failed to sign up enough top-flight players to wear its logo. Bad luck also played a part because one of the few players who signed up with Sanex – Martina Hingis – was hit by injury problems.
Sanex is not the only brand to have had its fingers burned by a sponsorship deal. GEM Europe director Nigel Currie claims that, because the sponsorship industry has evolved so quickly over the past ten years, it has thrown up problems for numerous brands along the way. This, he says, has led to an increase in the complexity of sponsorship deals. He adds: “We now have a bigger and more complicated market place. Sponsorship has become a victim of its own success.”
He claims that a major watershed in sponsorship history was the 1991 Rugby World Cup, when Sony, which was signed up as the first broadcast sponsor, overshadowed the event sponsors. Since then, event sponsors have been given first right of refusal for broadcast sponsorships.
Currie says that rights holders have also learned over the years to create an identity for an event so that it supersedes the name of any sponsor. For a long time, The League Cup was known as the Milk Cup because of its association with the Milk Marketing Board, but it has since worked hard to include “league” in the competition’s title.
Sponsorship has moved on so much that some brands have a department dedicated to sponsorship. But Sponsor Development Organisation managing director Matthew Tumbridge claims that this can lead to cultural problems because the “internal buy in” from the whole company, including marketing, is often overlooked. Without a strong relationship with the rest of the company and a commitment to support any deal it cuts, sponsorship can be left high and dry. Tumbridge says that a good relationship between brand owners and their agents is also crucial.
This is of particular concern where the same agency represents rights holders in addition to sponsors.
Mark McCormack’s IMG empire routinely represents both parties. But IMG Consulting international vice-president Graham Fleet says his company is always “transparent” about the properties it owns. He adds: “We are dealing with some very sophisticated people. Could we really form a long-term relationship with anyone if all we brought to them was IMG properties?”
Matthew Patten, joint chief executive of WSS, likens sponsorship to a marriage between sponsor and rights holder, which goes through honeymoon, stability, then burnout. He says: “Very often there is too much detail in a sponsorship deal. If you are too focused on contract detail you’ve no chance of re-energising the marriage.”
One relationship that ran its course before reaching its maximum potential was between Pizza Hut and Fulham Football Club. The fast-food giant did not use its option to extend its one-year, &£1m sponsorship of the club by another two years (MW April 11).
Sports marketing insiders claim the restaurant chain put little energy into the sponsorship and failed to adapt its logo to suit the shirt and perimeter boards. They say that this coincided with an increase in the influence of the US office of Pizza Hut, which was reported as being unimpressed by UK’s “soccer” sponsorship.
Even when sponsorships last, they can still be on the road to nowhere. Arsenal continued to carry the name of its shirt sponsor Sega Dreamcast, even after the product was no longer sold in the UK.
Nick Johnson, the sponsorship and advertising specialist at law firm Osborne Clarke, says that both rights holders and sponsors can do their best to guard against a number of events, including natural disasters or one of them going bankrupt. But he adds that events arise that are hard to anticipate, such as Enron’s collapse after signing up as title sponsor of the Houston Astros’ stadium.
Rows between rights holders can also leave sponsors shaken. The Football League’s row with ITV Digital, as well as the Football Association’s spat with the Premier League about players’ promotional responsibilities, have both caused concern for sponsors.
Lack of coverage by the media, as Sanex found to its cost, is another problem facing sponsors. Karen Earl Sponsorship director of consultancy Tim Crow doubts that the media mentioned the full name of Southampton’s new stadium – Friends Provident St Mary’s stadium – when England played there last week.
Barclaycard head of PR Mark Gonnella, who has overseen the credit card’s sponsorship of the Premiership, says he was faced with the task of getting Carling, the previous sponsor, out of people’s heads. He says: “From day one, Barclaycard tried to trade collateral through promotions and competitions and worked hard on building really good relationships.”
Sponsorship can be a vital part of the marketing mix, however, brand owners must be clear about what they want, what they can get and what steps must be put in place to support the sponsorship in order to achieve their goals. Paying the money is the easy part.