If a company sponsors a major sporting event, does it have the right to criticise organisers if attendances and viewing figures fall short of expectations?
That was the question the industry was asking itself after last year’s Rugby World Cup, an event which left a bitter taste in the mouth of a number of event sponsors.
The reason for their malaise? Sponsors complained that dull, one-sided matches in the early stages of the competition got the tournament off to an inauspicious start. The team mis-match was due to an increase in the size of the tournament.
Match schedules added to sponsors’ woes. The quarter-finals onwards were jammed into the weekends and exorbitant ticket prices throughout left many grounds half empty.
Considering the huge costs involved in such high profile sponsorship deals, it is understandable that sponsors complain when viewing figures disappoint, but many argue that it is naive for companies to expect sponsorship alone to maximise their return on investment.
Paul Narraway, managing director at event marketing company MDI, points the finger at sponsorship consultants for taking the view that event sponsorship will automatically give a company the marketing exposure it wants. “There’s a poor standard of sponsorship consultation in this country. A lot of sponsorship agencies short-change the client,” he says.
Narraway believes agencies should be working with clients on how best to integrate the event sponsorship with other marketing activity. “The question for clients is how much extra product is this sponsorship going to move? The answer is none unless you run the sponsorship in your advertising, feature it in your internal incentives, run consumer promotions around it and so on.
“With sponsorship, all you’re buying is the lock-out of your competitors, and the basic tournament rights. Coca-Cola will spend millions buying into world class events such as the Olympics and Champions League, but it will spend many times that exploiting the fact it is involved.”
But companies still face the dilemma, not to mention the added expense, of which additional marketing activities to embark on.
Tim Brady, managing director of TSMS Connector, which negotiates sponsorship deals for ITV, believes it is worth sponsors paying the extra cost of broadcast sponsorship, which gives the sponsor greater exposure and added distinction. ITV sells its broadcast sponsorship exclusively, giving companies the incentive to escape the collective group of event sponsors.
“The Football World Cup has about 12 event sponsors, the Rugby World Cup had about eight. When you put that together with the favoured partners, there’s about 30 companies linked to events. Not to mention all the brands that try to get in on the act unofficially,” says Brady.
According to Brady, research shows that broadcast sponsorship can distinguish a company’s exposure. “Take Heineken, which was the exclusive ITV Rugby World Cup broadcast sponsor in 1995. It was miles away from the next sponsor. Broadcast sponsorship moves you from being one of the sponsors to the sponsor,” he says.
Getting what you pay for
Of course, such deals don’t come cheap. In the case of last year’s Rugby World Cup, Guinness’ sponsorship of ITV’s coverage (about &£4m) cost more than being an event sponsor. Carlsberg, meanwhile, is paying in over &£5m to exclusively sponsor ITV’s coverage of Euro 2000 this summer, to support its event sponsorship and official association with the England team.
Brady also believes that companies cannot rely on their official sponsorship alone. “You have to work it once you have it.
“Guinness realised this, and at the rugby matches there were lots of people walking around with Guinness hats. They had other clever branded spin-offs such inflatable chairs. All sorts of additional work can be done, which is probably self-funding anyway. I’m sure Carlsberg is going to do something similar.”
In the wake of all the adverse publicity surrounding last year’s Rugby World Cup, Peter de Wesselow, director at marketing agency Dynamo, argues that it might be more fruitful if event sponsors were given the chance to work with organisers, to ensure the event is well marketed and hence well received.
He says: “Sponsors and sponsorship agencies should be working with organising committees, especially on an event such as rugby, which is still a fledgling in terms of its professional structure and organisation, to help them make the most of the event. That’s probably easier said than done, however, because even as a major sponsor you can’t expect to tell them how to run the event.”
Viewing figures also invariably depend to some extent on England’s success and participation in an event, something even the organisers cannot be held responsible for. Brady explains that many companies in the running for ITV broadcast sponsorship weren’t willing to commit to Euro 2000 until England had qualified for the finals.
Cornhill, meanwhile, has been sponsoring England’s home cricket tests since 1978, but it is pulling out at the end of this summer’s series. While Cornhill corporate communications manager Geoff Mayhew denies that England’s failure at test level – or cricket’s move from the BBC to Channel 4 – has had anything to do with its decision, he does recognise an inherent danger for sports sponsors.
He says: “I do share some concern on how the team’s lack of success might affect the audience. But this year, there’s been no evidence of that.”
Relying on team success
If a team is number one or two in the world, there is major interest – attendances will be up and a large TV audience is virtually guaranteed. Companies want to sponsor sporting success, but in terms of UK sport, success is hard to come by these days. Clearly, this is having the knock-on effect of sport sponsorship budgets being more carefully scrutinised by companies.
Cornhill’s handling of cricket does, however, show how sponsors can exploit their position. Cornhill pioneered the idea of putting its logo on the pitch and on the stumps.
Cornhill’s sponsorship of cricket has also centred around making the most of corporate hospitality. Ken Deeks, managing director at agency Argyll Consultancies, argues that this area of sponsorship is often underestimated by companies.
And he says a common mistake is basing the sponsorship deal purely on the sporting interests of the chief executive. Instead, he argues that agencies should take clients through the methodology behind the sponsorship deal and set objectives that can be clearly defined and measured.
“If you can’t prove that having an effective relationship with a particular chief executive does anything to keep that business then you shouldn’t do it,” he adds.
Cornhill has integrated its cricket sponsorship into all of its marketing activities, including its corporate website to help generate traffic.
Mayhew claims Cornhill’s cricket sponsorship has more than served its purpose in terms of building awareness of the company brand, and it simply saw no need to continue. The coming test season is costing Cornhill &£3.2m, though Mayhew points out that it will spend more than that making the sponsorship work, as well as researching what it has achieved for Cornhill.
Mayhew adds: “Sponsors get what they deserve. We work hard at achieving our results. You simply can’t sign a cheque and sit back. You have to push the event owners and work hard through your agency.”
Viewing figures, while providing the most obvious way to evaluate the success of a sponsorship deal, only provide part of the story, and wider use of the sponsorship within the brand or company’s market can clearly have even greater benefits.
There will always be some sport sponsors that have paid several million pounds and wonder why their sales have not shot up after the event.
But it is up to the sponsors and their agencies to leverage the sponsorship as much as they can. While organising committees can be criticised for empty stadiums, poor schedules on TV and lousy press coverage, their job is not to worry about sponsor exposure.
As Narraway says: “You can’t blame the organisers if you didn’t get your sponsorship pound. That’s your own fault, and your sponsorship agency’s fault for giving you poor advice.”