Re-appraising Sponsorships in Recession
Yes, they’re the BIG names and they ring bells loudly! You sure know them all. It’s impossible to miss them when you’re precariously perched on the edge of your seat, eyes ‘super glued’ to your TV, savouring the best of English premiership action (and not without the tension that comes with it, especially if your team has got something at stake during those 90 minutes!) or conspicuously emblazoned on colourful jerseys proudly donned by all manner of folks you encounter when taking a stroll down your street in Lagos or wherever……. Fly Emirates, AIG (Someone just whispered ‘Arsenal Is Great!’ into my ear; I really dunno about that!!), SAMSUNG, Carlsberg….the list goes on and on. The incontrovertible point is, without doubt, Sponsorship is by all means big business for all stakeholders (both property owners and sponsors alike).
However, presently, it’s become apparent that these contemporary times do not appear to be the best, as far as this potent marketing tool is concerned. (It’s been tagged variously as ‘economic slow-down’, ‘meltdown’, ‘recession’, ‘depression’, ‘cash-crunch’).The last couple of months have indeed been trying times and have witnessed remarkably noticeable and far-reaching implications on the marketing (and evidently, by extension, Sponsorship) landscape world-over.
Globally, recent unfolding trends lend incontestable credence to the downturn, right from AIG’s critically evaluated decision not to renew their coveted Manchester United shirt sponsorship deal(estimated at over US$27million annually) at the lapse of the contract in May of 2010. This reportedly arose due to the dire financial straits in which the leading insurer has found itself, as the company, alongside others, is currently expecting the receipt of US$150 billion as part of a bail-out plan from the US authorities.
General motors, also among top corporations hit the hardest by the crunch, announced that it is tightening the noose on the neck of the deal between its Buick brand and international golfer, Tiger Woods.
International media is replete with tales of ‘woe’, and respite, as it were, seems no where in sight; at least, not yet.
Interestingly, a couple of weeks ago, I was discussing over drinks with a friend whose primary brief entails managing the sponsorship portfolio of a multinational in the FMCG Category. In the course of our talk, she regaled me with tales of the herculean task she faced, alongside her colleagues in sifting through and trying to make sense of the ceaseless deluge of proposals their table has had to contend with day in, day out, ranging from those soliciting for sponsorship of music concerts and all manner of reality TV shows, including those that have been given an altruistic/educational twist.
It has become imperative that we critically re-evaluate the way we do business, especially in the face of the hard realities of the contemporary economic climate that persists. Brands are increasingly looking for more efficient and result-oriented ways to connect with consumers and obtain value from marketing initiatives
One salient realization that increasingly stares us in the face at this period is that traditional advertising is no longer delivering real value and ROI. This again is partly traceable to the fact that in our part of the globe, the landscape is characterized by intense cluttering and gross disregard/non-adherence to the most fundamental stipulated advertising rules, a scenario which ultimately makes nonsense of Above-the-line promotional efforts in the Nigerian Market (except in instances where painstaking effort has been involved in strategic differentiation, from creative or media deployment points of view). The foregoing is coupled with a marked shift in moment regarding consumer trends, increased audience fragmentation and increasingly shortened attention span of the target audience(s).
Again, the so-termed ‘global meltdown’ has evidently affected not only those multinationals with strong links to the Western Economies (who have apparently been hit the hardest by the ill-wind), purported to possess the big budgets and intimidating spending/promotional power, but also no less the SMEs and start-ups. These trends have consequently seen advertising and promotional budgets spiralling down alarmingly in virtually all sectors of economic endeavour (Well, maybe except for the telcos and brewers, though, howbeit humorously, the reasons are obviously no-brainers clearly the need to stave off depression occasioned by the realities of the recession, and that’s by talking, sharing one’s problems with others, on one hand and drinking (to stupor or otherwise) to drown out the glum!!!)
The hardest hit in this case are the real (manufacturing) sector and financial services (banking, insurance, stock-broking e.t.c), among others. With regards to marketing spend, a lot of banks have already clearly started holding back and have definitely not spent as much money on communication as they had in previous time, even as they have now been constrained by regulatory policy to minimize promotional spend considerably. The question, however, of how much leverage has even been given to their already existing sponsorship initiatives and platforms still remains.
Evidently, the bottom-line realization at this time is that tremendous value must compulsorily be obtained from even the most minimal budget outlays anything deemed by clients/prospective sponsors to have a hint of ostentation stands condemned and will probably not fly!!
The truth remains that it will be persistently difficult to find sponsorship and by extension, marketing managers who are sure enough to be willing to devote huge chunks of their considerably leaner budgets to long term sponsorship contracts in these unpredictable times.
The foregoing notwithstanding, sponsorship may actually hold a very important key in this time of recession (equally against the backdrop of the glaring, sometimes seemingly near-futility of above-the-line activity). Basically, it’s still all about brand visibility, from seeing the brand, to knowing the brand, to doing the brand, as far as the marketer’s desired consumer response and action is concerned.
This consequently necessitates a careful re-appraisal of sponsorship issues, from both property owners’ and sponsors’ perspectives, with a view to maximizing ROI and making the most of these initiatives.
The reality is that Measurement will invariably become a more critical factor of reckoning when evaluating sponsorship spend, from the perspective of Sponsors/Clients. Key questions that will come to the fore include that of what the rationale for sponsorship of a particular property is and how justifiable it is.
Also, just to mention, equally imperative is the fundamental principle of association. It follows that when a company or a brand chooses to sponsor any particular property or initiative, it has invariably decided to associate itself with that particular entity. Towards getting the best/most appropriate fit in this regard, it is pertinent to take into consideration core essence and ‘DNA’ of the brand, which translate into such integral elements as its personality, values, proposition, target audience and so on. That way, such platform can be meaningfully leveraged upon to add tangible value to the brand equity. This is evidently not the time to consider sponsoring any particular property simply because competition is doing same. Such crucial decisions must be critically evaluated and strategically aligned with the essence of a brand before implementation.
Finally, Truth is, “Will sponsoring a particular property or initiative increase your company’s revenue or profits?”
The answer is possibly a ‘NO’!, at least not directly anyway. Beyond outright sales, Sponsorships are aimed more at getting a brand’s name out into full glare on one hand, and also to achieve a desired positioning in the minds of the audience, thus subsequently influencing the target publics to develop some measure of affinity for the brand.
Basically, the idea of advertising/publicity is to increase revenue ultimately. But come to think about it, how many times do you see the white letters “AIG” against the backdrop of Man U’s bright red home jersey and even give remote consideration to getting a policy from the insurance giant? ‘Not likely, you say?’ But, truth is that you remember the company’s name, and same goes regarding lots of other sponsoring brands/companies. It’s called Top-of-mind-recall….and it sure works!
Remember also that Sponsorship, like advertising, can easily help a rolling ball hurtle down the slope even faster. Expecting it to make the ball roll uphill however is simply asking for way too much.
Tomi Ogunlesi is a professional member of the Chartered Institute of Marketing (UK) and is an account planner in Strategy and Business Development at BatesCosse, Lagos.
