Secret #2: The actual value of a sponsorship opportunity
Rumor has it that the metrics for how companies derive the value of a sponsorship have been hermetically sealed and stashed away in a drawer somewhere. It’s a major conspiracy by all who hold the title of CMO.
That’s probably a bit of a stretch. But I think there are three flawed factors at play in determining the value of a sponsorship opportunity:
1. While a company or an agency may evaluate a property, it’s likely they’re using traditional advertising metrics to determine “value.” Often times the company fails to measure the value associated with an integrated consumer activity and other factors linked to a personal connection with event. Limiting value to just the potential impression or reach removes that “relationship factor” that sponsorship creates (find Derek T.Y. Poon and Gerard Prendergast study, A New Framework for Evaluating Sponsorship, International Journal of Advertising, 25(4).)
2. The vast majority of fees for smaller sponsorships are derived solely from where the dart landed on the board. Many of these sales efforts are led by volunteers who have little background in marketing and advertising but they make up for it through the passion of supporting “their cause.” These skewed dollar figures become the basis by which other sponsorship requests are evaluated.
3. Relationships and trust. The Farrelly –Quester study in the Dec. 2003 Journal of Advertising Research confirmed that the antecedent for sponsorship renewals are based primarily on the relationship between buyer and seller, rather than from empirical, quantifiable values derived through evaluation and benchmarks. So, if a sponsor is paying too much for a property because of the relationship with that property – that’s going to affect how your proposal is evaluated.
A logical solution for these misguided efforts might be in the creation of an association that could provide some framework for industry standards to guide the valuation process. A professional sponsorship association could be the catalyst that outlines the parameters for these values and establishes a more common, disciplined approach. The result would be enhanced understanding and credibility for sponsor seekers and truer valuations of properties for marketing executives.
We also need to keep in mind that part of the “intangibles” associated with sponsorship marketing comes from buyer intuition and seller creativity. It’s what makes sponsorship such a unique marketing vehicle. To evaluate the value of a relationship based solely from number crunching would be a mistake.
Unfortunately, until standardized guidelines are established and implemented for the whole industry, the value for a sponsorship opportunity and how it's evaluated will remain secret, eluding property holders and potential sponsors. Dart board anyone?
Tuesday, April 28, 2009
Tuesday, April 21, 2009
The Best Kept Secrets in Sponsorship Marketing
It seems as though the idea of using sponsorships as a means to market a company/products is finally hitting Main Street. It is no longer just the beverage and communication, big insurance firms and banks – but smaller businesses are delving into the idea behind sponsorship marketing too.
Madison Avenue has been dabbling in the practice for a few decades, but until recently, measured results from sponsorship were attributed to the "intangible" category. Peer reviewed studies have started to measure its true effectiveness. What we always intuitively knew was working, finally has some research to back it up.
The shift in more use of sponsorship widens the number of new players in the industry who have a lot of questions about various aspects of sponsorship marketing. And since we don’t have a professional organization in the North America to help shape and formalize the practice, some truths and not so truths have crept into the discipline as a result.
We're now a group of “haves and have nots.” Many have noted there seems to be industry "secrets" which have become apparent by the same questions that are asked on many sponsorship listserves. As an example, "what is the REAL value of my sponsorship and how is it derived? Is it done based on impressions, the size of a sign in a venue or something far more reaching" and secretive.
Well, I’m choosing to use this space to bring about these questions that hopefully I can quell or at least put them out there for debate. Each week, I’ll post a new "secret" and perhaps uncover a few from you. Don’t be shy – post your best questions and secrets about sponsorship marketing.
I think we should begin by tackling the biggest secret first – Is sponsorship marketing really all that effective? And, if it is – how do we position its use so that it's effective?
Secret #1: The most effective method of building consumer connections is with Sponsorship Marketing.
In short, unequivocally, sponsorship marketing creates consumer intentions to make a purchase. Not only that, but sponsorship aids in the effectiveness and recall of those seriously expensive Madison Ave. ad campaigns. However, the effectiveness of sponsorships are attributed to:
1) how deep the sponsorship has been accepted by a company internally and
2) how a company chooses to leverage their relationship with sponsored properties.
Bottom line: Sponsorship is effective with internal "buy-in" across the corporate culture and
little buy-in equals little success.
The Sneath, Finney, Close, and Lacey study appearing in the Dec 2006 issue of the Journal of Advertising Research provided the foundation that event marketing serves as a powerful lever to engage the consumer. Consumers that attend community-related activities are more receptive to marketing messages because the experience engages sensory, emotional, relational and cognitive values together. But, these elements cannot be delivered by the property alone. The sponsor needs to engage the consumer using the property as the vehicle to tap into the emotional connection. Too often, company decision-makers want turnkey solutions without having to lift an internal finger which ultimately results in half the partnerships potential.
In an article from the same journal, Measuring the Effectiveness of True Sponsorship, Harvey, Gray and Despain report that what causes persuasion in the sponsorship context appears, however, to be logically different from what causes persuasion in the advertising context. Advertising appears to work by causing improvements directly in brand perception, whereas sponsorship appears to work by causing improvement directly in the perception of the sponsoring company and often indirectly by halo effect in the brand perception. However, even when brand perception is not affected, sponsorship can result in increased purchase intent, apparently as result of gratitude toward the sponsor. So, why wouldn’t a company WANT to take advantage of this across their marketing platform? Because the decision-makers are often too worried about how their latest FSI is going to drive case sales and no one is there to point out that the sponsorship can improve the value of a POS and FSI.
As a profession, it is important that we provide the educational context to help businesses understand that, without their total internal commitment to activating their sponsorship across their marketing platform, it's unlikely they’re going to achieve consumer acceptance. They also need to understand that consumer activism is drastically shifting how purchases are made.
Aligning with consumers through sponsorships is even more important. The ability for companies to capture the hearts of consumers through consumer activism will not be dissuaded by a slower economy. Fact is, companies that utilize sponsorship within their organization and for their audiences will be given the keys to the new kingdom; consumerism with a soul.
Put that in your digital recorder and TiVo it!
Madison Avenue has been dabbling in the practice for a few decades, but until recently, measured results from sponsorship were attributed to the "intangible" category. Peer reviewed studies have started to measure its true effectiveness. What we always intuitively knew was working, finally has some research to back it up.
The shift in more use of sponsorship widens the number of new players in the industry who have a lot of questions about various aspects of sponsorship marketing. And since we don’t have a professional organization in the North America to help shape and formalize the practice, some truths and not so truths have crept into the discipline as a result.
We're now a group of “haves and have nots.” Many have noted there seems to be industry "secrets" which have become apparent by the same questions that are asked on many sponsorship listserves. As an example, "what is the REAL value of my sponsorship and how is it derived? Is it done based on impressions, the size of a sign in a venue or something far more reaching" and secretive.
Well, I’m choosing to use this space to bring about these questions that hopefully I can quell or at least put them out there for debate. Each week, I’ll post a new "secret" and perhaps uncover a few from you. Don’t be shy – post your best questions and secrets about sponsorship marketing.
I think we should begin by tackling the biggest secret first – Is sponsorship marketing really all that effective? And, if it is – how do we position its use so that it's effective?
Secret #1: The most effective method of building consumer connections is with Sponsorship Marketing.
In short, unequivocally, sponsorship marketing creates consumer intentions to make a purchase. Not only that, but sponsorship aids in the effectiveness and recall of those seriously expensive Madison Ave. ad campaigns. However, the effectiveness of sponsorships are attributed to:
1) how deep the sponsorship has been accepted by a company internally and
2) how a company chooses to leverage their relationship with sponsored properties.
Bottom line: Sponsorship is effective with internal "buy-in" across the corporate culture and
little buy-in equals little success.
The Sneath, Finney, Close, and Lacey study appearing in the Dec 2006 issue of the Journal of Advertising Research provided the foundation that event marketing serves as a powerful lever to engage the consumer. Consumers that attend community-related activities are more receptive to marketing messages because the experience engages sensory, emotional, relational and cognitive values together. But, these elements cannot be delivered by the property alone. The sponsor needs to engage the consumer using the property as the vehicle to tap into the emotional connection. Too often, company decision-makers want turnkey solutions without having to lift an internal finger which ultimately results in half the partnerships potential.
In an article from the same journal, Measuring the Effectiveness of True Sponsorship, Harvey, Gray and Despain report that what causes persuasion in the sponsorship context appears, however, to be logically different from what causes persuasion in the advertising context. Advertising appears to work by causing improvements directly in brand perception, whereas sponsorship appears to work by causing improvement directly in the perception of the sponsoring company and often indirectly by halo effect in the brand perception. However, even when brand perception is not affected, sponsorship can result in increased purchase intent, apparently as result of gratitude toward the sponsor. So, why wouldn’t a company WANT to take advantage of this across their marketing platform? Because the decision-makers are often too worried about how their latest FSI is going to drive case sales and no one is there to point out that the sponsorship can improve the value of a POS and FSI.
As a profession, it is important that we provide the educational context to help businesses understand that, without their total internal commitment to activating their sponsorship across their marketing platform, it's unlikely they’re going to achieve consumer acceptance. They also need to understand that consumer activism is drastically shifting how purchases are made.
Aligning with consumers through sponsorships is even more important. The ability for companies to capture the hearts of consumers through consumer activism will not be dissuaded by a slower economy. Fact is, companies that utilize sponsorship within their organization and for their audiences will be given the keys to the new kingdom; consumerism with a soul.
Put that in your digital recorder and TiVo it!
Subscribe to:
Posts (Atom)
Posts
