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Riding shotgun: how brands can get their pound of sponsorship flesh

Sponsorship spending is on the rise as brands look to insert themselves into the relationships fans have with their favourite teams, causes and television programmes. But successful sponsorship takes more effort than putting logos on hoardings. These days, that place needs to be earned, says Lynda Brendish.

By Lynda Brendish | July 14, 2015 | features

Nick Harvey, Spur

Just as rhinos let the African oxpecker feast on their juicy ticks, or sharks let remora and pilotfish travel alongside them to eat parasites and leftovers, so too do sponsorship properties need sponsors to keep them afloat. But while sponsorships have long been pretty simple affairs, where brand exposure was primarily gained by buying real estate, sponsors now have work much harder to cut through.

In days gone by, Nick Harvey, co-director at sponsorship agency Spur, says there has been a lack of sophistication when it came to sponsorship and brands were generally looking for some sort of halo effect by aligning themselves with a sports team or event. Depending on your objective, sticking a logo above a stadium or on a jersey and leaving it at that still might be a strategy worth investigating as it can work as an effective media buy to drive awareness, but you’re likely missing a huge opportunity if that’s the whole of your approach. Why settle for basking in the glow when you have the chance to increase sales and humanise your brand, fostering goodwill among the community, customers and employees along the way?

Richard Howarth, Gemba

Rising tide 

Sponsorships have been rising in popularity and media spend in recent years. Globally, communications agency Mediacom estimates spending on sponsorships will outpace, for the third year in a row, both advertising and sales promotions spend. Locally it’s harder to get an idea of the size of the industry, in part because it depends how inclusive your definition of sponsorships is and there’s no set standard. As Mediacom’s New Zealand general manager Nigel Douglas says, it’s a “piece of string question”. That said, sports and entertainment agency The Gemba Group took at stab at it, in what managing director Richard Howarth calls a “a very high level estimate” in 2012 and pinned the annual number between $350 to $450 million. To put that in context, if accurate, if sponsorship was a separate category, it would fall somewhere between radio and interactive in the ASA ad spend numbers.  

What we do know is that sponsorship fosters high levels of recall and interest in sponsoring brands. Howarth cites internal research that shows one in six Kiwis can recall a sponsor of New Zealand Rugby unprompted, with the number increasing to almost two in three when provided with a prompted list of brands. Even further, those who attend a sporting event are 64 percent more likely to recall the sponsoring brands and those interested in a team or event are 2.5 times more likely to feel favourably towards the sponsor. 

The high level of favourability attendees tend to feel for sponsoring brands is part of the reason behind the rise in popularity, especially in an increasingly kaleidoscopic media landscape where it’s becoming harder and harder to reach key audiences through traditional channels. At least with a sponsorship, you have a captive and engaged audience. Another part of the equation is the reason why we respond so well to sponsorships, and that has to do with the emotion we feel during an experience and why we value those times. Watching the Black Caps play great cricket—whether you’re at Eden Park or at home with friends—is an emotionally engaging experience. And research in the field of happiness economics shows these kinds of experiences (sports or otherwise), increasingly mean more to us than material goods do. As a society we’re climbing up Maslow’s pyramid of needs, leaving baser materialism behind in favour of self-actualisation. And other research continues to show that emotion trumps rationality when it comes to marketing messages.

"Sponsorship is a portrait painted with a thousand brushstrokes. You’ve got to [activate it] with a complex range of activity that proves to the consumers that you have the right to have your logo on a property they love." Chris Brown. 

Guerilla warfare

If a brand forks out hundreds of thousands, or millions, of dollars for exclusivity, it’s reasonable to expect that exclusivity be protected. In reality, that’s not always the case and big sporting events are especially attractive platforms for ambush marketing. It almost seems like a win-win for the ambushers: they get to duck huge sponsorship fees and often come out the winner in public opinion even if they are flouting the rules. Obviously this strategy isn’t popular with official sponsors or organisers. Prior to the Rugby World Cup, the New Zealand government even enacted legislation aimed at curbing unauthorised advertising at designated major events. Still, we can’t help but admire some of the more creative and gutsy ambushes brands around the world have pulled off. Here are a few notables.

Michael Johnson’s gold Nikes

Nike has a long history of ambushing Olympics marketing and it all started at the 1986 event. Reebok was the official sponsor, but it was Michael Johnson’s gold Nikes that people noticed. The American sprinter raced to gold several times in his iconic shoes, earning himself the nickname ‘the man with the golden shoes’. No one was talking about Reebok. 

Steinlager’s White Can

During the 2011 Rugby World Cup, Steinlager, a long-time sponsor of the All Blacks, wasn’t allowed to mention the tournament, which was sponsored by Heineken. Lion claimed it was happier to have the All Blacks as a property. But it alluded to the event very cleverly by running a campaign based on a fan who decided to save a can of Steinlager from the All Blacks’ 1987 victory for the next win. Thankfully, he got the chance to open it.

Banned Beats

The high-priced headphones made famous by Dr Dre are a desirable accessory for many athletes. A desire no doubt propelled by the fact that Beats has a history of supplying free pairs to high profile athletes. Several organisations have gone on to ban Beats from their official events, including the American NFL and FIFA, to avoid earning the ire of official electronics partners. The strategy seems to have backfired, with Beats co-founder Jimmy Iovine reveling in the subsequent slew of media attention.

Sepp Blatter flies Kulula

The South African airline made media waves when it offered to fly FIFA president Sepp Blatter for free during the World Cup in 2010. Blatter was not amused, but the company persisted in finding someone—anyone—named Sepp Blatter to fly. Instead they found a dog—and thus earned the right to officially call themselves Sepp Blatter’s airline

Nike #FindGreatness

Another Olympics ambush from Nike. Instead of focusing on the athletic greatness taking place in London, England, Nike filmed everyday athletic moments of greatness at other Londons around the world. Using the hashtag line #FindGreatness, Nike made a dig at the pomp and circumstance of the Olympics without actually mentioning it.

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Make it real

In relation to sponsorships, this all means brands must facilitate the fan experience. Their participation must enhance the experience for the audience and in so doing, hopefully earn some love from the fans. That holds true whether the sponsorship plays out at live events, through media, quietly at community gatherings around the country, or via a combination of platforms. So there are really two parts to any good sponsorship: the deal with the sponsored property itself, and how you activate it with the audience. 

Chris Brown, Sputnik.

“What you’re trying to do with a great sponsorship is attach to a property people love and have that love reflected onto you,” says Chris Brown, managing director at Sputnik, a PR agency specialising in amplifying experiential and sponsorship campaigns. “If you do it right and it goes really well, people love you. If you do it poorly you get the opposite of love, which is indifference.” And, occasionally, annoyance for interrupting something special. 

Brown says the onus is on brands to “earn” their place as a sponsor, through activation. Take ANZ for example, which Sputnik has worked with on several sponsorship activations. The bank backed the Black Caps (a partnership that dates back to the National Bank days) and sponsored the ICC Cricket World Cup, but that was just one facet of its support. As part of its Dream Big campaign, deserving community cricket clubs were asked to tell their story and a few were selected to get the things they needed in terms of gear, uniforms, spruced up pitches and clubhouses. Watch one or two of the accompanying videos on YouTube and you’ll see genuine emotion and gratitude evident from grant recipients. While each specific grant may not have garnered national media attention, they did attract plenty of local press and social media, especially in rural areas. That’s an approach Brown reckons people appreciated—and thereby earned ANZ the right to be associated with Kiwi cricket.

“[Sponsorship is] a portrait painted with a thousand brushstrokes,” he says. “You’ve got to [activate it] with a complex range of activity that proves to the consumers that you have the right to have your logo on a property they love.” 

Tui’s Catch a Million campaigns, which offered cash to spectators who caught a clean one-handed six and saw the nation’s stadia filled with orange Tui t-shirts over the past two seasons, have been great examples of a sponsor enhancing the experience for fans. It was a simple idea that captured the imagination of the nation—and the commentators—and it showed why activation is so vital: it works hard to make the investment in a property pay off; it reminds punters why a sponsor deserves to be there; and, in rare cases like this, it takes on a life of its own and gains a fair swag of media attention. 

In the past, the general rule of thumb was that brands should dedicate three dollars to activation for every dollar spent on the sponsorship. But some believe that ratio has increased to five or maybe even six to one now. Very few brands announce how much their sponsorships or endorsement deals cost. But to service them, brands are now turning to hybrid PR agencies that amplify the activations on the ground as well as through the paid, owned and earned media model. 

Alana O'Neill, MediaWorks

Not just sport

Despite Gemba’s internal research showing sports only take up two of the top ten spots on the list of Kiwis’ national passions, two-thirds of sponsorship dollars are directed there. So what else is there? Charity and community initiatives can often be successful, again, as long as the sponsorship is engaged in genuinely. So while a bank like ASB has the clout to sponsor a sports team as big as the All Blacks, it also sponsors plenty of community initiatives, like financial literacy programmes in schools and St John’s Ambulance (as well as raising money, it also installed defibrillators in every one of its branches, providing a valuable community service, especially in rural Kiwi communities where access to the expensive life-saving machines might otherwise be scarce).  

There’s also plenty of love for New Zealanders’ favourite television shows. That’s something our broadcasters are capitalising on, and, in addition to the traditional ‘brought to you by’ broadcast sponsorships, both TVNZ and MediaWorks are offering new and creative integrated sponsorships, often for the popular reality shows. Toyota’s popular unibrowed Hilux spokesman squeezed his way into One News’ weather intros; Georgie Pie’s 7 Days sponsorship birthed the ‘Next Comedy Apprentice’ competition, which made use of MediaWorks’ multiple media platforms to promote and select a winner; The Block and Our First Home were full to bursting with sponsors; and the list goes on. 

Like live events and sports, the enthusiasm fans feel for media properties is transferrable to sponsoring brands. But Alana O’Neill, MediaWorks’ integration general manager, says it’s important to have alignment between the brand and the property. “It’s a really serendipitous moment when the client concept and content environment come together.”

But, she warns, it’s got to be done with the audience in mind.

“The minute you start to cross that line from a content point of view, the audience will call you on it.” The takeaway again being that brands must earn their right to sponsor something beloved and add to the experience.

Roger Beaumont, ASB

"Sponsorship is harder to drive direct rewards and outcomes from than other forms of marketing, but when it works it can be very powerful." Bob Gill

All about the brand

With a whole world of sponsorship opportunities out there, it can be confusing knowing where to start. As a first step it might pay to take a leaf out of ASB’s book. The bank is heavily involved in sponsorship around the country, at both national and local levels, and executive general manager for marketing and communications Roger Beaumont says the priority for them when assessing a potential sponsorship is brand value alignment.

“One of our platforms is helping others in time of need. I don’t think you could point to another organisation that does that more than St. John. The values, the way our culture as a bank works, we genuinely want to help people. In times of emergency or financial need, we want to be there as well.” Importantly, Beaumont says ASB treats every sponsorship as a way to further its brand story. 

Lion has also embraced that philosophy and Steinlager Pure’s sponsorship of Kiwi freediver William Trubridge formed the basis of a major, multi-pronged brand campaign, culminating in an attempt to break the world record that was broadcast live on TV One’s Breakfast. Steinlager also activated its sponsorship of the All Blacks during the 2011 Rugby World Cup brilliantly by releasing a limited edition white can that proved to be extremely popular—and slightly controversial given it wasn’t a sponsor of the tournament (see sidebar). 

Spark has done an about-turn on its sponsorship strategy in recent years. As younger Auckland-based customers were its main target—and because it wasn’t tracking well enough to justify the investment—it canned its All Blacks sponsorship in 2012 and looked for areas where that demographic over-indexed and where there was some clear air. It wanted to build something from the ground up. And it settled on basketball, videogames and music. It’s now using that money to build four high-tech basketball courts around Auckland as part of The Boroughs project and its Spark Lab project has run a series of events on a range of different topics. 

Bob Gill, Brand Advantage

Conversely, Jockey’s marketing manager Will Radford says the three-year sponsorship deal it signed with the All Blacks had been hugely successful, giving it a lot of market share and elevating the brand in terms of top of mind perception. It also influenced retailers, with the ‘Supporting the Boys’ launch campaign getting a lot of support from the trade and a big share of shelf-space. He says the sponsorship also played a key role in launching into the brand into a new channel: grocery.

Luckily, there’s no need to navigate sponsorship deals alone. Agencies like Spur and Gemba both help brands identify opportunities that will deliver the kinds of audiences and outcomes they’re looking for. At BrandAdvantage, director Bob Gill says they employ proprietary tools for valuation and outcome measurement to help brands understand the deals they’re making. “We have found that most of the rights owners/properties have great knowledge about their organisation and what they believe they can deliver, however they tend to have far less knowledge about their audiences,” says Gill. This can result in overstatement of things like airtime value, which might be based upon poorly negotiated media rates, or reporting media values on misaligned demographics. 

The appropriate metrics for sponsorships are not always financial ones. Corporate social responsibility initiatives differ from more commercial, awareness-based sponsorships, even though they still often come under the marketing department.But whether the yardstick is investment or objective-based, measurement is critical. “If you can’t establish a metric for any component, then not only do you need to question its worth in the first instance, but in a review you will not have defining outcomes but simply a best guess,” says Gill. And when it comes to setting those outcomes, he says the rights owner should be jointly responsible for performance—minimum audience attendance or viewership, exclusivity, ambush protection, those sorts of things. “You should, through measurement, share the risk and reward of success or sub-level performance,” he says. “Sponsorship is harder to drive direct rewards and outcomes from than other forms of marketing, but when it works it can be very powerful.”  

  • This story originally appeared in the May/June edition of NZ Marketing. Subscribe here

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