1 April 2005 | 0
Of all the possible advertising and marketing tactics that are available, sponsorship remains probably one of the hardest to get right.
It is often perceived as a luxury and only of use to large brands. It has been proven to raise awareness of well-known tech brands like Eircom, Vodafone, Sage and CMS Peripherals, usually in combination with a variety of other marketing and brand awareness campaigns.
If you are a small tech firm, it’s sometimes hard to resist what looks like a good sponsorship opportunity and the prestige that could conceivably rub off onto your brand as a result. Yet it’s also easy to miss the mark completely if you don’t do your homework.
In these cost conscious times, is sponsorship of any use to smaller firms? We asked a panel of PR/marketing experts for their views.
Judge opportunities case-by-case
Like many elements of the marketing mix (above the line activities and PR in particular), sponsorship is a notoriously grey area when it comes to judging whether it adds any value to your business (in terms of either revenue or increased awareness/goodwill).
At the end of the day, there is no cut and dry answer as to whether sponsorship is a good or a bad thing. It really has to be considered on a case-by-case basis, dictated by a combination of the size of organisation, its marketing objectives and the return on investment offered.
‘Ninety per cent of outbound marketing activity should, for most SMEs, be measurable and should generate leads,’ according to Tom Murphy, VP of Marketing at Cape Clear Software, the Dublin based technology developer. Murphy takes the view that sponsorship can be good value for large multinational organisations that have cash to spend but, for SMEs, all available marketing budget should be ploughed into generating leads and, ultimately, revenue.
Even with that view, he does accept that sponsoring is an activity that is highly focused (a specific industry conference or event for example) and can work well in making a small organisation appear larger than it maybe is, whilst at the same time generating awareness and leads.
However, how do you measure the effectiveness of sponsorship? It is an age-old question and, again, can be notoriously difficult. A small focused event or conference could be measured by the number of attendees, leads collected or leads generated through activity following the event.
Conversely, more generic sponsorship (sporting or music events for example) is a different case. Focus groups could be targeted to develop brand awareness but, like most above-the-line marketing, actually attributing sales to the activity is almost impossible. If a firm can’t show that some revenue is being generated from an activity (whether sponsorship or anything else) then they shouldn’t be doing it.
When one thinks of sponsorship, it normally conjures up images of multinational names on Formula 1 cars and premiership soccer shirts, but look at many of the SMEs in Ireland that sponsor local GAA and soccer clubs. They find that local awareness, goodwill and, most importantly, custom are generated as a result of their sponsorship and it doesn’t cost the earth. They make sponsorship work for them.
Scott McInnes, Freedom Marketing
Association is the key
Alongside public relations, advertising and promotion, sponsorship forms part of an integrated mix of marketing tools designed to communicate an organisation’s brand. The power of sponsorship is primarily its ability to establish, reinforce or reposition a brand’s personality and to raise its profile amongst a targeted audience.
It has a number of key strengths over other marketing communications tools, including offering the opportunity to give to consumers rather than just take; bringing a brand alive and giving it a personality; and enabling a company to promote itself in a relaxing environment and in one that the customer has chosen. In co-sponsorship deals, it offers the opportunity to be associated with bigger brands. Sponsorship also has the capacity to offer long-term results.
The key to sponsorship is association. It is essential that sponsorship is the ‘right fit’ and that the consumer can easily make the connection between the two. An organisation must therefore thoroughly examine all sponsorship opportunities and consider those that best fit its audience.
Budget is also a consideration. Major sponsorship opportunities like sporting tournaments or music festivals are often beyond the reach of many businesses – the financial commitment is just too big. However, there are alternatives worth considering that can be as effective and which do not take much of a bite out of a marketing budget.
‘DIY sponsorship’, where sponsors create their own properties, is one category beginning to grow in popularity. It requires a degree of original thinking, but it can be a highly effective way of promoting a company’s brand and retaining control over how it wants to be perceived.
Another option worth considering is broadcast sponsorship. This sponsorship category can offer great results to all parties involved. According to research by Amarach Consulting, broadcast sponsorship is ‘a powerful tool for keeping your brand front-of mind’ and consumers view it more positively than advertising. Again, for the more budget conscious, sponsoring a radio slot or programme rather than a TV programme is a more viable option. Stations will often include ad spots as part of the overall package, ensuring maximum exposure for the brand. The same goes for sponsoring a newspaper or magazine column. The audience reach can be considerable and the impact very effective due to the targeted nature of the sponsorship.
In summary, sponsorship is a marketing tool all too often ignored by businesses as it is perceived as a luxury and often eliminated from the overall marketing mix. Nonetheless, by considering all sponsorship options available and mixing this with a bit of creative thinking, it can deliver the desired results.
Bernice Burnside, communications consultant, Impact Communications
Make direct, lead-generating activities priority
Marketing communications is a discipline, which is firmly in transition. With the proliferation of new media and the challenge for marketing professionals to break through increasing clutter, sponsorship is one marketing tool that is receiving greater focus, particularly from larger organisations. Sponsorship is not new to the ICT sector. Readers will certainly be familiar with high profile sponsorship deals by mobile phone operators and telecommunications service providers. The sponsorship market in Ireland, which is valued at EUR65M, is spread amongst 15 to 20 major sponsors, but is primarily concentrated in the Business to Consumer as opposed to the Business to Business segment. However, the question is whether sponsorship can form a viable marketing activity for smaller organisations and whether it can deliver a tangible return on investment.
Sponsorship allows the client to present a very credible message to its target audience and research has shown that audiences find sponsorship far less intrusive than traditional advertising. However, sponsorship cannot be used in a vacuum and should be seen as complementary to other elements of the marketing mix.
Smaller organisations have limited financial resources and marketing funding is considered a precious asset. In times of economic uncertainty, I encourage companies to use their marketing budgets wisely and to look at more direct, lead-generating activities as a priority. For example, a telemarketing campaign can be easily measured and can deliver a tangible return on investment. In contrast, the return on sponsorship deals can be extremely difficult to calculate. However, for organisations with greater financial resources at their disposal, sponsorship can prove to be a very effective tool when used in conjunction with other elements of the marketing mix.
While not directly comparable to sponsorship, donations can be a cost-effective way to gain short-term publicity and build goodwill towards your brand. Donating IT equipment for example to worthy causes such as charities, voluntary organisations or community projects can build a positive association with your brand in the minds of users. However, companies need to follow a process of careful selection to ensure that image-fit and audience-fit are closely aligned to their overall marketing strategy.
Deirdre Cashion, consultant, ProfIT Marketing
Avoid being overshadowed by bigger brands
Sponsorship is not a ‘black and white’ issue, but nine times out of 10, it is not the route for IT companies in the SME bracket to adopt. There are three basic levels of sponsorship:
Good Cause Sponsorship centres on donating a few euro to a good cause that is close to your employees, company or market. It is best dealt with by setting a limited annual budget backed by clear criteria to evaluate the various approaches received.
CRM Sponsorship is an opportunity to be one of a number of secondary sponsors to a particular property. This has more to do with the number of free tickets or hospitality packages your ‘sponsorship’ buys you. It can be a worthwhile option if you get the right guests to attend and, in the case of a new business drive, if you follow-up with the right sales activities.
Full Monty Sponsorship is the classical role of sole, title or lead sponsor to a property. This is fully fledged sponsorship and should be assessed very carefully along the following lines:
* What are you hoping to achieve by this sponsorship and could it be achieved more efficiently by other means?
* What would you need to add to the sponsorship in order to maximise your association with the property? Would the owners of the property be supportive of you in developing the sponsorship to your company’s needs?
* What would the total investment in the sponsorship be? The industry rule is that you need to spend approximately 10 times the price of the sponsorship rights to maximise your association with the property.
* What is the history of the property? Who has sponsored it before and with what success?
* What term of sponsorship is being offered? It is best if you can sponsor an event for at least 5 years to drive association levels.
* Finally, what ‘permission’ does your company have to associate with this property? Put another way; is it a good fit for your company and target market?
The main problem for smaller companies in being a lead sponsor is that frequently the company’s own proposition and values are not clearly understood by its target market. In this circumstance, a sponsor can be swamped by a more famous property. It is best to engage in sponsorship only when your own brand is well established, then a well-devised sponsorship works by grafting the property’s values onto your brand gradually over time and after considerable investment. Make haste, slowly!
Conor Dempsey, director, Corporate Division, Slattery Communications
The longer the association, the better
At Esat BT, we have a number of different types of sponsorships. We have a prime media sponsorship: The Last Word with Matt Cooper on Today FM. We also have a number of event sponsorships. The most prominent is our Young Scientist and Technology Exhibition, which takes place in the RDS every January and focuses on secondary school students. In addition, we have also sponsored the Golden Spider Awards for the past five years, an event rewarding excellence in online communications largely focused on businesses. This year for the first time, we also sponsored the ICT Excellence Awards and the ICT Evolve Conference, Ireland’s premier forum for ICT companies.
Although I haven’t listed all, you can see from the above that there are quite a range of sponsorships in our portfolio. We entered into media sponsorships this year and they serve a dual role for us. One is to increase overall company brand awareness, the other is to drive awareness of broadband Internet access, which is a key product for our SME and consumer markets. We track for spontaneous and prompted awareness a number of times during the year to ensure we’re making progress. Our sports sponsorships, Wanderers Rugby Club in Dublin (and previously Garryowen Rugby Club in Limerick), link us into corporate hospitality events, which is important for our corporate market. Our other sponsorships allow us to present our ICT credentials and to network with senior business and association influencers.
With a number of markets to serve – corporate, SME and residential – the portfolio of sponsorships looks quite expansive, which isn’t always going to be the case for companies who serve fewer market segments. Often of course, you’re better to concentrate on a specific area and try to create a real linkage between your brand and that community, be it in arts, music, sport or whatever. In our case, we lean towards sponsorships that have a technology edge that fits with our business. Perhaps our most successful has also been the one we’ve been in the longest; we’re now in our seventh year of Young Scientist, however we still pick up Aer Lingus in tracking, as they were the previous sponsors for 33 years!
Michael Kennedy, director of marketing, Esat BT
Elevate hands-on experience with sponsorship
Selling technology is different to selling soft drinks. When it comes to sponsorship, many technology companies seek to integrate a hands-on product experience into a sponsorship and therefore gain strong value-add. This means allowing the audience to use the technology as they participate in or view whatever is being sponsored. This shows the product and brand in proper context and allows targeted communication of specific brand attributes.
Let’s take Sun Microsystems, for example, who sponsored a live global event that brought the White House to the people via the Internet. For Sun’s part, it supplied the video and audio streaming technology to broadcast the event and therefore allow potential customers gain an interactive experience of its technologies. Not only did Sun create brand awareness, it also gained the benefit of customers and government prospects using its technology.
Sponsorship is not a stand-alone activity. It must be considered as part of an overall marketing programme and its value and return analysed accordingly. The key to advising clients on the benefits of potential sponsorships is having an understanding of their products, market and competitors. We typically look for sponsorship opportunities that meet the following criteria:
* The event should allow the client to demonstrate its capability in a hands-on way.
* If there are multiple channel partners involved, the sponsorship should demonstrate their respective capabilities and technologies.
* The sponsorship should be carefully targeted at the relevant market.
* Where possible, the event sponsorship should be paid for through products and services supplied, rather than monetary payment.
* In a technology business environment that has become very results oriented, a sponsorship must be measurable in terms of return on investment. Today, that normally means revenue.
Allan Chapman, managing director, Comit Marketing
Comit-ing to ICT Expo
Cable & Wireless and ALLnet (previously known as Cable & Wireless Systems Integration) are clients of Comit Marketing. They came together with one of their channel partners, Avaya, to provide Internet connectivity for exhibitors, organisers and seminar rooms at a recent ICT Expo trade fair. This proved to be a great way of demonstrating how these different companies could provide a high quality, complete communications package by exploiting their respective capabilities. Cable & Wireless provided a high-speed Internet connection, Avaya provided wireless systems to network the show and ALLnet’s systems integration team looked after client-end network integration and connection. This sponsorship worked because everywhere there was an Internet connection, their respective brands were there to illustrate their capability. This was a great example of a rifle-targeted sponsorship, where mutual capabilities were demonstrated in a way that the target market could easily see the benefits. The result was a better return on investment and positive brand association for the respective channel partners.
Allan Chapman, Comit Marketing