The success of sports sponsorship in reaching consumers on a global scale is confirmed by massive marketing investment in the world's flagship events. The Olympics, World Cup Football, World Cup Rugby, Formula 1 and the multitude of golf and tennis championship witness the world's top soft drink brands reinforcing their global stature, reports Martin Cannon.

Sponsorship isn't the easy option to global brand dominance: prime sponsorship properties are relatively few, with a price tag to match their exclusivity. While affordable options may abound, their relevance to brand needs can be marginal at best. So any consideration of sports sponsorship should not be based on envy of what others have achieved but on a dispassionate analysis of a brand's needs and a realistic assessment of the likelihood of sport delivering those requirements. Thus the first rule of developing a sponsorship campaign must be that it is driven by the brand and not the sport.

The second rule is that brand and sponsorship should sit comfortably with each other in the minds, not just of the principals, but in those of the consumer. Polo is an up-market sport played and watched by people with, or at the very least access to, large sums of money. It has never been and never will be a suitable vehicle for the promotion of mass market, consumer products. By the same token, Rolls Royce does not spend any money on football sponsorship.

To work well, a sports sponsorship property should also become an integral part of a brand's total proposition, not merely a bolt-on accessory that operates separately from other marketing activities. Such considerations eventually mean that the proper use of sponsorship entails far greater expenditure on exploitation on top of the original rights fees. One rule of thumb is that the sponsor needs to spend at least twice the entry cost on support and exploitation, although ratios of eight or even 10 to one are not unknown.

Then there is the type of sponsorship to consider. All parties in sport need more money; funds can be directed to teams, events, governing bodies or individuals. Each has its attractions: teams and events have certain assurances of continuity and performance but individuals can seize the public imagination when they succeed; or totally lose it when they fail or discredit themselves through the use of drugs, alcohol or any one of a growing range of other anti-social activities.

When you add to this growing list of criteria the variety of global, regional, national or local sponsorship properties on offer then it becomes increasing apparent that, in sports sponsorship, one size does not fit all.

For many years, sponsorship managed to escape much of the disciplined scrutiny that was applied to other elements of the marketing Pantheon. As it has grown in stature, effectiveness and cost this is no longer true. Recognition of sponsorship's potential contribution to brand building and overall business strategy has moved it up the agenda and forced direct comparison to other marketing tools. Yet there is still some reluctance to allocate sufficient resources to audit the role and potential of sponsorship or to research its effects.

On the assumption that sports sponsorship has joined a brand's communications repertoire, it is no longer an option to sit back and expect the consumer to beat a path to its door. Sponsorship needs to draw on all the conventional marketing tools - a situation that can create the appearance of internal competition for resources unless there is clear understanding of its integral part of the brand proposition.

Such understanding will prevent the perception that sponsorship, for example, is taking from the public relations or direct mail budgets and foster a situation where it is seen that they - and other company departments and resources - are being used through the medium of sponsorship to achieve a common goal. The sponsorship objectives will determine what company or external agency resources are required but are likely to include some, or all, of the following:

  • Advertising
  • Public relations
  • Direct mail
  • Corporate affairs/hospitality
  • Human resources for staff involvement and motivation
  • Promotions and incentives
  • Internet
  • Design/photography/print
  • Sales
  • Legal
  • Research - at every stage: before, during and after the sponsorship

With careful selection and assiduous application of financial and commercial resources, sports sponsorship can communicate to the consumer in a uniquely powerful way. Its seductive power can also affect the businessmen who pay for it or, rather, whose companies pay for it. Sport has long profited from the schoolboy ambitions of businessmen or their desire to rub shoulders with their heroes. But the modern, commercial sponsor now brings as much to sport as sport brings to business. The real foundation of successful sponsorship is a mutually beneficial partnership that meets the needs of all parties involved.

Such partnerships have put a sharper commercial edge on current sponsorships, driving sales and profits as well as image. Sport, too, has commercial ambitions that can be achieved more effectively through partnerships with sponsors. Handled well, sports sponsorship can add value to a brand. In a world where there is often little difference in quality, content or price, this can become the most significant motivator to purchase.

Just as sponsorship has matured over the recent past, so too have its audiences. In extremely crowded sponsorship markets it is no longer sufficient to simply brand an event, activity or personality. The sponsor's involvement has to mirror the fans' commitment to and passion for the sport - from the showpiece events to everyday, grass roots activities in the clubs, schools and parks.

Sport, too, has risen up government agendas as its value in health, education and the development of stable and fulfilling communities is recognised. In England, for example, the Government's Sportsmatch scheme provides substantial cash incentives for companies to sponsor grass roots sport particularly in underprivileged communities and regions. Such support enables sponsor companies to use sport to meet brand and corporate social responsibility objectives and requirements.

Modern sponsorship is a complex and evolving discipline that has proved particularly successful at reaching audiences fragmented by an explosion in available leisure time activity and communications channels. Often fraught with difficulties, not least those generated by its participants, it nevertheless offers one of the most exciting and powerful tools available to marketers.

Main Terms of a sports sponsorship contract

Parties

  • Check constitution for authority and capacity.
  • Request copies of relevant contracts.

Term

  • Do you require an extension before or after the fixed period?
  • Specify the number of events.
  • Renewal.

Sponsor's rights

  • Naming.
  • Advertising and branding.
  • Corporate hospitality.
  • Presentation.
  • Association marketing.
  • Filming.
  • Control over organisation of event.
  • Approval.

Event owner's obligations

  • Organise and run event.
  • Restrictions on selling other commercial rights.
  • Not to alter materially the format and schedule of the event.

Warranties to be given by event owner

  • That key contracts have been concluded.
  • That event owner has the power and authority to enter into the contract.
  • That no conflicting contracts have been or will be entered into.
  • That the event owner owns or has the exclusive right to licence the intellectual property rights to be used by the sponsor.
  • That the marketing rights can be exploited.
  • That the leading players or teams have contracted to participate.

Sponsorship fee

  • Cash/non-cash.
  • Payment dates to be performance related.
  • Tax considerations.

Television

  • Quantity and quality.
  • Identity of broadcasters.
  • Regulatory issues.
  • Further marketing opportunities: prevent ambush marketing.

The venue

  • Avoid cluttered branding in and around venue.
  • Signage.
  • Alternative venues.
  • Suitable facilities.

Termination

  • Specify breaches.

Insurance

  • Cover all eventualities.

Trade marks and copyright

  • Ownership.
  • Use.
  • Sub-licensing.
  • Goodwill.

Reproduced with permission from Soft Drinks International, May 2004
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