How To Advertise: An Analysis of Contemporary Advertising (part 28)

Sponsorships and Events (part B)

by

Charles Lamson

While there are many avenues and events available for sponsorship, most of them are grouped into six categories: sports; entertainment; causes; the arts; festivals, fairs, and annual events; causes, arts and culture; and venue marketing. 

Sports Marketing

Sports marketing includes everything from the Olympics to NASCAR racing to professional athletic leagues. Companies do not have to be big multinationals to reap rich rewards from sponsorships---if they do it properly.

By buying the rights to serve Gatorade on the sidelines of professional basketball and football games, that brand has received more credibility than any television ad could provide, at a fraction of the cost. During every game, TV cameras show pros drinking the product in big Gatorade cups. And it is clear that they are doing it because they want to, not because their agent told them to.

In hotly contested markets, the giants in their fields fight over sponsorship rights. Nike battles Adidas, Coke spars with Pepsi, Kodak runs up against Fuji, and Visa struggles against American Express. This has certainly contributed to the rising costs of sponsorships. 

Many sports events are strictly local and threfore cost much less while giving the sponsor closer access to attendees and participants. Firms with modest event-marketing budgets, for example, use options ranging from local golf tournaments and tennis matches to surfing contests.

An increasingly popular promotion is the company-sponsored sports event. The event can serve as an effective focal point for an IMC (integrated marketing communications) campaign if it ties the company to the local community hosting the event as well as to the regional or national audience. But without a concerted effort to tie an event to other marketing communications activities like a currently running ad campaign, the money spent on sponsorship is generally wasted.

Some companies associate their names with existing events. Mountain Dew, Taco Bell, Sony, and T-Mobile, for instance, are the "gold" sponsors of ESPN's Winter X Games and regularly renew their sponsorships (2005).

But controversy often swirls around big sports sponsorships. The most controversial practice is ambush marketing, a promotional strategy nonsponsors use to capitalize on the popularity or prestige of an event or property by giving the false impression that they are sponsors. Ambush marketing techniques like buying up all the billboard space around an athletic stadium, are often employed by the competitors of the property's official sponsor. Fuji did this to Kodak in Nagano. One of the reasons this works is because people are often confused about who the official sponsors actually are---again, the problem is clutter. Just because a company advertises on the Olympic broadcast, for instance, does not mean it is an official sponsor. Ambush marketers take advantage of this.

Sports marketing is now a worldwide phenomenon. In Latin America, sponsorship of soccer teams has grown dramatically. In Argentina alone, it rose from $820,000 to more than $25 million in 2000. Out of 20 Argentine soccer teams, 17 now have official sponsors. The largest local sponsor is Quilmes beer, which paid $3 million to have its logo on the shirts of the country's most popular team, the Boca Juniors.

Entertainment

After sports marketing, the largest area of sponsorship is entertainment, which includes things like concert tours, attractions, and theme parks. For instance, numerous attractions at Disneyland and Disney World, are sponsored by major corporations such as GE, AT&T, ARCO, Kodak, and Carnation.

Brands even sponsor entire tours. The Vans Warped Tour has a rotating lineup of many bands with multiple stages and compounds sponsored by other companies, like Eastpak. Booths and tents at the festival provide ample targeted-marketing opportunities for cosponsors like Wells Fargo and Vagrant Records.

Festivals, Fairs, and Annual Events

One of the largest annual events in the state of Michigan is the National Cherry Festval in Traverse City. Held every year around the Fourth of July, it boasts an impressive lineup of events and promotional activities that drives both attendance and sponsor visibility. Events include, band parades, races, concerts, tournaments, an antiques show, an air show, Native American exhibits, and much more. Among the official sponsors Pepsi, Ford, Toyota, Intel, BankOne, and Sony.

Similarly, annual events such as business-to-business trade shows attract large numbers of sponsors as well as exhbitors because of the economics of being able to talk to prospects and customers in the same place at the same time.

Sometimes, the competition to sponsor an event even comes from within the same company. The Florida Renaissance Festival, for instance, received calls from three AT&T entities inquiring about sponsorship availabilities. Two calls were from different departments and the third was from one of AT&T's agencies. The festival ultimately signed with the phone company's Hispanic marketing department.

Causes

Sponsorships of charity events and educational institutions is a tried-and-true PR activity that often fits with the IMC strategy of mission marketing. A number of large corporations (including Chevrolet, AT&T, American Airlines, Pepsi, and Kodak) cosponsored the Live Aid concerts, for instance. 

A vice president for corporate relations at one large event sponsor, referred to mission marketing activities as "enlightened self self-interest." People appreciate the fact that the business does not really get anything tangible out of them to put in the bank.

Health care marketers such as hospitals, HMOs, and managed-care companies are increasing their sponsorship activities. 

Arts and Culture

Symphony orchestras, chamber music groups, art museums, and theater companies are always in desperate need of funding. What that means is that this is still a relatively untapped area, and it provides outstanding sponsorship and underwriting opportunities for both national and local firms interested in audiences on the highest end of the income scale.

Unfortunately, this group is likely to be hardest hit by any legislation aimed at ending tobacco sponsorships. For instance, the Gallaher Group, Northern Ireland's largest cigarette manufacturer regularly donates about a million pounds (U.S. $1.5M) to the Ulster Orchestra, the flagship of the arts in Northern Ireland. In the face of government plans to curtail tobacco advertising and sponsorships, the Association for Business Sponsorship for the Arts gave Gallaher its highest award for outstanding corporate citizenship, citing it for investing in the cultural life of the committee in which it operates.

Venue Marketing

Finally, an area not covered by IEG's report is venue marketing, a form of sponsorship that links a sponsor to a physical site such as a stadium arena, auditorium or racetrack. In 2000, for instance, the Great American Insurance Company made a good name for itself by offering the city of Cincinnati about $75 million over 30 years for the naming rights to the baseball stadium on the Ohio River. The city accepted the offer and since 2003, the Cincinnati Reds have played at the Great American Ballpark.

Likewise, Denver has Coors Field, and Charlotte North Carolina, has Ericson Stadium, Candlestick Park in San Francisco is now Monster Park. And SBC has put its name on San Francisco's baseball park. But what happens when sponsors with naming rights become a liability? When Enron filed for bankruptcy in 2001, the Houston Astros shelled out $2.1 million to buy back the naming rights to Enron Field. In 2002, the Astros found another sponsor, and Minute Maid Park was born.

Venue marketing is changing the economics of professional sports. Sponsorships help pay for stadium renovations and upgrades and may assist the home team in defraying the high cost of leasing. Many teams keep the money from their stadium luxury suites, stadium advertising, naming rights, and food and beverage concessions. Under the new economic rules, big stadium revenues are essential to signing big-name players and staying competitive.

*SOURCE: CONTEMPORARY ADVERTISING 11TH ED., 2008, WILLIAM F. ARENS, MICHAEL F. WEIGOLD, CHRISTIAN ARENS, PGS. 352-355*

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