Sports marketing and sponsrship article from Adnews in 2008

With the Olympics looming it is worth admiring the scale of the commercial machine that is driving the event. Beijing is not simply the 29^th Olympiad, it is the largest advertising and sponsorship event in the world to date.   Despite the time zone challenges, the Chinese games have captured corporate and public attention for lucrative US and European broadcast rights. The scale of investment, achievement and ongoing fascination with all things Chinese has propelled this Olympics into a world of its own. 

As impressive as the Chinese games will be, part of the commercial success can be attributed to an increased global interest in event and sports sponsorship. Year on year growth of direct sponsorship from 2007 is 15%, the vast majority of this going to sports sponsorship. This is more than twice the average global growth of the advertising industry as a whole. This year, USD$43.7 billion will be spent globally on direct sponsorship contracts. As a rule of thumb, for every $1 in direct sponsorship at least $1 is spent activating the sponsorship and a further $1 in advertising them - meaning companies are spending over USD$131 billion in 2008.

Not surprisingly, APAC is the fastest growing region in 2008 with direct sponsorship investment growing from USD$7.2B to almost USD$11B. While the Olympics have played a key role, the explosion of IPL cricket in India has also been a key player. Smaller events such as the Singapore Formula 1 and the prestigious Volvo Ocean Race also have an important role in a crowded 2008 sporting calendar.

Part of the shift in advertising dollars to major event sponsorship is a response to the evolving media landscape and how we consume media as a whole. We have become a world of media snackers with more sources of content than ever before. Effective event sponsorship delivers value for the sponsor in short form formats, like the news, or long form full telecast formats. Great sponsorships are also media agnostic and are prominent whether the viewer is watching TV or online.

KFC’s sponsorship of the cricket is an example of Australia’s most effective sports sponsorshis. While I should declare my interest as the head of the agency of record for KFC, the program is also the result of the strong relationship between KFC and Cricket Australia. On-pitch, in stadia and perimeter branding rights and the use of branding for marketing purposes combine to surround the event and audience with the brand values of KFC and excitement of the game. The package is carefully crafted to support, not annoy the viewing experience, while ensuring the two cannot be separated. The sponsorship is further leveraged with franchisees, suppliers and partners of KFC to deliver an impact that a standard media schedule could not deliver.

The question for marketers and media professionals is how to value and gauge the likely impact of competing sponsorship alternatives. While a sporting sponsorship delivers excitement, does an arts sponsorship deliver a depth and connection that is more meaningful?  Does the star power of Cate Blanchett provide an associative “brand halo” when considering a secondary or tertiary sponsorship with the Sydney Theatre Company?

If you are unsure of these issues, or have never purchased a sponsorship, it is best to employ a specialist in the area. The initial package presented rarely represents all the value available, and tools are available to assess the likely media equivalent impact of any given sponsorship. Finally, advice on how to activate and leverage the sponsorship delivers almost all the value of the program, so taking the risk is not worth it.