Are You Buying Sponsorships or Investing in Partnerships?

My recent work with a handful of brands seeking to establish or refresh their approach to sports and entertainment partnership has been a good reminder that as much as we discuss strategy in blog posts, podcasts and industry conferences, a majority of sponsorships remain ad hoc projects, fragmented and siloed within the company rather than optimized, integrated and aligned behind growth and enterprise-wide impact.

That is not the way sponsorship decision-makers and managers want it to be, of course. They understand the need for integration with and support from multiple other areas of the business. They just need to persuade senior executives and the leaders of other departments and business units.

One of the most effective tactics in those internal conversations is to position integration as a shift from being buyers of sponsorships to investors in partnerships. A buyer acquires something for limited use or to serve a single purpose—an arms-length transaction. While such purchases may have their place, their capacity is limited.

An investor seeks to maximize its return, exploring and developing multiple ways in which it can earn dividends, and working in concert with the investment property.

To determine whether a marketer is a buyer or investor, I often ask internal stakeholders a series of questions that serve to open their eyes to the difference between the two—and to what they are leaving on the table if they are in the former camp.

The critical first question is: Do you know what you want to do and with whom to do it?

Starting with the “what”: Sponsorships and partnerships should originate from the outside in. They should be the organic answer to the question: What does the business need?

Effective partnership investments don’t begin with the brand’s marketers exploring what to sponsor. The start with the search for a solution to a business challenge, such as brand equity is declining or sales are off in a particular demo.

Once you have determined that a partnership will help accomplish a priority objective, it is time to build a strategy to leverage the relationship to not only meet its main goal but also take advantage of its ability to serve a wide range of other business-building purposes.

Moving on to the “who”: A sponsorship buyer needs nothing more than a vendor willing to sell packages of rights and benefits. Investors require partners that will share responsibility for achieving mutual success and who see the long-term perspective, not a short-term transaction.

The decisive factor for selecting sponsorships that are bought is fit with the target audience. Although it’s not wrong to ensure interest from those the alliance is intended to reach, it stops well short of a fully realized relationship.

The criterion for a partnership investment is alignment of brand values on top of audience fit. As an investor, you must do your due diligence to understand your partner’s brand: what it stands for; what its key attributes are; and its potential to impact the same elements of your brand.

In my next post, I will share the other two questions in the buyer/investor determination.