Hey Big Spenders: Don’t Ruin It for Everyone Else

Having studied sponsorship since shortly after it was defined as a discrete form of marketing, I remain perplexed by certain conditions that seem never to improve despite better intelligence, more useful tools and the overall increased sophistication that surrounds the industry.

One example is the continuing lack of investment in measurement that was highlighted by the recent World Federation of Advertisers/Lumency survey of sponsorship decision-makers and was the subject of a recent post.

Another is why so many sponsorships are not fully activated when it has been established that activation is what produces positive partnership results.

I asked a CMO about that last issue the other day and his response was literally an aha moment for me. His explanation was so simple and sensible that it surprised me I had never thought of it, nor had anyone else previously articulated it, but perhaps it took someone with his experience having previously worked for a multibillion-dollar global brand and now serving as an executive with a significantly smaller regional U.S. company.

His reasoning was that brands with smaller budgets must maximize the return from every dollar spent; they simply cannot afford waste. If they pay for an official partnership, it will become a major marketing program and they must do everything they can to leverage the investment and ensure it pays off.

On the other hand, a company with a nine- or ten-figure marketing budget has more leeway to dabble. The downside to purchasing sponsorship rights and not utilizing them beyond the visibility and other benefits provided by the property is far less than for the smaller brand, as it has so many marketing irons in the fire.

That creates a sponsorship landscape consisting of three types of sponsors. (For this purpose, I am not including small hyperlocal deals, only sponsorships of say six figures or more.)

First you have major spenders where sponsorship is an important and strategic part of the marketing mix. They do things the “right way,” spending to activate and measure their efforts effectively. This is where you will find industry leaders such as AB InBev, Coca-Cola, Verizon and others.

Second you have the dabblers. Big brands with the ability to spend on fees and see if they can gain some traction with their target audience without going all in on activating a sponsorship. Not surprisingly, these brands are not terribly concerned with measurement, either.

And third you have the brands that are investing a sizable portion of their marketing budget in sponsorship and can’t afford not to get it right.

Clearly the middle group is capable of creating havoc for rights holders and other sponsors. Chances are they will not see positive results from their efforts and they will move on to try other things, creating churn for properties and perpetuating the impression that “sponsorship doesn’t work.” They don’t provide their fellow brand partners with opportunities for cross-promotions, or shared data and research. They are likely the brands that report that they don’t have an established strategy, a system for measuring ROO or ROI, or even insight into how much they spend.

Most vexing of all is that there isn’t a way to get rid of them. They are akin to the uneducated gambler with cash who shows up at the blackjack table and ruins the game for the rest of the players because he doesn’t understand the rules. Let’s just hope other brands don’t choose to move to another table.