I sponsor, therefore I am
Sponsorship I Companies are increasingly turning to sponsorship to counter consumers« weariness with traditional advertising. Events and product placements are giving this formerly »silent” discipline a professional edge.
Sponsoring I Companies are increasingly using sponsorship to counter consumers' weariness with traditional advertising. Events and product placements are giving the previously "silent" discipline a professional drive, with Mister Switzerland Robert Ismajlovic recently revealing in a magazine that he goes into a "shopping frenzy" in Coop City. If you had asked the beau about his favorite vacation destination or the Figaro of his choice, the answers would have been just as original: Malta and Gidor. Celebrity endorsement, in which celebrities are persuaded to make constructed brand-relevant statements, is generally summarized under the term sponsorship. According to estimates by the International Events Group (IEG) in Chicago, sponsorship generated a global sales volume of over 24 billion US dollars. And with a forecast growth of nine percent, sponsorships are likely to exceed the 26 billion US dollar mark in the current year. "This means that sponsorship has established itself as the fourth most important communication instrument after advertising, promotions and PR," says IEG Managing Director Laren Ukman with conviction.
On the rise worldwide
If the popular below-the-line marketing tool does not come across as contrived as in the example cited, the optimistic forecasts can be endorsed with a clear conscience. A prime example is the collaboration between Alinghi and UBS, which triggered an overwhelming international response and spontaneous national enthusiasm in crisis-ridden Switzerland. Even commercially critical contemporaries - often to be found in the cultural sector - no longer find it difficult to present themselves with their sponsors.
The latter have also come to the realization that the less influence they have as sponsors on the content of their commitments, the more credible and authentic the communication instrument appears. This is another reason why sponsorship generally shows fewer signs of saturation than media advertising and trade fairs. Advantages such as staging an experience or addressing customers in their free time emotionalize the sponsor brand on an exclusive advertising and relationship platform.
In view of the international figures, the negative development in Switzerland seems somewhat strange at first glance: The internationally active Fritz Kaiser Group Sports Consulting (FKG) in Vaduz estimated the sponsorship market at around 366 million francs in 2002, which corresponds to a 2.9 percent drop in turnover. On closer inspection, however, it is clear that the slump has hit media advertising much harder than sponsorship: the advertising statistics of Wemf AG recorded a decline of 4.8 percent in 2002.
However, because the concept of sponsorship is interpreted broadly both in common parlance and in specialist literature, trends should be treated with caution. In addition, empirical studies are still in short supply.
Obsolete country comparisons
One exception to the rule is the sponsorship study conducted by the GfS Research Institute in collaboration with the European Sponsorship Exchange (ESB), which is examining the future prospects for sponsorship by Swiss companies for the fifth time. According to the latest overview, the company managers surveyed expect expenditure to remain more or less stable - depending on the scope. If the study participants are to be believed, interest in local commitments appears to be waning in favor of international projects. However, sponsorship budgets with a regional and national reach are likely to remain the same over the next six years.
In the distribution of reduced communication budgets, sponsorship as an instrument retained its third place with a share of 11.8%, just ahead of public relations (11.4%), which has grown in importance. However, the lead would be even smaller if the event marketing share in sponsorship were filtered out more precisely. The trend in Germany appears to be moving in the opposite direction. There, the importance of sponsorship has risen steadily over the past five years. According to the study "Sponsoring Trends 2002" by the University of the Federal Armed Forces in Munich, sponsorship accounts for 15.3 percent of companies' communication mix. However, a direct comparison with Switzerland is not possible, explains Thomas Stalder, CEO and Managing Partner of Liechtenstein-based FKG, because the "club-like sponsorship scene" in Germany also shows networked expenditure in the sponsorship budget, which in Switzerland is distributed across the classic media channels and PR measures. It is clear that sponsorship and other communication instruments have come under pressure everywhere during the economic crisis. "And this applies to all areas of sponsorship," says independent communications and sponsorship consultant Elisa Bortoluzzi.
On the other hand, the distinguished expert knows that sponsorship money - especially for sport, culture and social affairs - has always been subject to fluctuations depending on the economic situation. The two strongest areas of sport and culture had to cede shares to social/environmental and media sponsorship in 2002, but were able to retain their top positions. The market is no longer prepared to fill the coffers of organizers of international projects with astronomical sums, is the reason given. "Broadcasting rights in particular will generate less income in future, as TV broadcasters will no longer be able to refinance these costs with income from traditional advertising," the sponsorship expert continues.
However, according to ESB Managing Director Hans-Willy Brockes, if you look at Swiss football, it is remarkable that a number of new contracts have been concluded: Axpo is the name sponsor of the Super League, Swisscom is the title sponsor of the Swiss Cup. Stalder from FKG sees great potential above all in lifestyle-oriented extreme sports, because these have their own culture with which the young target audience can identify more easily. There is even potential in cultural sponsorship. "This must and will take new creative paths in its implementation. Music and literature in particular have a huge potential for fascination - also for young people. This is both a challenge and an opportunity," says Elisa Bortoluzzi, adding that "the slogan 'do the unexpected' is often forgotten in cultural sponsorship".
From a macroeconomic perspective, the success or failure of a sponsorship project has a lot to do with social developments - and with consumer habits. These are influenced by a variety of factors, not least of which is the media. Who would have thought a year ago, for example, that a sailing crew from the Alpine country of Switzerland would be making headlines in the sports columns for weeks on end?
Does sponsorship work in the long term?
For the head of the European Sponsorship Exchange, Brockes, the Alinghi victory is an indication that sponsorship can certainly trigger short-term impulses - something that an (image) advertising campaign or other stand-alone measures, for example, can only achieve with difficulty: "The old wives' tale that sponsorship only has a long-term effect dates back to the time when people didn't dare to define clear sponsorship goals and also measure them."
Both Bortoluzzi and Stalder attribute the fact that sponsorship budgets are less dependent on economic trends to the fact that the contracts are usually multi-year and cannot simply be "cut" during a crisis: "Sponsorship is now seen as an instrument that influences both brand awareness and brand image and is therefore defined, targeted and managed for the long term. Careless, hectic measures could jeopardize a brand value that has been built up over the years with a lot of money." And: "It's easier to forego classic advertising measures before putting a well-established sponsorship project at risk and then accepting criticism from the public and the media," says Bortoluzzi. Brockes adds, almost heretically, that in contrast to traditional advertising, the benefits of sponsorship are now very well recognized. "However, the prerequisite is that the companies have a clear objective and monitor the success of the measures."
During the crisis in particular, more money is being invested in evaluating and researching the return on investment, and vice versa.
Stalder describes a current trend as saving on copyrights. As a result of the sluggish economy, sponsors are once again focusing more on what they get in return. "Today's sponsors want more for their money, specifically relevant services and not just additional hot air. Today, the sponsored party must actively develop additional added value for the sponsor," says the FKG manager, summing up the current development in the sponsorship market. "Thanks to decision-support tools such as SportsMaxx from FKG, sponsors have more power because they know the alternatives and can assess where they might get more for less money." Elisa Bortoluzzi observes something similar: "Larger budgets today focus even more strongly on those areas in which the sponsor can fully and exclusively make its mark." Swiss properties without a sufficiently high profile are therefore likely to find it difficult in future to attract financially strong, internationally active major sponsors.
Elisa Bortoluzzi is convinced that the pressure to save money during the economic crisis is driving the professionalization of sponsorship. This in turn should increase its acceptance in society. Sponsorship is facing a turning point. The importance that communication as such has gained due to corporate governance guidelines (CSR) will have consequences. "The discussion surrounding corporate social responsibility will lead to sponsorship being implemented more comprehensively in CSR projects, as we have already seen abroad," says Bortoluzzi.
For this reason, we should by no means look to the future of domestic sponsorship with complacency. It is true that Switzerland only plays a modest role in the country portfolio for major national and international brands as a result of advancing globalization. However, the threat of a sponsorship brain drain in the industry appears more serious. Although geographically small, Switzerland has enjoyed an edge in terms of know-how thanks to the presence of important international agencies. "At the end of the nineties, the sponsorship debate was much livelier. Today, we have to make sure that we remain attractive for sponsoring companies and associations. But many outstanding personalities in sponsorship are leaving the profession or going abroad. I see this as a greater danger than the current economic crisis and, of course, it also has to do with the fact that the career prospects for sponsorship specialists in this country are rather modest," warns Bortoluzzi.
New contracts are giving Swiss football a boost again.
Between promotion and sponsorship: Lovely goes to the consumer.
Golden rules for sponsors...
+ Clear target and target group definition
+ Integration of sponsoring measures in the overall marketing mix, including sales tasks
+ Regular success monitoring and evaluation of all commitments
+ Budget at least ten percent of the sponsoring budget for success monitoring and optimization
+ Respect the partner's integrity and do not interfere in their areas of competence
+ Always remember that success cannot be bought
...and sponsors
+ Always get precise information about the sponsor and know exactly how and how much value you can create for them.
+ Be critical of your own offer, i.e. always ask yourself what the sponsor gets out of my activities.
+ Since in sponsoring the service serves as a platform for the sponsor's investment, the sponsored party must know specifically what relevant and realistic value it can provide in return.
+ Total service orientation of the account team
+ Open up creative opportunities for the sponsor to activate a platform, but at the same time control the rights
+ Keep the sponsor's appetite for this communication tool alive with enthusiasm and professionalism
Luca Aloisi
On the rise worldwide
If the popular below-the-line marketing tool does not come across as contrived as in the example cited, the optimistic forecasts can be endorsed with a clear conscience. A prime example is the collaboration between Alinghi and UBS, which triggered an overwhelming international response and spontaneous national enthusiasm in crisis-ridden Switzerland. Even commercially critical contemporaries - often to be found in the cultural sector - no longer find it difficult to present themselves with their sponsors.
The latter have also come to the realization that the less influence they have as sponsors on the content of their commitments, the more credible and authentic the communication instrument appears. This is another reason why sponsorship generally shows fewer signs of saturation than media advertising and trade fairs. Advantages such as staging an experience or addressing customers in their free time emotionalize the sponsor brand on an exclusive advertising and relationship platform.
In view of the international figures, the negative development in Switzerland seems somewhat strange at first glance: The internationally active Fritz Kaiser Group Sports Consulting (FKG) in Vaduz estimated the sponsorship market at around 366 million francs in 2002, which corresponds to a 2.9 percent drop in turnover. On closer inspection, however, it is clear that the slump has hit media advertising much harder than sponsorship: the advertising statistics of Wemf AG recorded a decline of 4.8 percent in 2002.
However, because the concept of sponsorship is interpreted broadly both in common parlance and in specialist literature, trends should be treated with caution. In addition, empirical studies are still in short supply.
Obsolete country comparisons
One exception to the rule is the sponsorship study conducted by the GfS Research Institute in collaboration with the European Sponsorship Exchange (ESB), which is examining the future prospects for sponsorship by Swiss companies for the fifth time. According to the latest overview, the company managers surveyed expect expenditure to remain more or less stable - depending on the scope. If the study participants are to be believed, interest in local commitments appears to be waning in favor of international projects. However, sponsorship budgets with a regional and national reach are likely to remain the same over the next six years.
In the distribution of reduced communication budgets, sponsorship as an instrument retained its third place with a share of 11.8%, just ahead of public relations (11.4%), which has grown in importance. However, the lead would be even smaller if the event marketing share in sponsorship were filtered out more precisely. The trend in Germany appears to be moving in the opposite direction. There, the importance of sponsorship has risen steadily over the past five years. According to the study "Sponsoring Trends 2002" by the University of the Federal Armed Forces in Munich, sponsorship accounts for 15.3 percent of companies' communication mix. However, a direct comparison with Switzerland is not possible, explains Thomas Stalder, CEO and Managing Partner of Liechtenstein-based FKG, because the "club-like sponsorship scene" in Germany also shows networked expenditure in the sponsorship budget, which in Switzerland is distributed across the classic media channels and PR measures. It is clear that sponsorship and other communication instruments have come under pressure everywhere during the economic crisis. "And this applies to all areas of sponsorship," says independent communications and sponsorship consultant Elisa Bortoluzzi.
On the other hand, the distinguished expert knows that sponsorship money - especially for sport, culture and social affairs - has always been subject to fluctuations depending on the economic situation. The two strongest areas of sport and culture had to cede shares to social/environmental and media sponsorship in 2002, but were able to retain their top positions. The market is no longer prepared to fill the coffers of organizers of international projects with astronomical sums, is the reason given. "Broadcasting rights in particular will generate less income in future, as TV broadcasters will no longer be able to refinance these costs with income from traditional advertising," the sponsorship expert continues.
However, according to ESB Managing Director Hans-Willy Brockes, if you look at Swiss football, it is remarkable that a number of new contracts have been concluded: Axpo is the name sponsor of the Super League, Swisscom is the title sponsor of the Swiss Cup. Stalder from FKG sees great potential above all in lifestyle-oriented extreme sports, because these have their own culture with which the young target audience can identify more easily. There is even potential in cultural sponsorship. "This must and will take new creative paths in its implementation. Music and literature in particular have a huge potential for fascination - also for young people. This is both a challenge and an opportunity," says Elisa Bortoluzzi, adding that "the slogan 'do the unexpected' is often forgotten in cultural sponsorship".
From a macroeconomic perspective, the success or failure of a sponsorship project has a lot to do with social developments - and with consumer habits. These are influenced by a variety of factors, not least of which is the media. Who would have thought a year ago, for example, that a sailing crew from the Alpine country of Switzerland would be making headlines in the sports columns for weeks on end?
Does sponsorship work in the long term?
For the head of the European Sponsorship Exchange, Brockes, the Alinghi victory is an indication that sponsorship can certainly trigger short-term impulses - something that an (image) advertising campaign or other stand-alone measures, for example, can only achieve with difficulty: "The old wives' tale that sponsorship only has a long-term effect dates back to the time when people didn't dare to define clear sponsorship goals and also measure them."
Both Bortoluzzi and Stalder attribute the fact that sponsorship budgets are less dependent on economic trends to the fact that the contracts are usually multi-year and cannot simply be "cut" during a crisis: "Sponsorship is now seen as an instrument that influences both brand awareness and brand image and is therefore defined, targeted and managed for the long term. Careless, hectic measures could jeopardize a brand value that has been built up over the years with a lot of money." And: "It's easier to forego classic advertising measures before putting a well-established sponsorship project at risk and then accepting criticism from the public and the media," says Bortoluzzi. Brockes adds, almost heretically, that in contrast to traditional advertising, the benefits of sponsorship are now very well recognized. "However, the prerequisite is that the companies have a clear objective and monitor the success of the measures."
During the crisis in particular, more money is being invested in evaluating and researching the return on investment, and vice versa.
Stalder describes a current trend as saving on copyrights. As a result of the sluggish economy, sponsors are once again focusing more on what they get in return. "Today's sponsors want more for their money, specifically relevant services and not just additional hot air. Today, the sponsored party must actively develop additional added value for the sponsor," says the FKG manager, summing up the current development in the sponsorship market. "Thanks to decision-support tools such as SportsMaxx from FKG, sponsors have more power because they know the alternatives and can assess where they might get more for less money." Elisa Bortoluzzi observes something similar: "Larger budgets today focus even more strongly on those areas in which the sponsor can fully and exclusively make its mark." Swiss properties without a sufficiently high profile are therefore likely to find it difficult in future to attract financially strong, internationally active major sponsors.
Elisa Bortoluzzi is convinced that the pressure to save money during the economic crisis is driving the professionalization of sponsorship. This in turn should increase its acceptance in society. Sponsorship is facing a turning point. The importance that communication as such has gained due to corporate governance guidelines (CSR) will have consequences. "The discussion surrounding corporate social responsibility will lead to sponsorship being implemented more comprehensively in CSR projects, as we have already seen abroad," says Bortoluzzi.
For this reason, we should by no means look to the future of domestic sponsorship with complacency. It is true that Switzerland only plays a modest role in the country portfolio for major national and international brands as a result of advancing globalization. However, the threat of a sponsorship brain drain in the industry appears more serious. Although geographically small, Switzerland has enjoyed an edge in terms of know-how thanks to the presence of important international agencies. "At the end of the nineties, the sponsorship debate was much livelier. Today, we have to make sure that we remain attractive for sponsoring companies and associations. But many outstanding personalities in sponsorship are leaving the profession or going abroad. I see this as a greater danger than the current economic crisis and, of course, it also has to do with the fact that the career prospects for sponsorship specialists in this country are rather modest," warns Bortoluzzi.
New contracts are giving Swiss football a boost again.
Between promotion and sponsorship: Lovely goes to the consumer.
Golden rules for sponsors...
+ Clear target and target group definition
+ Integration of sponsoring measures in the overall marketing mix, including sales tasks
+ Regular success monitoring and evaluation of all commitments
+ Budget at least ten percent of the sponsoring budget for success monitoring and optimization
+ Respect the partner's integrity and do not interfere in their areas of competence
+ Always remember that success cannot be bought
...and sponsors
+ Always get precise information about the sponsor and know exactly how and how much value you can create for them.
+ Be critical of your own offer, i.e. always ask yourself what the sponsor gets out of my activities.
+ Since in sponsoring the service serves as a platform for the sponsor's investment, the sponsored party must know specifically what relevant and realistic value it can provide in return.
+ Total service orientation of the account team
+ Open up creative opportunities for the sponsor to activate a platform, but at the same time control the rights
+ Keep the sponsor's appetite for this communication tool alive with enthusiasm and professionalism
Luca Aloisi
