1

P.Dehlsen

A successful sponsorship involves a company to approach with a strategy

Introduction
Sponsorship is a form of marketing activity wherein, at its simplest, one organisation
contributes to the costs of another organisations event in return for a benefit.
Sponsorship can be very big business nowadays such as in the Olympic Games or it
can be at a local level. But no matter how much money is involved there are key
factors involved in a successful sponsorship campaign. This paper identifies those
key factors underpinning strategy and examines several sponsorships to assess the
efficacy of the strategy.

Source: http://www.sponsormap.com

The Value of Brand Building

The importance of brand building is a relatively new phenomena. According to Lesley
Craig and Lindsay Moore (Craig et al. 2002) it was not until the late 1990s and the
new economy, that intangible assets such as brand became capital that could be
leveraged for a new source of income. Building on brand is therefore important and
sponsorship is one method of getting the brand image in front of an audience.
Perusal of any televised football event will show team-members apparel emblazoned
with a sponsors logo (assuming sponsorship for the purpose of this paper) and the
televised event means that the brand image will be seen by large numbers of
viewers. Thus the value of the sponsorship can be reasonably determined by
reference to the estimated audience size. Simply, the bigger the audience the more
the sponsorship is worth.

Source: http://www.brightonsc.org.au

Key Objectives of a Sponsorship

A key objective for a sponsor is therefore to have its brand in front of the audience.
The benefits of this include image enhancement through exposure of name or logo,
increased sales, positive publicity, increased business and consumer relationships,
promotion of the corporate good citizen and greater exposure to the marketplace
through bigger or different audiences. And, for the sponsored, goals and benefits
include financial injections, product or service assistance, increased credibility,
greater media coverage, enhanced workplace and public relations (Friedman 2004
and 2007; also Pope 2000, Table 1).

Risks of sponsorship can include perceptions of impropriety, conflict of interest,

undue influence and cronyism, potential embarrassment from inappropriate
partnerships, unclear or breached terms of agreement, accounting and taxation
difficulties through revenue projection uncertainties, undervaluation of sponsorship
and poor return on investment (Australian National Audit Office (ANAO)). For an
example of the illegal use of public monies in a government sponsorship program
and which contributed to the end of the 12 year reign in government by the Canadian
Liberal Party see Wikipedia Sponsorgate (Wikipedia).

Source: sponsormap.com

Strategy
In order to bring these goals to fruition, and avoid risk, a strategy is required and,
accordingly, success will be dependant on the ability to deliver on the strategy
(KLMINC 2011a). That lofty goals and ideals appear reasonable on paper they are in
practice quite difficult to achieve. It is noted that Many new executives, and even
those long within the executive ranks, are unsure how to properly engage in strategic
thinking (KLMINC 2011b).
Before embarking on a sponsorship program, an organisation should consider such
matters as what they do, who their customers are and what type of marketing
strategy will be the most effective for the organisation. Having satisfied itself that a
sponsorship will be effective an organisation can then set about formulating a
strategy.
A first step in sponsorship effectiveness is the correct identification of a firm as a
sponsor. (Pope 2000). Far from being a simple matter, correct identification will

involve due diligence and risk assessment (as outlined above) and should not be a
decision based solely on whim or fancy.
The plan or strategy document will address matters such as;

Benefits to parties

Risk management

Ethical and moral standards

Marketing

Administration arrangements including human resources

Financial and accounting considerations and arrangements including

management of funds

Restrictions and quality standards

Legal issues including contractual matters and intellectual property

rights

Reporting, evaluation and assessment

(See ANAO2012, Friedman)

Source: events.leagueofblackwomen.org

Of course not all sponsorship events will require extensive planning and preparation
but even small one-off events will benefit from by giving due consideration to the
above and having some form of plan in place. It was commented by Pope in 2000
that many sponsorships under three years duration failed to have adequate, if any,
plans and evaluation methods in place (Pope 2000). Further, research by Amis,
Slack and Berrett also notes that successful sponsorships were an intrinsic part of
the overall marketing plan of an organisation whereas failed sponsorships had been

entered into in a piecemeal fashion with little thought directed to marketing (Amis et
al 1999).
There are any number of reasons why a sponsorship might fail but some common
reasons include:

Not understanding that the sponsorship is driven by consumers needs,

Choosing the wrong sponsorship,

Poor resource allocation,

Failure to perform adequate due diligence,

Paying for rights fees and doing nothing with the sponsorship,

Misunderstanding the relationship between the different stakeholders,

Sponsorship jumping or too much time with the same sponsorship,

Insufficient marketing diversity,

Failing to secure trade interest and support in the sponsorship,

Not understanding that an event takes time to build and grow,

Failure to evaluate or specifically measure ROI.

(Reynolds 2004, Sports Nexus 2009).

Sponsorships
When choosing a sponsorship it is not necessary for sponsor and sponsee to be in
directly related industries. For example, while sports shoe manufacturers Nike and
Adidas sponsorship of sporting events can be seen to be directly related ie sports
people wear sports shoes during the event, a Telstra or Vodafone sponsorship of the
same event is not as clear. What is relevant in this situation though, is audience
demographic. Simply put, people who watch sport are very likely to buy telephones
or subscribe to networks. Different measures of success can be seen in this

example. On the one hand Nike and Adidas is successful in terms of brand building
by having top athletes wear the shoes, whereas on the other hand Telstra and
Vodafone may be more successful in terms of sales, as more money is likely to be
spent on communications rather than sports shoe-ware. Choice of sponsorship will
therefore depend on what goals are important for an organisation.
Management consultants KLM Inc. argue that a successful brand needs to stand for
something that actually matters (KLMINC 2011c). Standing for something that
actually matters also touches on ethical and moral considerations and the associated
risks.
Voukefalas
Picture 1

Source: Gawker.com
In tough economic times attracting the right sponsor will involve a degree of
creativity. Struggling Greek amateur football team, Voukefalas, depends on 67-yearold madam Soula Alevridou for survival. The team plays at football games wearing
jerseys emblazoned with the logos of two local brothels, "Villa Erotica" and "Soula's

House of History". The team also reportedly receive unspecified in-kind and in-house
benefits for successful competitions (Berman 2012).
Although there is no legal impediment to such a sponsorship in Australia (and
Greece), it is quite likely to attract moral arguments and criticisms based on religious,
cultural and feminist issues. While the teams financial difficulties may have been
alleviated in the short term, in the long run it may be a less than satisfactory
sponsorship given the ethical and moral arguments. It is questionable what message
the team intends to give the spectator and is a core issue alongside risk
management and relationships between stakeholders that may, or may not, have
been thoroughly considered.

Source: execdigital.com

Space Jump
In August 2012 Felix Baumgartner took the heroic plunge from space and in the
process broke a number of records. Images of the jump were beamed across more
than 40 networks in 50 countries around the world in addition to social media
channels (Clancy 2012).
The event was manufactured by Red Bull, whose logo could be seen on Felixs
helmet, spacesuit, parachute, support team clothing and mission control amongst
other places. Additional marketing includes a plethora of hats, t-shirts, jackets,
Christmas cards, toys etc (Red Bull Shop 2012). The importance of the event cannot
be underestimated and has been reported as not just the Space Jump but the Red
Bull Space Jump, one of the most buzzed about events of the year (Heitner 2012).
According to Ben Sturner, President and CEO of Leverage Agency the Red Bull
Stratos was one of the greatest marketing stunts by Red Bull, and perhaps the

greatest marketing stunt of all time (Heitner 2012). The company doesnt simply
sponsor events in a traditional sense but creates events and content around those
events plus product distribution and media management through its media business
Red Bull Media House (Clancy 2012).
Clancy reports that Red Bull positions itself as a young, thrill seeking organisation
that creates extremely dangerous events and that these thrill seeking type events
are designed to appeal to young adults rather than children or teenagers (Clancy
2012). Although the immediate audience may be young adults it is submitted the Red
Bull Media House is well aware that todays children and teenagers are tomorrows
young adults and that fact is integral to the marketing strategy.
The Red Bull Space jump is a good example of the time involved in bringing a major
event to fruition. The event was over 5 years in preparation and the jump lasted less
than 20 minutes. It goes without saying that a major event such as this requires
close co-ordination and co-operation between partners and reference to a very
detailed strategy.
Regarding financials, Red Bull is a privately owned company and therefore it is
unclear how much was spent on the jump. Some executives estimate that after the
jump Red Bull company could be worth over 5 billion pounds (Clancy 2012).
Whatever the financial investment it seems clear from the reports that the returns, at
least on branding, have already been very satisfactory (Clancy 2012, Smith 2012,
Boies 2012, Heitner 2012).
From a social media point of view success can be gauged more readily from
recorded page views, like numbers, tweet mentions and other social media
performance indicators. Red Bull Stratos event is reported to have generated over
2.6 million social media mentions on the day alone (Boies 2012). Graph 1 shows the
level of interest on Twitter where users have tweeted with the most popular
hashtags.

Graph 1, Twitter Hash Mentions

Source: Boies 2012

The Red Bull Stratos homepage also records the public approval rating where, at the
time of writing (7 December 2012), Facebook likes are 837,000 and Tweets over
28,000. By 16 December 2012 Facebook likes had risen to 842,000
(www.redbullstratos.com): A significant increase. The actual page views could be
much higher than these figures and would be available to the company via Google
analytics. However, these bald figures alone do not address a questions such as
how the event has improved the companys image? To answer this and other less
tangible questions, more complex methods of evaluation are required (see
sponsormap.com 2012).
Figure 2: Stratos Homepage

Source: http://www.redbullstratos.com/

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It is clear that in order for Red Bull to bring to fruition five years of work, break world
records, do what no person has done before, contribute to scientific understanding
and achieve high levels of social media comment, a very sound sponsorship strategy
has been put in place with due regard to the minimum factors outlined earlier.
Conclusion
A successful sponsorship depends on many factors, including those identified in this
paper, which need be co-ordinated by a carefully crafted strategy. And, the higher the
stakes in the sponsorship, the more attention must be given to the detailed strategy
plan. A failed sponsorship in contrast, can be distinguished by reference to one or
more factors that have either not been implemented or poorly implemented.
Depending on the goals, measures of success can be gauged through numbers
recording sales figures, audience size and media hits but evaluation of brand
awareness and goodwill, although not impossible to determine, will require more
complex evaluation methods. A good indication of successful sponsorship and brand
awareness is however, when the public continue to talk about an event long after the
event, which it is submitted will be the case for the Red Bull Space Jump.

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