Sponsorship in Marketing

Effective Partnerships in Sports, Arts and Events

T. Bettina Cornwell

• Publisher: Routledge
• Year: 2020
• ISBN:
  9781000036862
• Edition: 2
• Topic: Business
• Subtopic: Scienze motorie e sportive
• Index: Business

Sponsorship of sports, arts or events can be a powerful form of marketing communication for businesses and organizations. This new edition of Sponsorship in Marketing introduces the fundamentals of sponsorship-linked marketing, helping the reader to understand how sponsorship can be planned, executed and measured.

Drawing on original research and exploring key theory, best practice and cutting-edge issues, the book fully explains how the sponsor can implement successful sponsorship to achieve communication and engagement objectives. It covers every important conceptual and functional area of sponsorship in marketing communications, including:

• understanding the technology-led transformation of sponsoring
• learning about audiences, strategies and objectives
• leveraging and activation in traditional and social media
• building sponsorship portfolios and rosters
• managing and ending relationships
• understanding public policy and legal issues

Every chapter includes international case studies and examples, test questions, and data from real organizations, business, campaigns and events, vividly illustrating the link between fundamental principles and effective practice. This updated edition features a new model of the sponsorship process with an ecosystem perspective, discussion of endorsers and influencers in sponsorship, an introduction to the impact of streaming on sponsoring, and entirely new thinking on sponsorship returns and evaluation. No other book provides such a comprehensive, evidence-based introduction to sponsorship, demonstrating how organizations can connect brands to real life.

This is essential reading for all students and practitioners working in sport marketing, sport business, events marketing, arts administration, business communication or marketing management.

PART I
Background basics

1
How we got here

Why would a company whose heritage is jeans become a sponsor of the San Francisco 49ers National Football League (NFL) team and have its name appear on the team’s stadium? At its simplest, sponsorship in marketing begins with an organization’s investment in an event, person or activity, typically with the expectation of recognition or collaboration that supports the marketing goals of the investor. The sponsorship phenomenon is a cultural, social and commercial plethora of connectivity. To understand sponsorship from a marketing perspective is to understand it as part of a full-scale dynamic evolution taking place in marketing and communications. The ascendency of sponsoring as marketing communications activity is part of the rise of indirect forms of marketing. The two words that describe and explain the rise of sponsoring and other forms of indirect marketing are “embedded” and “engaged.”

The 20-year contract between Levi Strauss, the popular denim jeans company founded in 1873, and the new San Francisco 49ers Stadium in California is an unfolding story of the obvious and the unexpected. The $220 million agreement to call the 49ers football team’s home the “Levi’s Stadium” brings together two iconic brands with roots in the same region. The authentic links between the two are easy to see. Why is it a good business idea for a maker of casual clothing to sponsor a football stadium for $11 million per year for 20 years? Only two decades ago, expenditure like this for a brand like this would have been unlikely, even unimaginable.

What does the Levi’s brand gain from its alignment with the 49ers Stadium? There is the typical signage on and around the stadium, luxury suites, access to the arena for its own events, and access to star players and even the coach. These assets of the deal are not, however, worth $11 million per year. What Levi’s has purchased is a brand image boost, a reconnection to its San Francisco heritage in a modern form. The jeans market has become fragmented, with old competitors to Levi’s such as Lee and Wrangler still in the picture but with premium denim brands such as True Religion and Diesel making significant inroads.

Levi’s relationship with the San Francisco 49ers allows them to tell new stories about the brand by leveraging the remainder of the advertising budget, for example, with athletes as influencers. Mark Foxton, Levi’s Head of Sports Marketing, looks for influencers with storytelling skills and genuine enthusiasm for the brand. According to Foxton (Williams 2019), “We look to connect through authenticity, personalization and customization, and platforms that allow us to find original content,” he said. “We’re not just going out buying social spots. We’re looking at getting fans more involved.” With Levi’s advertising budget of $80+ million per year, the annual $11 million cost to connect with the also iconic 49ers seems more reasonable, especially when one considers that this connection can differentiate the brand from its competitors and help the brand reach a youth market that is more focused on today’s football than yesterday’s gold mining history. Every year, sponsorship brings together a huge array of organizations and individuals that must align on points of interest for a contractual period. How did this major collaborative promotional platform evolve?

The ascendency of indirect marketing

The ascendency of sponsoring as marketing communications has been part of the rise of indirect forms of marketing in the past decade (Cornwell 2008). Product placement in movies and programming, gamification and the use of social media by brands have all moved in the same direction: away from mass communication advertising and toward integrated communication where the brand becomes part of the programming, part of the sharing and part of the life experience.

When a brand name is at the heart of the action, on a player’s uniform or in the hand of the actor on the screen, it comes alive and, importantly, it is difficult to edit out of the picture. Take for example, how New Coke, drunk by characters during the Netflix series Stranger Things (Beer 2019a), became part of the narrative. Or consider the moment when Megan Rapinoe struck her now iconic statue pose after scoring against France in the 2019 Women’s World Cup. The only brand in focus was Nike on her jersey. Embeddedness is particularly valuable in sport given consumers’ desire to see live programming in real time. It is the case that many a game has been recorded, but unlike other entertainment programming, real-time engagement with sport tends to drive viewers toward immediate rather than delayed viewing.

Embedded and engaged relationships are also found in cause-related sponsorships but may take a subtle, benefactor tone. Consider the arts sponsorships of the Mostly Mozart Festival by financial services company American Express. When Lincoln Center, the venue for the festivals, communicates, information is included about its “lead sponsor,” and when billboards promote events such as “Ninagawa Macbeth,” American Express is featured. Music goers understand that American Express is supporting a passion of theirs and is part of their community.

Trends of change

The evolution of strategic thinking in sponsorship is exemplified by Mastercard Chief Marketing Officer Raja Rajamannar in his explanation of the decision to partner with Riot Games in esports making Mastercard the first. After detailing that brand impact, measurable new business and competitive advantage are key (Beer 2019b), he stated that:

Advertising is dead in its current form…. The future is all about story making, which is creating and curating experiences for customers and consumers. They narrate those experiences, they tell their own stories, and the brand is subtly embedded in those stories. As opposed to us throwing messages at our customers.

Advertising has not died, but it has morphed, and in many instances, it has become secondary to sponsorship. Sponsorship investments often dictate collateral advertising expenditures and creative platforms. One could say sponsorship is, in many industries, the tail that wags the advertising dog. The media landscape evolved toward embedded communications in the early 2000s in response to advertising avoidance made possible by technology and through technology-enabled lifestyle changes, including delayed viewing. Current trends in the evolving communications landscape are also based on technological change, but the new trends are also socially grounded:

1. Content on Demand – People are moving away from packaged pay TV and toward streaming content, and in particular live content, when and where they want it. The move away from broadcast content is also a move away from standard advertising distribution and standard formats toward embedded and targeted communications that seem natural, or native, in the context.
2. Device and Platform Fluidity – People use a variety of devices and content providers across an array of places. Device and platform fluidity leads to expectations of instantaneous, high-quality content everywhere and disappointment when not found. The emphasis is on visual content and ever more on video.
3. Two-Way Communication – The potential to communicate directly and publicly with and about organizations, brands and their representatives has never been higher. To view, to like, to share, to recommend, to comment and to follow – or unfollow – are all ways for brands and consumers to have two-way conversations. This democratization of information flows has moved brands to take stands on social issues and to respond to audiences in new, direct and public ways and to become more transparent.
4. Transformation of Community and Influence – The ways in which people identify others and connect with them, as well as the ways in which groups and individuals hold influence over others have been transformed. This trend leads organizations and brands to seek to develop communities and spokespeople or align with groups and individuals that are authentically part of existing conversations.

All of these trends are complementary to sponsorship. Sponsored content is often live streamed and is visually oriented. Two-way communication in social media typically surrounds sponsored events and activities. Further, on some platforms, such as Twitch, a live streaming platform popular with esports players, a constant stream of viewer interaction is possible. Perhaps most important, sponsorship connects brands and companies with established communities in sport, the arts, music, entertainment and charity.

Sponsorship growth

Sponsorship spending has been steadily increasing year over year, and sponsorship leveraging, or the additional amount spent related to the sponsorship, has also increased (Figure 1.1). There is considerable plasticity in sponsorship figures since each deal (or fee) is negotiated, so prices may decrease and influence apparent patterns, while the number of sponsorship contracts might actually rise. Statista (2019a) reports global advertising spending in 2019 as $563 billion. In the same year, sponsorship spending worldwide exceeded $65 billion (IEG Sponsorship Report) and is estimated to reach $71.3 billion in 2020.

Figure 1.1 Worldwide Spending on Sponsorship and Leveraging, 2010–2020

Source: Based on compiled information from IEG Sponsorship.com.

Thus, while sponsorship spending is dwarfed by advertising spending, it helps fuel and increasingly direct how brands spend their ad dollars. In Figure 1.1, the estimated sponsorship leverage spending (the investment beyond the initial deal) is based on industry leveraging ratios (deal-to-leverage ratio, Sponsorship.com 2016) and demonstrates the significance of sponsorship-related advertising and promotion. While not all sponsorship activations (e.g., on-site) would be accounted for in worldwide advertising estimates, the vast majority of leveraging (e.g., advertising and promotion) would be. That is to say that sponsorship-themed advertising (e.g., the Budweiser beer Clydesdales in advertisements during US Super Bowl football programming) takes a large chunk of advertising spending each year.

Other indirect marketing activities have also grown. Brand placement in movies and television programming, games and digital media is poised to expand. From a base of $4.7 billion spent in 2012 on product placements in the US, expansion has reached $11.4 billion in 2019 (Statista 2019b). Considering that US product placements have been roughly half of world placement in prior years, one can estimate that world product placements exceeded $20 billion in 2019. Digital advertising spending worldwide was $333 billion in 2019 but expected to exceed 517 billion by 2023 and in that year to constitute more than 60% of total media advertising spending (Enberg 2019). Interestingly, many of these direct and indirect marketing activities are also sponsorship linked and themed.

Growth in properties and prices

“The global sports market reached a value of nearly $488.5 billion in 2018, having grown at a compound annual growth rate (CAGR) of 4.3% since 2014, and is expected to grow at a CAGR of 5.9% to nearly $614.1 billion by 2022” (Business Wire 2019). The growth of sport in many countries has outpaced gross domestic product growth. For the sports industry, it is also important to note that sports properties are now monetized from a mix of merchandising, sponsorship, media rights and gate receipts. The increasing popularity of women’s sport is another potential growth area for sponsoring partnerships.

It is not only sports events that have increased in absolute numbers, live events of all kinds have grown. For example, the worldwide live concert industry will reach $31 billion in 2022 with $24 billion of that coming from sales of tickets (Sanchez 2018). Food festivals have expanded as well, and while their nu...