Special Report: Sponsorship and event marketing: Corporate sponsors taking up government shortfall

February 5, 1996 by Strategy Staff

Also in this report:

- Non-profits woo corporate sponsors: Many charitable organizations marketing themselves as advertising opportunities: page 30

If one word can characterize an entire decade, the word for the ’90s is cutback.

And along with hospitals, daycare centres and universities, arts organizations and socially-oriented causes and events are finding public funding is drying up as governments at all levels try out their political arithmetic.

Small wonder then that those same troupes, groups and what have you, formerly dependent on the public purse, are looking more than ever to the corporate sector for sponsorship funds.

Although corporations remain willing, in some cases eager, to provide support, the fact remains sponsors will not give organizations much more than the time of day if those with their figurative hands out do not have at the ready a plan that explains the benefits and the value sponsorship their ventures will bring.

Peter Allemang, president of DelWilber & Associates in Toronto, says in the last three years there has been a greater number of people wanting sponsorship money, but, he adds, some groups have been treating the funds like donations.

Allemang says those groups or organizations that will receive the most sponsorship help are those that get to know a company’s plans and can match their attributes with corporate objectives.

Mark Sarner, president of Manifest Communications, where the specialty is social marketing, says the shift from public money to private has ‘accelerated significantly’ in the last two years because of the seriousness of government cutbacks.

Further, says Sarner, who numbers Imperial Oil and Health Canada among his clients, governments are insisting on partnerships to make social marketing programs happen and are thus being much more ‘directive.’

Like Allemang, Sarner advises those who seek sponsorship funds to do their homework, adding that is something organizations too frequently overlook, to the detriment of their pitch.

He says it comes down to a simple maxim: know your market.

If a potential sponsor is a bank, then the group seeking help should take the initiative to learn what the bank’s ‘issues’ are.

Michael Lang, president of Lang & Associates in Toronto and Strategy’s event marketing columnist, says there is no doubt the field of sponsorship, because of cutbacks, is moving towards a more ‘user pay’ system.

Lang says athletes, for example, have historically been heavily funded by government. But in future, they will have to stump up more themselves to pursue their goals or turn to their family for greater support.

Further, Lang says, the price/ value equation of sponsorship is really going to be examined, with marketers demanding more tangible benefits for their money.

‘The price of what I am paying for the value of what I am getting is going to continue to be something that is really scrutinized from here on in,’ Lang says.

He says the emotion that got a corporation involved in a sponsorship to begin with will be replaced by an economic analysis of the benefits the corporation derives from spending its money.

Sid Priddle, vice-president, event marketing at the Edelman Houston Group in Toronto, says the ‘charity side of sponsorship has long gone.’

Priddle, who numbers among his successes the Molson Indy Car races in Toronto and Vancouver, says corporations are becoming less forgiving.

Echoing his colleagues’ views, he says those seeking sponsorship funds need to appreciate and understand the needs of the corporations supplying the money.

Priddle says corporate sponsors need a return on their investment, whether it be new customers or sales.

‘The time has passed by that companies are able to justify spending money for awareness components only,’ he says. ‘They have to get some return on their investment.’

Five, or even three, years ago, a sponsored event would give the company underwriting it some tv exposure, some signage, a page in a program, and that was that.

Now, Priddle says, those things are considered standard.

‘So what has to happen is the creative side of the business has to come into play, recognizing that sponsorship is only one part of the marketing mix,’ he says.

It is essential to develop ‘measurable’ events that go after a specific target market, says Priddle.

Keith McIntyre, president of K. Mac & Associates in Mississauga, Ont., says anyone who wants sponsorship money cannot sit back and wait for it to come to them; he or she must work ahead of their schedules, if necessary, to get in sync with the would-be sponsor’s planning cycle.

McIntyre says a detailed business plan is also a good idea for people seeking sponsorship funds, and it has to be in tune with what marketers want, identifying what their return will be if they agree to underwrite a particular event or group.

Nina Kaiden Wright, president of Arts and Communications Counsellors in Toronto, has the same opinion of those looking for sponsorship funds as others in her field.

Kaiden Wright says the biggest problem organizations encounter when seeking funds is they frequently don’t understand what is expected of them.

She says they need to look at the potential sponsor’s target market; understand the business side of the exchange; and understand what the sponsor actually wants from the relationship.

As for what marketers can get out of sponsorship in these financially straitened times, Sarner says two key benefits are an enhanced corporate image and an equally enhanced brand image.

He says there is a competitive advantage in a public display of good corporate values.

Still, Sarner says the most important element of sponsorship is the fact it provides the corporate giver with an opportunity to demonstrate relevance to the consumer.

McIntyre is not so sure that sponsorship will provide any immediate return for a corporate investor, but he takes the view it will drive goodwill.

Goodwill is a theme Allemang picks up.

He says with sponsorship, a company can show gains by demonstrating what it is doing in the community or for the community.

However, he says in no way can its initiative become too self-congratulatory.

Opinion about where the best sponsorship opportunities lie in a cut-back economy is scattered.

Some say the big events – an Olympics, for instance – will continue to be worth the thousands or millions of dollars corporations invest in them.

Others agree on the worth of the high-profile group or event, but say investment at the local level is the way forward for at least the next few years.

Lang says there is clearly a trend towards sponsorship spending that is closest to the consumer or the so-called grassroots.

‘In order to generate excitement, you’re going to still need some elite activity,’ he says.

‘[But] there is clearly a trend that spending will get closest to the consumer, so, in essence, that’s grassroots.

‘[There's a] continuum of elite to grassroots, so you’re going to fill in the whole funnel. That wasn’t the case in the past.’

Lang sees the greatest growth in what he calls cause-related marketing or ‘strategic philanthropy,’ followed by growth in arts sponsorship and a bit of expansion in music sponsorship.

However, Lang sees sports marketing in stasis.

McIntyre and Sarner both say arts and entertainment still offer marketers good sponsorship value, with the former pointing out entertainment’s worldwide pull and the latter dismissing the notion the arts are dead and do not offer opportunities.

Whatever lies ahead for sponsorship, Allemang does not see such a broad group of players.

He says over the next five years there will not be the same number of events, organizations and causes competing for help because some of them with similar interests will get together.