Marketers rethink sponsorship ROI

Without corporate sponsors, many major world events would not be financially viable. While sponsorship often provides a strong and effective form of advertising for a corporation, in response to the Grinch-spawning economy many companies are pulling in the reins on advertising, leaving events struggling to find those essential sponsors.

Without corporate sponsors, many major world events would not be financially viable. While sponsorship often provides a strong and effective form of advertising for a corporation, in response to the Grinch-spawning economy many companies are pulling in the reins on advertising, leaving events struggling to find those essential sponsors.

A growing number of major sporting events are fighting over fewer ad dollars. Several Super Bowl sponsors from last year, including Cingular Wireless, Electronic Data Systems Corp. and Volkswagen AG, have opted out of the 2002 game, and News Corp.’s Fox struggled to fill its advertising slots for the Feb. 3 football broadcast from Louisiana.

In recent years, finding sponsors has become a tougher challenge for sponsorship agencies. Mary Ann Freedman, president of Freedman Sports Marketing in Toronto, believes the current economic climate, together with massive cutbacks experienced by amateur sports in Canada, are just part of the problem.

‘The economy and Sept. 11 have certainly beaten up new sponsorship opportunities for many companies, but more importantly, we are seeing a great deal of repositioning,’ she says. ‘Corporations are looking for measurable return on investment instead of just putting money into any cause or event without rhyme or reason.’

‘The economic climate has made it harder to attract sponsors, but also the age of throwing money at great causes has passed. Even when the economy recovers, I think that the tough sponsorship market will continue,’ she adds.

Many Canadian companies are actively reassessing their commitments. RBC Financial Group, for example, has just completed a year-long audit to assess the company’s sponsorship inventory, although Patricia Straker, managing director of sponsorship marketing at RBC, says that the move was not for financial reasons, but rather to strengthen brand continuity.

‘We have very clear guidelines as to what we should be sponsoring and what we want our brand associated with,’ she says. ‘We have acquired a number of companies over the last 10 years and a number of them are doing their own sponsorship deals, some of which are not aligned to our new brand.

‘The aim of the audit is to make sure the company as a whole is speaking with one voice and putting all its sponsorship dollars together. ‘

Following the audit, which was conducted by Optimum Fusion, a division of Montreal-based Cossette Communication-Marketing, RBC has decided not to take on any new partnerships or renew any expired deals until a clear sponsorship plan has been established during 2002.

According to one industry insider, another major corporate sponsor, Sears Canada, is also undergoing a sponsorship audit, although nobody at Sears was willing to comment.

Yet, despite the current economic downturn, the Winter Olympics is one event that doesn’t seem to be suffering from the post-Sept. 11 blues. Internationally, the Feb. 8-24 Salt Lake City Games have raised more than US$860 million in funds from 65 sponsors, more than twice as much as the 1996 Atlanta Games.

However, the Canadian Olympic Association (COA) is suffering from the economic slump. It’s facing a difficult search for sponsors from the ailing airline industry and also has a hole to fill in the computer hardware category since IBM opted out after Sydney. Craig Lowder, IBM’s director of communications for worldwide sponsorship, confirmed the decision was partly financial.

‘We made that decision in 1998, partly because of the IOC’s [International Olympic Committee] system of using a consortium of sponsors, which didn’t suit us, and partly because we felt that the marketing return would not be justified by the investment,’ he says.

Nonetheless, revenues at the COA are currently 20% to 25% higher than during the previous four-year cycle, and sponsors are confident of a good return on investment. Four new sponsors have added their names to the list in recent months, bringing the total number of sponsors to 15, which, according to Nick Marrone, executive director of development and marketing, indicates the health of the COA property. The latest additions are Monster.ca, Budget Rent-a-Car, Hallmark Canada and Kimberly-Clark Canada. Nine suppliers are also lined up to support the Canadian team.

One of the most recent additions to the sponsor list, the career planning business Monster.ca, is capitalizing on its new four-year partnership by creating an online career management and transition program for athletes. The new Web site aims to help athletes make the transition back to work after the Olympics. The company will also be running ads during the TV broadcast by CBC.

Monster.ca started its Olympic investment at the Sydney Olympics in 2000, a move that resulted in a 90% increase in traffic to the Web site, and led to the decision to become an official sponsor of the Canadian team.

DaimlerChrysler will be pushing its Olympic involvement with an ad campaign starting on Jan. 12, featuring special Olympic edition models of the PT Cruiser, Jeep and Dodge Caravan.

This will be the fourth consecutive Olympics for the car maker. ‘The Chrysler, Dodge and Jeep brands skew very much towards the Olympics, particularly the Winter Games,’ says Ron Smith, VP of marketing at Windsor, Ont.-based DaimlerChrysler Canada. ‘I believe we’ll get a high return on our advertising.’ Smith says that previous Olympic ad campaigns have resulted in major sales increases, although he declined to give figures.

Visa has been a worldwide sponsor since the Calgary Olympics in 1988 and has developed a vast global program. Visa Canada, for its part, now participates in the CBC broadcast and has developed specific advertising to communicate its sponsorship. TV ads were launched in November with English and French versions, focusing on bobsled racing, as Visa Canada sponsors the Canadian bobsled teams. Another bonus for the credit card giant is exclusive Visa card acceptance at Olympic events.

Visa Canada is well-known for sponsoring other major events in Canada, such as film festivals. ‘In all our sponsorships, we try to negotiate added value to give card holders something special,’ says Brenda Woods, VP of marketing at Visa Canada. ‘For example, with the film festivals, tickets go on sale to Visa card holders a week before the general public.’

As a sponsor of the COA since 1947, RBC Financial Group’s chief aim this year is to promote awareness of its long-term commitment. As per RBC’s Straker: ‘The Olympics brand is very much associated with leadership and that provides a great brand fit for us.’

According to sports marketer Freedman, one of the keys to a successful sponsorship agreement is a good brand match.

Freedman has recently been named the new sponsorship agency and official supplier of merchandise for Baseball Canada, which for the last 10 years has been sponsored by Honda. Since Honda has decided not to continue to support the program in 2002, Freedman is in search of a new sponsor, and has initially approached 50 companies.

Tennis Canada is another body that relies heavily on sponsorship, and is currently searching for a title sponsor for its men’s tournament, the 2002 Tennis Masters Series Canada. At the association level – companies who pay to have their name associated with an event – Tennis Canada is doing well, says Stacey Allaster, VP, tournament director. ‘The types of companies we are working with at this level are premium luxury brands that are not as affected by the economic downturn so we are doing well at maintaining those names from previous years,’ she says. Current names include BMW and Evian.

Where the difficulty lies, Allaster continues, is in securing a multi-million-dollar five-year partnership with a title sponsor. ‘It has definitely become more difficult after Sept. 11, as it is such a major financial commitment,’ she says. However, Allaster says Tennis Canada is currently in discussions with two potential partners and has launched an aggressive marketing strategy to attract the right kind of sponsors.

Tennis Canada’s main women’s event of the year was sponsored in 2001 by co-title names, Rogers AT&T and AT&T Canada, a union Tennis Canada says produced a 13:1 return on investment for the telecom giants. Through unaided recall, 60% of event attendees named Rogers AT&T Wireless as a sponsor. Canadian Olympic Initiatives
Budget-Rent-a-Car, Roots and DaimlerChrysler have launched a scratch card promotion for customers renting cars from Budget. Prizes range from Roots T’s to discounts on rental cars and the grand prize of a 2002 Jeep Liberty from DaimlerChrysler.
RBC Financial Group has launched the Watch & Win contest, which runs from Feb. 8-25 and invites viewers of The Olympians (a series profiling Canadian athletes, produced by the CBC and sponsored by RBC) to answer questions online about the athletes. The winner gets a trip to Athens, site of the 2004 Olympics.
Coca-Cola Canada has packed Olympic coins bearing pictures of Canadian hockey players into 5.3-million 12-can packs of Coke, Diet Coke and Sprite. Purchasers of the bottled soft drinks can mail away for a complete set of eight coins in a frame.
Visa Canada is entering card-users into a prize draw every time they make a purchase with Visa. The prize value increases every time a Canadian wins a medal in the Olympics.