You are sitting at your desk wondering what to do with the tons of sponsorship requests pouring in. You just received an email from the finance department asking you to do an in-depth review of sponsorship spending and effectiveness. Your budget has been cut and you need to optimize your partnership portfolio.

Elevent is the world’s first and most innovative sponsorship valuation software. Built with groundbreaking research, an optimized user experience and relevant data. It can build a strong business case for you, with all the arguments you need to make the right decision and strongly justify it.

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Sponsorship is an evolving area and the recent 2015 Relevent Conference shed light on a new way of approaching sponsorship. The speakers addressed numerous issues that are gaining traction in the sponsorship field such as the increased usage of social media as an important channel for activation, the effectiveness of the performance evaluation, the need to clarify precise objectives beyond awareness and finally is the logo dead? What the speaker Ian Malcolm, President of Desperado Inc. agency, would call the in-ice-logo dilemma, which stresses the fact that sponsorship is no more about visibility but way more about engagement.

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The best practices for renewing and ending sponsorship agreements

the conditions that enable partners to generate value and to maintain a good relationship aren’t that well understood. Moreover, when a brand exits a sponsorship, it is often ill equipped to do it properly, which can make the situation even more uncomfortable.

The renewal and cessation of sponsorships are topics that—despite their huge importance—don’t tend to be well covered and for which there are few resources. That’s why we decided to devote our attention to the subject in this edition.

We will cover the ending of a sponsorship when a contract comes up for renewal or when a scandal strikes, the impact of a sponsor exit on fans, and the relationship between the sponsor and the property—a subject rarely touched upon, but which has significant consequences on the success of the partnership. We will also supply data that sheds a light on these aspects of the sponsorship industry. 

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You spend years building a partnership between a brand and a property and then, for various reasons—objectives not being met fast enough, lack of vision at the management level, a changing of the guard or simply the strategic realignment of a scattered portfolio—and the time comes to call it quits.

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Series on the science of sponsorship

All good things come to an end, and partnerships between sponsors and properties are no exception. Financing sponsorships is becoming an increasingly costly endeavour, and when a contract comes up for renewal, there are times when a brand decides to walk away. The results of the above study suggest that even if pulling out of a sponsorship is negatively perceived by consumers, brand sponsors can mitigate that response by paying special attention to how they announce the news and when they decide to make it public.

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Should I stay or should I go?

When a scandal breaks, keeping quiet can seem like the most appropriate course of action for a sponsor. But there are, in fact, many different tacks a sponsor can take when the time comes to distance itself from an important property.

Turn the scandal into a business move: the Festina Affair

Long before Lance Armstrong, the Tour de France already had a number of scandals under its belt (hence the nickname: the Tour of Doping). The most significant scandal was the Festina Affair in 1998. For the first time in the history of cycling, an entire team was excluded from the Tour de France after their soigneur was arrested at the border with large quantities of doping products in his car. It was tough for Festina—the luxury watch brand sponsoring the team—to distance itself from the scandal when its name was peppered all over the media. The Festina team put an end to its activities in 2001, and the brand redirected its involvement in the event: it became the official sponsor of timekeeping for the Tour de France and set up a foundation to prevent doping.

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Have you ever heard of 3Com Park or Monster Park in San Francisco? No? Despite attempts to name the 49ers stadium after a brand, the team ended up going back to Candlestick Park after San Francisco residents voted largely in favour of bringing back the original name. Fans around the world often react negatively to branded name changes by protesting, boycotting or refusing to acknowledge the new name.

Though title sponsorships attract sponsors that see them as a powerful tool to increase brand awareness and improve their image through association with the property, there are a number of downsides to the deal. Fan resistance can have a negative impact on attitudes towards the sponsor and on word-of-mouth. Fans who identify deeply with the property and the region where their team resides react more strongly to name changes. When a property is steeped in tradition and heritage, a title sponsor can pose a serious threat to its identity.

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2005 was a year with no Olympics, no soccer World Cup and no rugby World Cup. So how could it deliver one of the most unforgettable sporting events of the last few decades? Ask Liverpool fans who celebrated the 10th anniversary of their team’s riveting Champions League Final last week—perhaps the most enthralling in the history of the competition. In 2005, in front of more than 70,000 spectators in Istanbul’s Atatürk Olympic Stadium, with three billion more watching the game on television, Liverpool, trailing AC Milan three goals to nil at halftime, rallied during the second period, scoring three times in a six-minute frenzy. After a scoreless extra time, Liverpool carried their momentum through to the penalty shootout, where they came out on top, thanks to a stunning save by their goalkeeper.

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With only 3% of sponsorship budgets devoted to research[1], several companies can’t answer the following questions with any certainty:

• What was the impact of the sponsorship program?
• Did it work?
• What was our return on investment?

There is no point investing a penny in sponsorship if, as an organization, it’s impossible to confirm whether or not the set objectives were met. Of course, the efforts invested in measurement tools should reflect the importance of the sponsorship for the organization. The bigger the sponsorship, the greater the need to measure the results.

To measure the impact of a sponsorship, it’s important to understand every piece of the puzzle, and to keep in mind that the criteria will change depending on the company and the sponsorship. But you don’t need to be a business analyst or a numbers person: when you understand how the process works, measuring sponsorships becomes an instinctive tool that you can build upon as you go.

A little reality check before we continue: budgets often leave no room for research, and companies often don’t have the specific expertise required to build a program to measure performance. Here is a brief guide to help out in that regard.

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There’s something special about the atmosphere at a major festival or popular event that reels in the crowds and has sponsors willing to dig deep into their pockets to get in on the action.

That vibe, unique to every event, is created by a multitude of factors that promoters strive to shape and influence to give event-goers an experience that is positive—and hopefully memorable. 

Ever been approached by a rude or overzealous security guard at an event? Did it leave you with a bad taste in your mouth? These kinds of negative experiences, or an excessively long wait at the concession stand, for instance, can seriously tarnish an event’s reputation, whereas positive experiences—brought on by good logistical planning—help build and reinforce an event’s favourable image.

It’s important, then, to carefully analyze each and every contact point a visitor may have with an event, including those with sponsors, which can play a big part in creating a positive experience with on-site activations.

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Science of Sponsorship Series

This series takes a look at the academic literature on sponsorship and offers a condensed summary and managerial implications.

By Hakim Azrour, M.Sc.

For the past few years, morality clauses have been cropping up in a lot of endorsement contracts, enabling companies to end their association with a celebrity and distance themselves from a negative event should it occur. That’s how endorsement contracts came to an end between McDonald’s and Kobe Bryant, Kate Moss and Chanel, and H&M and Burberry, not to mention Tiger Woods with Accenture, Gatorade and Gillette.

Because of the extravagant nature of celebrities—or maybe just because they’re human—endorsement scandals are inevitable. Unfortunately, such scandals are also totally unpredictable, and a company generally has no advance warning when its highly paid spokesperson decides to stray from the script. The one thing a company can control is its reaction when the media is in an uproar about its association with an offending celebrity.

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Social sponsorship is no longer a bland vehicle for corporate social responsibility or philanthropy. Brands use it more and more to achieve marketing or corporate communication objectives. In that light, the authors discovered that social sponsorship, like its traditional counterpart, is most effective when strategically planned and executed. To achieve desired results, it is paramount for a strong natural fit to exist between the brand and the selected non-profit. Managerial implications are covered below.

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A sponsorship is a sophisticated and complex marketing tool; it entails an entire strategic process of solicitation, negotiation, and customer service. What’s more: professionals who are responsible for sponsorships must fully grasp both traditional and non-traditional marketing communication channels as well as the inner workings of several different markets. Sponsorships can be leveraged to achieve many objectives and reach different target audiences. It is therefore important to understand the basics before launching a full-fledge sponsorship campaign.

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When it comes to evaluating a sponsorship package, pulling a number out of a hat is not enough. That’s where the Elevent report can serve you well. We’ve collated the latest data on the market so you can have a fair and independent assessment of sponsorship plans.

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