Apr 12, 2011 at 01:40 PM
written by Michael Munson

Back to Basics

The plan for this week was to propose a new business model for sponsorship. I think it’s time for sponsorship to have a business model uniquely different from advertising and media buying that truly allows for accountability and rewards value creation for buyer and seller. However, the response to last week’s column and accompanying survey suggests the sponsorship market is not ready for very much advanced thinking. It struggles with the basics.

My unscientific survey has provided some insight into how well brand marketers - responsible for deciding how much money gets spent and how - really know what sponsorship is, how to use it and measure what it produces. The results suggest not even half of the people making spending decisions “get” sponsorship. These preliminary results track to my experiences (and probably yours) with both property sales professionals and brand marketers for many, many years. This is a pretty significant issue that needs to be addressed if the market is to grow.

Brand marketers not understanding how to use sponsorship is like the Libyan rebels being given sophisticated rockets, and proceeding to fire them backward, into their own territory, rather than forward toward the enemy, and then the army blaming the rockets. But even if you believe a rocket has some value, if you don’t know how to fire it, how in the world are you going to target one to actually hit a valuable target and accomplish a meaningful objective?

Most people seem to believe less than half of brand marketers know the difference between an advertising shot gun and a sponsorship rocket. Even if they know there is a difference, most believe fewer marketers still know how to hit desirable targets to achieve valuable goals with the sponsorship rocket. So it should come as no real surprise how few of these rockets are being fired; how little money is spent on sponsorship if you will. If the numbers of marketers not appreciating or understanding how to use sponsorship are as large as I fear, we have a situation with sales people selling sponsorship and brand marketers buying advertising light because they don’t understand sponsorship. It’s no wonder I talk to so many sponsorship sales professionals that lament the fact brand marketers just don’t get it. They are missing out on dollars they would get if the people buying knew the potential value of what they are selling.

How on earth can there be such a massive disconnect and lack of appreciation for what sponsorship is and how to use it between those that sell and buy it? IEG, what is your response to this? After 30 years serving and advocating for the sponsorship industry, we appear to be living in a world where sponsorship gets 4% of the money advertising does. Isn’t this kind of a joke? Shouldn’t this percentage be at least double or triple? This is what happens when there is no organized trade association for educating people about and promoting sponsorship marketing.

Maybe I have it wrong. Maybe sponsorship needs a new widely adopted business model in order to get brand marketers to appreciate it more? I mean those recommending for years that properties sell pre-determined assets in gold, silver, and bronze packages, have put sponsorship where it is. The pre-packaging route was a convenient band-aid, not a real solution. Being proud of what sponsorship has done is like giving a kid a trophy after he hit .035 on his Little League team (that’s the percentage of dollars sponsorship is getting vs. advertising). Sponsorship isn’t ever going to get to the Big Leagues if we are celebrating such awful performance, or continue to be influenced by those responsible for holding it back.

Even if a new model for sponsorship is needed, that doesn’t change the fact people that spend marketing dollars have to be informed. The best way to find out exactly to what extent people in these positions need to be informed is by doing a peer-reviewed academic research study to find out how educated they are now. We need to benchmark where the level of knowledge is today so we can have something to compare to later, after efforts to educate and persuade brand marketers to embrace more sponsorship spending have been made. This is exactly what we are going to do.

I talked to a sports and sponsorship PhD about this topic and he agreed an academic study to determine just how many brand marketers understand what sponsorship is and can do, is warranted. We’ll come up with a test instrument that will collect data about what brand marketers actually know, by testing brand marketers themselves, not by having third parties guess what they know based on anecdotal evidence. This will provide insight into what needs to be taught.

We’ll enlist the help of trade associations. We will make every effort to get the survey into the hands of sales professionals that interface with brand marketers every day, so we can expose as many sponsorship decision makers as possible to the survey. The goal is to have the best understanding of the market we can, based on empirical truth. We have to understand the problem before we can address it.

Meanwhile, if you are a sponsorship marketing professional, you should have 96-4 seared into your brain like a bad loss taken in a competition. Everyone with a passion for sponsorship should be motivated to seek redemption and make that ratio of advertising vs. sponsorship spending look much, much better. If you aren’t doing what you can to improve it every day, you should get out of the game and make room for people who care. If you aren’t part of the solution, you are part of the problem.

Now I have some questions for you professionals to discuss. What do you think an acceptable ratio of advertising to sponsorship spending is and why? What do you think can be done to improve it? Absent idea sharing there is now growth. We might as well start sharing ideas to try to get better. There is a TON of work to do and we need everyone we can get to help!

Contact Michael Munson:

Email: [email protected]

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The opinions expressed herein do not necessarily represent those of the publisher, SponsorPitch, LLC.