DOA Sponsorship Deals

What happens if the CFO slams on the breaks half way through a multi-year contract? There are always outs, but they're complicated so let's assume that is not an option. Does your activation get the axe? The standard line for activation spend is 2-3x investment... sometimes more. How has the current environment changed how marketers are activating and how much they are spending? That's a study I'd like to see.

The Olympics - arguably the greatest single global activation opportunity - could see some serious scaling back given the economy, competition for dollars from World Cup 2010 and the traditionally large executive hospitality component of the event.

Here's General Motors Spokesperson Steve Low on the subject: "We have no plans for hospitality of any kind in association with the Vancouver Games, nor will we have a major exhibit at the Games."

Activation can come in many forms including hospitality, promotional products, advertising, pr and promotions, etc - basically any spending that is not contractually part of the deal with the property, but is used to ensure that the sponsorship impacts your intended audience. The sponsorship fee is the foundation, but the activation is the house everyone sees. You need both components to build a successful sponsorship platform.

We hear about the deals that aren't getting renewed. What I'd like to know is how many deals are still contractually in tact, but aren't getting activated sufficiently to make a real business impact (aka dead on arrival deals). Personally, I've heard of several financial co's that aren't filling MLB and PGA hospitality suites. Not because of cost, but because of public perception.

Take for example, Bank of America's Super Bowl activation of their NFL sponsorship. Critics blasted Bank of America, in the midst of a bailout, for their 850,000 square foot NFL Fan Experience this past February, which is an activation component of their multi-million dollar sponsorship deal. Rightly, B of A stood up for the expense, but how many other sponsors will choose to scale back on activation spending?

Properties - this is your problem too. Without activation, ROI looks worse, which means greater scrutinization of sponsor portfolios and more pressure on you to "over deliver." And what happens to the fan experience without activation? Fans will tolerate advertising when it adds value to the experience. If the best seats in the house are reserved for sponsors (but empty) and static banner signage is the norm, then experience - and in time ticket sales - will suffer.

Will marketers cut off their nose to spite their face? For all of those critics looking at activation as excess, the simple fact that without it - marketers are wasting their ENTIRE sponsorship spend should be of even greater concern.