Jan 27, 2010 at 03:37 PM
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Relay's 5 Ways to Drive Sponsorship Value

Sponsorship Consultancy and Publicis Groupe agency, Relay Worldwide, yesterday doled out some free advice in the form of 5 new tips for sponsors. Reconsider exclusivity?! What! Blasphemy. All joking aside, some good advice for sponsors and a smart perspective for properties to keep in mind. A few of these are obvious, but #2 and 4 warrant special consideration. Seems as though some 'experts' take exclusivity and escalators as immutable laws of sponsorship with at times little concern for merit, value or context. Thoughts? Here are Relay's tips for sponsors.

Five Ways to Drive Sponsorship Value

In this ongoing environment of economic uncertainty, many companies are reviewing their sponsorship investments as part of an overall audit of marketing spending. However, the current business landscape also presents a new opportunity to work with partners to evaluate key sponsorship provisions, fine tune existing portfolios and ensure that any new sponsorship investments work hard to meet business objectives.

Here’s a look at five areas where brands can really move the needle for maximizing value in their partnership agreements:

1. Leverage the flexibility the market has afforded

Gone are the days when properties can insist on multi-year commitments in order to attract sponsors into the fold. The recent announcement that Papa John's has signed a short-term partnership with the National Football League to serve as the "Official Pizza Sponsor" of Super Bowl XLIV is yet another example of sponsors having the flexibility to leverage national properties during shorter promotional windows. Over the past two years the NFL has inked similar partnerships with KFC, IHOP and McDonald's, who will be the Presenting Sponsor of this year's Pro Bowl, demonstrating that even heavyweights like the NFL are more willing than ever to be flexible. While you’re at it, negotiate in the flexibility to modify contractual elements that may not be working as hard as you expected.

2. Reconsider exclusivity

Ask yourself if paying for exclusivity is really necessary. While exclusivity does have a critical value in some product categories where it's an important element for selling in programs to retailers or other channel partners, many brands continue paying a premium for exclusivity when that status has declining value in a cluttered sponsorship world. Make sure you are clear about the role of exclusivity in making your sponsorships perform.

3. Require activation rights and property assistance

Fans need reasons to spend their limited disposable income on your product or service, and one of the best ways to explain those reasons is through a meaningful one-on-one interaction. Work with properties to repurpose passive sponsorship elements (e.g. program ads or concourse signage) into ways that your brand can have a real, person-to-person conversation with fans about your product or offering.

4. Beware of “escalators”

Many properties have historically made annual price “escalators” a standard element in sponsorship agreements. These automatic increases assume sponsorship value goes up each year regardless of any other factors (attendance, your sales, the economy, etc). Brands should be wary of such clauses, especially if these increases aren't tied to specific performance metrics being met by the property. Similarly, the old policy of charging additional fees for post-season rights should also be resisted.

5. Demand accountability

Remember, the balance of power is now with the brands, so demand that properties be accountable for both program execution and property performance along key metrics such as attendance, brand interactions, TV ratings and web traffic.