The Perils of Overcompensating

As my colleagues know, and readers of this blog may be aware, I am a pretty big stickler for sponsorship accountability. OK, I’m a Nazi about it. This is nothing new. Ever since doing my Master’s thesis on sponsorship effectiveness and discovering the “sausage factory” that is sponsorship measurement over 10 years ago, it has been my contention that to be meaningful and worthy for a sponsor, sponsorship initiatives must do more than create awareness and exposure for a brand.

Everyone used to talk about ROI and accountability, but very few actually demanded it. After seeing the ghost of the economic implosion in the last year or so, the rhetoric about the need for measurable and quantifiable results became louder. Proving they weren’t just “crying wolf “anymore, marketers began backing the words with determination, and wiped out more than a few properties. The Arena Football League and the Greater Milwaukee Open are now just footnotes in history. The message from marketers is becoming clear: deliver a sponsorship that drives bottom line results and moves the needle, or get out of my face. OK, maybe it’s put a little more nicely than that, but it might as well be “Nooooooo…. I don’t want to support YOOOUU anymore” for the property experiencing the bloodletting.

Sales! Not media impressions. Not attitude toward brand. Not recall. Not intent to purchase. Not focus groups and the other “square peg in round hole” methods of measurement often applied to determining sponsorship efficacy, will determine whether this money is well spent. SALES! The ability to tell a CFO “I got back $2.23 for every $1 I spent,” that is the Holy Grail everyone seeks.

It tickles me to finally hear sponsorship is going to be held to greater account. Nothing is better than knowing more and more deals are going to be put together that eschew media promotion value, in favor of creating the value being promoted by it. Sponsorship, as a marketing medium, can only increase in relevance and volume as it shows more ability to deliver quantifiable, bottom line results.

The economic collapse scared a lot of people, and rightly so. We do know from the legion of examples of history however, that we as humans have a long and well-documented history of over-reacting to challenging or threatening situations. Throwing Japanese citizens in concentration camps because Japan attacked the United States, going after suspected communists in the United States because Russia was a threat, and my mom making me quit Little League Baseball because I had nine U's (U = unacceptable behavior) on my citizenship report card in 4th grade, in hindsight can be demonstrated to have not solved the problems they were intended to ameliorate, and in fact created new problems. But we move on…

Is it possible the bean counters and gatekeepers of sponsorship funding, in their zeal for accountability and measurement, could similarly overreact and in actuality end up hurting themselves? It’s great to get in hot water when you are cold, but getting in 150 degree water presents its own problems! Might it be a good idea to embrace sponsorship as a branding and image building tool, and be creative without regard to what each dollar spent is returning? Could it make sense for a marketing budget to have resources earmarked to “brand building sponsorships” never expected to demonstrate ROI, and then have other dollars allocated to sales promotion - based sponsorships that are? Maybe some initiatives aren’t ever going to deliver measurable ROI, but can in fact build a brand and/or demonstrate it supports things people care about. Maybe consumers favor brands that give to their communities and enable the things that make them desirable.

It is great to have sponsorships with built in accountability measures to assess ROI, but if every dollar has to be accountable, could the creativity and brand building ability of sponsorship be sucked out? I mean is Red Bull going to meticulously seek dollar for dollar measurable results from the campaign with Shaun White? Or is Red Bull thinking they are not going to worry about it, and just look at how its products are selling, do research on how the brand is being perceived, and continue doing what seems to be working, without trying to pick everything apart? If marketers are looking past exposure and awareness, significant media assets are no longer a prerequisite to make a sponsorship valuable and accountable. If true, why spend all that money on media-heavy properties while complaining about the need for more than the awareness and exposure, especially when media can be had for free?

What is needed is creativity to put together activations that work. This means engagements that are meaningful and valuable to those participating in them. In today’s socially connected media world, you need to create engagements that work and ride the wave of others promoting your sponsorship. The property’s media is no longer the engine to drive sponsorship results thanks to My Space, Facebook, Twitter, YouTube, email, texting, etc. Reallocating resources formerly earmarked to producing ads and buying media, to unique and creative activations that can measure revenue, is advisable. Adopting a “if you won’t buy from me you get nothing” mentality probably is shortsighted. Sometimes you have to give something to get something. Plus, studies demonstrate consumers favor brands that take their social responsibility seriously.

So I have a message to those controlling corporate sponsorship purse strings. In your drive to see to it every dollar spent on sponsorship is accountable, it may be wise to apply a little right brain thinking to the decision matrix. Don’t think just about inputs and outputs. Think about the totality of the world you live in. Think about others and what they want. Don’t make every decision in a near term financial box. Understand that creativity isn’t a mathematical exercise, and that sometimes decisions just have to be made based on intuition about what seems like the right thing to do.

Mike can be reached by email at [email protected] and on Twitter at @mjmunson. Also, don't forget to view all of Mike's previous posts. The opinions expressed herein do not necessarily represent those of the publisher, SponsorPitch, LLC.