We are proud to feature in the European Sponsorship Association’s Spotlight, offering our view on the latest trends in the global sponsorship industry.
Our Sport and Sponsorship Lead, Stuart Owen, explores the growing shift towards collaboration and co-operation that is increasingly changing the mindset of sponsorship into one of partnership.
At SQN, we believe that 2022 will be the year where the full power of partnership gets unleashed, opening previously unexplored opportunities and benefits for brands looking to refresh and revitalise their marketing mix. Here, Stuart explains more…
As an agency that lists sponsorship as one of its services, it might seem a little contradictory that we focus on the word ‘partnership’ instead. Let’s address that from the outset. We are still firm advocates of the role that sponsorships can play as part of a brand’s marketing activity, but we believe the full potential can only be fully unlocked when viewing it as a harmonious collaboration between two like-minded businesses: a partnership.
Whereas sponsorship is – in its crudest most literal form – money given by a company to support a person, organisation or activity, a partnership denotes an agreement to work together. What we are talking about here is a change in mindset, not necessarily in terminology.
Sponsorship, as a term, is rather transactional and one-way in its delivery, with the emphasis on providing financial support. Partnership is about bringing two entities together to work on something equally to the benefit of both.
For the sponsorship industry to continue its growth and to stay relevant – especially as we emerge from two years of Covid-affected business – it must encompass the ethos of partnership.
At the heart of every sponsorship deal, more often than not, lies a monetary fee paid by the sponsor to the rightsholder. In return for that fee the sponsor receives a set of rights that, if activated correctly, enables a brand to tell its story in an engaging manner to new and existing audiences. It’s a model that has formed the foundation of the industry and has resulted in many successful sponsorships.
Further to this, there is also value-in-kind (VIK) sponsorship. VIK is nothing new and has been used to the benefit of rightsholders and brands for many years. Most commonly it enables product integration to the advantage of the rightsholder. In return, the brand receives marketing rights and the chance to tell the story of its products in action. However, beyond offering product-based services, whether that’s integration of IT systems, hotel rooms for athletes, or flights for VIP guests, are sponsors really bringing a full range of solutions to the negotiation table?
You only need to flick through a list of the world’s biggest brands to quickly pick up on ones that currently play in the sponsorship industry: Microsoft, Alibaba, Visa and McDonald’s to name a few. These brands didn’t become the world’s biggest by accident. Yes, they offer products and services that the world wants, but they have also grown exponentially thanks to their ability to effectively manage a global business.
On the surface, providing rightsholders with product-based benefits is fine, but what about all the things underneath that ensure these businesses are the success that they are? The employee management systems, the CSR campaigns, the ability to manage and process data from millions of customers, the leadership skills of some of the most professionally savvy people in the world. If a rightsholder, whether that be a football team, or an entire sporting organisation, could tap into just a small proportion of what makes the biggest companies in the world be so successful, then this in turn could take them on a similar journey.
Therefore, we must move away from the term ‘sponsorship’ in its current form and move towards ‘partnerships’. Brands shouldn’t be entering a new deal stating what they want and asking how much it’s going to cost – that’s not collaboration. Brands need to think about all the benefits they can offer a rightsholder. If a rightsholder does that in return, then you start forming a partnership whereby each is working together to form the best possible outcome. It means rightsholders are receiving value beyond just financial gain, and sponsors aren’t paying extortionate fees that get harder and harder to justify and more difficult to prove a valid return-on-investment.
Value doesn’t only come in the form of currency. By working together, rightsholders and sponsors can benefit equally, and most importantly, both parties’ target audiences must benefit from the partnership too, resulting in the ultimate win-win-win scenario. It is therefore vital that brands don’t underplay or overlook the true value they can bring to the negotiation table; value that is probably taken for granted as part of their day-to-day business. It also puts in the spotlight the role of specialist sponsorship agencies such as SQN. We must work harder to make brands see the value that they bring and get them to think creatively as to how this can benefit a rightsholder.
So, are we saying that the term ‘sponsorship’ should be replaced by ‘partnerships? No, not at all. What we are saying, though, is that the thinking and philosophy behind partnerships is what must be front and centre of all parties’ minds from the very outset of a sponsorship conversation.
It’s time to move away from thinking about the strengths of sponsorship to focusing on unleashing the power of partnerships.
Check out our ESA Spotlight feature here.