Notes on Sponsorships- Chapter 11

3) Exclusivity

*- Category Exclusivity=* occurs when a sponsor is the only company within its product category associated with the sponsored property - this is valued by Sponsors because then they do not have to worry about competition in the sponsorship realm - Exclusivity can either be Broad or Narrow

Three Areas of Measuring Sponsorship Effectiveness (3)

*1) Awareness Measures:* - sponsorships that set awareness objectives can measure success through a pre/post comparison of awareness levels -Brand Awareness is measured on three levels: 1) Recognition (no prompts), 2) Recall (prompts), and 3) Top-of-Mind (the first brand that pops up in a given product category) *2) Image Measures:* - the image transfer capability of a sport's property's associations to a sponsor can influence how consumers perceive brands associated with the property - Common Methods of Measuring Brand Images: 1) Attribute Agreement (disagree-agree), 2) Semantic Differential Ratings (scale of 1-5), and 3) Free Associations (any word that describes the product) *3) Financial Measures:* - gains in sales, new customers, or revenue per customer are outcomes that any business would welcome, but attributing such gains to a sponsorship can be difficult to verify - Three Main Measures of Financial Impacts from Sponsorships: 1) Sales, 2) Return on Investments, and 3) Media Equivalents (measure of media exposure)

4) Marketing Opportunities

- Branding Campaigns---> creates awareness - On-Site Activation---> reaching the target audience at the physical space where the audience interacts with the sports brand - Cross Marketing---> invovles a collaboration between a sponsor, sports property, and sometimes the sponsor's marketing partners to create campaigns aimed at benefiting all parties

Causes

- Cause Marketing is when the sponsor seeks to exploit the commercial potential of being associated with a nonprofit organization or charity - this will usually create favorable brand associations - Two Forms of Cause Sponsorship: 1) Sports Properties Support Causes 2) Sports Properties are the Recipient of Cause Support from Corporate Sponsors

1) Inseparable Brand Associations

- Sponsorships ARE the Medium and the Message--> they are DEPENDENT on each other - the interconnectivity of the Medium and the Message makes it that much harder for the target audience to ignore the message - Title Sponsorships - Category Sponsorships

Individuals

- Sponsorships of Individuals could be players or coaches - it is stronger for non-team sports, like Golf or NASCAR - there can also be business collaboration between the sponsor and athlete *-Main Disadvantage of Sponsorships of Individuals=* there could be negative ramifications on the sponsor if the individual is involved in a bad situation---> Negative Brand Associations - but a Morals Clause could get them out of it

3) Avoidance of Media Clutter

- Sponsorships provide an alternative route to reach an audience, which allows for the avoidance of media clutter - people dislike advertisements because they are "timeouts" from the sporting events whereas Sponsorships are *woven* into the property being consumed

Types of Sponsorships (6)

- Sports Sponsorships account for 68% of all monies spent on sponsorships -Leagues -Teams -Events -Venues -Individuals -Causes

1) Targeted Audience Reach

- Targeted Reach= the number of persons or percentage of a population exposed to a brand message that is also part of the target market for the brand - Sponsorships are effective in obtaining highly targeted audience reach because the characteristics of the Sponsor can be aligned with the characteristics of the audience or fan base of the sport's property

Sponsorships

- a cash or in-kind fee paid to a property in return for access to the exploitable commercial potential associated with that property - *Cash Payment=* the exchange of a *monetary* amount - *In-Kind Payment=* the exchange of a *nonmonetary* item - Sponsorships are the primary channel used for Marketing THROUGH Sports

Events

- a sponsor would associate with a specific event in which leagues or teams compete Three Types of Events that are Sponsored: *1) Single-Day Events=* a game or contest that is a one-time event--> even though these events happen on one day, Sponsors market in the weeks leading up to the event *2) Multi-Day Event=* games or contests that last for several days--> longer period of time for Sponsors to reach a large audience, as well as a larger geographic scope for them to read *3) Off-Field Events=* events that do not involve games or contests--> sponsors have less competition here and the cost is lower

*TYPES OF SPONSORSHIPS* Leagues

- achieved by a company connecting with a league or organization - one League could have many different sposnros, which could lead to different levels of sponsors receiving different benefits - the more narrow a sponsor category, the more opportunities to carve out a piece of the sponsorship inventory -Ex: Visa is the official card of the NFL

2) Connection with Affinity for Sports

- companies can connect with fans' affinity for sports by linking their brands to a sports property via a Sponsorship - positive brand associations can be created this way - Ex: FedEx does a great job extending their brand beyond their core services and onto different sports as to create these brand associations

2) Influence of Secondary Brand Associations

- it's the linking of a brand with information already stored in memory that are formed from past sponsorships - Ex: Mountain Dew has constantly sponsored action sports events over the years, which leads to Secondary Brand Associations such as "extreme", "youthful", or "edgy"

2) Image Transfer

- occurs in sponsorships when the meaning consumers hold for a sports property is transferred to a brand through sponsorships - Secondary Brand Associations are also formed through sponsorships - Image Transfer IS NOT A GIVEN---> some companies will be better associated with a sports property than others

Teams

- similar to Leagues, but there are three main advantages Advantages of Team Sponsorships: 3 *1) Local Geographic Scope*--> greater geographic fit between the Sponsor and the Team *2) Lower Cost (than League Sponsorship)*--> because of the narrower geographic scope *3) Higher Level of Involvement*--> being the sponsor for a Team gives the sponsor a greater opportunity to interact with the fans -Ex: Audi is the official luxury car of the NYY

5) Protection of Investment

- sponsors are increasingly seeking relief from a practice known as Ambush Marketing---> this is where non-sponsors implement campaigns that act in a way that make it seem like they are true sponsors

1) Targeted Reach

- the Sponsorship allows for their brand to reach out to a specific and desired audience that best fits the sponsor's customers

5) Develop an Activation Plan

- the effectiveness of a sponsorship depends on how a sponsor leverages those marketable assets to communicate its association - *Activation Plan=* a plan that will determine how you will 1) Meet your Sponsorship Objectives, and 2) Develop a Realistic Budget that goes beyond the basic Rights Fees

6) Measure Effectiveness

- the final step in the sponsorship management process - measuring the effectiveness of a sponsorship will help to see if it has met its previously stated objectives *Three Areas of Measuring Performance Success:* 1) Awareness 2) Image 3) Financials

1) Define the Target Audience

- the linkage of a brand and a sports property can suggest to consumers the type of person who should be using the brand - characteristics of the Target Audience are based on the demographics and psychographics - defining who is going to be reached by a sponsorship is important because it will guide the decision on the type of sports property to sponsor

Venues

- the sponsorship of physical spaces - Naming Rights Sponsorship= an association in which a corporate sponsor acquires the rights to have a corporate or brand name incorporated into the venue's official name **it's the most valuable and visible form of Sponsorships - usually requires a long-term deal because changing the name of venue over and over again will decrease the value of the venue

2) Set Objectives

- there are multiple objectives that should be reached: - Create Brand Awareness - Influence Image Transfer - Strengthen Client Relationship - Stimulate Product Trial - Increase Sales - Generate Media Exposure

Five Values for Sponsors through Sponsorships

- these are five ways that Sponsorships help Sponsors 1) Targeted Reach 2) Image Transfer 3) Exclusivity 4) Marketing Opportunities 5) Protection of Investment

4) Establish a Budget

- you want to determine your planned expenditures before you develop an activation plan Two Types of Costs Incurred by a Sponsorship: *1) Rights Fees=* the cost a company pays, either in cash or in-kind payments, to be recognized as an official sponsor of a property - Rights Fees are dependent on many factors, including: prestige of the property, geographic scope, audience reach, sponsorship level, time frame of sponsorship *2) Activation Costs=* the amount spent on marketing activities to communicate a brand's sponsorship - the meaning and value of a brand's association with a sports property is enhanced when activation occurs Leverage Ratio= a measure used by sponsorship managers to assess the proportion of sponsorship budget spent on Rights Fees and Activation Costs---> it is a comparison of activation dollars spent on rights fees

3) Select the Sports Property

- you want to select the sports property that offers the best opportunity to reach the target audience and achieve the objectives - you form a Sponsorship Proposal, which is a document that outlines the sponsorship details Three *Primary Criteria* used for Selecting a Sports Property: 1) Fit with Brand Objectives 2) Duration of Sponsorship 3) Partner Relationship Two *Secondary Criteria* used for Selecting a Sports Property: 1) Level of Exposure (Title Sponsor, Category Sponsor) 2) Exposure Type (radio, tv, etc...)

Steps in Managing a Sponsorship (6)

1) Define the Target Audience 2) Set Objectives 3) Select the Sports Property 4) Establish a Budget 5) Develop an Activation Plan 6) Measure Effectiveness

Two Distinct Characteristics of Sponsorship

1) Inseparable Medium and Message 2) Influence of Secondary Brand Associations

Three Reasons for Sponsorship Growth (3)

1) Targeted Audience Reach 2) Connection with the Affinity of Sports Fans 3) Avoidance of Media Clutter -- these factors help to differentiate Sponsorships from other forms of brand communication tools

Reasons Sponsorships End (4)

1) Unclear Expectations 2) Inadequate Budget/Activation 3) Change in Strategic Focus 4) Change in Managerial Personnel