Chapter 11

1. Chapter 11 Sponsorship Foundation and Failure McGraw-Hill/Irwin ©2007 The McGraw-Hill Companies, All Rights Reserved

2. Failure • Failure - Different Meanings to People • Failure: • Failed to Meet Expectations • Sponsors Chose Not to Renew • Dilemma Is that Sponsors Often Choose Not to Renew Some Sponsorships that Have Met All of Their Expectations

3. Competitor Response • Natural Response by Competition is to Attempt to Neutralize Any Differential Advantage Based Upon a Sponsorship • Responses by Competitors: • Piracy or Ambush Marketing • Increases in Promotional Activities • Aggressive Changes in Marketing Mix

4. Sponsorships Fail WhenThey Have a Poor Foundation • Sponsorship Should Be: • Defined • Need to understand what a sponsorship Is • An Appropriately Selected Communications Medium • Fit the target market and communications goals • Objective Led • Decision based on Organizational Goals

5. Sponsorships Fail WhenThey Have a Poor Foundation • Sponsorships Should Be: • Integrated • Fits within the sponsor’s IMC plan • Effectively Screened • Selected Based on Merits • Contracted • Written contracts help to avoid surprises and to provide recourse in the case of non-compliance

6. Sponsorships Fail WhenThey Have a Poor Foundation • Sponsorships Should Be: • A Long-Term Commitment • Ongoing serial sponsorship over time tends to be more effective than a “once-off” sponsorship • Protected from Ambush • Both the sponsor and the sponsee should engage in activities that identify and provide protection from ambush marketing

7. Sponsorships Fail WhenThey Have a Poor Foundation • Sponsorships Should Be: • Leveraged • Sponsor should recall that sponsorship is not a stand-alone promotional tool and invest an adequate level of resources for collateral support • Evaluated • Marketer will not know if the sponsorship succeeded or failed if there is no attempt to measure the results

8. Other Reasons for Failure • Decrease in Market Value • The Benefits Are Not Delivered, So the Sponsor Considers the Sponsorship to be Over-priced, but Sponsee Does Not Reduce the Price Accordingly • New Events at Lower Prices Drag Down the Market Value of Existing Events

9. Other Reasons for Failure • Cost Becomes Prohibitive • Rights Fees Escalate because of Increased Demand as Events Prove to Be Effective • Prime Properties such as the Olympics and the World Cup of Soccer Have Dramatically Increased their Rights Fees over the Past Few Sponsorship Cycles

10. Other Reasons for Failure • Change in Corporate Direction • Even When a Sponsorship Has Been Effective, the Sponsor May Decide to Pursue a different Marketing Strategy that Does Not Involve the Sponsorship in Question • Isuzu Terminated Its Sponsorship with the Celebrity Golf Challenge Solely because of Its Effort to Create a New Image for Isuzu

11. Other Reasons for Failure • Property Hopping • The Sponsor Focuses on Short-Term Strategies that Result in the Movement across a Series of Sponsored Properties

12. Other Reasons for Failure • Timing Considerations • Events Are Not Always Staged During the Same Time Period from Year to Year • A Sponsorship that Made Sense for an Event Held in July May Not Make as Much Sense When that Event Is Staged in May

13. Other Reasons for Failure • Failure to Understand What Is Not Received • “Due Diligence Overlooked” – The Sponsor Expected Certain Plan Components that Were Not Specified in the Contract • The Sponsor Misunderstands Some Issue • Sponsor Expected Broader Category Exclusivity • Sponsor Expected Signage to be More Prominent

14. Other Reasons for Failure • Greenwashing • Public and Media Scrutiny Arises in Regard to a Marketer’s Sponsorship of a Cause-Related or Environmental Property • IEG Caveat: “Don’t sponsor green unless you are green”

15. Other Reasons for Failure • Over reliance on Small Sponsorships • Small, Grass Roots Sponsorships Typically Do Not Provide the Benefits Associated with Major Properties; This Reality Is Often Perceived to Be a Failure which Results in a Greater Propensity for Property Hopping

16. Other Reasons for Failure • Failure to Sell Internally • Many People Who Have a Vested Interest in Using Company Resources Wisely Are Not Sold on the Benefits that the Sponsorship Has Provided • The Unconvinced May Want to Use Resources in Other Ways, So the Sponsorship Is Not Renewed

17. Other Reasons for Failure • Failure to Deliver Sought Results • There Is a Deficit When Comparing the Actual Results to the Anticipated Results such that the Return on the Sponsorship Investment Is Deemed to Be Inadequate

18. Overview of Failure • Some Failures Are Inevitable • Learn from the Successes & the Failures

19. Examples of “Failure” • Xerox & IOC • New Focus on “Other Customer-Facing Initiatives” • Siemens & McLaren Mercedes F1 Team • F1 Racing Deemed to be Inconsistent with Siemens Image • Reynolds Tobacco & NASCAR • New Laws Limited Ability to Promote and Leverage the Winston Brand of Cigarettes

20. Closing Capsule • Some View Any Non-Renewal as Failure • Some Successful Sponsorship Relationships Are Terminated by Satisfied Sponsors • There Are Many Reasons for Failure • Learn from Successes and from Failures