Sponsorship - when needs of sponsors and offerings diverge

In recent years, sponsorship has developed into a full-fledged instrument of marketing communication. Decision-making is defined less by emotions than by rational, measurable criteria. This means that the services must be geared as precisely as possible to the needs of the partners. The more professional and rational the sponsorship decisions, the higher the demands on the rights holders. Flexibility and adaptability are thus essential.




An important factor in the success of sponsorship is the optimum interplay of benefits for the rights holders and returns for the sponsors. This is relevant not only in view of settling the contractual agreement but also in ensuring a long-term return on sponsorship investment. Several years ago sponsorship decision-makers tried to snap up top positions by purchasing rights packages that were as comprehensive as possible. It did not matter whether rights were bought which did not really contribute to achieving the overall goal; a clearly defined goal was often missing. It was more important to gain a certain status as a sponsor than to secure the benefits necessary to achieve the goal. Thanks to an absent effectiveness assessment and a generous budget, these scatter losses and inefficiencies could be tolerated. The rights holders focused on this and developed sophisticated sponsorship packages with far-reaching benefits and exclusivity which could be offset even against the correspondingly high prices. It was desirable to “occupy” a sport, an event, or a project as comprehensively as possible, keep other businesses at a distance, and completely shut out competitors. Just like the motto: it’s better to accept a benefit that we don’t need than for someone else to receive it. The rights holders focused on this and more intensively concentrated and controlled the rights. This strategy worked for rights holders for a long time, but is it still the right strategy today?


For years it was desirable to “occupy” a sport, an event, or a project as comprehensively as possible to keep other businesses at a distance and completely shut out competitors.


Sponsorship budgets are under pressure; sponsorship must truly perform while it competes with other marketing instruments. The activation of sponsorship rights by the sponsor is in focus. Acquired rights must be used; otherwise the expected ROI will not materialize. But as for the demands on rights holders, this means that today businesses want to purchase only the rights they need for activation and desired positioning. Professional companies develop activation concepts eartly on, before the contract negotiation, and know exactly which rights must be included in an ideal package. A complicating factor is that the priorities in the activation change over time, so they do not remain constant over the entire duration of the contract. Flexibility is the key word here. The offers must more become more flexible, i.e. they must be better aligned with the needs of the partners. Rigid concepts with a fixed sponsor structure and a correspondingly fixed price concept, along with detailed, pre-defined benefits packages are a thing of the past. The organizer must fully understand the needs of the interested partner in order to then develop an appropriate offer. At the same time, the rights holders also must take into account the partner’s needs for refinancing and protection. The solution: offers which provide a framework for minimal financial engagement on the part of the partner, but whose range of benefits contains the maximum flexibility the partner desires. It should be possible for the sponsor/partner to re-fit the benefits to the goals yearly, if they change, and thus generate optimal value.


Conclusion:

Rights holders must react more flexibly to the changing needs of their partners. For their part, the partners should focus much more on differentiation and originality, as well as on rights protection and blocking oversized rights packages.

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