In this ongoing environment of economic uncertainty, many companies are reviewing their sponsorship investments as part of an overall audit of marketing spending. However, the current business landscape also presents a new opportunity to work with partners to evaluate key sponsorship provisions, fine tune existing portfolios and ensure that any new sponsorship investments work hard to meet business objectives.
Here’s a look at five areas where brands can really move the needle for maximizing value in their partnership agreements:
1. Leverage the flexibility the market has afforded
Gone are the days when properties can insist on multi-year commitments in order to attract sponsors into the fold. The recent announcement that Papa John’s has signed a short-term partnership with the National Football League to serve as the “Official Pizza Sponsor” of Super Bowl XLIV is yet another example of sponsors having the flexibility to leverage national properties during shorter promotional windows. Over the past two years the NFL has inked similar partnerships with KFC, IHOP and McDonald’s, who will be the Presenting Sponsor of this year’s Pro Bowl, demonstrating that even heavyweights like the NFL are more willing than ever to be flexible. While you’re at it, negotiate in the flexibility to modify contractual elements that may not be working as hard as you expected.
2. Reconsider exclusivity
Ask yourself if paying for exclusivity is really necessary. While exclusivity does have a critical value in some product categories where it’s an important element for selling in programs to retailers or other channel partners, many brands continue paying a premium for exclusivity when that status has declining value in a cluttered sponsorship world. Make sure you are clear about the role of exclusivity in making your sponsorships perform.
3. Require activation rights and property assistance
Fans need reasons to spend their limited disposable income on your product or service, and one of the best ways to explain those reasons is through a meaningful one-on-one interaction. Work with properties to repurpose passive sponsorship elements (e.g. program ads or concourse signage) into ways that your brand can have a real, person-to-person conversation with fans about your product or offering.
4. Beware of “escalators”
Many properties have historically made annual price “escalators” a standard element in sponsorship agreements. These automatic increases assume sponsorship value goes up each year regardless of any other factors (attendance, your sales, the economy, etc). Brands should be wary of such clauses, especially if these increases aren’t tied to specific performance metrics being met by the property. Similarly, the old policy of charging additional fees for post-season rights should also be resisted.
5. Demand accountability
Remember, the balance of power is now with the brands, so demand that properties be accountable for both program execution and property performance along key metrics such as attendance, brand interactions, TV ratings and web traffic.
We are Relay Worldwide.
Our mission and goal is to make brands a more meaningful part of people’s lives. As experts in brand consulting, sponsorships, lifestyle and experiential marketing, we use relevant insights to create real connections with people where they live, work and play. We are a part of the Publicis Groupe family and we serve a diverse roster of brands including Coca-Cola, Walgreens, PayPal, Sharp Electronics, Kashi and Beam Global Spirits & Wine.
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