With the return of many high-profile events and new television programming in a world that is now just-about managing Covid, brands are keen to recoup some of the losses suffered over the past 18 months, with budgets at the ready that were placed on-hold during the early stages of the pandemic.
The return of sporting fixtures, festivals and fresh TV content has provided a flurry of sponsorship opportunities for brands to choose from, with big audiences that can be reached with big budgets. But as marketers take a stock of their strategy, they may question: is sponsorship worth it? What can go wrong? And how can it benefit PR plans?
Here, we take a look at how sponsorship has been working up a sweat, and in some cases, failing to sizzle.
Back to basics
Sponsorship is a form of advertising, but instead of creative executions existing in isolation, such as a press advert, billboard or TV commercial, money is instead paid to another entity in return for being associated with it. For example, the sponsor’s logo appears alongside the recipient’s in marketing communications.
The goal is to create an association between two brands, a form of piggybacking, working together to leverage each other’s audiences in a bid for commercial gain.
In its smallest form, it could be the high street greengrocer sponsoring the town’s summer fayre, with their name used on all associated promotion. At the other end of the scale, big players fight to retain market share by spending millions with other brands in a bid to be seen by billions. For example, the 2017-2021 cycle of the Olympic and Paralympic Games, including Tokyo 2020, has generated more than $2bn for the International Olympics Committee from brands vying to put their products and services in front of a global audience of over three billion people.
Giving wings to new audiences
One of the best examples of effective sponsorship is demonstrated by energy drink manufacturer, Red Bull. By living-out its high-energy philosophy and well-known ‘gives you wings’ slogan, the company has spent years using sponsorship to build its brand, before, quite literally, taking the strategy to a whole new level with the ultimate PR stunt.
Previously, Red Bull’s marketing comprised sponsorship and, in some cases, ownership of many extreme sports teams, including racing, mountain biking and skateboarding, aligning itself with adrenaline-inducing activities. The brand also began extending the strategy by funding its own sporting fixtures, including the Red Bull Cliff Diving World Series and Red Bull Air Race and, perhaps most notably, forming a highly successful Formula One team, Red Bull Racing.
In 2012, they went a step further: marketed by Red Bull as a ‘world-class, multi-stage, scientific flight test program’, global headlines were made when they sponsored skydiver Felix Baumgartner’s free fall from the earth’s stratosphere. The Red Bull Stratos project saw the dive break the speed of sound – all with the company’s famous red and yellow bulls logo plastered all over Baumgartner’s space suit.
And the PR results? The much-hyped daring leap was shown on almost 80 TV stations across 50 countries, with online streaming boasting 52 million views and, at the time, was the most-watched live stream in history.
Red Bull’s years of aligning itself with heart-in-mouth sports made it the perfect partner for the project and they ended up reaping the rewards. What’s notable about this case study is that, for the first time, Red Bull managed to reach people outside of its more ‘traditional’ sporting audiences. A PR success indeed.
It is also a prime example of how sponsorship has moved on from a company simply attaching its logo to the marketing collateral around a scheduled event; in many cases, events now rely on sponsorship budgets for them to even take place at all.
Show me the merch
And it’s not just in the sporting arena where sponsorship opportunities are evolving. With ITV’s Love Island back on TV screens, sponsors of this generation's ‘Big Brother’ are enjoying more involvement in the production of the dating game show which has come a long way since the days of BB’s telecoms sponsors forking out just to preview their flip-phones in ad break bumpers, while contestants donned their own unbranded outfits throughout their stay. Now, sponsors’ products can be seen placed throughout the contestants’ experience – and pay handsomely for the privilege. From JD Sports supplying gym equipment, to Tinder partnering with a dating app, everything is for sale.
For ITV, this sponsorship model for its runaway reality success is lucrative: described by The Guardian as ‘the most commercialised show on British television’, this year’s offering saw the channel bag £12 million from sponsors before the first episode had even aired and the Mail Online estimates ITV raked in over £73 million from its nine ‘official partners’.
And for the brands, partnering with the programme can prove to be a game changer. In its first year with the show, fast fashion retailer, I Saw It First, enjoyed rapid growth in sales, up 67%, and saw its Instagram following increase by over 250%. This year, as Love Island’s official fashion partner, contestants’ wardrobes comprised the popular online brand’s products and these were made available to purchase by audiences. As a result, ISIF has credited its rapid success to its relationship with the Island.
In a similar vein, the rise of social media has also provided sponsorship with a relatively new channel. As influencer marketing still finds its feet, brands can employ contestants of the show, as well as anyone else with a strong social media following, to post on their behalf, often using ‘#sponsored’ or ‘#ad’ as a way to ‘influence’ their following with brands’ products, providing another route to market for advertisers.
It's a ‘no’ from Ronaldo
What happens when sponsorship goes wrong? As England hit fever pitch earlier this summer when the country’s men’s football squad found themselves in their first major football tournament final in over 50 years, one story managed to break through all the Three Lions noise.
Portugal’s poster boy, Ronaldo, caused a stir when he removed bottles of sponsor Coca-Cola's products from view at a press conference, then picked up a bottle of water stating: ‘No Coca-Cola’, advocating a healthier lifestyle.
Moving the products out-of-shot had a substantial impact: Coca-Cola's share price dropped from $56.10 to $55.22 and Coca-Cola's market value dropped by $4 billion, according to Nasdaq index and the New York Stock Exchange.
After the trend caught on amongst other players, UEFA was forced to intervene, briefing competing delegations to stop removing the strategically placed sponsor products from the news conference platforms, citing the importance of sponsorship revenues for the both the tournament and European football.
Such an issue can pose a real challenge for brands: with a combined 550 million social media following, stars like Ronaldo aren’t always under the control of sponsors. When people don’t get a choice in the endorsement, there is always a risk that they won’t play ball.
To sponsor, or not to sponsor?
Evidently, there are both big benefits as well as risks involved when making sponsorship choices. To maximise the value of sponsorship and mitigate against potential issues, there needs to be a good fit between the sponsor and the entity being sponsored. Brands should ensure they have a clear understanding of their values, their objectives and who their audiences are, before deciding where to part with their budget.