In part 1, we discussed what sponsorships were and how they could be useful in helping startups capture a market segment. In this second part, we will be focusing on how to decide on a sponsorship, how to use it and lastly, how to ensure it is working.
Getting Your Target Audience Right
As previously mentioned, a sponsorship is more than a business transaction — it influences the way in which the sponsoring company is portrayed. For example, when news of Tiger Woods’ infidelity broke, companies like Gatorade, Gillette and Accenture dropped him. This was to avoid being represented as brands that supported such behaviour to their target audience.
When thinking about whom to sponsor, one should always have one’s target audience in mind. Nike knew that sponsoring Colin Kaepernick, who sat down during the playing of the American national anthem in 2016, would alienate a certain market segment. Yet, they took the bet because they also knew that it would enhance the brand’s image for their target audience.
While Nike seemed to have lost a relatively larger proportion of their seniors market (-12%), it was offset by the +3% increase in the 18 to 29 age range, arguably a much larger market for sports products.
When determining your target audience, some of the factors to take note of include their demographic, psychographic, socioeconomic status and geographic variables.
Being a Special Sponsor
Another factor to consider is the exclusivity that the entity can grant your company. Most events/entities looking to acquire sponsorships will have designated sponsorship categories.
For example, a TV show might have a soft drinks sponsorship category that only allows for the sponsorship of a single soft drinks brand – so you won’t see both Pepsi and Coke advertisements being displayed.
This is important because advertising clutter may confuse the audience, reducing the efficacy of the sponsor’s outreach. As mentioned in the previous article, this exclusivity is important because it helps to promote your brand while suppressing others.
Of course, the most important factor when selecting a sponsorship is the cost. High-profile sponsorships, like the Olympics and celebrities with high social media following, tend to cost more and for good reason — they attract a larger number of viewers and more viewers mean greater brand visibility.
While it is most important that sponsorship reaches out to your brand’s target audience, some companies will still choose to sponsor high-profile entities or events. This happens despite a seeming “loss”, because brands want to be associated with these celebrities or events and be viewed as premium.
Mengniu, a dairy products company based in China that sells their products mainly in China, was one sponsor for the Olympics. Despite a very large number of viewers not even being potential customers, those who were potential customers associated Mengniu with the Olympics, a premium entity, and viewed Mengniu as a premium brand. In fact, this isn’t the first time Mengniu has sponsored a premium entity to great effect.
So now you’ve decided on your sponsorship. What next? Deliver your shiny, new portable cupholder that also doubles as a selfie stick to Justin Bieber and wait for the cash to roll in, right? Not so fast.
Activating the Sponsorship
You can’t just rely on chance paparazzi photos of a celebrity being seen with your product to create impactful associations. Sponsorships require activation to create the greatest impact. The point of an activation is to build and reinforce the brand’s association with the entity or event that you are sponsoring, such that every time your target audience thinks of the entity or event, they immediately associate it with your brand.
Activation comes in many forms, from hospitality opportunities and peri-event activities, to the oft-used take-home memorabilia. If you were intending to start the next AirBnb, you might consider sponsoring a sports event as well as offering the athletes and a few lucky fans accommodation in the best areas in town, or perhaps hosting meet-and-greet opportunities. Consider how Beko, a previously relatively unknown home appliances brand in Europe, organised a Global Fan Wave during the game between FC Barcelona and Real Madrid. There are many possibilities when considering how you can leverage on a partnership to further enhance your brand’s association with the entity.
Now you have your sponsorship and you know what to do with it. How do you know it’s working?
This is probably the most difficult part. Sponsorships are primarily public relations efforts and it is difficult to measure the impact that a sponsorship has because it usually doesn’t occur within the place where the transaction between the customer and business happens.
For example, if a financial consultant at a roadshow attempts to and succeeds in selling you a savings plan, you can attribute the success of that sale directly to that form of promotion. On the other hand, if the financial services company that the consultant is working for sponsors a marathon, you wouldn’t be able to attribute the increase in phone-in sales to that particular event (unless the customer explicitly says so). Moreover, the message the brand is trying to get across isn’t to “BUY THE PRODUCT” like in traditional advertisements, but to create a certain image.
Nevertheless, there are a few key indicators that have been generally agreed upon to be highly valuable in tracking the success of a sponsorship, such as attitudes towards the brand, amount of positive social media activity and awareness of the product or brand.
The simplest tools to use would be surveys and focus groups at the end of a sponsored event with questions aimed at determining the event attendees’ attitudes and awareness of the product or brand. Social media engagement can be tracked rather easily, but the issue lies in placing a tangible dollar value on it. Fortunately, some clever people have already created general benchmarks that you can refer to.
Now you know what sponsorships are, how beneficial they can be for startups, and how to select one, use it and measure its success. So, the next time you’re thinking about how you can increase your customer base or raise brand visibility, resist the instinctive urge to reach for more traditional methods of promotion and maybe consider a sponsorship.