The vast choice of sponsorships can by tempting for any company, especially if you assess each one in a vacuum. It’s easy for a sponsor to feel like a kid in a candy shop when so many options abound, but the wrong choice can lead to a scattered portfolio. Such an approach can sometimes yield positive results for a sponsor, but a well-structured selection can enhance your performance tenfold. Here we’ve broken down the strategies successfully leveraged by major brands, and drawn a few important conclusions. Here are six sponsorship strategies worth taking note of:
1. Vertical integration
Common in the sporting world, a vertical strategy is used to associate a brand with a specific market. For example, if a company sponsors a professional team within a given sport, it will also partner with a variety of amateur and recreational teams and leagues, or it will sponsor various elements associated with the professional team, such as the league, the stadium, the team and the athletes.
If well executed, this type of strategy gives the brand a seal of authenticity within the realm of a given professional sport. It also offers a lot of flexibility when it comes to activation, both with the mass market for major sponsorships and with niche markets when sponsoring local or community associations.
Being associated with a sport that a lot of people follow and play has the advantage of building a long-term competitive advantage for the brand. This approach is especially effective in sectors where there isn’t much differentiation among the products and services and where establishing a unique positioning is key to the marketing strategy, as is the case in the banking, insurance, energy and telecommunications industry where competition is allowed (not a monopoly).
BMO has put its money on soccer, with a partnership that extends from the professional level right down to local teams and the aim to build a strong connection with the sport. Being involved at the local level gives the brand credibility with young people, and its sponsorship of professional teams gives it the opportunity to talk to potential clients.
Tim Hortons uses a similar strategy for hockey. The brand has a presence with all the Canadian teams and with the NHL, and it supports community hockey teams through its Timbits Program, which has helped 200,000 kids aged four to eight, and has been extended to other sports beyond hockey.
Other brands have adopted the same strategy, but with even more of a focus on the different properties within a single sport. Shell and LG come to mind, whose sponsorship of the F1 extends to the track, the championship, the teams and even the drivers.
For the appropriation of a sport or a niche market to work well, a brand needs to have multiple points of contact with the target to ensure that its message is getting across effectively. The idea is to partner at a high level by sponsoring a professional team or league, and at the local level where people are in it for fun.
When it comes to personal finances, it’s never wise to put all your eggs in one basket. But that precise strategy can actually pay off in certain sponsorship contexts. Rather than spreading yourself thin with multiple partnerships, a single well-activated sponsorship can enable your brand to reach its objectives without having to diversify.
A brand can justify investing in a single partnership for a variety of reasons: the lack of resources, the desire to own a platform that offers international reach and is less costly than partnering with multiple properties in individual markets, and the wish to have a single activation platform and a single message. This last point is crucial, as several points of contact and more than one message can create confusion, especially if the target is the same across the board. As a general rule, this approach also frees up more funds for the activation itself, as less need to be spent acquiring rights.
Various brands have developed sponsorship programs with this sharp of a focus. Subaru established a strong association with the car rally world whit its Impreza rally car, before shifting its focus to Ironman competitions, in Canada. British American Racing did a huge clean-up of its worldwide sponsorship portfolio, opting to invest in a single platform—State Express 555 and Lucky Strike becoming sponsors of the F1—which gave them international exposure and the ability to create the brand image they desired with their target market. Qatar Airways enjoys the same kind of reach in its partnership with FC Barcelona, one of the best-known and most popular brands in the sport.
To deploy this kind of approach, a brand either needs to be a new kid on the sponsorship block or has to do a drastic overhaul of its portfolio—a process that can take many years. This approach also comes with its fair share of risk. The United States Postal Service benefitted from its partnership with its cycling team—and with Lance Armstrong—but it had to manage some seriously negative press as well.
An umbrella approach is when a sponsorship portfolio is composed of several heterogeneous properties that are unified by a single activation platform instead of being leveraged independently.
This approach paves the way for clear and simple messaging in the market, generates significant activation savings, and enables the brand to reach its communication objectives.
Loto-Quebec is a good example of this. With more than 100 festivals throughout the province, it leverages a unique activation platform: les Rendez-vous Loto-Québec. Instead of coming up with individual activations for each event—which would demand a lot of resources—the crown company launches an umbrella campaign that showcases its involvement in a variety of free summer events, and communicates its mission as a crown company—that of providing entertainment and reinvesting in the community.
Since 2003, The TD Bank has also deployed an umbrella approach through its TD Music platform, based on the insight that music enriches lives. Their platform extends to several music events and festivals, and covers all the big jazz festivals across the country. It also gets involved at the community level by enabling youth in under-served communities to have access to musical instruments and equipment. The program also gives clients the chance to sign up for special offers like contests, member discounts and VIP experiences.
Toyota uses a similar strategy with its sponsorships by promoting its trucks division to a primarily male target market. However, the company adapts its messaging depending on the context of the event to showcase different utilitarian aspects of its vehicles, be it for fishing, renovating or other activities.
It helps if the portfolio has some common themes that an overarching communication can unite.
Small-scale projects can also have a substantial impact on a brand’s marketing objectives by creating strong ties with communities or sub-cultures, or by establishing a solid foundation for authentic storytelling. A community approach is relevant when a brand comes into contact with a specific group and has a real marketing insight. Such is the case for Pabst Blue Ribbon, who has seen its popularity grow through its association with small and marginal events supported by a fringe group of influencers. After noticing a spike in sales in certain New York neighbourhoods with no marketing support to back it, brand managers realized that bike couriers were drawn to Pabst because of its low price and the underground vibe that its lack of marketing had helped create. Pabst slowly inserted itself within this sub-culture by offering free products at events frequented by this target, and then by extending its contribution through the funding of several small independent events, from rock concerts to single-speed bike races.
Ben & Jerry’s also anchors its approach in the community, especially in Burlington, Vermont where it was founded. In addition to giving back at the local level through various programs, the company also uses social engagement as a tool for recruiting employees and bringing its brand philosophy to life. Their most important scholarship program, Grassroots Organizing for Social Change, donates money to small community organizations throughout the United States to help them effect social change.
An approach like this doesn’t cost a lot, but it must be executed in a way that doesn’t alienate its core influencers. And the connection between the company and the chosen cause must be a relevant one. The investment in activations tends to be higher than the acquisition of rights, which is fairly inexpensive given the more marginal nature of the properties.
5. Creating a platform
When the choice of properties on the market isn’t enough, a brand can decide to create its own platform and be the only brand—or one of the only brands—associated with it.
The size of the niche market can vary, but what characterizes this approach is the complete control the brand has over its image, its choice of target audience and partners (if it’s deemed appropriate to have partners), the fit of the event and the revenue generated. The brand enjoys total freedom by determining its own benefits, negotiating its own broadcast deals, choosing its own media partners and protecting itself against rising sponsorship costs. In so doing, they avoid what a lot of brands often come up against when they invest in an event early on: contributing to the success of an event to the point where it becomes too costly to continue sponsoring it, essentially digging its own grave.
A lot of brands have used this approach, but Red Bull was the one that made the model of creating a platform from the ground up—and handling all the organizational and promotional aspects of the event—a truly popular one. Imperial Tobacco had used this approach in the 90s when it bought up a lot of properties and turned them into Player’s-sponsored events. Molson did the same thing with its Association of Party Pros. From a social responsibility standpoint, Bell takes a similar tack with its Let’s Talk program, which is a hybrid strategy that merges the umbrella approach with the creation of its own platform.
Despite the advantages of having greater control, this approach demands a significant investment, a lot of internal resources (both on the financial and the staffing front), and the ability of a brand to appeal to consumers with its program—which isn’t the case for all sectors, like the banking industry.
It’s possible for brands to become omnipresent within a given market by virtue of quantity alone: the theory of bombardment. Here the idea is to maximize the points of contact with as many people as you can.
Some brands find themselves in this situation because they don’t, in fact, have a strategy, or because a decentralized sponsorship approach gives their satellite or affiliated brands the opportunity to develop their own sponsorships. This approach can help a brand establish its presence in a community or assert its leadership.
Ethiad Airways, the official airline of the United Arab Emirates, has a large global sponsorship portfolio in a number of different markets. Closer to home, Desjardins is present in almost all Quebec communities, in addition to partnering with major provincial organizations. It’s impossible not to be exposed to the brand, which is one of the best known in Quebec from a sponsorship standpoint, thanks to the company’s model where the individual co-ops make a difference and affirm their presence in the community and head office looks after the major properties.
Not a lot of brands have the luxury of using this kind of approach, and most brands should avoid it outright because of the huge amount of resources required to pull it off.
Though the cases discussed here involve a lot of big brands, all of the strategies can, for the most part, be applied on a smaller scale. You just have to be aware of your available resources and the flexibility of your portfolio before making any significant change in your sponsorship approach.
It can be tempting to try something new, but sometimes your best bet is to maintain existing partnerships and improve on the quality of your activations.
Do you have other strategies in mind? Feel free to share them with us for our next publication.