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Chapter 7Chapter 7

Leveraging: Activation Leveraging: Activation

Of the SponsorshipOf the Sponsorship

Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill/Irwin

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LeveragingLeveraging

• Sponsorship Has Been Characterized as a License to Spend More Money

• Sponsorship Is Not a Stand-Alone Activity

• Need to Support Any Sponsorship with Additional Efforts Designed to Reinforce the Awareness that the Marketer Is an Official Sponsor of the Property

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LeveragingLeveraging

• Also Referred to as:– Activation– Collateral Support

• Defined as:– the set of strategic initiatives that are

designed to support and enhance the sponsorship

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Why Leverage?Why Leverage?

• Reinforce Relationship in Consumers’ Minds

• Reduce Vulnerability to Ambush Marketing

• Increase Likelihood that the Sponsorship Will Achieve Its Anticipated Objectives

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License to SpendLicense to Spend

• Drop in Figure 7.1 Here

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How Much Should Be Spent How Much Should Be Spent on Leveraging Activities?on Leveraging Activities?

• No Universal Agreement

• Actual Amounts Vary Significantly

• Generally Accepted Standard Is That a Minimum of $1 Should Be Spent on Leveraging for Each $1 Committed to Rights Fees

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Leveraging in PracticeLeveraging in Practice

• IEG Reported Expenditure Ratio in 2004: $1.30 Spent on Leveraging for Each $1.00 Paid in Rights Fees

• New Report Indicates that Ratio Increased in 2007 to an All-time High of $1.90

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Leveraging TechniquesLeveraging Techniques

• Drop in Box 7.1 Here

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Theme-Based AdvertisingTheme-Based Advertising

• Use Advertising that Focuses on the Same Theme Germane to the Sponsored Event

• For example:– adidas Sponsors FIFA and the World Cup of

Soccer; They Use TV and Magazine Ads that Feature a Soccer Theme to Leverage that Sponsorship

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Example of Theme-Based AdExample of Theme-Based Ad

• Drop in Figure 7.2 Here

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Advertise During Advertise During the Broadcast of the Eventthe Broadcast of the Event

• Often, Sponsors Are Given Opportunities to Purchase Advertising Time Prior to that Time Being Offered to Nonsponsors

• For Example:– McDonald’s Airs TV Advertisements during

the Olympic Broadcast in an Effort to Leverage Its Sponsorship of the IOC

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Advertise in the Event ProgramAdvertise in the Event Program

• Reach the Fans at the Event; Those in Attendance Will Read the Program and Be Exposed to the Sponsors’ Advertisements

• For example:– FedEx Used Ads in the Ryder Cup Program to

Reach Fans and Increase On-Site Business

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Use Sponsee’s Logo Use Sponsee’s Logo on Packaging & Promotionon Packaging & Promotion

• Incorporate Trademarks and Logos of the Sponsored Event on Product Packaging

• Must Have Been Granted This Right in the Contract by the Sponsee

• Incorporate Logo on Other Promotional Efforts

• For Example:– McDonald’s Incorporates Logos of World Cup, UEFA,

& Olympics on Its Drink Cups

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Use of Logo on PackagingUse of Logo on Packaging

• Drop in Figure 7.3 Here

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Distribution of Free Distribution of Free Products or PremiumsProducts or Premiums

• Use Free Samples of Sponsor’s Product or Promotional Giveaways that Feature the Sponsee’s Trademarks and Logos

• For Example:– Absopure Gives Free Samples of Its Water at

Michigan Stadium

– GM Gave Out Poster Featuring NFL Team

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Use of PremiumUse of Premium

• Drop in Figure 7.4 Here

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Provision of PrizesProvision of Prizes

• Sponsor Provides Goods and Services that Sponsee Uses as Prizes for Selected Activities

• For Example:– Southwest Airlines Provides Tickets that

MLB’s St. Louis Cardinals Give Away to Contest Winners Selected from Fans in Attendance

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Point-of-Sale Display (POS)Point-of-Sale Display (POS)

• Use of Themed Signage at Retailers; the Signage Features the Sponsorship

• For Example:– adidas Uses Displays that Feature Soccer in

General and the Brazilian Soccer Team in Retail Stores in South America

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Push Strategy for RetailersPush Strategy for Retailers

• Engaging in Activities Designed to Persuade Retailers to Increase Exposure of the Sponsor’s Products and Promotions within the Retail Stores

• This May Involve Some Type of Financial Compensation for the Retailer

• For Example:– NASCAR’s Sponsor, Country Time, Achieved a

Substantial Increase in Display Space because Retailers Saw a Chance to Increase Their Sales

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Consumer Sales OverlayConsumer Sales Overlay

• Consumers Associated with the Sponsor Can Buy Tickets at Discounted Prices

• For Example:– AAA Is a Sponsor of the Detroit Tigers;

Members of AAA Have Several Opportunities Each Season to Purchase Tickets at Half Price (2 for 1)

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Cross-Promotions Cross-Promotions with Co-Sponsorswith Co-Sponsors

• Collaborate with Another of the Property’s Sponsors in a Joint Marketing Endeavor

• For Example:– U.S. Olympic Team Sponsors (Hilton Hotels

and United Airlines) Put Together Travel Packages While Referencing Their Association with the USOC

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Affinity ProgramsAffinity Programs

• Capitalize of the Brand Equity and the Consumers’ Affection for the Sponsee

• Effective For CRM-Based Sponsorships, but Applicable in Sports Marketing

• For Example:– MNBA NFL “Extra Points” Visa Credit Card Features

NFL Logos and Consumer Benefits Are Accumulated by Using the Card

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Web Tie-InsWeb Tie-Ins

• Acknowledgement of the Relationship on the Sponsor’s Own Web site – May Link

• For Example:– McDonald’s Web Site Has a Link for “Sports”

Clicking Through Will Direct the Browser to a Listing of All of the Marketer’s Sponsorships Where One Can Click Through to Any of Its Sponsorships Including the IOC, All American High School Basketball, FIFA, and NASCAR

• http://www.mcdonalds.com/usa/sports.html

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Provide HospitalityProvide Hospitality

• Reward Top Employees & Customers

• Reinforce Relationship with Sponsee in the Eyes of Those Entertained by Sponsor

• For Example:– Nokia Invited 2,000 Customers to Attend the

Nokia Sugar Bowl – Included Parties and Other Events Affiliated with the Game

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Overview of LeveragingOverview of Leveraging

• Essential for Maximizing Impact

• Expensive – Consider Cost of Leveraging as Well as the Cost of the Rights Fees

• Sponsee Can Advise Sponsors on the Use of Effective Leveraging Strategies

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Example of a Leveraging EffortExample of a Leveraging Effort

• Visa and the NFL

• Components– Affinity Credit Card– Contest for Consumers Who Use the Card– Print Advertising Featuring NFL Logos– POS Featuring NFL Logos in Stores– Cross-Promotion with DirecTV– Chance to Win Tickets to Super Bowl

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Example of a Leveraging EffortExample of a Leveraging Effort

• Best Western International and NASCAR

• Components– NASCAR Room Rate (Discounts)– Affinity Credit Card– Cross-Promotions with Co-Sponsors– On-Site Hospitality at Race Location– Access to Tickets through Hotel

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Ten Steps to EffectivelyTen Steps to EffectivelyLeveraging a SponsorshipLeveraging a Sponsorship

• Drop in Box 7.2 Here

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Make-Buy DecisionMake-Buy Decision

• Make – Sponsor Develops and Implements Its Own Leveraging Program

• Buy – Sponsor Hires an Outside Agency to Assist in the Development and Implementation of Its Leveraging Program

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Who Is Used When “Buying”?Who Is Used When “Buying”?

• Insert Figure 7.7 Here

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Closing CapsuleClosing Capsule

• If a Sponsorship Fails to Achieve Its Objectives, the Sponsor Must First Ask Itself: “Did We Do an Adequate Job in Leveraging Our Sponsorship?”

• Leveraging Helps Reduce Impact of Ambush Marketing Efforts

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Closing CapsuleClosing Capsule

• Sponsorship Is Only Effective When the Consumer Recognizes the Relationship between the Sponsor and the Sponsee

• Effective Leveraging Makes that Recognition Far More Likely