7-1 Chapter 7 Leveraging McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved.

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7-1 Chapter 7 Chapter 7 Leveraging Leveraging McGraw-Hill/Irwin ©2007 The McGraw-Hill Companies, All Rights Reserved

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Transcript of 7-1 Chapter 7 Leveraging McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved.

Page 1: 7-1 Chapter 7 Leveraging McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved.

7-1

Chapter 7Chapter 7

LeveragingLeveraging

McGraw-Hill/Irwin ©2007 The McGraw-Hill Companies, All Rights Reserved

Page 2: 7-1 Chapter 7 Leveraging McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved.

7-2

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

Page 3: 7-1 Chapter 7 Leveraging McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved.

7-3

LeveragingLeveraging

• Also Referred to as:– Activization– Collateral Support

Page 4: 7-1 Chapter 7 Leveraging McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved.

7-4

Why Leverage?Why Leverage?

• Reinforce Relationship in Consumers’ Minds

• Reduce Vulnerability to Ambush Marketing

• Increase Likelihood that the Sponsorship Will Achieve Its Anticipated Objectives

Page 5: 7-1 Chapter 7 Leveraging McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved.

7-5

License to SpendLicense to Spend

Source: IEG, Inc. Reprinted with permission.

Page 6: 7-1 Chapter 7 Leveraging McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved.

7-6

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

• No Universal Agreement

• Amounts Vary Significantly

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

Page 7: 7-1 Chapter 7 Leveraging McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved.

7-7

Leveraging in PracticeLeveraging in Practice

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

• New Report Indicates that Ratio Slightly Increased in 2005 to $1.34

Page 8: 7-1 Chapter 7 Leveraging McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved.

7-8

Leveraging TechniquesLeveraging Techniques

Page 9: 7-1 Chapter 7 Leveraging McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved.

7-9

Theme-Based AdvertisingTheme-Based Advertising

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

• adidas Sponsors the World Cup of Soccer; They Use TV and Magazine Ads that Feature a Soccer Theme

Page 10: 7-1 Chapter 7 Leveraging McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved.

7-10

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

• McDonald’s Airs TV Advertisements during the Olympic Broadcast in an Effort to Leverage Its Sponsorship of the IOC

Page 11: 7-1 Chapter 7 Leveraging McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved.

7-11

Advertising in the Event ProgramAdvertising in the Event Program

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

• FedEx Used Ads in the Ryder Cup Program to Reach Fans and Increase On-Site Business

Page 12: 7-1 Chapter 7 Leveraging McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved.

7-12

PackagingPackaging

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

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

• McDonald’s Incorporates Logos of World Cup, UEFA, & Olympics on Its Drink Cups

Page 13: 7-1 Chapter 7 Leveraging McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved.

7-13

Distribution of Free Distribution of Free Products or PremiumsProducts or Premiums

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

• Absopure Gives Free Samples of Its Water at Michigan Stadium

• GM Gave Out Poster Featuring NFL Team

Page 14: 7-1 Chapter 7 Leveraging McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved.

7-14

Provision of PrizesProvision of Prizes

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

• Southwest Airlines Provides Tickets that MLB’s St. Louis Cardinals Give Away to Contest Winners Selected from Fans in Attendance

Page 15: 7-1 Chapter 7 Leveraging McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved.

7-15

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

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

• Adidas Uses Display that Feature Soccer and the Brazilian Team in Retail Stores in South America

Page 16: 7-1 Chapter 7 Leveraging McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved.

7-16

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 Environment

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

• NASCAR Sponsor, Country Time, Achieved a Substantial Increase in Display Space because Retailers Saw a Chance to Increase Its Sales

Page 17: 7-1 Chapter 7 Leveraging McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved.

7-17

Consumer Sales OverlayConsumer Sales Overlay

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

• 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)

Page 18: 7-1 Chapter 7 Leveraging McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved.

7-18

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

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

• U.S. Olympic Team Sponsors (Hilton Hotels and United Airlines) Put Together Travel Packages While Referencing Their Association with the USOC

Page 19: 7-1 Chapter 7 Leveraging McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved.

7-19

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

• MNBA NFL “Extra Points” Visa Credit Card Features NFL Logos and Consumer Benefits Accumulated by Using Card

Page 20: 7-1 Chapter 7 Leveraging McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved.

7-20

Web Tie-InsWeb Tie-Ins

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

• Coca-Cola’s Web Site Has a Link for “Citizenship.” 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, FIFA and NASCAR

Page 21: 7-1 Chapter 7 Leveraging McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved.

7-21

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

Page 22: 7-1 Chapter 7 Leveraging McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved.

7-22

Example of a Leveraging EffortExample of a Leveraging Effort

• Visa and the NFL

• 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

Page 23: 7-1 Chapter 7 Leveraging McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved.

7-23

Example of a Leveraging EffortExample of a Leveraging Effort

• Best Western International and NASCAR

• NASCAR Room Rate (Discounts)

• Affinity Credit Card

• Cross-Promotions with Co-Sponsors

• On-Site Hospitality at Race Location

• Access to Tickets through Hotel

Page 24: 7-1 Chapter 7 Leveraging McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved.

7-24

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

Page 25: 7-1 Chapter 7 Leveraging McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved.

7-25

Who Is Use When “Buying”?Who Is Use When “Buying”?

Source: IEG, Inc. Reprinted with permission.

Page 26: 7-1 Chapter 7 Leveraging McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved.

7-26

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 Effort

Page 27: 7-1 Chapter 7 Leveraging McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved.

7-27

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


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