Not only are sponsorships an important source of funding for special events — often making up a third of overall revenue, and sometimes more — but their prominence is growing. Jim Andrews, senior vice president of Chicago-based sponsorship consulting firm IEG Inc., looks at the latest trends.
Q: How has sponsorship grown over the past 15 years?
A: Overall, spending on sponsorship by North American companies has grown from a few hundred million dollars in 1984 — the first year IEG conducted its comprehensive year-end survey to determine spending — to a projected $9.6 billion in 2001.
Q: How has the role of sponsorships changed?
A: I don't think the role itself has changed, but the perception of it has. While still at its core a revenue stream, sponsorship is now seen as more of a partnership between the event producer and the sponsor. It is no longer just a case of, “Here's a check, make sure my signs are hung properly.” Both sides recognize that working together and sharing resources other than cash, such as a sponsor promoting an event in its advertising or retail displays, can result in the classic win-win scenario.
The perception of the audience members in some cases has changed, and in others still needs to change. For the sponsors to achieve their goals, the audience must understand that sponsorship is more than just the banners, signage and logos in the programs. Both sponsors and events must make sure that they are educating the audience that sponsors play an integral role in the event and that without them the event might not exist at all, or at least would not have all of the amenities it now has.
Q: What tips do you have on targeting the prospective sponsor?
A: Your most likely prospects are companies that are already sponsoring similar events, either by type of event or the location of the event. It is also very important to think categories, not just companies. For example, if you see that Cadillac is sponsoring an event that reaches a similar audience to yours, you should not only think about approaching Cadillac, but all the automakers that compete with Cadillac, e.g., Mercedes, Lincoln, Lexus, BMW.
Q: What segments are eager to sponsor special events now?
A: The most active categories in sponsorship are autos, telecommunications, financial services and beverages — soft drinks, water, etc.
Q: What mistakes do event planners make most often when approaching sponsors?
A: In their proposals to prospective sponsors, they don't do enough to tailor the benefits offered. They offer a standard menu of benefits to all sponsors, not appreciating the difference in how those companies market and sell their products and services.
Q: What advice do you give them?
A: You have to do your homework and find out, even if it's only in a rudimentary way, how the company does business, what its hot buttons are and what are the benefits that you offer that are most attractive to that company. You then have to tailor your proposal to highlight those key benefits. Sponsors don't take a great deal of time looking at proposals, so you can't expect them to dig through a laundry list looking for something they want; you have to put it front and center and make it easy for them to say yes.
Q: How does the special event planner deliver results?
A: Of course it depends on what the specific objectives of the sponsor are, but overall the best advice we can give is to underpromise and overdeliver. A recent survey we conducted asked sponsors what their criteria were for making decisions on renewing existing sponsorships. The No. 1 reason for renewing a sponsorship was simply that the property did everything it promised in the agreement.
Q: What effect will the tragedies of Sept. 11 have on sponsorships?
A: It is difficult to judge at this stage what the specific impact will be until we have a better idea of the long-term effects on the economy. However it is apparent that as companies look at their marketing and sponsorship budgets for 2002, many are expecting at this point to be making cuts.
IEG can be reached at 312/944-1727 or www.sponsorship.com.