Sponsorship Game is Changing

The Big Shift

We have noticed two major shifts in the way global brands are taking the approach toward sponsorship. The first is the trend of longer term strategic relationships versus one-offs. The second is the multiple corporate partners with official category exclusivities versus a headline sponsor usually followed by second-tier sponsorships.

This confirms the shift from being a buyer of sponsorships to an investor in partnerships is alive and well. Senior marketers increasingly see sponsorships as a core part of brand strategy, and are investing in sponsorships that span a longer activation period. (see “Why the sponsorship game is a long one“)

Occasional one-off high-value events such as the World Cup, Olympics, or the GRAMMY Awards, etc. will still be actively pursued by brands. But even then we are using as examples events that are repeated, keeping open the activation window in the off-season or between events. Audience engagement is no longer a series of one-off experiences—it’s an ongoing dialogue.

Corporate Circle

The same is true when it comes to top-tier brands as part of a “Corporate Circle” in lieu of one single headline partner. Major museums and other properties have accomplished this properly for several years. Name rights partnerships are still in demand, but generally speaking rights holders gain a lot more value when they use this multi-brand partnership strategy.

This becomes more evident when properties and rights holders take advantage of brand recognition and association to gain leverage to attract additional official corporate partners. Brands love it when they don’t have to share the full load. This enables them to invest in more opportunities, just as a VC spreading its investments.

Take the Premier League for example, which is embracing a new marketing strategy that includes several official partners instead of one title sponsor. It is abandoning its traditional setup and focusing instead on developing a slate of top tier partners. Most professional leagues including FIFA’s World Cup, the National Football League and the Olympics are following the same strategy.

Category Exclusivity

That is why we see a lot more of “official partner” sponsorships via category exclusivities. Couple that with the fact that brands are “investing” in long-term relationships for repeat exposure and engagement rather than one-off events, we have ourselves a winning strategy. The media and ad agencies love it because the activation campaigns enjoy a longer shelf life, and can be reapplied with modifications over the course of the term, with more opportunities for greater ROI.

In fact, according to IEG/WPP, more sponsors are willing to increase spending on activation than on rights fees. This is good news for properties who can then help brands with better metrics over a longer period of sampling as a result.

The New Trend

One last observation to strengthen our findings: In the past, headline and title sponsors locked out a ton of sponsorship inventory rights holders and properties could sell. Now with more possibilities and options, this new trend of multiple brand partnerships is more attractive, lucrative, and results in a win-win.

A true partner is not just a sponsor. At the same time corporate partnership requires more expertise. Clients using this smarter approach also realize a greater return. And just as brands are realigning their sponsorship strategy, rights holders and properties must also adhere to this new game plan and adapt accordingly.

Reputable sponsorship and brand partnership agencies can help in this effort.