Date: June 16, 2004

TORONTO – As economic conditions in the United States continually shift, arenas chasing sponsorship dollars have to stay on top of the trends. Vinu Joseph, project director for IEG Inc. consulting, a sponsorship facilitator, brought Event & Arena Marketing Conference (EAMC) attendees up to speed in a session titled “Sponsorship Trends & Best Practices” on June 10.

EAMC drew 350 attendees to the Toronto Hilton June 9-12, of which 149 were first time attendees. Tammy Koolbeck, general manager of the Cedar Rapids Ice Arena, and outgoing president of the conference association, said she thinks the reason for the high percentage of newcomers was that arena budgets are still under pressure due to the decline in the economy, so marketing department managers opted to send new employees to learn all they could about the business and make contacts.

Joseph told attendees that today's sponsors are risk averse, are forced to do more with less and are demanding greater accountability. Live entertainment sponsorship dollars totaled $11.5 billion in 2004, he said, with 69 percent of that going to sports. Fairs and festivals drew 7 percent and the rest went to charitable causes, arts and music.

“Sponsors or companies in general are getting tied into making connections, as opposed to advertising or offering a new coupon. They're looking to connect to people through sports teams or their favorite band,” Joseph said.

This trend will require a lot more care from arena sponsorship sales teams. Sponsors in general are taking longer to close deals, and are looking to “cherry pick” benefits, rather than provide an overall sponsorship, Joseph said. So arenas need to sell business opportunities to them. “Find out what the other person's pain is,” he said. “They're not in the business of giving you money, they're in the business of doing business, which is making money.”

He gave as an example a Dallas shopping mall that tried to sell Pepsi a sponsorship sign on the ice rink's Zamboni. Pepsi declined. The final deal was that patrons with a Pepsi bottle cap were allowed to sit in a special Pepsi section. The only place to get a Pepsi bottle cap at the mall was in the under-noticed vending machines in the parking garage. “They keyed in on the objective of Pepsi,” Joseph said.

Another outstanding sponsorship he mentioned was the Nokia Totally Board event that allowed patrons to use their Nokia phones to dial in text messages that would appear on a large screen. They also could take photos with their phones, which were posted on the screens and on the Nokia Web site.

Arenas need to make the public understand that sponsorships are good for the venue, Joseph said. “You need to be brand ambassadors. Without sponsorship, it doesn't happen for you,” he said. “You want your fans to sponsor the sponsors and a sign isn't going to do that. …You really need to communicate your sponsor's involvement completely.”

Fans can become upset when a title sponsor messes up their tradition by changing the name of a venue, Joseph said. To combat that, advertise all the good things the sponsor is bringing to the venue. “They're more likely to buy the sponsor's product if they understand why they're there,” he said.

It also helps to position an arena as a community asset, “not just four walls where every week a concert comes in,” Joseph said. This will spur not only patrons, but the city or county to support sponsors.

Demographic research has to go deeper now, Joseph said. “Macrotrends and demographics don't tell what people are passionate about,” he said. The essential research is the fans' opinions on the importance of sponsors to an event. For example, NASCAR racing is a sport where fans understand that the event doesn't happen without sponsor dollars, and so they support the sponsors.

Pricing of sponsorships needs to be clearly broken down, Joseph said. “If you have no information to back up what you're selling, the sponsor is in control.” Intangible assets should also be included, such as media coverage potential, established track record of the venue's sponsorships, prestige and protection of the venue from non-sponsor business.

A venue can also provide incentives for sponsors to “activate” their own sponsorships, such as providing advertising of the sponsorship, by giving the sponsor at 10 percent credit for all the money they spend to activate it.

And venues can tie their sponsors together as a value-added benefit. A benefit one sponsors gives the venue can be passed on to another sponsor. “Just getting sponsors together to brainstorm can result in ideas,” Joseph said. “The more you can facilitate that, the better. …You'd be amazed at some of the ideas that come up just during lunch.”

Also, venues can leverage their buying power, for instance throwing their power or office supply account into a sponsorship deal with one of those providers, Joseph suggested.

“In today's low-growth, hyper-competitive market…there has to be measurable goals and actions that will be understood by all parties,” he said. “You really need to develop the metrics for that through additional accountability.”

What's good for the sponsors, is good for the venue, Joseph stressed. “It lets them go back and look like a hero and say, 'Here's what I got out of this sponsorship deal.'”

Next year's EAMC conference is slated to be held in Denver.

Interviewed for this story: Vinu Joseph, (312) 944-1727; Tammy Koolbeck, (319) 398-0100 Ext. 222