The “Creating Tomorrow's Sponsors” panel included Jason Wolfe, Trip Wheeler, Liz McMillan and moderator Todd C. Koesters (Photo by Martin McKenzie)
REPORTING FROM COLUMBIA, S.C. — Budgets are tighter than ever and sponsorship salespeople have to work harder to justify expenditures, according to the opening panel convened at the Sport, Entertainment and Venues Tomorrow Conference in Columbia, S.C. on Nov 17.
The sports industry is still reeling from the economic downturn that began in 2008, and the companies that market their products to sports fans are increasingly pressuring sales teams to prove that sponsorships have a solid return on investment.
“There was a readjustment of sponsorship prices, but if you deliver what needs to be delivered, you will get your dollar,” said panelist Jason Wolfe from sales and marketing firm Wolfe Solutions. The deals that were haphazardly thrown together in the past will cease to exist because “there are options available that do deliver, and sponsors are getting smarter about their upfront objective. If you can’t meet that objective, don’t call the sponsor and reverse engineer something that won’t happen.”
In nearly every case, the objective is assisting the sponsor achieve an incremental profit, and for many major event producers, that means allocating greater resources toward hospitality.
“We are spending more away from the racetrack than we are spending on the race itself,” said Trip Wheeler, CMO for Formula 1 Grand Prix of America. That means private concerts with Eric Clapton, special showings of Cirque du Soleil and several private exhibitions at the Museum of Modern Art in New York.
“We spent millions of dollars giving sponsors an audience for their products,” Wheeler said.
Wolfe said the experience of the 2008 economic collapse will forever be cemented in the minds of business leaders, and it will be decades before another generation returns to the freewheeling spending of the late 90s and early 2000s.
“Spending was crazy until 2008 and 2009 and there was no sense of accountability for every dollar you spent. Overnight, every dollar spent had to generate $1.15 and it was across every industry,” he said. “The whole experience made sponsors a little smarter. Now it's more rooted in financials and less of an emotional decision. It doesn’t affect how they operate, just how many dollars being spent.”
Sponsors also want to feel connected with the sport they're investing their marketing dollars with, said Liz McMillan, general manager for Gamecock Sports Marketing, a division of IMG College.
The buzzword of 2011 is “experiential marketing,” she said, noting that sponsors increasingly “want to be on the sidelines, they want to be inside the locker room and they want to be on set when coach (Steve) Spurrier tapes his weekly television show. They want access that makes them feel like part of the program.”
That can be a bit irritating for the coaching staff who has to deal with additional bodies on the sidelines during a big game, “but the coaches understand why we do these things,” she said. “IMG brought $6 million to the athletic department last year,” she said, later adding, “We used to need three or four interns on game day to service the sponsors, and now it’s 10 to 15. We can’t let fans randomly go on the sidelines, so we need interns to guide that process.”
Many brands investing in sports have a global consumer base, marketing to consumers from Vancouver to Venice, Italy. That makes global events like the Summer Olympics and the World Cup appealing because of their large audiences.
“But the challenge is to make the activation work in both Boston and Bangladesh,” Wheeler said. “My sales pitch has to do everything that everyone needs, but it can’t add in any waste or everyone will say no. It will simply cost too much to be significantly changed for each country.”
Part of that formula is getting in front of the right program — an approval by a U.S. CEO might not be enough to launch a global activation if the company doesn’t get buy-in from the CEOs of the Russian division or the Southeast Asia office.
“More than ever, we’ve got to get to the decision makers,” said Wolfe. “Everyone can say no, but only a few people can say yes and it's important to get in front of those people.”'
Interviewed for this article: Jason Wolfe, (704) 293-7808; Trip Wheeler, (888) 205-3315; Liz McMillan, (803) 777-8254