Media Forum: Is sponsorship losing lustre?

Is sponsorship too 'long term' for the current climate, Alasdair Reid asks.

In theory, broadcast sponsorship should be relatively insulated from the ravages of a downturn. Spot is traded as a commodity so its price fluctuates, almost on a day-to-day basis, according to the immutable laws of supply and demand. Sponsorship is a more considered proposition, demanding a longer term commitment; and it's driven by qualitative concerns, such as the perceived "fit" between brand values and the values of the broadcast property being sponsored.

As a communications option, it's able to command stronger loyalties out there in the market and is even, arguably, more effective, pound for pound, than spot advertising. In homes with personal video recorders, when people fast-forward through ad breaks, they use sponsorship break bumpers as a marker to press play again, which almost guarantees that awareness stays high.

However, sponsorship isn't exactly flavour of the month at the moment. UK commercial TV properties currently looking for a sponsorship partner include two of Five's big ticket items: movies, as a genre, and the new series of House. At ITV, the drama portfolio is available after Sainsbury's pulled out and over at Sky, The Simpsons and 24 are looking for sponsors.

The bigger international picture is less than encouraging and there have been those willing to question the whole validity of sponsorship as a marketing vehicle. Such as the senior marketers at General Motors, who have decided to pull back from a commitment to golf in general and Tiger Woods in particular.

As belts tighten, will sponsorship lose its appeal? Very possibly, Simon Thompson, the European managing director and chief marketing officer of Lastminute.com, suggests. He says marketing strategies still need to keep an eye on the longer term - and the right sponsorship can still prove a powerful option. But companies need to balance this with short-term tactical communications that are going to drive immediate returns.

He explains: "An organisation asking for upfront payment for sponsorship or any other expenditure is asking the impossible. Cash is now king and you have no guarantee the organisation you pay it to will be here in a year's time. Why take the risk? Marketing budgets will also become more fluid - I can feel weekly budget reviews on the horizon, so why commit yourself so far in advance?"

Which is pretty much the way that Chris Locke, the trading director of VivaKi, sees things too. And he reckons some broadcasters may have to change their negotiating parameters. He warns: "Certain broadcasters will take a pragmatic line on this but there will be others who reckon it's worth taking the high ground, especially if they've a track record of successfully holding out. But I think broadcasters should realise that sponsorship is not immune to the market."

Perhaps unsurprisingly, Gary Knight, the sponsorship, content partnerships and interactive sales director at ITV, doesn't agree with all aspects of Locke's analysis.

He says: "The main issue currently isn't cost per se. There is no question about sponsorship's ability to deliver brand awareness but these days everyone talks about return on investment and about how sponsorship works with other media and how it cuts through to the bottom line - and that's something we can continue to help them with."

And Sean Jefferson, the leader of Mindshare Innovation, which has just helped LG Electronics tie up a landmark sponsorship deal with Formula One, agrees with much of that. He concludes: "In the downturn, there's a risk that some advertisers will retreat into their comfort zones - taking a step backwards into what they've always known, which in many cases will be spot TV. That, to my mind, could be dangerous. Dynamic brands will always be looking for opportunities - and where sponsorship is concerned, it's just possible that you might be able to acquire a greater inventory of rights and better opportunities to leverage them."

YES - Simon Thompson, European MD, chief marketing officer, Lastminute.com

"The marketing focus for 2009 will be more focused on driving sales than brand-building or brand sponsorship associations. Companies need to generate sales today, not tomorrow."

MAYBE - Chris Locke, trading director, VivaKi

"Sponsorship can be a cheaper option than spot but it involves putting a lot of cash up front, so that's an issue for clients. Some properties sell within five seconds of coming on the market. That won't change."

NO - Gary Knight, sponsorship, content partnerships and interactive sales director, ITV

"Advertisers know that sponsorship is still great media value. And though it's true that short-term cash release may be an issue, the main issue, as always, is getting the right fit."

NO - Sean Jefferson, leader, Mindshare Innovation

"We'd argue this is the time to really invest in your brand and that sponsorship represents a real opportunity - and that it's as measurable as any other marketing discipline, so I don't think anyone can question its value for money or suggest it represents a greater risk."