Different cultures experience things differently: Baby boomers in the US were brought up with TV dinners and cheesy presenters announcing the arrival of Kraft Television Theatre and The Texaco Star Theatre. Soap operas were produced by the likes of Lever and Procter & Gamble in the Fifties to lodge their brands in the public consciousness. Commercial TV was launched in the US in 1945 and by 1948, 933 sponsors had bought air time, a rise of 515% over the previous year.
This was television association designed to sell products from the off – a very different state of affairs from the UK. TV sponsorship in the UK became a viable option only in 1990, and the option has never exactly been optimised by agencies and clients unused to the potential of a softer sell and a more complex negotiation.
But as the industry swoops into a digital age and towards truly convergent, interactive mediums which could package TV spot ads out of the equation, the detractors are starting to look seriously at the sponsorship angle. “I’ve been involved in TV sponsorships for the past 10 years and remain amazed at how slowly businesses have taken it on,” says Nick Walford, managing director of MindShare sponsorship division BroadMind.
“It’s a more complex process, and in some senses could be a case of fighting vested interests in the status quo. It’s a higher risk, higher return proposition and some agencies and clients shy away.”
Shedding the straitjacket
Since 1990, the Independent Television Commission has revised its code on sponsorship several times, to level the playing field between satellite and terrestrial television (see box). In April this year it announced another revision, which crucially allowed the product or service to be shown and the strapline to be spoken.
The industry has welcomed the proposed relaxation in the rules, but uncertainty hangs in the air while the ITC considers comments on its revised guidelines. A new code is expected before the end of the year.
“We need more flexibility but it will end up being about the detail,” says Carlton director of sponsorship David Prosser. “Will the ITC change the draft to take in the consultation comments, and how will the commission respond?”
Many think changes are a long while coming, and ultimately inevitable. After all, the industry and the technology have been evolving so fast that the ITC has run the risk of seeming hopelessly outdated.
BSkyB commercial director of sponsorship Mark Wood says: “The industry has moved so much that what they say has been by-passed. I accept the need to separate programmes and advertising but so much of that ground was covered a long time ago by EC guidance. And we’re already doing things that go way beyond putting credits on programmes.”
Wood says something such as Gillette Soccer Saturday shows the potential, with the brand as overall season sponsor, putting spot ads into breaks and extending the brand presence online. Similarly with long-time The Simpsons sponsor Domino’s Pizza, a Booth Lockett Makin client: Wood is proud to say the sponsorship takes almost the whole marketing budget and exploits the association with off-air promotions and online content. “Any relationship can work better over the long term,” he says. “But that doesn’t mean it can’t be used tactically.”
Knocking on the digital door
Blair Krempel is managing director of Sponsorvision, one of the few long-term sponsorship specialists to have kept the faith. When he started in 1992, he says, the problem was getting clients and agencies to identify the role of the technique in an integrated marketing mix. “You can make the deal work right to the point of sale, but media planning and buying and off-air exploitation are all crucial to optimising a sponsorship.”
Krempel knows his game, having brokered the associations between Cadbury and Coronation Street, Allied Domecq’s Cockburn’s Port and Cold Feet and The Sun’s sponsorship of Who Wants To Be A Millionaire through 1998 and 1999. But he says the £80 million sponsorship market could be worth a lot more in the future. “We’re looking to pioneer digital sponsorship,” he says. “It’s the same skillset but in a new media marketplace, with all the potential that interactive TV, the internet and wireless technology has to offer.
Chem Assayag, general manager for digital broadcaster Open TV Europe, says: “Interactive technology broadens the way clients can address messages to viewers, makes the experience richer by providing additional information, and moves the whole process closer to one-to-one marketing.” He points to a sponsorship trial in France whereby Renault consumers could choose to find out more information, take a virtual tour around the car and organise a test drive with a local dealership. But he points out that viewing habits change slowly, and the process will be step by step.
Assayag says spots and sponsorships will continue to co-exist as they always have, with big sporting events delivering mass audiences, and content providers becoming increasingly important to the mix. In a truly convergent world the content will be re-purposed across each appropriate device, be it WAP, G3 or digital TV. And sponsorships attached to that content will clearly travel much further.
Sports content provider Quokka Sport is a good example. It provides content for what it simply calls “the digital space”, regardless of the medium. It offers a huge amount of data and analysis to fans of particular sports, mostly online so far, but it partnered with US broadcaster ABC last year for an ITV trial and 70% of its revenues come from sponsorship, which it calls “complete brand immersion”.
Not just the frilly bits
Currently, there are some clear distinctions made in the ITC’s existing code between terrestrial and satellite/cable broadcasters – for instance, the use of the brand name is not allowed in programme titles on terrestrial TV – but Channel 4 head of sponsorship David Charlesworth agrees with Mark Wood that the level of sophistication in sponsorship increases on an almost daily basis.
“Sponsorship has been growing exponentially – which has involved a big culture change – so that it is no longer just the icing on the cake. And now that we’re moving seriously into digital with properties such as Film Four and soon-to-launch entertainment channel E4, the future is bright.”
Aside from the digital revolution, the ITC’s own recently published annual survey into viewing habits showed that 59% of respondents disagreed that there were too many sponsored programmes on TV, while 74% disagreed that sponsorship interfered with their enjoyment of programming.
Increasingly, successful sponsorships are coming not just for major sporting events such as Carlsberg’s sponsorship of Euro 2000, but across mainstream peak-time programming such as Friends (sponsored by Nescafé), Ally McBeal (sponsored by BeMe.com) and Peak Practice (sponsored by Crookes E45) and also across regional and small cable channels such as New Zealand Meat’s sponsorship of programming on the Carlton Food Network.
Tess Alps, executive chairman of sponsorship specialist Drum PHD, says more flexibility in the draft code is welcome, but will only be one half of the explosion in sponsorship over the next few years. “There is a huge potential now to look for online content that enriches websites and pushes traffic through the association.” She highlights Frasier sponsor Equitable Life using Paramount material for its site. But Alps warns of the new complexities that opportunities such as cable and digital provide. “We did a deal between First Direct and Film Four to provide the first night of unscrambled content, branded as Directors First,” she says. “But in pay-TV it’s hard to do sponsorships now, as it’s hard to convince people who are already paying for a service. Having said that, in the longer term it may provide a mechanism for the facility of cheaper pay TV.”
Playing to its strengths
Jeff Hyams, managing director of specialist agency Zed, says sponsorship will always have a strength as a shorthand way to borrow brand values very quickly. Krempel agrees. “It can create an image like Nescafé’s sponsorship of Friends; it can reinforce an image; it can change an image like the Cockburn’s Cold Feet deal; it can launch brands like Cadbury’s Miniature Heroes and it can be tactical like The Sun’s tie-up with Millionaire. But it must look for the synergies.
“It’s always been said in the industry, ‘whatever you spend on sponsorship you spend the same again on telling people about the sponsorship’.”
If technology does begin to lend itself to a situation where viewers can screen out ads, sponsorship’s stock will certainly rise. But for the moment a key factor seems to be proving its worth. Richard Fox, managing director of lobby group uksponsorship.com, says measurement is a key hurdle yet to be overcome. “An industry standard study that enabled some means of comparative assessment of the cost/value relationship with spot advertising is overdue,” he says. “Whatever they sponsor, advertisers are well aware they could have put the money in spot advertising. What they are seeking is a connection with viewers which is qualitatively different.”
David Prosser at Carlton agrees. As part of the ITV Sponsorship Group comprising TSMS Connector, Granada Media and Carlton TV, he has been involved in establishing an on-going tracking study of sponsorships. He says: “It provides clients with quality measurement and stands us in good stead by giving clients and agencies confidence for the future.”