If the recent glut of high-profile deals is anything to go by, broadcast sponsorships continue to be serious business. Last week, Campaign revealed that the furniture store chain Harveys was poised to sign on as the new sponsor of ITV's Coronation Street. Harveys will replace the long-term sponsor, Cadbury, which enjoyed a successful 12-year partnership with the programme. It saw off a number of high-profile brands for the £10 million-a-year deal, thought to be the largest in Europe.
The Corrie deal is not the only one to have been on the table recently. The X Factor, also on ITV1, signed The Carphone Warehouse as its sponsor, and Channel 4 struck a deal with the online insurance brand comparethemarket.com to replace 118 118 as the sponsor of its drama content.
Broadcasters are taking advantage of renewed demand for big properties by creating lucrative deals for advertisers. Broadcast sponsorships have evolved beyond tagging a TV show with a brand logo, to offering off-air rights deals, merchandising and exclusive content for online and mobile packages.
1. The broadcast sponsorship market is maturing. Last year, the TV sponsorship market was estimated to be worth £176 million by media agencies, a 26 per cent increase on 2005, which was up by around 20 per cent on 2004. Yet, while the sponsorship market is still strong and outperforming the spot market, experts predict the market will flatten in 2007 with revenue growth of just 5 per cent.
Laurence Munday, the founding partner of Drum PHD, says: "Over the past few years, the market has really come of age. From the back end of 2004 to 2005, sponsorships became a more accepted way of using broadcast. There is a number of big properties now that are extremely attractive to advertisers who can see the value of these sorts of deals."
2. Key to the market's maturity was a relaxation of the sponsorship regulations by Ofcom, which gave the broadcasters more responsibility for self-regulation and greater flexibility on the length and format of idents. However, the Ofcom regulations still require that broadcast sponsorships must be clearly defined and separated from advertising, and the regulator has been quick to act over brands and broadcasters who blur this area. David Peters, the head of sponsorship at Carat, says: "The change to the Ofcom rules two years ago brought in brands that wouldn't have looked at sponsorships before. The relaxed rules have attracted a number of brands that want to cut through the clutter and reach the audience, because sponsorships are more difficult to avoid than ads."
3. The days of a broadcast sponsorship deal being confined to a few TV idents or "break bumpers" are long gone. New deals are mainly cross platform and include online, mobile and video-on-demand elements. According to Carat, 80 per cent of deals now have online or digital elements as part of the deal. Peters says: "It's just the norm to have online and other elements in sponsorship deals now." Virgin Media's sponsorship of the current series of Big Brother includes rights deals across Channel 4, E4, C4.com, 4Radio and 4OD, as well as syndication deals for mobile and broadband.
Virgin is also creating exclusive content with Endemol to use on the Virgin website and Virgin Mobile platform. David Charlesworth, the head of sponsorship at Channel 4, says: "New media enhances and extends programme sponsorship to a 24/7 experience. Where the actual programme is the tip of the iceberg, for instance with Big Brother, brand awareness is not limited to those who just watch the show."
4. While the commercial deals are flowing, sponsorship experts say that the quality of creative is still a potential barrier to growth. Brands need to create a strong link between the sponsor and the programme. However, research indicates that a subtle approach to the link can pay off. Tove Okunniwa, the managing partner of MEC Sponsorship, says good creative is vital to the success of a sponsorship. "It's absolutely essential to get the creative right to make a successful sponsorship and engage the audience and build a relationship with it."
He says that good examples of entertaining and compelling sponsorships include the aforementioned 118 118 activity with Channel 4 drama and the Gordon's sponsorship of Ramsay's Kitchen Nightmares.
WHAT IT MEANS FOR ...
- Engagement. It might be a marketing buzzword but sponsorship deals potentially allow brands to create a relationship with audiences; for example, through exclusive content and extra incentives to award brand loyalty.
- Sponsorships are useful for repositioning brands. A well-executed sponsorship can lead audiences to rethink brand values linked with the programme's positioning. Munday says: "Great sponsorships understand the programme's brand values and borrow from those values. The strength of a sponsorship comes from a brand taking on attributes that audiences wouldn't necessarily associate with that advertiser."
- Munday cites Bailey's sponsorship of Sex in the City as an example, because it introduced the brand to a new market, repositioning it as a sexy, younger and trendier brand.
- There's no denying that sponsorship has become a lucrative revenue driver for agencies. Peters says: "Any agency worth its salt should have a sponsorship division, in the same way as it should have a digital business - it's almost mandatory now. Agencies will be losing revenue if they can't provide these deals to clients."