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By Simon Cazelais
The Olympic period is always very interesting for the sponsorship world. For brands that want to establish mobilizing messages on a global level, clearly associate a spokesperson with their companies and, most of all, derive tangible results from their alliances, the Olympics are a unique learning laboratory.
The question of value is central to these considerations. How much is a medal worth? How much is an alliance worth during the Olympic Games, which offer a world of possible associations? The coming weeks will show us who will be the winner of the Games’ commercial battle, but everything suggests that the impact of this event on purchase intentions is variable.
A recent Experian Marketing study reveals that Americans are nine percent more likely to choose a brand that sponsored the Games than one that did not. However, this picture is reversed when it comes to athlete-endorsed products and services. Consumers are curiously 43 percent less inclined to consider them. This surprising fact illustrates that all Olympic alliances do not enjoy the same credibility and that this credibility has a direct impact on their commercial value.
What is the real value of an alliance?
Why do we do sponsorships? To achieve objectives that brands cannot achieve alone. Sponsorship is not a must (Apple, for one, does very little). It must enable companies to accelerate the achievement of their objectives in an economically valid way.
For example, the TD Bank uses sponsorship to get closer to Quebecers, to make its brand more accessible. It is associated with the Montreal International Jazz Festival, the Journées de la Culture, and it has even created its own foundation. The bank uses these channels because alone it cannot achieve its objective quickly enough, or because traditional communication methods do not suffice.
Assessing the value of a marketing alliance is part of an opportunity cost analysis. This is the real question that marketing managers have to answer. Before focusing on sponsorship at the expense of other marketing activities (since budgets have limits), the most efficient path must first be determined. This means concentrating on the return on objectives before considering the return on investment.
What is the difference?
Beyond impressions, the intangible benefits and interactions that the alliance generates should create a measurable positive difference. In other words, you must be able to answer the following question: if this alliance ends tomorrow morning, how would that impact my brand? In attempting to answer this question, marketers and properties must equip themselves with key arguments to build strong, strategic and sustainable alliances.
Without the Olympic Games, we’re talking about millions of dollars less in contracts for GE—during the London Games, the American company announced more than $100 million in financial benefits. Similarly, the Olympics also helped UPS conquer certain Asian markets. Procter & Gamble confirmed that the London Games helped it generate $500 million in revenues. The P&G’s Olympic platform, integrating more than 34 different brands, led to a return on investment that was twice as high as what it would have been with a traditional one-brand centric marketing approach.
The value of an alliance is measured by changes in behavior and by the direct impact on favorable predispositions. The case of Loto-Québec is an interesting illustration of this. The public corporation established its own formula to measure the value of partnerships five years ago. Powered by Montreal-based Sponsorium’s Performind, its formula ensures not only that clear objectives are achieved, but also that the performance measurement system is balanced and transparent.
“The public corporation oversees a brand that walks a fine line between being disliked or admired. Sponsorship enables Loto-Québec to showcase the impact its investments have had on citizens’ lives. The event sponsorship sector, which is the one we favor, helps our brand shine above and beyond its products, while it also creates a favorable impression of these same products. It’s also another way to create winners,” said Lucie Lamoureux, corporate director, Sponsorships and Social Commitment, at Loto-Québec.
Some appearances can be deceiving
Sponsorship evaluations based only on media equivalencies, monetary value based on industry comparisons, or standard online solutions often offer inadequate ROI calculations. The analysis of the real value of a marketing alliance requires more depth.
This type of analysis should include all the aspects of the company and take into account the impact that the alliance can produce, such as brand, internal motivation and sales. The value is not a magic number, a price to pay or to negotiate, but the result of the study of the impact of an alliance added to the marketing portfolio of a brand. An alliance does not exist in a vacuum, but in synergy with the entire investment portfolio.
The analysis of the value therefore has nothing to do with comparing yourself to others. Rather, it is about comparing yourself to yourself according to the strategic vocation that the company gives to sponsorship.
Establishing the value of an alliance is a more complex exercise than a simple calculation. It is a cooperative process that takes into account the unique role that marketing alliances play in achieving a company’s business objectives.
Simon Cazelais is a partner and account services VP at Bleublancrouge, an advertising agency based in Montreal, Canada. As head of the alliance marketing group that he developed at Bleublancrouge, Cazelais works with clients that include Loto-Québec, Akzo-Nobel, Astral Media, Johnson & Johnson and TELUS to develop brand visions by creating engaging, stimulating and winning platforms. He has been head strategist behind innovative programs like “La Grande Grande Tablée” for Metro, “Bienvenue chez vous” for Saputo, and “Les rendez-vous Loto-Québec.” His strategic experience spans the retail, food, automobile, pharmaceutical, and telecommunications industries.
Back in 2008, Cazelais published the first global study on sponsorship performance evaluation. Since then, several North American organizations have picked up his “Sponsorship Insight Model,” which remains the only model that the Sponsorship Marketing Council of Canada has recognized.
Mar.
2014
2014
Posted in Contributers, Strategic Marketing
