Sponsorship Masterclass for Festivals and Events

Bucharest 18 September 2014

What is Best-practice Sponsorship?

Sponsorship is a mutually beneficial relationship between a company or brand, and a festival or organisation that…

•Is meaningful to the target market•Is relevant to the brand•Aims to change people’s perceptions and/or behaviours toward that company or brand•Offers activation opportunities

1. Commercial transaction/investment and not a donation – Sponsorship is not about your need; it’s about achieving the sponsor’s objectives.

2. May take form of either a direct payment or provision of in-kind services/products

3. Putting logos on things for awareness and exposure is old hat and no longer the primary goal of sponsorship.

4. It’s better to get a couple of big sponsors than lots of small ones

5. The return sought from sponsorship is one that will ultimately positive affect profitability of a business

Key Dimensions of Sponsorship

Questions to ask before you begin...

• How much money is needed?• Is the purpose just to raise money or is it also to raise awareness? • What is your supporter base?• What resources are available to support the fundraising?• What is the timescale?

Steps to Success

• Get your own house in order

• Understand and segment your audience effectively

• Develop a strong marketing plan

• Know what you have to offer

• Target only the most appropriate sponsors

• Develop creative, strategic offers

• Approach all negotiations as win win-win

• Price yourself correctly• Service your sponsors’ needs

Corporate-related Objectives Increase Public Awareness of the Company and its Services Enhance Company Image Alter Public Perception Increase Community Involvement Build Business/Trade Relations and Goodwill Enhance Staff/Employees’ Relations and Motivation

Product/Brand-related Objectives Increase Target Market Awareness Identify/Build Image within Target Market (Positioning) Increase Sales and Market Share

Sponsors’ Objectives

Understand What You Have to Offer

• Your Brand

• Your Audience

• Tangible Benefits

• The Intangible Benefits

Understand What You Have to Offer

• Sponsors don’t want to align with you, they want to align with your target market

• The more you know about your market and can provide benefits that are meaningful to that market, the more valuable you will be to Sponsors

• You provide the opportunity, activation provides the results• You need to foster it

• Always think win-win-win• A small, meaningful benefit for all or most of a target

market, is more powerful than a chance to win big for one or two

Overview of Sponsorship Planning Process

Sponsorship Plan Framework

Needs to answer 3 questions:

1.Where are we now? •Fundraising Audit2. Where do we want to be?•Sponsorship and Fundraising Objectives3.How are we going to get there?•Strategies•Tactical Plans

The Sponsorship Plan

1) Fundraising Audit: a review of the environment; market analysis and competitor benchmarking; information on where the synergies lie; who is likely to support activity and what level of funding is available

2) Fundraising and Sponsorship Objectives: define objectives and setting of realistic income generation targets

3) Definition of the strategy and tactics to achieve these targets

Essential potential sponsor knowledge: Marketing objectives Product or brand attributes Target markets Needs – absolute requirements Wants – that that would be nice Exclusions – what will they not support Special emphasis – new services, product launches...

Desirables Relevant interests of Chairman, CEO and directors Do you know anyone who knows them? Are they already a member of your audience?

Research to Assess a Match

Knowing your Audience

• If all you have is demographics…– You don’t have enough information

to market to them successfully– You don’t have enough information

for a sponsor to see the value in the audience

• If you don’t have strong research (yet), do simple descriptions of each market

• Prioritise markets based on their strategic value, not size

UK Arts Consumer Segments

1. Consider and label three types of people attending Festival

2. What is the prime motivation for segment to attend Festival?

3. What else makes the Festival appealing to this segment?

4. What proportion is this segment (%)?

5. Who will this segment attend with?

6. What things have to go right in order for this segment to consider their experience to be a success?

7. What message will this market be receptive to (what will make them attend)?

Segmenting Audience by primary motivations - by perceptions / motivations

Target Market Assessment Exercise

Definition of Target Market  1 Folkies - music lovers, musicians dancers, the in-crowd visitors 2. Locals at individual events with specific interest to them 3. Folkies who want to play with their mates & drink beer in pubs rather than see of buy tickets

What is the prime motivation for segment to attend Festival?1. Good mix of music2. Personalities or niche activities 3. Informal sessions/sing a rounds in pubs, meeting mates and playing together good craic

What else makes the Festival appealing to this segment?1. Friendly atmosphere in attractive setting, safe for families2. Festival village atmosphere3. Festival atmosphere Festival village camping (even for locals)

What proportion is this segment (%)?1. 65%2. 20&3. 15%[65% audience aged 36 – 55 (sim proportion male & female)

Example Target Market Assessment

Who will this segment attend with?1, 2, & 3. Partner or friend What things have to go right in order for this segment to consider their experience to be a success?1. Quality breadth of artists friendly welcome from Festival volunteers; clean attractive facility for camping2. Safe Known names chance to learn something new, 3. Friendly welcoming atmosphere, meeting mates, convivial social occasions What message will this market be receptive to (what will make them attend)?1. Good quality music, friendly atmosphere, attractive location, good campsite, easy access2. Know what they are coming to, interested in person or subject; not too folkie beer, beards & sandals3. Meet your mates, it has the trad folk you love, you can join in good beer

Target Market Assessment

• Few companies have only one brand

• Corporate sponsorship departments and budgets oversubscribed - go directly to brand manager

• Individual brands have separate marketing budgets

Think Brand

• Brewery based near Harrogate in Yorkshire• Recently bought back into Theakston family ownership – desire to raise

profile• Beer has historic crime link - Peculier Court of Masham• Emblem is a legendary tale from the crusades• Solving problems over a pint of beer is a common

theme in crime fiction• Promotional strapline “Beer on the darkside”• Target market -mature, discerning drinkers

Recognising Synergy

Activation

Definition:

Activation = marketing activities implemented by sponsor to make most out of

funds invested directly in sponsorship

= added expense to sponsor above and beyond the cash paid to sponsoree.

Sponsor’s ”activation activities” should not be left up to sponsors alone, but should be handled in a spirit of coordination and cooperation.

Supporting event sponsorship

Sponsors use these types of activation:

Traditional advertising: 80%Public Relations: 77%Internal communication 71%Hospitality: 69%Online promotion: 70%Direct marketing: 62%On-site sampling: 60%B-to-B: 50%Sales promotion/offers 47%

Kilde: IEG

IEG's sponsorship activation tools...

Promotional Reputational Experiential Behavioral Emotional

Activation level 1: PromotionalStrategy > action > result

Strategy: Action: Result:Promotion Naming something Visibility

Sponsoree's www AwarenessSponsors' www & exposureDedicated micro-site Enhances effect ofLogos i ads other activitiesCross-advertisingCross-advertising with other sponsors

Activation level 2: ReputationalStrategy > action > result

Strategy: Action: Result:Reputation Auction or give-away… Higher level of

Add ”a good purpose” affinityAdd a theme Transfer/association Demonstrate own of attributes Experteese / knowledge Social responsibility

Less commercial impression

Adds greater internal pride

Activation level 3: ExperientialStrategy > action > result

Strategy: Action: ResultExperience Integrate product or service Relevance

Give space/room own ”brand” Demonstrates Create on-site competition or special abilities Similar instant participation Encourages newCreate pre-event experiences or renewed Create post-event experiences sense of loyalty /Stage special area/ belonging viewpoint for for ”insiders”Plan www-oplevelser

Activation level 4: BehavioralStrategy > action > result

Strategy: Action: Result:Behavior: Start loyality programme Build up databases

Get something before others Reach new outletsDo something to get something Generate revenueInvolve own sales channels Increase market Product launch share

Activation level 5: EmotionalStrategy > action > result

Strategy: Action: Result:Emotion Awarding costumers with Stronger ties

something unexpected Greater loyaltyProduce special merchandise Retention not available elsewhereEngage employees

The Sponsorship Proposal

Must answer three basic questions:

– What is the organisation being asked to sponsor?

– What will the organisation receive for its sponsorship?

– What will it cost?

Attributes of a Successful Proposal

1. Sell benefits, not featuresNot the artistic merit of the festival - rather benefits to sponsor

2. Address the sponsors needs not the festivalsMany proposals emphasise the festival needs for money, rather than the sponsors needs -such as market access

3. Tailor proposal to the business Benefits will not have equal meaning to each potential sponsor

4. Include promotional extensions a) identification in collateral materials b) sponsor leverage of event: provide ‘exploitation menu’

5. Minimise Riske.g. guaranteed media coverage or listing reputable co-sponsors

6. Include added value present in terms of its total impact on achieving greater sales

Sponsor Benefits

• Use inventory to create list of benefits

• Make a comprehensive package

• Categorise benefits where appropriate

• Must be tailored to sponsor’s needs

Example Benefits Naming Rights Category Exclusivity Event sponsorship Preferred Supplier status Sampling opportunities Venue usage /signage Inclusion in all print, outdoor and/or broadcast advertising Access to money can’t buy experiences Celebrity meet and greets Promotion on festival web site (hyperlinked) Loyalty marketing (eg early access to tickets for customers) Access to audience database and research Opportunity to provide inserts in event-oriented mailings Inclusion in Press releases and media activities Preview /participation in the event by employees Workshops for employees Opportunity to provide prizes for media or event promotions

Calculating Baseline Fee ie cost of servicing sponsorship:- 2 x (cost to deliver benefits + cost of sale + cost of servicing) = baseline feeor

Full cost of event + cost of benefits + cost of sale & servicing – budgeted ticket sales) = baseline fee

Then apply market influencers: • What the market will bear

– Research– Use your network

• Lead time before the event• Under 6 months will very likely impact your price• Under 3 months will severely impact both your price and your credibility

• Other activities competing in the marketplace• Uniqueness of what you offer and its position in the marketplace• Economic situation and trends

Calculating the cost of sponsorship

Determining Market Price

• What is cost of similar sponsorship products on the market?

• How does your proposal stand up?

• How does you sponsorship servicing measure up?

• How much is your potential sponsor likely to invest?

• Multi-year discount?

Some Sponsorship Queries

a) Should we offer different sponsorship levels?

b) How do we define category exclusivity

c) When is the best time to approach sponsors?

• Platinum, Gold, Silver, Bronze levels are popular –

But

• Only usually work best with lower level sponsorships - e.g. Corporate Membership

• Not beneficial to creating strong high level sponsorships – makes for bargain hunters paradise

a) Should We Offer Different Sponsorship Levels?a) Should We Offer Different Sponsorship Levels?

• Rule of exclusivity – the more exclusive is granted, the more valuable it is

• Exclusive naming rights - Title sponsorship

• Event exclusivity – sole concert sponsorship

• Official supplier (water; alcohol; travel/transport; printing; musical instruments...)

b) How Do We Define Exclusivity? b) How Do We Define Exclusivity?

Sponsorship Exclusivity

Exclusivity – does not Exclude

• Ask when they set budgets during your research

• Best time is before they have set their annual budget

• You can try last minute deal but can smack of desperation

c) When Is Best Time To Approach Sponsors? c) When Is Best Time To Approach Sponsors?

Contra Sponsorship

Things to keep in mind:-

1. A contra sponsorship only has value if: You have budgeted for specific item already It adds value to your sponsorship packages

2. Is the contra sponsorship saving you cash?

3. You still need cash to run your event - endeavour to negotiate contra deals only as a component

of the investment

Types of Contra Sponsorship

• Promotion• Media• Creativity• People• Infrastructure• Product or services• Accommodation• Travel

Contra Sponsorship Benefits

for Thirsty Planet

•Designated ‘Official Water’ of the Moor Music Festival •Opportunity of bottled water reseller status on-site •Opportunities to promote Thirsty Planet on-site •Raising awareness and generating donations for Pump Aid •Credit and logo on Festival website•Photo opportunities with artists •10 complimentary Weekender and day passes for staff or promotional use

Evaluating the Sponsorship

• To demonstrate evidence of value generated to internal and external stakeholders

• To review if your partnership met its objectives and delivered for your Festival

• To improve and enhance your partnership so that you achieve maximum return on investment?

Measuring Success

Robust evaluation process will be necessary to enable Festival to measure success against the expectations of sponsor

Things to include in an evaluation:•Quantitative measures•Exposure to sponsor logo•Media coverage•Attendances•Audience awareness of sponsor

NB. Remember the need to benchmark in advance to measure NB. Remember the need to benchmark in advance to measure impact!impact!

An Evaluation Framework

Discussion and Questions