From sponsorship to partnership

In the job I have just left in Nokia’s global marketing team, I spent a lot of time thinking about sponsorship. Sponsorship is a traditional marketing discipline, but with some re invention it is one that can help brands tackle the challenges they face today. What follows is an edited transcript of a speech I gave to an industry meeting on this subject. The first half is pretty standard stuff about the state of marketing that sets the context for the stuff about sponsorship in the second half..…

Presentation to the inaugural meeting of the International Guild of Sponsors.

“….

We are a society of editors

I don’t need to preach to the converted today about the fragmentation of media and the explosion of commercial messages that surround us. We are all consumers, and we experience that on a day to day basis.

The fragmentation of media also means consumers can select the content they want from many sources and simply try to avoid commercial messages and edit them out of their lives.

These days that editing is just as much about turning over a full page ad to read the article you are really interested in, or looking at what your fellow train passengers are wearing and not the billboards going by, as it is about not listening to commercial radio and playing a game on your Ipod. Or Nokia N97!

And of course consumers are more digitally empowered than ever before, more able to physically edit out and ignore the explosion of commercial messages. Enabled by digital tools that let you to skip ads using Tivo or Sky + or simply clicking close on an annoying pop up.

Our accelerated culture means that consumers are expert at editing their environment – we have evolved into a society of editors.

This has had an enormous impact on the marketing industry and examples of that impact are familiar to anyone working in marketing today.

And it means that brands must play a valuable role when present in the context of the things consumers care about – including through sponsorship activities- if you don’t get it right consumers will edit it out.

The paradox of choice

Consumer’s ability to edit out commercial messages is increasing at a time when they have more choice available to them than ever before.

Choice is often seen as the ultimate achievement of our civilization, the pinnacle of an ascent through a hierarchy of needs.

“It is choice with equity we are advancing. Choice and consumer power as the route to greater social justice not social division”

Tony Blair
2003

“We have always wanted to be authors of our own lives”

Will Hutton
The Observer

If you can choose your home, your kid’s schools, your healthcare, your car, your job, and the things that you buy, well that is the ultimate in self-actualization.

However even though being able to choose may be satisfying, it doesn’t follow that the more choice there is the better.

In fact Barry Schwartz talks about the Paradox of Choice.

“All of this choice has two negatives effects on people. One effect, paradoxically, is that it produces paralysis rather than liberation. With so many options to choose from, people find it very difficult to choose at all……”

Most of us have busy lives and are time poor and attention poor. So set in that context it is possible to feel that you can have too much choice. Choice can be paralyzing and distressing. What do I choose? If if have so much choice how can I possibility have chosen the right option? Choice turns out to be the consumer problem of our age.

Role of brands and marketing in a world of choice

It would be quite easy to get depressed working in marketing given these two trends. Consumers can ignore your marketing at will by editing it out, and marketing can exacerbate their choice overload, cluttering up the environment with things they don’t need and advertising encouraging them to think they do.

I was struck recently by this definition of marketing by evolutionary psychologist, Geoffrey Miller.

“ At its heart consumerist capitalism is not ‘materialistic’ but ‘semiotic’.
Marketers understand they are selling the sizzle not the steak, because a premium brand of sizzle yields a higher margin of profit, whereas a steak is just a low-margin commodity that any butcher could sell.”
Geoffrey Miller
“Spent”

As a marketer it is easy to see the value of brands to companies.

But that intangible, “semiotic” nature of brands creates value for consumers too.

So it is possible for marketing to be useful as it builds brands, despite the challenges proffered by the trends we have just been looking at.

Brands help you navigate choice. Brands help you feel better about what you have chosen. Brands always have and always will. Consumers love brands. Brands help them answer that question “What do I choose?”

And Marketing plays an important role in building brands and creating that intangible value

Like a bird building a nest, consumers gather facts, images, experiences, perceptions and feelings together to create a brand in their mind.

Marketing communications can add a twig or two to that nest, and so help address the issue of choice overload by helping consumers edit out brands that have low intangible value and select the brands they love.

But marketing can only play that role if it creates a twig that is picked up by the consumer

The role of experiences in engaging consumers

Distributing the twigs – raising awareness – is the easy part. Few brands suffer a lack of prompted awareness, certainly few of the brands that we all work for. But engagement is an issue for many brands.

One way we can try to ensure that twig is picked up is by creating fantastic experiences that entertain and reward.

In their book, The Experience Economy, Pine and Gilmore, talk about the power of experiences to engage consumer attention and provide a new unit of economic value-experiences.

In their view consumers seek out authentic experiences from brands. Their definition of authenticity means being true to ones self, so Disneyland is authentic because it is what it claims to be – a make-believe magical kingdom.

Consumers are incredibly savvy. Whilst they will edit out anything that doesn’t engage, they are happy to engage with brands that provide them with enriched experiences of the things that matter to them, experiences where the brand is playing a valuable role in their passion.

So that is the context. In an effort to engage with a society of editors, brands can try to create experiences that engage consumers

Sponsorship’s limitations

The trouble with sponsorship viewed as a traditional discipline is that it evolved as a tool to distribute the twigs – to increase reach and raise awareness or maybe influence brand associations and not as a tool for creating engagement.

Like broadcast TV which was dominated by a few terrestrial channels with a monopoly on an audience and serving thousands of advertisers, the sponsorship marketplace has had far more demand than supply.

This has led to a buyer/seller relationship between advertisers and rights owners. The lucky advertiser would have the chance to buy the right to associate with the property and reach its audience.

And if we have learnt one lesson from the last 10 years, it is – what is the use of delivering reach, even if it represents fantastic media value, if that doesn’t engage consumers?

A new role for sponsorship

The lessons we are learning about digital can be applied to sponsorship. As all the media that surrounds us is infused with digital connectivity – and we move from digital as internet advertising to digital as social media, interactive TV, digital billboards, and mobile etc, it no longer makes sense to think of digital as a channel.

Similarly as reach and association become blunt tools in the era of engagement we need to stop viewing sponsorship as a channel.

If we are trying to engage consumers by enriching their experience of their passions then we should consider sponsorship as a means to deliver the subject matter, the content, the hook or the stories that infuse our communications.
The discipline of sponsorship can cut across all of our channels. Sponsorship activation shouldn’t be restricted to standalone activities that extract value from the sponsorship assets. Sponsorship activation should be the task of the whole marketing department.

So how do you make sure that the whole marketing department wants to activate the sponsorship? Well I am not going to pretend that is easy.

But I think that the core of this approach is to do deals on the basis of common interests, and around a shared activity,

A collaboration around an idea.

However, the buyer/seller relationships that typify many sponsorship conversations are based on preconceived notions and prejudices. And the negotiation that follows, where each side takes positions makes it impossible to have a creative, developmental conversation.

It is not a new concept to instead base negotiations on the common interests of both parties and Fisher and Ury’s thinking Getting to Yes from 1981 still seems fresh today. But it is still hard to put into practice.

And It can be seductive to see this as a simple question of establishing brand fit. A comparison of brand steering wheels or brand onions. But too often this is an exercise in post rationalization. A reconciliation of vague and generic concepts.

True brand fit has to manifest itself in action, playing a valuable role in the lives of consumers, and that comes from creative, developmental conversations around mutually beneficial ideas

It can help to take a consumer centric view not and industry centric view. Rather than viewing the relationship as Advertisers VS rights holders. We should think about Brand PLUS Brand.

After all that is how consumers see things – as lots of different brands. Ones they care more about and ones they care less about

With the consumer in mind it is easier to focus on working together in order to engage them.

So what is needed is advertiser and property developing an idea together for how they will create a collaborative activity that adds to the consumer experience and creates engagement.

This should build on the equity that exists between the property and consumer,
and perhaps create a transaction between the consumer and the advertiser.
The end result should be that value is created for all parties– a win/win/win.

Value Based Partnerships

Collaborating around an idea also means doing the deal to support it.

It puts the emphasis on an exchange of value, and in fact we talk about trying to create “value based partnerships”. In a value based partnership the value of the totality of what each partner is bringing to the table is taken into consideration when doing the deal.. Not just what is being bought by one party and sold by the other. This includes brand equity, consumer bases, marketing, digital and retail platforms, skills and expertise. In reality this of course doesn’t mean no cash will change hands, but probably, well hopefully, it does mean less cash will change hands!

It also means there is less of a distinction between the budget for creating the sponsorship and the budget for activation. In the ideal world the majority of the budget would be invested in the joint activity. This means we can rely less on the usual evaluation metric where we look at media value delivered, and rather we need to look at specific metrics to do with engagement.

Conclusion

So I will conclude by saying that whilst the principles of collaboration I have described have been inspired by working for a technology brand like Nokia, I hope you will agree that in fact they are relevant to brands from any sector who are able to work together to create a win/win/win.

What can we jointly do together?

What is our idea?

From those questions a partnership can spring, where doing a deal is a means to an end, not the end itself.

Thanks a lot for your attention. …..”

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