Sponsorship and the Economy

As I mentioned in a previous blog entry, I had the privilege of being interviewed by my friend James Malinchak for his business. Since that time, we have gotten some great feedback from the interview, and also some questions. I want to take a few minutes to address one of the questions that seem to keep coming up, since it is obviously on a lot of our minds.

Sponsorship and the economy…how the poor economy has impacted sponsorship? The answer is some "good news ---- some less-than-great-news" insofar as the economy is concerned.

The good news is that while the economists are pointing out that for the first time since post-9/11 -- that overall spending on advertising will drop this year (...which is only like the third or fourth year since World War II that overall spending on advertising is down...). But for sponsorship -- spend in 2009 on sponsorship will go up yet again. Nothing radical.
According to IEG (the sponsorship clearning house out of Chicago...) overall spend on sponsorship this year will only go up between 1.1% to 2.2% overall -- it's still going up. (The less-than-great-news is that this is the first year in the last five years that sponsorship spend won't go up by double-digits! It's still going up, just not as sharply as it has so far every year in the 21st centure).

Now the question you should be asking is WHY is it going up when everything else is going down? Simple -- it's going up because only sponsorship can deliver the up-close and personal one-on-one experiences ("touches") that
companies are looking to create. A good sponsor-to-property match is worth
its weight in gold -- because you're customers/readers/audience members are exactly the kinds of customers that your sponsor is looking for. They want/need/value the products/services that your sponsors offer, and you're simply bringing the two parties together and tying a band around the wrists of both. They both believe in you ... and you believe in both of them.

Try to create that "connection" with a TV spot ... or a radio ad ... or a
quarter page in a newspaper? You can't.

So sponsorship will continue to thrive when others lag ... and when the others bounce back (... as they ultimately will...) sponsorships will continue to zoom ahead at it's double-digit growth pace.

Now -- about the economy today and it's impact on your sales cycle (and a company's ultimate decision to sponsor your
product/service/event). The downward spike in money being invested/spent out there on all things advertising-related is being adversely affected by the economy right now. What we're finding with sponsorships is that you're going to need to start the process earlier.

Which is to say that if your event is coming up next summer, start now....
don't wait. If your event is this October ... good luck! (I find, in
general, that people seriously underestimate the sales cycle in sponsorship ... tending not to think about getting sponsors until "the last minute" --
which is anything four months-in. In the best of economic times, you need
to start the wheels spinning on this six-eight months out, and with bigger companies, (more "layers" to wade through), you should be in front of them a
year out. Some of the top corporate sponsors are advising that we should
be in front of them 18 months out right now -- especially if you're a "first timer" with them (i.e. you're not a renewal, you'd be a new sponsor property for them).

As for getting their attention in today's economy ... again, always remember those three "magic" letters: R-O and I. ROI, Return on Investment. In short, if they agree to sponsor you, what kind of sales response can they expect to see in return? (If you're "sales strategy" is to sell the corporate partner "exposure" .... don't go there! They don't need "exposure" right now ... they need "sales". How can sponsoring your property bring them sales? The better the case you can make for that -- the easier it's going to be for you to get their attention ... and their sponsorship check.