Sponsorship and Commerciality - Event Perspectives Series
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The document discusses various aspects of sponsorship and commerciality for events, including viability and sustainability, budgeting, revenue sources, and sponsorship. It notes that events need to achieve financial goals and viability by generating income through sponsorship, tickets, concessions, and other means. Sponsorship provides benefits to sponsors like brand awareness and exposure to target audiences. Effective sponsorship requires assessing fit between the event and sponsor's image and determining appropriate packages that meet sponsorship objectives.
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Sponsorship and Commerciality - Event Perspectives Series
- 1. Sponsorship and Commerciality Chris Austin 12 November 2014
- 2. Commerciality and events • Event business planning • Viability and sustainability • Budget and revenue planning • Sponsorship • Incremental income • Other income sources • In-kind support twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 3. Viability • “Events need to achieve financial goals and the viability component assesses the business case for a proposed event. [Events] generally need to fit within organisational financial constraints or budgets. Other types of events may be required to generate an expected return or profit”. Ferdinand and Kitchin (2012:76) twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 4. Viability Feasibility Stakeholder expectations Viability Desirability Ferdinand and Kitchin (2012:76) twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 5. Sustainability • Financial sustainability if the event is not a one-off proposition. • Long-term resources to cover the costs of future events. twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 6. Budget and revenue planning Establish what is the economic environment Establish budget guidelines to fit objectives, including sub-budgets Identify and estimate cost areas and revenue sources Prepare a draft budget for committee and approval Evaluate draft budget and prepare final budgets and control ratios Bowdin et al (2012:303) twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 7. Budget and revenue planning • Revenue plan… EventScotland (2006:68) twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 8. Sponsorship • “Any commercial agreement by which a sponsor, for the mutual benefit of the sponsor and sponsored party, contractually provides financial or other support in order to establish an association between sponsor’s image, brands or products in return for rights to promote the association and/or for the granting of certain benefits”. Collett and Fenton (2013:2) twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 9. Sponsorship • “Emphasis is now on ‘connecting with’ rather than ‘talking at’ the market, event sponsorship can be the ideal way for marketers to create brand interaction with consumers and stakeholders… pretty much every event is sponsored in some way”. McDonnell and Moir (2014:6) twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 10. Sponsorship process Strategy •Historical review •Asset inventory •Asset valuation •Resources review •Marketing strategy Planning •Timetable •Website •PR plan •Sales materials •Prospect research •Employee communications Execution •Implement PR •Direct mail •Face to face •Contract negotiation •Budget control Review twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin •Objectives sharing •Staff training •Partnership review and evaluation •Exit planning Sales effort and Sponsorship activation Collett and Fenton (2013:22)
- 11. Benefits to the sponsor • Brand awareness • Brand image • Target market (existing segments or new audiences) • Media coverage • Corporate hospitality • Database expansion / lead generation • Sales promotion • Product exposure McDonnell and Moir (2014) twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 12. Sponsorship fit • Sponsorship fit (aka congruence) has two dimensions… • Relevancy – The degree to which the information contained in the stimulus favours the identification of the message being communicated. • Expectancy – The degree to which an item or information falls into a predetermined schema or structure evoked by the theme. Heckler and Childers (1992) twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 13. Sponsorship fit • Dimensions of fit… • Target market • Image • Geography • Typicality • Complimentarity • Clash McDonnell and Moir (2014:54) twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 14. Sponsorship risks twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 15. Sponsorship proposal • Cover and contents • The event • The organisers / partners • Benefits • Sponsorship opportunities / packages • Practical information (payment etc) • Contact twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 16. Sponsorship sales funnel Dibb et al (2012) twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 17. Incremental income • Definition 1… • Incremental budgeting – “take the previous year’s budget as a base and and add (or subtract) a percentage to give this year’s budget” Collier (2012:311) twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 18. Incremental income • Definition 2… • Incremental costs – “Incurred only when the individual event or project is undertaken. The incremental costs include both additional fixed and variable costs arising from the event or festival, besides the costs already being incurred by the business” Rak et al (2009:171) twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 19. Other income sources • Ticket sales • Participant entry fees • Public funds • Charitable donations • Concessions and franchises • Merchandising • Showcase, demonstration and information stands twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 20. Other income sources (cont’d) • Advertising • Licensing and broadcasting rights • Private benefactors • Fundraising events EventScotland (2006:67) twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 21. Ticket sales • Pricing structure • Perceived value • Sales forecasting • Discounts and special offers • VAT • Ticket agents and commission twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 22. Participant entry fees • Sporting events • What is included? • Research similar events • Discounts twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 23. Public funds • Local authorities • DMOs • Government funding • Subvention • Bidding for funds twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 24. Public funds • “The rationale for support for major events should be that, while an event may not be able to cover all of its costs through admission charges or sponsorship, it is worthy of support because the event generates benefits for [residents]. These benefits should not only cover economic factors but also embrace other community benefits”. Victorian Auditor General, cited in Richards and Palmer (2010:214) twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 25. Public funds • “The city of Ottawa has an excellent arms-length policy for determining levels of funding. A jury of experts… reviews all grant applications and assesses them on excellence in programming, quality of management, contribution to the community, support of local artists, economic impact and impact on tourism. All festivals that receive ongoing funding are required to submit highly-detailed reports including annual audited statements.” Armour (2006) twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 26. Public funds The Guardian (2008) twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 27. Charitable trusts and foundations • Specialist projects • Difficult to attract mainstream funding • Specific target groups • Bidding for funding twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 28. Concessions and franchises twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 29. Concessions and franchises twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 30. Concessions and franchises twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 31. Concessions and franchises • Pitch fee vs. profit share • Tendering • Insurance and liability • Legalities (e.g. catering) Allen et al (2008:468) twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 32. Merchandising twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 33. Merchandising • “Games Visitors spent significantly more money for tickets, and, when compared against the Casuals, they spent significantly more on merchandising. All these findings support the hypothesis that groups that accept higher outlay only do so because they expect event-related benefits in return. This expectation translated into longer stays in the host city, and increased spending on tickets and merchandise”. Preuss et al (2007:15) twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 34. Showcase, demonstration and information stands twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 35. Advertising • Programmes • Banners / sponsor boards • Website twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 36. Licensing and broadcasting rights twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 37. Private benefactors • Patrons • “Friends of…” • Raffles • Fundraising activity twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 38. In-kind support • “Contra” deals • Brand awareness • Free tickets • Venue use twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 39. Discussion • Critically review ‘Event sponsorship as a value creating strategy for brands’ (Papadimitriou, 2008). twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 40. References Allen, J., O’Toole, W., Harris, R. and McDonnell, I. (2008) Festival and Special Event Management, Fourth Edition, Australia: Wiley & Sons Ltd. Armour, J. (2006) Festivals more than justify city investments, cited in Richards, G. and Palmer, R. (2010) Eventful Cities: Cultural Management and Urban Revitalisation, Oxford: Butterworth-Heinemann. Bowdin, G., Allen, J., O’Toole, W., Harris, R. and McDonnell, I. (2012) Events Management, Third Edition, Oxford: Butterworth-Heinemann. Collier, P. (2012) Accounting for Managers: Interpreting Accounting Information for Decision Making, Fourth Edition, Sussex: John Wiley & Sons Ltd. Collett, P. and Fenton, W. (2011) The Sponsorship Handbook: Essential Tools, Tips and Techniques for Sponsors and Sponsorship Seekers, Sussex: John Wiley & Sons Ltd. twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 41. References Dibb, S, Simkin, L, Pride, W.M. and Ferrell, O.C. (2012) Marketing – Concepts and Strategies: Sixth Edition, Hampshire: Cengage Learning. EventScotland (2006) Events Management: A Practical Guide, Edinburgh: EventScotland. Ferdinand, N. and Kitchin, P.J. (2012) Events Management: An International Approach, London: SAGE Publications. Getz, D. (2010) Event Management & Event Tourism, Second Edition, USA: Cognizant Communication Corporation. McDonnell, I. and Moir, M. (2014) Event Sponsorship, Oxon: Routledge. Papadimitriou, D., Apostolopoulou, A. and Dounis, T. (2008) ‘Event sponsorship as a value creating strategy for brands’, Journal of Product & Brand Management, 17(4), pg.212-222. twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 42. References Preuss, H., Seguin, B. and O’Rielly, N. (2007) ‘Profiling Major Sport Event Visitors: The 2002 Commonwealth Games’, Journal of Sport & Tourism, 12(1), pg.5-23. Raj, R., Walters, P. and Rashid, T. (2009) Events Management: An Integrated and Practical Approach, London: Sage Publications Ltd. Richards, G. and Palmer, R. (2010) Eventful Cities: Cultural Management and Urban Revitalisation, Oxford: Butterworth-Heinemann. The Guardian (2008) Boris Johnson shakes up funding for capital's cultural events [online]. Available at http://www.theguardian.com/politics/2008/nov/06/boris-johnson-london- culture [Accessed 09.11.14]. twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
- 43. Contact • chrisaustin87@btinternet.com • Twitter @chrisaustin87 • linkedin.com/in/chrisaustin87 • slideshare.net/christopheraustin twitter.com/chrisaustin87 | linkedin.com/in/chrisaustin87 | slideshare.net/christopheraustin
Editor's Notes
- Feasibility – Desired level of performance and means of supply – requirements (tangible and intangible) and sources for these. Desirability – Internal and external stakeholders. More attractive than the competition, differentiation etc. Stakeholder expectations – Expectations change and events need to stay up to date with these. Can include internal and external stakeholders (either with an interest or who are affected by the outcomes).
- Assess the fundraising options Confidence to existing partners/stakeholders Contingency plans Action – What do you need to do to apply? Fundraiser – Who is responsible? Contingency – What if not achieved?
- For information – prepared in industry showing the risks associated with a sponsorship approach in a large organisation.
- Cover Page > Prepare an eye catching cover page with your event logo/visuals, your contact details and a short summary of the key benefits on offer to the sponsor. Contents > Create a contents page to ensure the proposal is easy to navigate 1. The Event > The Event – give an overview of the event and its background. Include a couple of good press quotes and images if you have them > The Audience – state the audience profile and predicted attendance levels 2. The Organisers & The Partners > The Organisers – tell them a bit about you and your experience > The Partners – tell them about any funding partners that are on board such as the local council, national agencies, etc 3. The Opportunity > Introduction – detail the opportunity or opportunities that are available to them > Value – tell them how much it will cost > Usage – say how the sponsorship funds will be used 4. The Benefits & Entitlements > Benefits – outline the package of benefits they will receive in return for their support including the amounts and types of marketing materials (it may be a good idea to include an overview of the event’s Marketing Plan and tools) > Entitlements – state clearly what they will be entitled to do in support of the sponsorship > Additional Benefits – list any additional benefits that they could take advantage of for a further price 5. Contact Details > Make sure your details are on the final page of the document as well as the cover page
- Alternative definition… What is the problem with this method of budgeting? Assumes that the budget in previous years was reflective of the organisation’s priorities and meaningful justification was used to allocate it originally. Can also budget for income in the same way – set targets based on previous performance etc.
- For example – If working for an organisation / brand, may be paid a salary as part of the ‘normal’ operation of the business. Specific events or projects will incur additional costs such as staffing, equipment, venue costs, licensing etc. This will also be the case for income – Additional income especially from the event, as opposed to that generated by the business anyway. Costs and income on a sliding scale – the larger and more complex the event, the greater the cost but the greater the income.
- Establish pricing structure based on other / similar events – research! Could charge for some parts of the event or a fee to enter, not both?!? Different price levels (multiple dates, adults, juniors, concessions etc) Expectations and perceived value based on ticket price – high price may raise expectations, free or too low may de-value the event product. Sales forecasting – break-event point, for example concerts based on tickets alone will need a minimum number of tickets to be sold. Discounts and special offers, factor these into sales figures – if reliant on a minimum sales number then consider the impact that discounting may have on this. VAT – Use the net figure for revenue purposes, as VAT will be payable to HMRC. Think about commission from agents – sell tickets yourself of use a third party? Inside charges – applied to the organiser as a % of the tickets value Outside charges – applied to the purchaser as a booking/admin fee, one off fee per transaction or ticket BOTH??
- Mainly found in sporting events – mass-participation, elite or professional Research the price based on similar events – entrants need to feel that they are getting value for money as with ticket sales What is included – for example, if entering a marathon, will this include t-shirt, merchandise etc? Discounts – may offer discounts for early entrants, sponsor/partner organisations etc. If charging for spectators and visitors, think about the combined price for tickets and entries – is it affordable and are they still getting value for money?
- Authorities and governments are faced with in increasing requests for funding so have to make tough decisions on how to allocate this based on a range of benefits from the event – international example from Victoria.
- More and more authorities are providing an arms-length approach to events. Enabling them to organise their own and submit detailed plans to ensure the quality of events which are being funded.
- Arts council Evidence specific outcomes Bid for funds Often have to have strong evaluation mechanisms
- Glastonbury
- Glastonbury
- Glastonbury
- Manchester 2002 Commonwealth Games – want to be immersed in the event experience. Consider when merchandising… The type of event and forecast the level of demand Don’t want lots of stock left over that is branded so can’t do anything else with it – Potteries Pied Piper t-shirts!! Consider licensing to another supplier to take a fee – saves time and risk.
- Charge a pitch fee similar to a concession Align to event values, ethics and message – otherwise can de-value the event or give conflicting messages Thing about sponsors and conflicts, exclusivity etc. Beware of ambush marketing!
- May ask an agency to look after this for you – BE AWARE OF CONFLICTS WITH SPONSORS OR AMBUSH MARKETING
- Ensure to have agreements in writing – as any withdrawal of support could be costly to the event.