Sponsorship Myths and Reality - Conference 2009 (E1)

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Session E1 - ARPA 2009 Conference

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Sponsorship Myths and Reality - Conference 2009 (E1)

  1. 1. SPONSORSHIP MYTHS AND REALITY HOW TO KEEP FEES LOW AND REVENUES HIGH Alberta Recreation and Parks Association Annual Conference – October 31, 2009
  2. 2. Presenter Brent Barootes President and Senior Consultant Phone: 403-255-5074 Fax: 403-208-7892 Toll Free: 888-588-9550 Email: brent@partnershipgroup.ca October 31 2009 . Copyright 2009 2
  3. 3. Introductions Name and organization you represent What sponsorship experience you have What you are seeking from this session October 31 2009 . Copyright 2009 3
  4. 4. Session Overview Different from Judy Haber’s session Define what sponsorship is in today’s world Define why it should be important to you at big and small levels October 31 2009 . Copyright 2009 4
  5. 5. Session Overview Discuss industry trends in sport, recreation, parks and facilities – story telling Discuss how you can avoid looking like NASCAR and still putting money to the bottom line October 31 2009 . Copyright 2009 5
  6. 6. Defining Sponsorship Confusing what sponsorship “is” 2009 Canadian Sponsorship Landscape Study: 34% those surveyed defined sponsorship as a promotional strategy to generate profit It is an alternate revenue channel outside product sales, government funding and membership October 31 2009 . Copyright 2009 6
  7. 7. Defining Sponsorship Confusing what sponsorship “is” 23% say it is a co-promotion to enhance reach 18% say it is a way to provide resources to those in need in exchange for recognition 13% say it is a donation October 31 2009 . Copyright 2009 7
  8. 8. Defining Sponsorship Our Definition: A cash and/or in-kind fee paid to a property (typically in sports, arts, entertainment or causes) in return for the exploitable commercial potential associated with that property. October 31 2009 . Copyright 2009 8
  9. 9. Defining Sponsorship These are some key terms when discussing sponsorship: Property Assets or benefits Inventory Activation ROI October 31 2009 . Copyright 2009 9
  10. 10. Defining Sponsorship Why do companies sponsor properties? Differentiation from competition Unique ability to interact with target audience Client entertainment Merchandising opportunities Showcase new or existing products October 31 2009 . Copyright 2009 10
  11. 11. Defining Sponsorship Why do companies sponsor properties? Combat larger budget competition Drive sales or leads Create loyalty to a brand or product Deliver better ROI than traditional advertising October 31 2009 . Copyright 2009 11
  12. 12. Defining Sponsorship Why the big Fuss in Today’s World Competitive marketplace Properties getting more professional Need to differentiate Parks and Facilities and Recreation need the additional revenues October 31 2009 . Copyright 2009 12
  13. 13. Defining Sponsorship Why the big Fuss in Today’s World Budgets are tighter Sponsors seeing better results than traditional advertising There is $1.4B out there October 31 2009 . Copyright 2009 13
  14. 14. Industry Update – Climate Change Canadian Sponsorship Industry (as reported by the 2009 Canadian Sponsorship Landscape Study – produced by the University of Ottawa and Laurentien University) is a: $1.4 Billion industry (Fees and activation) Up from last study October 31 2009 . Copyright 2009 14
  15. 15. Industry Update – Climate Change Canadian Sponsorship Revenue Allocation: 49% Sport 12% Causes 11% Arts 22 % Festivals, Fairs and Annual Events 6 % Entertainment, Attractions & Tours (Reported by the 2009 Canadian Sponsorship Landscape Study produced by the University of Ottawa and Laurentien University) October 31 2009 . Copyright 2009 15
  16. 16. Industry Update – Climate Change The “big sponsors” were spending more “Small” and “Medium” level sponsors were spending less The 2008 average sponsorship was $125,000 (Reported by the Canadian Sponsorship Landscape Study – produced by the University of Ottawa and Laurentien University) October 31 2009 . Copyright 2009 16
  17. 17. Industry Update – Climate Change Canadian Sport Organization Details: 43% of their money come from Government 14% from corporate sponsors 13% from membership fees Can sponsorship grow? 54% of Canadians say they are a sports fan 41% of Canadian women say they are a sports fan October 31 2009 . Copyright 2009 17
  18. 18. Industry Update – Climate Change On average, companies are dedicating 22.5% of their marketing budgets to event marketing 55% of companies surveyed expect this number to increase in 2009 October 31 2009 . Copyright 2009 18
  19. 19. Industry Update – Climate Change A recent Canadian non profit study showed that 67% of nonprofits surveyed claimed sponsorship to be very important to their revenue mix 76% of these non profits identified sponsorship as one of their biggest revenue sources October 31 2009 . Copyright 2009 19
  20. 20. Industry Update – Climate Change Private facility moving forward with valuation October 31 2009 . Copyright 2009 20
  21. 21. Industry Update – Climate Change Winners engages in a multi year soccer sponsorship with CSA as title sponsor of women’s soccer and women’s youth (under 20) soccer October 31 2009 . Copyright 2009 21
  22. 22. Industry Update – Climate Change Enerflex Systems invested with the MS Society of Canada – Calgary Chapter and Alberta Division $135,000+ per year for 5 years and $50,000 per year with AJHL for 5 years! October 31 2009 . Copyright 2009 22
  23. 23. Industry Update – Climate Change Parks Canada just undertook a sponsorship inventory audit and valuation October 31 2009 . Copyright 2009 23
  24. 24. Industry Update – Climate Change Remember the Trans Canada Trail? October 31 2009 . Copyright 2009 24
  25. 25. Industry Update – Climate Change ScotiaBank follows RBC into cricket Last year we reported how RBC invested heavily into cricket to focus on a New Canadian target audience ScotiaBank wants a piece of this action too…they are now the official bank of Cricket Canada October 31 2009 . Copyright 2009 25
  26. 26. Industry Update – Climate Change ScotiaBank secures 150,000 new accounts through ScotiaBank Scene Card and ScotiaBank Cineplex Theatres Decreases turnover rate in key 18-34 demographic to 3% from national average of 17% October 31 2009 . Copyright 2009 26
  27. 27. Industry Update – Climate Change Wascana Centre Authority – Learned for Canada Games and now growing the opportunity October 31 2009 . Copyright 2009 27
  28. 28. Industry Update – Climate Change In 2009, sponsorship in Canada will grow by 2-3% Average timeline from initial discovery to closing in Canada…24 months! October 31 2009 . Copyright 2009 28
  29. 29. ORGANIZATIONS THAT ARE TAKING THE NEXT STEPS TO BE SUCCESSFUL Organizations we have or are serving: October 31 2009 . Copyright 2009 29
  30. 30. WHY INVEST IN SPONSORSHIP? Grow your revenue base outside of membership fees, government revenues and product sales Ensure long-term stability through an ongoing revenue source Build internal capacity for long term success October 31 2009 . Copyright 2009 30
  31. 31. WHY INVEST IN SPONSORSHIP? You need to know what you have to sell: Determine what your assets are and what they are worth Can you … do you want to name your property? There is lots more than just naming rights Signage at arenas, events, memberships, access to facilities October 31 2009 . Copyright 2009 31
  32. 32. WHY INVEST IN SPONSORSHIP? You need to know what you have to sell: Access to parents and users Direction signage in parks Booth and retail space – branded concessions Sampling – Edmonton Fringe Festival October 31 2009 . Copyright 2009 32
  33. 33. WHY INVEST IN SPONSORSHIP? You need to know what you have to sell: Saskatchewan Roughrider inventory Build as a group, brainstorm, never work in a silo What Gallagher Centre is going to do October 31 2009 . Copyright 2009 33
  34. 34. WHY INVEST IN SPONSORSHIP? What belongs to you… your partners/stakeholders / government? A good inventory of benefits will determine this and also value this to enable any level to sell appropriate benefits that a sponsor needs and the applicable organization is paid accordingly GO Community Centre / Gallagher Centre October 31 2009 . Copyright 2009 34
  35. 35. WHY INVEST IN SPONSORSHIP? A Comprehensive inventory ensures: Ensures less “bickering” and “possessive sales” and “protectionism” Focuses on the sponsor and NOT your property October 31 2009 . Copyright 2009 35
  36. 36. WHY INVEST IN SPONSORSHIP? Is this just for big properties or how can smaller parks, recreation facilities benefit from the process? All can benefit – look at “Summer Solstice” MS Calgary example, MS Alberta example Association of Canadian Mountain Guides Human Resources Association of Calgary October 31 2009 . Copyright 2009 36
  37. 37. Industry Update – Climate Change Pump Hill Gardens Community Summer Solstice Block Party (My wife’s block party event!!) October 31 2009 . Copyright 2009 37
  38. 38. WHY INVEST IN SPONSORSHIP? Get professional assistance Have a company like ours or others in Canada provide assistance MS Society Calgary went from $0 in BIKE to $25,000 October 31 2009 . Copyright 2009 38
  39. 39. WHY INVEST IN SPONSORSHIP? Get professional assistance YESS went from $50,000 per year to $100,000 Airdrie Festival of Lights doubled in 1 year HRAC went from $20,000 to $80,000 per year October 31 2009 . Copyright 2009 39
  40. 40. DO YOU HAVE TO SELL THE FARM? No, never sell the farm Many have pristine properties, signage is wrong! Sponsors don’t necessarily want signage It could be access, facilities like a hockey rink October 31 2009 . Copyright 2009 40
  41. 41. DO YOU HAVE TO SELL THE FARM? No, never sell the farm It could be access to your board members It could be to provide service or products It could be access to your data base October 31 2009 . Copyright 2009 41
  42. 42. DO YOU HAVE TO SELL THE FARM? No, never sell the farm It could be sampling opportunities - Fringe Wascana Centre Examples GO Centre Examples October 31 2009 . Copyright 2009 42
  43. 43. DO YOU HAVE TO SELL THE FARM? No, never sell the farm The big dollars are hard to replace The sum of the parts is greater than the whole October 31 2009 . Copyright 2009 43
  44. 44. Inventory Development Open discussion Lets look at assets for your properties / parks / facilities What do you have to sell? Look at intangible products versus signage October 31 2009 . Copyright 2009 44
  45. 45. Inventory Valuation How do you place a value? Where do the valuations come from? How are they justified? How do we as a company do valuation? October 31 2009 . Copyright 2009 45
  46. 46. Inventory Valuation Some basic values: Logo on a web site (1/3 of a cent) Sampling (2 cents) Signage (Impressions/ traffic) Naming (Prestige, goodwill, traffic and impressions) October 31 2009 . Copyright 2009 46
  47. 47. Wrap Up The industry is changing rapidly and you need to look at sponsorship as a partnership, not an evil thing Sponsorship will provide the opportunity to generate a substantial revenue channel outside what you have at fee, government funding and rentals levels October 31 2009 . Copyright 2009 47
  48. 48. Wrap Up Sponsorship can support ideas, concepts and dreams that cannot be attained through existing budgets There are companies out there that will provide tools and internal capacity for you to succeed October 31 2009 . Copyright 2009 48
  49. 49. QUESTIONS October 31 2009 . Copyright 2009 49
  50. 50. October 31 2009 . Copyright 2009 50

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