How sponsors can be left at the start

FAST TRACK   OLYMPICS   SPONSORSHIP

As the London Olympics fast approaches we are beginning to see sponsors ramp up their engagement activity as they look to drive maximum value from their huge marketing investments.

Experienced sponsor brands such as Coca-Cola, adidas and McDonald's pour millions into creative and innovative activation programmes, on top of their rights fees, to ensure they squeeze every last benefit from their official status.

Yet, many sponsors fail to appreciate this need for activation spending, relying instead on rights holders to deliver the value for them.

The classic sponsorship agreement involves a brand or company buying a package of rights from a rights holder. Some of these rights will be tangible - advertising boards, tickets, hospitality places - and these can easily be passed on to a sponsor by the rights holder.

For many brands, however, a significant benefit of a sponsorship package comes with the "intangible assets" and the "right" to be associated with a team, event or individual.

With these intangible assets, the sponsorship investment simply confers on the sponsor the ability, the "right", to communicate an association with that property and the onus is on the sponsor to maximise this opportunity.

It is not the role of a rights holder to invest time and money in leveraging assets for a sponsor brand. They have passed on that right to the sponsor and it is the sponsor's responsibility to then maximise the value of this asset for their business. This is where investment in activation spend is required.

Activation must be considered a vital part of any sponsorship strategy and as such should be planned and budgeted for from the start of any sponsorship project.

Incredibly, many sponsors still overlook this point, either relying on the rights holder to do the activation for them, or spending their entire budget on a sponsorship which they then cannot afford to leverage.

The analogy I like to use is that of a shiny new toy. It looks fantastic and promises great things but until you put the batteries in, you won't get the best out of it.

Batteries are the activation. In the more immature sponsorship markets where a robust approach of activation and evaluation often does not prevail, sponsors are missing out on significant value by failing to add the batteries to their shiny new toy.

A clear, well thought out and significant investment in sponsorship activation is fundamental to delivering maximum value and therefore justifying the sponsorship investment in the first place.

Dan Parr (pictured) is director of Fast Track Hong Kong.

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