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7-1 Chapter 7 Leveraging McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved.

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Presentation on theme: "7-1 Chapter 7 Leveraging McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved."— Presentation transcript:

1 7-1 Chapter 7 Leveraging McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved

2 7-2Leveraging Sponsorship Has Been Characterized as a License to Spend More Money Sponsorship Is Not a Stand-Alone Activity Need to Support Any Sponsorship with Additional Efforts Designed to Reinforce the Awareness that the Marketer Is an Official Sponsor of the Property

3 7-3Leveraging Also Referred to as: –Activization –Collateral Support

4 7-4 Why Leverage? Reinforce Relationship in Consumers’ Minds Reduce Vulnerability to Ambush Marketing Increase Likelihood that the Sponsorship Will Achieve Its Anticipated Objectives

5 7-5 License to Spend Source: IEG, Inc. Reprinted with permission.

6 7-6 How Much Should Be Spent on Leveraging Activities? No Universal Agreement Amounts Vary Significantly General Standard Is That a Minimum of $1 Should Be Spent on Leveraging for Each $1 Committed to Rights Fees

7 7-7 Leveraging in Practice IEG Reported Expenditure Ratio in 2004 Was $1.30 Spent on Leveraging for Each $1.00 Paid in Rights Fees New Report Indicates that Ratio Slightly Increased in 2005 to $1.34

8 7-8 Leveraging Techniques

9 7-9 Theme-Based Advertising Using Advertising that Focuses on the Same Theme Germane to the Sponsored Event adidas Sponsors the World Cup of Soccer; They Use TV and Magazine Ads that Feature a Soccer Theme

10 7-10 Advertise During the Broadcast of the Event Often, Sponsors Are Given Opportunities to Purchase Advertising Time Prior to that Time Being Offered to Nonsponsors McDonald’s Airs TV Advertisements during the Olympic Broadcast in an Effort to Leverage Its Sponsorship of the IOC

11 7-11 Advertising in the Event Program Reach the Fans at the Event; Those in Attendance Will Read the Program and Be Exposed to the Sponsors’ Advertisements FedEx Used Ads in the Ryder Cup Program to Reach Fans and Increase On- Site Business

12 7-12Packaging Incorporate Trademarks and Logos of the Sponsored Event on Product Packaging Must Have Been Granted This Right in the Contract by the Sponsee McDonald’s Incorporates Logos of World Cup, UEFA, & Olympics on Its Drink Cups

13 7-13 Distribution of Free Products or Premiums Use Free Samples of Sponsors Product or Promotional Giveaways that Feature the Sponsee’s Trademarks and Logos Absopure Gives Free Samples of Its Water at Michigan Stadium GM Gave Out Poster Featuring NFL Team

14 7-14 Provision of Prizes Sponsor Provides Goods and Services that Sponsee Uses as Prizes for Selected Activities Southwest Airlines Provides Tickets that MLB’s St. Louis Cardinals Give Away to Contest Winners Selected from Fans in Attendance

15 7-15 Point-of-Sale Display (POS) Use of Themed Signage at Retailers; the Signage Features the Sponsorship Adidas Uses Display that Feature Soccer and the Brazilian Team in Retail Stores in South America

16 7-16 Push Strategy for Retailers Engaging in Activities Designed to Persuade Retailers to Increase Exposure of the Sponsor’s Products and Promotions within the Retail Environment This May Involve Some Type of Financial Compensation for the Retailer NASCAR Sponsor, Country Time, Achieved a Substantial Increase in Display Space because Retailers Saw a Chance to Increase Its Sales

17 7-17 Consumer Sales Overlay Consumers Associated with the Sponsor Can Buy Tickets at Discounted Prices AAA Is a Sponsor of the Detroit Tigers; Members of AAA Have Several Opportunities Each Season to Purchase Tickets at Half Price (2 for 1)

18 7-18 Cross-Promotions with Co-Sponsors Collaborate with Another of the Property’s Sponsors in a Joint Marketing Endeavor U.S. Olympic Team Sponsors (Hilton Hotels and United Airlines) Put Together Travel Packages While Referencing Their Association with the USOC

19 7-19 Affinity Programs Capitalize of the Brand Equity and the Consumers’ Affection for the Sponsee Effective For CRM-Based Sponsorships, but Applicable in Sports Marketing MNBA NFL “Extra Points” Visa Credit Card Features NFL Logos and Consumer Benefits Accumulated by Using Card

20 7-20 Web Tie-Ins Acknowledgement of the Relationship on the Sponsor’s Own Website – May Link Coca-Cola’s Web Site Has a Link for “Citizenship.” Clicking Through Will Direct the Browser to a Listing of All of the Marketer’s Sponsorships Where One Can Click Through to Any of Its Sponsorships Including the IOC, FIFA and NASCAR

21 7-21 Overview of Leveraging Essential for Maximizing Impact Expensive- Consider Cost of Leveraging as Well as the Cost of the Rights Fees Sponsee Can Advise Sponsors on the Use of Effective Leveraging Strategies

22 7-22 Example of a Leveraging Effort Visa and the NFL Affinity Credit Card Contest for Consumers Who Use the Card Print Advertising Featuring NFL Logos POS Featuring NFL Logos in Stores Cross-Promotion with DirecTV Chance to Win Tickets to Super Bowl

23 7-23 Example of a Leveraging Effort Best Western International and NASCAR NASCAR Room Rate (Discounts) Affinity Credit Card Cross-Promotions with Co-Sponsors On-Site Hospitality at Race Location Access to Tickets through Hotel

24 7-24 Make-Buy Decision Make – Sponsor Develops and Implements Its Own Leveraging Program Buy – Sponsor Hires an Outside Agency to Assist in the Development and Implementation of Its Leveraging Program

25 7-25 Who Is Use When “Buying”? Source: IEG, Inc. Reprinted with permission.

26 7-26 Closing Capsule If a Sponsorship Fails to Achieve Its Objectives, the Sponsor Must First Ask Itself: “Did We Do an Adequate Job in Leveraging Our Sponsorship?” Leveraging Helps Reduce Impact of Ambush Marketing Effort

27 7-27 Closing Capsule Sponsorship Is Only Effective When the Consumer Recognizes the Relationship between the Sponsor and the Sponsee Effective Leveraging Makes that Recognition Far More Likely

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