There has been a fair bit of chatter online about what the standard sponsorship leverage ratio should be. That is, how much incremental money should you budget for your leverage program, as a ratio to the sponsorship fee paid. People have offered up 1:1 (spend one dollar leveraging for every dollar spent on a sponsorship fee), 2:1, and 3:1 in the discussions. If you pay attention to IEG, you’ll know they recently reported an average leverage spend of 1.4:1 in 2009. And there are plenty of that media hail big leverage spenders as being at the vanguard of sponsorship. I disagree with all of that. Vehemently. Spending that much, incrementally, flies in the face of […] Read More
sponsorship budgets Archives - Power Sponsorship
I had an interesting question a couple of days ago. A charitable organisation was advised by their lawyers that they were obliged to spend sponsorship income only on the event or program that was being sponsored, and it could not be used for general operating expenses. The question was whether this was true or not. Without denigrating the lawyers’ abilities – this is a pretty specialised field – they are way off base. One of the reasons sponsorship is such prized income for non-profits is that it is unallocated funds. That is, it isn’t pinned to any specific program or expenditure. This is unlike a grant, where money is provided for a specific purpose, and […] Read More
“How many tickets to the event should we get for a silver package?” “What proportion of our sponsorship portfolio should be made up of sports, arts, community events, etc?” “How much should we spend on leverage for an $X sponsorship?” “What should our target ROI be for this sponsorship?” I get questions like this all the time. In fact, I’ve had every one of these exact questions in the past month. On the surface, they seem perfectly reasonable. The problem is that each and every one of these assumes that there is a “right” answer – some formula that will distil the complexities of modern sponsorship into a neat, little number. There is no such […] Read More
Looking at the title, I think I probably should have been more specific. I mean, there are dozens of ways to exit a sponsorship, including telling your partner to “get stuffed”, berating them for your own shortcomings, or simply not responding to any of their calls at renewal time. While you can take the approach that it’s your money, so you can do what you want, behaving badly is not recommended. So, perhaps a better title for this blog should be: “How to Exit a Sponsorship so that Lightning Does Not Strike You Down for all the Bad Karma You Create” I agree. It’s a little wordy, but it is more accurate. Absolutes There are […] Read More
When the global economy stopped sputtering and tumbled into a full-blown recession, the sponsorship industry took its biggest hit in my 24-year career. Some sponsors stopped all new investments. Some sponsors dropped every sponsorship they could. Some sponsors dropped every sponsorship they should have dropped years ago. Some sponsors decided to go “stealth”, underplaying their investments so as not to look ostentatious. Some sponsors halted, or at least minimised, leverage spending. Some sponsors re-evaluated everything and started fresh. Some sponsors stayed the course. Although I’m a bigger fan of some of these strategies than others, whatever your company decided to do, I’m sure it was driven by some combination of necessity and politics. The good […] Read More
I think it’s funny that recipients of TARP funding are prohibited from using those funds for sponsorship (and a lot of other things). It’s a bit like giving Joe on the Street $1000 and telling him he can’t spend any of it on beer. So, he pays his bills with that money and spends some of what used to be the bill money on beer. But he didn’t spend any of THAT $1000 on beer, so that’s okay.
When US Senator, and former Presidential contender, John Kerry came out against recipients of TARP funding investing in corporate sponsorship, I was appalled. My reaction was, and continues to be, that he should stick to what he knows. He called it “extravagant spending” by the banking sector. He mentioned “fat cats” and “corporate ego”. He called it an “idiotic abuse of taxpayer money”. Kerry’s cohort, Senator Barney Frank, wants one bank to refund taxpayers the money they spend on an annual PGA event that was contracted five years ago. All politics aside, this attitude toward our industry is ill-informed and dangerous. When it’s done well, sponsorship provides an unparalleled marketing platform for building strong, loyal […] Read More