Sponsorship - a Mid LIfe Crisis?

We are thick in the midst of sponsorship conference season. There’s an interesting debate brewing. Patrick Nally, one the most influentical figures in the growth of sports marketing, has suggested that sponsorship is entering a ‘mid life crisis’. His rationale is that the big bucks global media rights and tickets deals beloved of rights holders are increasingly redundant. To paraphrase - consumers know the rights have been bought at great expense. A pitch side billboard does nothing for me, nothing for the community, nothing for my daily working life, and certainly nothing for my propensity to purchase. It is irrelevant to me. The consumer will no longer pay a price premium just because a brand has decided to give $50m to UEFA.

Think about the private equity analogy again. When private equity professionals are buying businesses, they are looking for return over the next 4 years. The seller is regularly fairly aware of the value it currently holds. It is probably over-charging for it. The buyer will only pay the price if there are some extra areas, some newer streams of value they can see. Or if they can deliver value from the ‘regular’ stream more efficiently. That’s exactly where sponsorship sits at the end of 2009.

There is a way forward, because the newer sources of value do exist. Nally cites Coca-Cola as an example of a brand which as managed to emotionalise its FIFA and global Olympic connections in ways which makes sense. He is right. Sponsorship is a bridge to various stakeholder groups – consumers, trade partners, employees, government. All of these can be emotionalised to drive real, quantifiable value.

The current challenge is that the majority of the sponsorship industry has not grasped that the rules of the game have changed. All of sudden, rights owners cannot over-inflate the value of their traditional packages. I am sorry, but World Cup Final tickets are not ‘money can’t buy’ because I can buy them on seatwave. Those who are not prepared to challenge their operating model, and the ways they support their partners (not sponsors) in emotionalising their connection will be in trouble.

It’s less a case of mid-life crisis than a troubled late adolescence. Often one big event turns adolescent to adult. This often involves demonstrating that there is a ‘real world’ out there which is harder, tougher, and less tolerant than the heady teenage years. Let’s hope the recession is that one thing for the world of sponsorship, and the industry is able to respond.

2010 Planning - On the B of the Bang.

My good friend Steve Hacking, who writes a cracking blog at http://www.stevehacking.blogspot.com/, has just released a great post on the limitations of SWOT analysis in business planning. Steve rates the SWOT as the basic start, not the ultimate end game, of the strategy process. I completely agree.

I wrote in an earlier post that our mindset as we approached business planning for 2010 here at Lane4 was one of 'opportunity, not threat'. Steve says, ''I'm not saying that SWOT doesn't have its place at the beginning of the strategy development process; it does, especially if you start with the "O". O, for opportunity, forces you to take a moment to look around and speculate where the future pools of profit might be, which is especially useful for bringing out those areas that you're currently not doing anything about.''

We were in the 'O' phase during the Summer. Now we're making decisions. However decisions as Steve recognised should be anything but straight from SWOT to reality. We have been immersed in market insight, gathering customer feedback, financial projections, scenario analysis and like-for-like comparison between our ideas, recognising we can't do everything. Essentially September and October have involved a good dose of marrying our excitement with internal and external reality.

The good thing is that things are coming together. We are aiming to hit 2010 on the 'B of the Bang', as Linford Christie would say.

The Last Amateurs

I had the pleasure of sitting down and reading a few books cover to cover on holiday recently. A varied bunch - from the chequered history of the Tour de France to the fascinating 'Freakonomics'. The best of a good bunch though was 'The Last Amateurs' by Mark de Rond - an ethnographer from Darwin College, Cambridge who followed the Cambridge University Boat Club in preparation for the Men's Boat Race in 2007. It can be read as an ethnography, sports diary or insight for business into what it takes to build an elite team. I took pieces from all three angles, but also the chance to revisit a lot of sporting memories from my own time at Cambridge. Tennis is by no means rowing in terms of profile at Cambridge, but the highs and lows we all went through as a team trying to end our Varsity losing streak were the same.

Cambridge Boat Club enter de Rond's account in September 2006 on the back of multiple defeats, with a team (both coaches, coxswain and crew) perceived to have blown it when it counted in previous years. I won't share the outcome from the race, but if you do get a chance, I found it a tremendous read...

http://www.amazon.co.uk/Last-Amateurs-Hell-Back-Cambridge/dp/1848310153/ref=sr_1_2?ie=UTF8&s=books&qid=1255288848&sr=8-2

London 1948 and Rio 2016

I am researching a session for our forthcoming Client Conference at the moment on the London 1948 Olympic Games. It has been fascinating to learn how the Olympic Games provided such a major source of social, psychological and economic healing to war-torn Britain.

Fast forward to the IOC's decision this evening to select Rio as the home of the 2016 Olympic and Paralympic Games. There is no doubt that Rio's objective of using the Games as a lever for not just a growth economy, but a growth continent struck a chord. If 2016 achieves quite as much for Brazil as 1948 achieved for Britain, the 2016 Organising Committee will have achieved their objective.

All in all, I have to admit that I am disappointed on behalf of Chicago. That's sport I guess. Given that Britain will be handing Brazil the Olympic flag, let's hope they return the favour with the FIFA World Cup!