Chapter 7

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

2. Leveraging • 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. Leveraging • Also Referred to as: • Activization • Collateral Support

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

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

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. 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. Leveraging Techniques

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. 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. 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. Packaging • 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. Who Is Use When “Buying”? Source: IEG, Inc. Reprinted with permission.

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. 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