Art of Sponsorship - 2

After the many calls, emails and messages for my last post on sponsorship, I decided to write another trying to answer some of the questions you all asked.

The most common question was, "Is sponsorship best leveraged only in sport?"

The easy answer is no. It is applicable to any content, be it sport, music, movies, events, books, organisations, institutions and individuals. The content mix is only 25% and activation is the main 75%.

And swearing the second most popular query, "How do we go about it?"

The stages of getting a sponsorship programme right has the following steps:

1. Brand Analysis - The first step is always internal. You need to have complete understanding of your own brand, audience, the positioning, tone of voice, and values. The most common mistake I have observed in this step is most brand mangers look at it from what they think their brand stands for, but the secret is to understand what the audience and market actually thinks of your brand. For example you may have a niche high priced herbal brand and you may believe you stand for luxury, while your audience may not be looking at you a luxury brand to flaunt but as a brand that stands for purity and natural. So this step is not an exercise in understanding brand guidelines but market research and lots of consumer interviews. It is outside looking in, not navel gazing.
2. Brand - Content fit - The second step is obviously doing a similar exercise on the content you wish to sponsor and understand if it is a right fit for you.
3. Deal Making - What may seem like an obvious point is still being highlighted here as everyone thinks they know how to buy a sponsorship just because they have bought media before. If this was the case there would be no IMG, WSG, Infront, Octagon etc. I experience this myself inside GroupM . There is a need to understand this space better to be able to extract true value. For the Naysayers, let me share a personal experience.

A few years ago a global Ecommerce brand was launching in India and approached us to help structure a deal with IPL teams for them. We negotiated with various teams and got them official partnership status (and we did get some teams for far less than you can believe possible and some for free). The next year they decided to speak to the teams directly as they had each others connections and they came back after two months of negotiations as they could not get anything lower than 5x of what we got them.

Well I am sure there are clients amongst us who still believe they can do a better job than the agency directly?

4. Activation - I have covered this in depth in my last post. The link to the earlier post - https://bit.ly/3NtfNVt

Now coming to some more examples let's start with the iconic Michael Jordan endorsement deal by Nike.

In 1984, Nike took a risk on the young athlete and signed a unique deal with Jordan to produce his own line of shoes. Jordan was an Adidas athlete then.

The original Air Jordan I sneaker was produced exclusively for Jordan in early 1984 and released to the public in late 1984. With their iconic red and black features, the original shoes were actually banned by the NBA for being too colorful at a time when all shoes were mandatory white.

This marketing strategy – a quick reaction to the NBA banning – proved to be one of the all-time greatest marketing coups, driving more than $150 million in sales. The famous ploy by Nike at the time was to pay the $5000 fine that Jordan received every time he wore the new shoes on the court. This sparked news headlines and was capitalized into a TV advertisement which played off the rebellious aspect of the shoes.

Today Air Jordan's are a collectors Item

StockX, a trading platform for alternative assets such as sneakers and trading cards, said Jordan shoes were the top-selling brand on its platform in 2021, with Jordan sneakers reselling for 54 per cent more than the retail price.

“The popularity of Air Jordans can largely be tied to the exclusivity level. Virtually every Jordan release is limited edition, meaning there is never enough to satisfy the market demand,” said Jesse Einhorn, senior economist at StockX

 In 2019, ace collector Jordan Geller sold the most expensive sneakers he owned -- a pair of Nike Waffle Racing Flat Moon Shoe-- for US$437,500. Two years later, he broke his own record with a pair of game-worn Air Jordan 1s that sold for US$560,000 in a Sotheby’s auction

The demand for Jordans is also tethered to pop culture. After the April 2020 release of “The Last Dance” on Netflix, Jordan sneaker trades rose more than 40 per cent.

While this is an iconic success story, it's not been replicated to the same level despite repeated attempts with Tiger Woods, Roger Federer, CR7 and even our own Virat Kohli's 'One8'.

This is just one example of an individual sponsorship deal that goes beyond a photo/video shoot or store opening/event appearance.

What are you going to create next?