Sponsorship’s move to the centre of the comms mix

Introduction

Digital has profoundly changed the landscape. Empowered customers are disrupting every sector. How we communicate, shop, bank is profoundly different to as little as 5 or 10 years ago. There are more media channels, more customer touchpoints, more paths to purchase. In short, there is more choice and this means more consumer power.

In today’s world, traditional strengths (like the scale of your media budgets or distribution) are no longer enough to guarantee survival and this creates a need to refresh your brand identity, fully integrate your marketing campaigns and provide a customer experience that is consistent across all channels.

But it’s not all doom and gloom. We now have the opportunity to involve customers in the design our marketing campaigns, products and customer experience - as well as the opportunity to assess Brand sentiment and gain feedback in real-time on how their last interaction made them feel - delivering genuine customer intelligence.

Background

The number of digital users is still growing.

People are spending more time online.

Social Media usage is still growing

We have entered a new era that Forrester calls the ‘age of the customer’

So what’s different in the age of the customer?

The media landscape and consumption are very different. 9 out of 10 adults go online every day. The job of planning media and deploying campaign budget is much more complicated with ‘digital’ now accounting for 27% of all advertising spend.

There is increasingly a move away from 'push' campaigning to a more dialogue-based approach. This also creates the challenge of richer content development and increasingly brands are buying into sponsorship properties to engage their target audiences.

Interestingly, social networks and blogs now account for around half of all time spent online in the UK. Consumer habits have changed and the digital age has empowered them.

The balance of power has shifted

It’s no exaggeration to say that empowered consumers have eroded previous sources of dominance. A focus on the customer must now be the key strategic imperative for any brand manager. Why? Because, according to Forrester Research, 76% of world's population are connected to each other on Social media and a wealth of information is at their fingertips through the mobile devices in their pockets (2011). They “want things faster, better, cheaper and with a higher degree of service; technology makes it possible for them to get what they want”.

In fact, technology is now so thoroughly integrated into our lives that 42% find it “hard to be without my phone/mobile device” (Euro RSCG 2012). Consumers can find what they want anywhere in the world. Let’s not forget that 100 years of brand equity and significant High Street presence weren’t enough to save Woolworths. Large scale brand campaigns are also no longer guaranteed to provide competitive advantage.

Traditional sources of strength no longer apply. Only 15% of consumers trust ads to inform purchase decisions, whilst 76% trust consumer recommendations for purchase decisions. Consumer purchase behaviour is changing with a greater reliance on networks, blogs and wider information gathering before providers are actively evaluated and ‘considered’.

So what needs to be done?

It has been said many times before, but the Marketing agenda now needs to be focused on ‘customer insight’ and ‘engagement’ at the expense of the traditional focus on ‘awareness’ and ‘consideration’. In addition, we all need to build richer content and interactivity into our campaigns.

Many brands that have traditionally spent big on TV have shifted to making significant investments in sponsorship properties. For example, Sharp's sponsorship of UEFA Euro 2012, while McDonalds, Coke and Lloyds TSB have all invested heavily in London 2012. Indeed, the sponsorship revenue associated with the 2016 Rio Games is already expected to exceed the London 2012 total. Some brands, such as Coors with their relationship with the Mexico national football team, are targeting their future customer based on the insight that the Hispanic community amongst the US population is rapidly growing.

Procter & Gamble, the FMCG giant, is pursuing a more "balanced" growth strategy, reflecting the increasingly challenging trading conditions and implementing a change in approach that would enable it to "win" with shoppers and investors. P&G believe that their affiliation with the Winter Olympics in Vancouver “generated up to $100 million in incremental sales [in the US]” and they “feel comfortable on building that on an international basis”. At the same time, they are taking a "brand agnostic" approach to digital marketing and cutting $1bn from their marketing expenditure by 2016 across the Tide and Pampers brands by leveraging the cost advantages of new media.

This is serving to bring about a shift in the position ‘sponsorship’ has traditionally held at the periphery of the comms mix – bringing it into centre stage. Digital technologies and social media are the key enablers here. Johnnie Walker is a good example of a brand which has harnessed the power of both sponsorship and social media with great success. Needing to tackle the trend of waning interest in scotch in the U.S and introduce younger drinkers to its brand, Johnnie Walker created buzz around a trendy event where young people could come to learn more about scotch. An integrated social media platform allowed participants to share their experiences with Johnnie Walker and each other. The ‘Striding Man Society’ exceeded its membership targets by 23% and demand was up 34% among new members.

A new, aligned set of KPIs is now required to ensure a robust framework is in place to measure success. Internal structures also need to be aligned to ensure an integrated approach to Social Media / digital touchpoints across Marketing, eCommerce, PR and Customer Service teams.

Concluding thoughts

The change brought about by digital technologies is inevitable and needs to be properly planned for. The proliferation of choice means that the USP remains a critical marketing principle. However, communicating it via traditional media means a real likelihood that the message won’t be believed and your customers expect more from you than a 30 second spot on ITV. Thought needs to be given to evaluating the shifts in your audiences’ perceptions, attitudes and behaviour, rather than simply in shifts in their awareness and the resultant uplift in sales. And finally the growth in ‘earned’ channels must be leveraged to compliment efforts in the ‘paid’ and ‘owned’.