Engaging Sponsors

Year-round exposure and longer alliances replace product logos.

Tough economic times stretch your business and personal dollar, forcing financial decisions that you wouldn’t otherwise have to, or want to, make. Companies are becoming more cognizant of how they are investing their funds and event marketing budgets are often the first to be slashed. Associations and non-profit organizations are usually the most in need of funds, with an economic model based largely on member dues, donations and sponsorship dollars.

The global cash crunch caused a 6 percent decline in sponsorship spending from 2008 to 2009, the first time less money was spent on sponsorships than in the previous year, according to IEG, a global provider of sponsorship measurement and valuation. “Those unprecedented numbers reflect a marketplace that never recovered from the economy’s free fall towards the end of ’08,” says William Chipps, IEG Sponsorship Report senior editor.

The financial crisis has forced organizations to realign the way they are recruiting new sponsors and maintain existing ones. The now industry-wide cliché — out-of-the-box thinking — isn’t enough. Companies must add strategy to their creative thinking and top it off with a dose of financial frugality.

“Sponsorship and advertising are key barometers on an organization’s radar, more so than in fatter times,” says Karl Ely, CAE, vice president and publisher, the American Society of Association Executives (ASAE). “We have to change the way we bundle assets in a more comprehensive way.”

Rather than slapping a sponsor’s logo on a tote bag or listing names on a throwaway show guide, organizations must prove value to sponsors, more so than ever before. Return on investment (ROI) must be shown immediately at the end of the event as well as an expanded analysis of how the sponsorship might bring prospective business to the company in the future.

Philip Arbuckle, MT, MBA, CMP, of MeetingTrack Inc., links a sponsor’s support with a program element that can demonstrate a result. “Whereas in the past it was sufficient to have their name/brand linked with the program,” Arbuckle says. But an IEG survey in partnership with the Association of National Advertisers (ANA) states that only 65 percent of organizations determine the results of their sponsorship and event marketing programs. At the same time, almost eight in 10 respondents said the need for validated results has increased in the past two years as a result of having to justify expenditures.

Ely agrees that validation of sponsorship spending is crucial. “We have to be very smart and sharp about tracking the value right away,” he says. “The sponsor doesn’t want it three months after the event; they want it now.” And, he adds, it’s not enough to simply show ROI; you must also provide ROE, Return on Engagement.

“Sponsors are also your event attendees and they need to be engaged,” Ely says. “They are in the market and want to know about it. [They] want to be a part of the discussion.”

Many associations analyze their sponsoring partners’ need factors by interviewing them and understanding what they really want to get out of their investment. It sounds simplistic, but organizations have had a history of creating packages based on what they need (including a certain dollar amount), not what their sponsors want. With the decline in sponsorship revenue, organizations now have to change this history and start customizing programs according to the sponsors’ needs.

Karl Kirsch, CAE, vice president of Meeting Expectations, agrees that sponsorships should be tailored to each company’s needs and like any nurturing relationship, should be given attention on a year-round basis. “The sponsorship is not about the meeting or trade show,” he says. “The planner should be calling the sponsor throughout the year and giving them alerts on how to better leverage their sponsorship both pre- and post-event.”

Another fact-finding idea is to create an advisory board for each of your conferences and events, inviting a member of the sponsoring company to sit on the board. William Drohan, CAE, president of Drohan Management Group, limits this benefit to his top-level sponsors — the platinum as opposed to the gold. He then adds the value of this access to decision makers into his sponsorship package. “There’s a value in providing exposure to these executives,” Drohan says. “And if you’re a top supplier in the industry and you don’t show up, the decision makers will think you’re no longer interested in their industry.”

Drohan also suggests inviting the top-level sponsors to the board of director’s dinner, which might precede the opening day of the conference. The admission that normally would be paid to attend the dinner is then added to the sponsorship package. “Sophisticated board members understand that this is where [sponsorship] revenue is coming from and that’s it an opportunity for the sponsor to develop a business and personal relationship,” Drohan says. “The chance for sponsors to actually meet these executives means much more now in these days of impersonal Internet and e-mail than it did 20 years ago.”

Medical associations must be even more creative in generating benefits. Governed by strict guidelines as to how much and what kind of exposure a sponsor can receive, their programs are limited in advertising opportunities.

Tara Morrison, CAE, president of Association Management Executives Inc., has become more flexible in working with sponsors to achieve their needs. Because only educational materials and pamphlets are permitted in the exhibit hall for pharmaceutical meetings, Morrison cannot provide the traditional logoed merchandise benefit to her sponsors. Not even pens and notepads with a company’s logo are permitted into the hall. A bucket of candy is the minimal booth-traffic enticement sponsors are allowed, but even at that there can’t be a company logo on the wrapper. “We’ve had to call on our other members and not focus solely on pharma companies,” Morrison says.

Philip Arbuckle of MeetingTrack believes that concerns about public perception have made associations much more sensitive to what they are sponsoring and how the sponsorship is listed. “There seems to be more emphasis on being linked with education and community support,” Arbuckle says.  “We also see some sponsors asking that their logo not be used on conference materials and opting for a simple listing of their company name instead.” When he is recruiting funds, he now leaves out the word “sponsor” when asking for an association’s support.

Charles Dillehay, MBA, CAE, of Dillehay Management Group, also had to become more creative in developing benefits for his Association of Physician Assistants conferences. In addition to a more robust e-mail campaign to members, he’s purchased online ads on industry websites targeting pharmaceutical representatives. The reps visiting the site then see the exhibitor opportunity for his conference. “We’ve had to become more cutting-edge and create strategies we haven’t employed to date,” Dillehay says. “You’ll be out of business if you’re doing things the same as you did one to two years ago.”

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Nonprofit sponsorship matchmaking:
Linking together has never been better.

Imagine a matchmaking service for nonprofit organizations seeking funding and companies looking to enhance their corporate social responsibility profile. The nonprofit may not have staff to write a grant or the expertise to craft a proposal targeting interested corporations. The company may not have time to research nonprofit associations offering sponsorship opportunities that can blossom into long-term strategic partnerships.

Enter SponsorPark, an online service that links association to sponsor, opportunity to prospective funding. Result:  a triple bottom-line marriage of “people, planet, profit.” Membership to SponsorPark’s nationwide, web-based community is free of charge. The service provides nonprofit organizations and potential sponsors with the ability to review proposals that match the criteria they enter in the site.

SponsorPark’s search engine manages multiple searches to satisfy a company’s request for more than one event with different target audiences. Although a company can contact the association if interested in the sponsored event, the privacy settings ensure that pursuing the opportunity is at the company’s discretion; they are not inundated with unwanted requests.

Released to a limited audience in March of 2009, the software was beta tested for usability and to gain public feedback. By the end of the year, the SponsorPark website had almost 5,000 registered community members and more than 40,000 proposals had been reviewed.

“SponsorPark is now truly the premier Internet community portal bringing sponsors and sponsorship opportunities together,” says Emily Taylor, co-founder of SponsorPark.  “The best part is we have only started.”

An association such as Soroptimist, for example, would benefit from SponsorPark’s service. A 501 (c)(3) volunteer organization for business and professional women, Soroptimist works to improve the lives of women and girls in local communities.

“We are a charitable organization and we have actually returned to some of the more traditional approaches to sponsors,” says Leigh Wintz, CAE, executive director of Soroptimist International of the Americas. “A lot of our sponsorships have been in-kind good and services, such as laptop computers for our Women’s Opportunity Awards recipients.”

Nearly all recruiters of sponsorship revenue agree that the bundling of benefits into a year-long value package and a multiple-year discount are two top trends.

Arbuckle has moved to multi-year packages where a sponsor is offered a program for three years instead of just sponsoring one event. “This allows us to work with the sponsors in an on-going mode where we can develop an alliance throughout the three-year period,” he says.

Drohan gives a multi-year discount for a bundled benefits package purchased in one payment. He shows the individual pricing of each benefit and then shows the discount if they are purchased together. He believes these packages are also easier to renew because the conference organizer can show the benefits the sponsor received for a longer period of time.

“We can say, ‘here’s what we did for you all year,’ which is easier for the association to sell and less complicated for the sponsor to buy,” Drohan says. “If the sponsorship has a $30,000 value and we charge them $20,000, they know they are getting a $10,000 discount and they have to make only one payment.”

A third trend in sponsorship recruitment is researching industries outside your immediate membership and expanding your offerings to alternative markets. “We have looked at our membership/conference participants and analyzed their buying needs to find new sponsoring companies that may not have been part of our sponsorship mix in the past,” Arbuckle says.

Kirsch is creating flexible packages to accommodate his sponsor’s vertical markets. If his sponsor has a niche product, he might work with the association to create a Webinar targeted at that niche. “Most associations are casting a wider net to try to attract a larger variety of sponsors,” Kirsch says. “This helps to mitigate the risk of being dependent on a small number of large sponsors.”

The good news is that IEG is expecting sponsorship spending by North American companies to grow by 3.4 percent in 2010 to $17 billion, up from $16 billion in last year. “We saw a 12 percent drop in sponsorship revenue in 2009,” Arbuckle says. “Sponsorships improved some in 2010, mainly as a result of taking a different approach in working with sponsors and developing new opportunities. Next year [2011] is looking good and may come close to 2008 levels.”

SponsorPark exists for the purpose of supporting people’s passions by connecting sponsors to sponsorship opportunities. Our service allows for proactive outsourcing and competitive partnerships, while operating more efficiently than ever. Our goal is to introduce the most mutually beneficial relationships, therefore seeing talents realized, business grown and life giving communities unfold.