What exactly am I paying for? The sponsors’ dilemma
By Tunji Adeyinka
I have had the great privilege of working in my close to 30 years working life as a sponsor (working for a brand that invests in a sponsorship property), a sponsee (the owner of a sponsorship property seeking for sponsors), and as an agency ( working for the sponsor most of the time and for the sponsee in some cases). I have had the privilege of seeing the elephant from different sides. It is especially frustrating to deal with owners of sponsorship properties who are looking for sponsors when they have not done any kind of marketing work for the property.
I need to explain this because I am talking marketing, not sales. Marketing and Sales are twin towers in the same commercial equation. Marketing seeks to understand the customer and from this understanding it creates, promotes and prices products and services which can be delivered profitably. Sales takes the marketing proposition and converts it into revenue. If the product does not meet the needs of the customer, sales cannot deliver. If sales does not work, marketing is a waste. And joining these two is the customer experience which is the quality of interaction at each point with the brand. Again, if the two legs of the tower are sound and the experience is weak, there is a problem.
In my experience, one consistent question I keep hearing sponsors ask is, what exactly am I paying for? The reason we keep getting this question especially in this environment is because of the unpreparedness of sponsees and a total lack of understanding by property owners who want to sell something they have not invested any marketing effort into. This question is asked at different stages of the sales cycle. In most cases, when this question comes during the pitch, the sponsor turns down the sponsorship property and if it comes after the sponsor has made a commitment, the sponsor quickly jumps out of the sponsorship commitment. If the sponsorship contract is very tight and the sponsor has made a multi-year commitment, this question is a signal that the sponsor is about to churn.
Sponsorship is one of the elements in the marketing promotional mix which provides some unique benefits. If we go back to Marketing 101, David Aaker defines brand equity as a set of assets (and liabilities) linked to a brand’s name and symbol that adds to (or subtracts from) the value provided by a product or service to a firm or that firm’s customers. Aaker proposes that brand loyalty, perceived quality/leadership, associations/differentiation, awareness and market behaviour are the various dimensions acting as sources of brand equity.
Sponsorship directly impacts on brand association and can also impact on awareness and perceived leadership. Sponsorship builds brand association with a marketing asset or property with tangible and intangible benefits. The essence of the association is for the sponsor to enjoy pass-on benefits from the sponsorship property. The benefit could come in the realm of image enhancement, or even access to the core audience who are passionate about the property.
Sponsorship properties sometimes present an opportunity for a brand to bring alive its brand promise and experience. For example, why would the Government of Rwanda sign a three-year £30m deal with Arsenal Football Club? First, because tourism is one of the big revenue target areas for Rwanda and with the broadcast footprint of the EPL and millions of fans of the club, millions of prospective tourists will see the campaign. According to the Rwanda Development Board, the number of tourists from England climbed by 5% while total figures were lifted by 8% one year after commencement of the sponsorship.
So why are the sponsors asking the question, what am I paying for? To answer this question, we will look at sponsorship properties in the sporting sector in Nigeria. We are choosing sports because global data shows that between 60% to 70% of sponsorship spend goes to sports. So why are our Nigeria sport properties doing so badly? Let us use the football clubs in the Premier League as a case study.
The top seven clubs in the Nigeria Premier Football League from the last season are; Plateau United, Rivers United, Lobi Stars, Enugu Rangers, Enyimba Aba, Akwa United and Kano Pillars. The youngest among the clubs is twenty-four years old and the oldest is fifty years old. The revenue profile of all the clubs in the league is poor and the clubs have continued to struggle to build a sustainable commercial profile. If you are a follower of the Nigerian league you will agree that brands like Rangers International, Heartland, Rivers United, Kano Pillars, Enyimba, Lobi Stars, Kwara United, Plateau United, 3SC should not be struggling commercially. The reality is that they have continued to struggle because none of them has paid any attention to their marketing, brand building and fan experience. Some of these clubs play good football but we all know that a good product without good marketing cannot sell itself especially since we have moved from a product orientation phase to a marketing orientation phase. It is like manufacturing companies like Unilever or Procter and Gamble or Promasidor or Nestle producing quality products and assuming that the products will sell on their own without any support.
Nigerian clubs have not invested in marketing and strategy and that is why they are not getting sustainable growth outside the field. Where brands have sponsored the clubs, the commitment has been short term. It is clear that the clubs have not answered the key questions in marketing; in which market am I playing, who am I going to target, how will I win in the market and what position am I going to adopt in relation to my target and my competitors . Who are my most important customers? How do I serve them? What are my objectives and how do I measure my success? What tactics am I going to adopt after I have answered these strategic questions? Without answering these questions, there is no way these sports brands can achieve mental and physical availability which is the key to growth.
If the clubs were answering these questions it will be clear to them that their cheese moved a long time ago. In a country where the population of people aged 0-35 is over 60% and the highest brand recall rate for the club brands are among the 48 year- plus male adults, the mental availability is fast dying. If the clubs do not quickly inject some seriousness into their marketing strategy to redefine their positioning and essence, we may soon be saying bye to them because the new Sherriff in town does not know 3SC! This new consumer who has the money to spend, who is becoming affluent and who is becoming a decision maker does not know the clubs.
Of course, when some clubs read this article, they will quickly go and recruit a Social Media Manager to manage their presence on Facebook, Instagram and Twitter! The strategy goes before the tactics and if you get the strategy wrong, everything goes wrong. Strategy first, then tactics. How do you explain that according to the Global Digital Football Benchmarking Analysis published by RESULT Sports, Enyimba made it to the top 32 African club list but Enyimba continues to struggle to drive commercial success even after winning the CAF Champions League twice and the CAF Super Cup twice as well as several Nigeria Premier League titles?
As long as our sports brands are not investing in their marketing and building a strong equity which covers the entire brand and customer experience gamut, they will never achieve commercial success. When I look at the organogram of some serious teams in Africa and I see roles like Marketing Director, Marketing Manager, Brand Manager, I know that some people are taking this entire sports business more seriously than us. Perhaps the reason for this laxity is because of government ownership of the clubs. Perhaps there is no serious incentive to grow revenues because of government yearly budgets to the clubs. In these tough times when government income has been seriously impacted by the Covid effect, perhaps this is the time to make a change. Mr. Governor, are you really interested in growing the club? If you don’t change the direction, you are about to have another NITEL or Nigeria Airways on your hands.
I have used the Nigerian football league clubs as an example but it is the same case with most of the other sporting codes and properties including a lot of private properties. It is the same story in athletics, boxing, golf, etc. ‘We want sponsorship’ is a mere statement of intent which we have been repeating for over sixty years. When that call is translated to brand managers it sounds like ‘please give us a handout’. ‘Afterall you do business in Nigeria, give us money’. Of course the Brand Manager then says I have spent the money on Davido , Tiwa Savage, Burna Boy and Wizkid. At least they are Nigerians too and I can see the benefits I get from that investment.
The answer to ‘why should we invest so much money in your property’ is not ‘ well, we have been around for 50 years’. Or, ‘we play good football or we play excellent golf.’ The right answer is ‘ we have a fan base of 1million and 50% of them are actually on our database’. ‘We know that 50% of them are male, urban dwellers living around the South East and their age range is between 20-30’. On each match-day, we have 20,000 fans in our arena and we reach 3 million on TV’. ‘ Each time we are playing, we get media value worth N50m and when we are not playing we get engagements worth N30m’. ‘We can run a cooperative promo with you if you want to reach our fanbase’ ‘More importantly, our brand ethos and positioning aligns very well with your brand’. This is the kind of data that sponsors are interested in.
Tunji Adeyinka is the GMD of Republicom Group, a Marketing, Sales and Technology Group.
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