The world of sponsorship is a path tread lightly for businesses. Putting cold hard cash behind a person, team, or event, means taking a potentially big risk. The entity being sponsored subsequently becomes something that represents, and even can become synonymous with the brand backing it. Some very successful cases would be the Nike sponsorship of Michael Jordon. From the avid hoops junkie to the fair weather footballer, you'd be hard pressed to find a sports fan hasn't heard of Air Jordan. Then there is some of the less successful moments in sponsorship like the Rimmel sponsorship of model Kate Moss who was shown the door after being caught on camera indulging in some class A snoochy hooch.
We'd all love to be that guy, gal, thing who is so famous, talented, sexy that companies come banging on the door to hand you the keys to the champagne lounge. It's never gonna happen for most of us. Any fame we're likely to acquire is from doing something monumentally stupid on youtube which will have the opposite effect.
What I'm really progressing towards is the question of 'why do companies give sponsorships?'. Sponsorship isn't charity. Gillette isn't giving Roger Federrer a 7 digit golden handshake because they'd like to see him have the best training and play to the best of his ability or just can't stand to see him with a 5 o'clock shadow. It is also not because he's won plenty of competitions and established himself as arguably one of the best sportsmen on the planet. It's based on the psychology of hero worship which comes back to what I said earlier about wanting to be that "famous, talented, sexy", person, place or thing. If you can't be it, then you can act like it or at least try to look like it. If Alex Nord was in a Gillette commercial, some viewers (those who play Ultimate Frisbee at a high level) might notice that there's a Gillette advert on the TV but for most Billy McCouchpotatos, it would get tuned out. Put Roger Federrer in the advert and now people who don't even like Tennis notice the advert. Let's throw in that VaVaVoom guy and why not bring Wayne Gretzky in as well to make sure we've covered any Canaduhs who might be tuning in. Now your really watching this advert! More than likely your next razor is also a Gillette razor.
In the end it comes down to the fact that sponsorship is an investment. Like all investments, a return on that investment is expected. If Gillette injects 10 million badoogans to sponsor players and advertisements for its new 7 blade kryptonite face axe then it expects that investment to conjure up considerably more than that amount in sales. And by sales, I mean sweet delicious profit.
Lets look at some examples...Company X sponsors Johnny Awesome for 10million to sell their new elbow moisturiser and spends another 10 million in advertisements using Johnny. If the profit on a bottle of moisturiser is £1.00, then we need to make sure we sell 20 million bottles to cover our investment right? Of course not! We want a return not a break-even! So, we need to sell 40 million bottles to cover our investment right? Of course not! That's only a 20 million profit margin. If Company X had done no sponsorship at all, resulting in half of the sales, they'd still have made 20 million in profit. Let's try again. That means that a sponsorship needs to yield a profit that not only pays for itself but also boosts sales so significantly (more than double in this case ), that it brings in a profit well beyond what the projected levels would have been if no sponsorship had been done at all. Somebody get me a towel!
Complicated? It gets worse. If your advert reaches 50 million people, not every person is going to run out and buy your product. If your previous advertisement statistics say that your campaign will bring in a new sale for every 10 views, that means in the above example, the advertising would need to have reached at the very least, 10 times the number of people as bottles of products you need to sell. Assuming we need to sell 60 million bottles of elbow glow, we'll need to reach at least 600 million people with our advertising campaign. Woah! That's going to cost more than 10 million! We need to start over with our math then!
That leads us nicely to the final factor and absolute key to sponsorship value that we're talking about, and that is, exposure. It's that combination of hero worship, brand association, and exposing that association to as many people as possible that brings in the Benjamins! Without exposure, the value of a sponsorship of even the most talented, sexy, and unique person/team/event drops to zero. You need to convey your message many times to many people. Even then, it's not that simple because it's not just any people. This is where market segmentation comes into play. Your message only holds value if it's being delivered to the right people, aka, the 'demographic' for your brand. Advertising value approaches zero the farther you get from your market segment. The exciting new Gillette face axe advert, playing repeatedly during Sex in the City would be an example of wasted sponsorship investment just as much as adverts for Rimmel's new eye liner would be if played during the Superbowl. Swap those around however and you've cracked it! The end result is, you need to find not just any 600 million people, but the right 600 million people. Problem solved. Now you have to hope that your 600 million people are easy to find. Let's hope you aren't marketing yourself to Ultimate Frisbee players then!
This is why televised sports are rolling in the money thanks to the millions of home viewers, while more underground sports like Ultimate Frisbee are struggling to figure out why everything costs so much, why they aren't being paid yet and why it's not yet being considered for the Olympics.
The next time your thinking of asking for sponsorship, if you really want it and think you deserve it for your achievements, then it's time to apply the formula. Does your person, event, or team stand out from the crowd in some positive way? Is your mojo strong? Do you feel that your uniqueness is almost capable of being a brand in itself, and is something that others respect, admire and potentially seek to emulate? Do you believe that your choices and associations may influence people? Lastly, do you have ideas about how your sponsor and yourselves can convey all this to enough relevant people that you feel your association with your sponsor will garner a significant return for the sponsor, meaning the relationship is beneficial for all involved! If you said yes to all of above and yet haven't already been approached by a potential sponsor, you might want to ask yourself those questions again.
Thursday, 21 April 2011
Tuesday, 4 January 2011
Branding and stuff
Marketing is not only one of the necessary evils of business, it's almost the life's blood of some companies. I have a love/hate relationship with it as I'm sure do many others who are responsible for both the actual products a company produces as well as the promotion of said products. While I LOVE to shout about new developments I really HATE that I know it must be done in a certain way. The certain way I'm referring to is the eternal question or problem faced by so many in the past and so many more to come. How do we catch the attention of a person X while not offending person Y or alienating person Z. I'm not blaming the Ys and Zs. It's not their fault but I'll get to that later.
Most of us have at least heard of the expression "You can please some of the people all of the time and all of the people some of the time but you can't please all of the people all of the time." commonly attributed to good old slavery buster Abe Lincoln. If you think this is all too true the real quote was actually "You can FOOL some of the people all of the time and all of the people some of the time but you can't FOOL all of the people all of the time." I think Ab was a marketing guy deep down. For many companies brand awareness and brand marketing walk a fine line between "please" and "fool". Quite often in fact the two are one and the same. Most of the time marketing and advertisements don't really tell you much at all but instead allow you to draw conclusions like the "fact" that because Tiger Woods and Roger Federer using a certain razor, it must be a damn good razor! How many blades did they say it had? Micro-fine-what?
Getting back to the person X, Y and Z, the unfortunate reality of these three people is that while person X is the majority, they are also usually the idiot of the bunch who usually as formed an opinion about the product before even seeing it based on all of their knowledge. A knowledge typically gained through advertisements like the razor one. Y is a bit uptight but actually cares about the technical spec and might actually do some real research. Z is all about the money. Cheaper is better even if that razor was CO2 farting Chernobyl powered by mal-nourished sweatshop children on hamster wheels and tested on pandas.
So how then do we solve the problem of trying to actually please everyone all the time. From the perspective of knowing the product well, it's easy to please person Y with information at least if not with the product itself. It's person X we really need to please and unfortunately the best way to attack that problem is the old fashioned way, with money.
It's no secret that companies like Nike who are on top of the pack stay on top of the pack. In our world, every company has essentially the same methods to communicate about their products. These are primarily tv, radio, internet. The basic costs to use each doesn't change depending on whether you're Superinterglobalmegacorp or Fran's B&B. It should be no surprise then the company with the most money to spent will of course dominate all of these areas and as a result when it comes to decision time for buying that next stretch fit micro flexmathingy the brand and logo that comes to mind without having to flip the "on" switch in your brain is pre-programmed. Additionally because that programming (marketing) has created multiple associations between product and greatness through costly sponsorship endorsements (eg. Tiger Woods, Michael Jordan, David Beckham) then person X will also consider the product to be great by proxy. It actually requires the kind of increased brain function person X doesn't frequently exhibit to acknowledge that these stars are actually not discerning individuals who chose of their own free will to endorse the product out of sheer adoration for it, but in fact paid employees doing what they're told. It works. Of course if I could scare up the 5 gajillion get Beckham to say he loves and wears my products I would, but I can't.
The final consideration with marketing is the size of the market. There's no point if spending a large or even small fortune on marketing if the potential customer base isn't large enough to provide a return. The average person X, or Y and Z for that matter, rarely consider the marketing reality that no company will spend money on something unless they expect to get a
financial return from the exercise that will cover the costs. That can be a short term return in terms of an advert for a sale or a long term return if the exercise is based on exposure by, for example, sponsoring Wimbledon or the Olympics. Yes that means if Nike give 20 bakillion squids to Johnny Awesome, then think they'll make twice that back thanks to the overwhelming number of person Xs who will gobble up everything Johnny Awesome drops a bead of sweat onto. Keep that in mind next time you ask any company for a sponsorship. Have your prospective return in mind and compare that with what you're asking for. If you can't do the math then it's unlikely you'll get a sponsorship. Getting back to the market size, the sport we dwell in is Ultimate Frisbee. If Ultimate Frisbee were an animal it would be the something like the Lion-Tailed Macaque and by that I mean, only other Lion-Tailed Macaques have actually heard of the Lion-Tailed Macaques or know anything about them. Try specialising in selling gear to the Lion-Tailed Macaque market. Welcome to the business side of Ultimate Frisbee. To further drive this home let's compare Ultimate Frisbee to Football (soccer). There is approximately 4600 professional players in the UK across all leagues. There is an estimated 46 million fans. That's a ratio of 10000:1 fans to players. In this context, sponsoring a team makes complete sense. The exposure result is massive especially considering that even non-fans will likely still see the effect of the sponsorship. In Ultimate Frisbee the ratio of fans to players is closer to 1:10000.
You were probably reading this (oh thanks for reading by the way, I'm sure you're in limited but excellent company) hoping for a solution. A great big answer to tell you how to market products and company branding with little or no money to a tiny and often apathetic market. Unfortunately I don't have one and wish by the beard of Odin's ghost that I did. Until I win the lottery, wake up and realise I actually have some wealthy parents to provide a sudden and massive bankroll to my business, get bought up by a Winnipeg based holding company or the population of the Ultimate playing public or fans in the UK and Europe increases 100 fold I'll just have to do what I already do. Tread lightly, say truthful things, make the best products I can and hope for the best.
Most of us have at least heard of the expression "You can please some of the people all of the time and all of the people some of the time but you can't please all of the people all of the time." commonly attributed to good old slavery buster Abe Lincoln. If you think this is all too true the real quote was actually "You can FOOL some of the people all of the time and all of the people some of the time but you can't FOOL all of the people all of the time." I think Ab was a marketing guy deep down. For many companies brand awareness and brand marketing walk a fine line between "please" and "fool". Quite often in fact the two are one and the same. Most of the time marketing and advertisements don't really tell you much at all but instead allow you to draw conclusions like the "fact" that because Tiger Woods and Roger Federer using a certain razor, it must be a damn good razor! How many blades did they say it had? Micro-fine-what?
Getting back to the person X, Y and Z, the unfortunate reality of these three people is that while person X is the majority, they are also usually the idiot of the bunch who usually as formed an opinion about the product before even seeing it based on all of their knowledge. A knowledge typically gained through advertisements like the razor one. Y is a bit uptight but actually cares about the technical spec and might actually do some real research. Z is all about the money. Cheaper is better even if that razor was CO2 farting Chernobyl powered by mal-nourished sweatshop children on hamster wheels and tested on pandas.
So how then do we solve the problem of trying to actually please everyone all the time. From the perspective of knowing the product well, it's easy to please person Y with information at least if not with the product itself. It's person X we really need to please and unfortunately the best way to attack that problem is the old fashioned way, with money.
It's no secret that companies like Nike who are on top of the pack stay on top of the pack. In our world, every company has essentially the same methods to communicate about their products. These are primarily tv, radio, internet. The basic costs to use each doesn't change depending on whether you're Superinterglobalmegacorp or Fran's B&B. It should be no surprise then the company with the most money to spent will of course dominate all of these areas and as a result when it comes to decision time for buying that next stretch fit micro flexmathingy the brand and logo that comes to mind without having to flip the "on" switch in your brain is pre-programmed. Additionally because that programming (marketing) has created multiple associations between product and greatness through costly sponsorship endorsements (eg. Tiger Woods, Michael Jordan, David Beckham) then person X will also consider the product to be great by proxy. It actually requires the kind of increased brain function person X doesn't frequently exhibit to acknowledge that these stars are actually not discerning individuals who chose of their own free will to endorse the product out of sheer adoration for it, but in fact paid employees doing what they're told. It works. Of course if I could scare up the 5 gajillion get Beckham to say he loves and wears my products I would, but I can't.
The final consideration with marketing is the size of the market. There's no point if spending a large or even small fortune on marketing if the potential customer base isn't large enough to provide a return. The average person X, or Y and Z for that matter, rarely consider the marketing reality that no company will spend money on something unless they expect to get a
financial return from the exercise that will cover the costs. That can be a short term return in terms of an advert for a sale or a long term return if the exercise is based on exposure by, for example, sponsoring Wimbledon or the Olympics. Yes that means if Nike give 20 bakillion squids to Johnny Awesome, then think they'll make twice that back thanks to the overwhelming number of person Xs who will gobble up everything Johnny Awesome drops a bead of sweat onto. Keep that in mind next time you ask any company for a sponsorship. Have your prospective return in mind and compare that with what you're asking for. If you can't do the math then it's unlikely you'll get a sponsorship. Getting back to the market size, the sport we dwell in is Ultimate Frisbee. If Ultimate Frisbee were an animal it would be the something like the Lion-Tailed Macaque and by that I mean, only other Lion-Tailed Macaques have actually heard of the Lion-Tailed Macaques or know anything about them. Try specialising in selling gear to the Lion-Tailed Macaque market. Welcome to the business side of Ultimate Frisbee. To further drive this home let's compare Ultimate Frisbee to Football (soccer). There is approximately 4600 professional players in the UK across all leagues. There is an estimated 46 million fans. That's a ratio of 10000:1 fans to players. In this context, sponsoring a team makes complete sense. The exposure result is massive especially considering that even non-fans will likely still see the effect of the sponsorship. In Ultimate Frisbee the ratio of fans to players is closer to 1:10000.
You were probably reading this (oh thanks for reading by the way, I'm sure you're in limited but excellent company) hoping for a solution. A great big answer to tell you how to market products and company branding with little or no money to a tiny and often apathetic market. Unfortunately I don't have one and wish by the beard of Odin's ghost that I did. Until I win the lottery, wake up and realise I actually have some wealthy parents to provide a sudden and massive bankroll to my business, get bought up by a Winnipeg based holding company or the population of the Ultimate playing public or fans in the UK and Europe increases 100 fold I'll just have to do what I already do. Tread lightly, say truthful things, make the best products I can and hope for the best.
Thursday, 25 November 2010
The Blog Title
Blog titles on blogspot are becoming arguably as valuable as domain names. What really does my head in as that while Google own it, they don't provide any means to oust squatters or even allow blog owners to be contacted if they aren't using a good blog title. My case in point is this one http://conservationofgreatness.blogspot.com. It's the name of the blog we actually wanted but had to settle for adding a "the" in front of it all because some dork got that name and has done sweet nothing with it. Much like this URL http://conservationofgreatness.com which also has somebody just sitting on it doing nothing. At least if I really wanted to I could contact the owner and try to get it.
All I can suggest is that we RISE UP! and start registering every potential blog name imaginable on blogger until the whole thing becomes useless. We'll need about half a million people and a heap of dictionaries but I think with the power of the megahyperinterbahn we can do it.
Who's with me?!?!
Fine! Be like that. I don't need your help anyway (sniffle). We think you look great today by the way! and where did you get those shoes?!... Still no? Ok flattery sometimes works. Any way in this case it's not that important. For us just adding a "the" isn't the end of the world.
That's a nice lead into the purpose of this blog though. The END OF THE WORLD!! Ok so it's probably a few years off but the title of the blog can be interpreted in so many ways. There is the sports association with the typical act of doing something extraordinary followed immediately by something equally or often slightly more inane implying that greatness, like energy, can neither be created nor destroyed but must remain in balance. The term greatness can be viewed as just about anything. It can be the ability to fall down the stairs without spilling your full pint to landing on the moon (as if that really happened!)
The term conservation is an interesting one for us as it's often associated (when not referring to greatness) as something far more commendable. That being an 'ethic' of resource use and protection (check this excellent wiki entry for more details).
So for us The Conservation of Greatness is more primarily a look at the ability to promote an ethic that leans towards keeping our great planet alive and well not just from an environmental sense but also a human sense. A Bill and Ted "Be excellent to each other" kind of way. We're not tree hugging activists but we're also not (to quote Doug Stanhope) driving down the road in a fleet of Hummers with our asses out the window farting Styrofoam packing particles into the atmosphere.
This blog will highlight the things we do at our workplace (Lookfly) and also in our everyday lives. We're not going to preach about boring stuff like turning the water off when you brush your teeth or car pooling. This blog will hopefully educate and entertain through allowing us to vent now and then about the things we see out and about that go so far to the opposite end of the Conservation of Greatness spectrum that they truly need to be taken up the backside...bloggy style.
All I can suggest is that we RISE UP! and start registering every potential blog name imaginable on blogger until the whole thing becomes useless. We'll need about half a million people and a heap of dictionaries but I think with the power of the megahyperinterbahn we can do it.
Who's with me?!?!
Fine! Be like that. I don't need your help anyway (sniffle). We think you look great today by the way! and where did you get those shoes?!... Still no? Ok flattery sometimes works. Any way in this case it's not that important. For us just adding a "the" isn't the end of the world.
That's a nice lead into the purpose of this blog though. The END OF THE WORLD!! Ok so it's probably a few years off but the title of the blog can be interpreted in so many ways. There is the sports association with the typical act of doing something extraordinary followed immediately by something equally or often slightly more inane implying that greatness, like energy, can neither be created nor destroyed but must remain in balance. The term greatness can be viewed as just about anything. It can be the ability to fall down the stairs without spilling your full pint to landing on the moon (as if that really happened!)
The term conservation is an interesting one for us as it's often associated (when not referring to greatness) as something far more commendable. That being an 'ethic' of resource use and protection (check this excellent wiki entry for more details).
So for us The Conservation of Greatness is more primarily a look at the ability to promote an ethic that leans towards keeping our great planet alive and well not just from an environmental sense but also a human sense. A Bill and Ted "Be excellent to each other" kind of way. We're not tree hugging activists but we're also not (to quote Doug Stanhope) driving down the road in a fleet of Hummers with our asses out the window farting Styrofoam packing particles into the atmosphere.
This blog will highlight the things we do at our workplace (Lookfly) and also in our everyday lives. We're not going to preach about boring stuff like turning the water off when you brush your teeth or car pooling. This blog will hopefully educate and entertain through allowing us to vent now and then about the things we see out and about that go so far to the opposite end of the Conservation of Greatness spectrum that they truly need to be taken up the backside...bloggy style.
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