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Sponsorship and
Commerciality
Chris Austin
12 November 2014
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Commerciality and events
• Event business planning
• Viability and sustainability
• Budget and revenue planning
• Sponsorship
• Incremental income
• Other income sources
• In-kind support
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Viability
• “Events need to achieve financial goals and the viability component assesses the business case for a proposed event. [Events] generally need to fit within organisationalfinancial constraints or budgets. Other types of events may be required to generate an expected return or profit”.
Ferdinand and Kitchin (2012:76)
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Viability
Stakeholder expectations
Feasibility
DesirabilityViability
Ferdinand and Kitchin (2012:76)
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Sustainability
• Financial sustainability if the event is
not a one-off proposition.
• Long-term resources to cover the costs
of future events.
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Budget and revenue planning
Establish what is the economic
environment
Establish budget guidelines to fit
objectives, including sub-budgets
Identify and estimate cost areas and
revenue sources
Prepare a draft budget for
committee and approval
Evaluate draft budget and prepare
final budgets and control ratios
Bowdin et al (2012:303)
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Budget and revenue planning
• Revenue plan…
EventScotland (2006:68)
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Sponsorship
• “Any commercial agreement by which a sponsor, for the mutual benefit of the sponsor and sponsored party, contractually provides financial or other support in order to establish an association between sponsor’s image, brands or products in return for rights to promote the association and/or for the granting of certain benefits”.
Collett and Fenton (2013:2)
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Sponsorship
• “Emphasis is now on ‘connecting with’
rather than ‘talking at’ the market,
event sponsorship can be the ideal
way for marketers to create brand
interaction with consumers and
stakeholders… pretty much every
event is sponsored in some way”.McDonnell and Moir (2014:6)
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Sponsorship process
Strategy
•Historical review
•Asset inventory
•Asset valuation
•Resources review
•Marketing strategy
Planning
•Timetable
•Website
•PR plan
•Sales materials
•Prospect research
•Employee communications
Execution
•Implement PR
•Direct mail
•Face to face
•Contract negotiation
•Budget control
Review
•Objectives sharing
•Staff training
•Partnership review and evaluation
•Exit planning
Sales effort and
Sponsorship activation
Collett and Fenton (2013:22)
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Benefits to the sponsor
• Brand awareness
• Brand image
• Target market (existing segments or new audiences)
• Media coverage
• Corporate hospitality
• Database expansion / lead generation
• Sales promotion
• Product exposureMcDonnell and Moir (2014)
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Sponsorship fit
• Sponsorship fit (aka congruence) has two
dimensions…
• Relevancy – The degree to which the
information contained in the stimulus favours
the identification of the message being
communicated.
• Expectancy – The degree to which an item or
information falls into a predetermined
schema or structure evoked by the theme.Heckler and Childers (1992)
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Sponsorship fit
• Dimensions of fit…
• Target market
• Image
• Geography
• Typicality
• Complimentarity
• ClashMcDonnell and Moir (2014:54)
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Sponsorship risks
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Sponsorship proposal
• Cover and contents
• The event
• The organisers / partners
• Benefits
• Sponsorship opportunities / packages
• Practical information (payment etc)
• Contact
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Sponsorship sales funnel
Dibb et al (2012)
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Incremental income
• Definition 1…
• Incremental budgeting – “take the
previous year’s budget as a base and
and add (or subtract) a percentage to
give this year’s budget”Collier (2012:311)
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Incremental income
• Definition 2…
• Incremental costs – “Incurred only when
the individual event or project is
undertaken. The incremental costs
include both additional fixed and variable
costs arising from the event or festival,
besides the costs already being incurred
by the business”Rak et al (2009:171)
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Other income sources
• Ticket sales
• Participant entry fees
• Public funds
• Charitable donations
• Concessions and franchises
• Merchandising
• Showcase, demonstration and information stands
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Other income sources (cont’d)
• Advertising
• Licensing and broadcasting rights
• Private benefactors
• Fundraising events
EventScotland (2006:67)
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Ticket sales
• Pricing structure
• Perceived value
• Sales forecasting
• Discounts and special offers
• VAT
• Ticket agents and commission
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Participant entry fees
• Sporting events
• What is included?
• Research similar events
• Discounts
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Public funds
• Local authorities
• DMOs
• Government funding
• Subvention
• Bidding for funds
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Public funds
• “The rationale for support for major events should be that, while an event may not be able to cover all of its costs through admission charges or sponsorship, it is worthy of support because the event generates benefits for [residents]. These benefits should not only cover economic factors but also embrace other community benefits”.
Victorian Auditor General, cited in Richards and Palmer (2010:214)
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Public funds
• “The city of Ottawa has an excellent arms-length policy for determining levels of funding. A jury of experts… reviews all grant applications and assesses them on excellence in programming, quality of management, contribution to the community, support of local artists, economic impact and impact on tourism. All festivals that receive ongoing funding are required to submit highly-detailed reports including annual audited statements.”
Armour (2006)
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Public funds
The Guardian (2008)
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Charitable trusts and
foundations
• Specialist projects
• Difficult to attract mainstream funding
• Specific target groups
• Bidding for funding
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Concessions and franchises
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Concessions and franchises
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Concessions and franchises
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Concessions and franchises
• Pitch fee vs. profit share
• Tendering
• Insurance and liability
• Legalities (e.g. catering)
Allen et al (2008:468)
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Merchandising
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Merchandising
• “Games Visitors spent significantly more money for tickets, and, when compared against the Casuals, they spent significantly more on merchandising. All these findings support the hypothesis that groups that accept higher outlay only do so because they expect event-related benefits in return. This expectation translated into longer stays in the host city, and increased spending on tickets and merchandise”.
Preuss et al (2007:15)
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Showcase, demonstration and
information stands
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Advertising
• Programmes
• Banners / sponsor boards
• Website
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Licensing and broadcasting
rights
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Private benefactors
• Patrons
• “Friends of…”
• Raffles
• Fundraising activity
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In-kind support
• “Contra” deals
• Brand awareness
• Free tickets
• Venue use
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Discussion
• Critically review ‘Event sponsorship as
a value creating strategy for brands’
(Papadimitriou, 2008).
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References
Allen, J., O’Toole, W., Harris, R. and McDonnell, I. (2008) Festival and
Special Event Management, Fourth Edition, Australia: Wiley & Sons Ltd.
Armour, J. (2006) Festivals more than justify city investments, cited in
Richards, G. and Palmer, R. (2010) Eventful Cities: Cultural Management
and Urban Revitalisation, Oxford: Butterworth-Heinemann.
Bowdin, G., Allen, J., O’Toole, W., Harris, R. and McDonnell, I. (2012)
Events Management, Third Edition, Oxford: Butterworth-Heinemann.
Collier, P. (2012) Accounting for Managers: Interpreting Accounting
Information for Decision Making, Fourth Edition, Sussex: John Wiley & Sons
Ltd.
Collett, P. and Fenton, W. (2011) The Sponsorship Handbook: Essential
Tools, Tips and Techniques for Sponsors and Sponsorship Seekers, Sussex:
John Wiley & Sons Ltd.
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References
Dibb, S, Simkin, L, Pride, W.M. and Ferrell, O.C. (2012) Marketing –
Concepts and Strategies: Sixth Edition, Hampshire: Cengage Learning.
EventScotland (2006) Events Management: A Practical Guide,
Edinburgh: EventScotland.
Ferdinand, N. and Kitchin, P.J. (2012) Events Management: An
International Approach, London: SAGE Publications.
Getz, D. (2010) Event Management & Event Tourism, Second Edition,
USA: Cognizant Communication Corporation.
McDonnell, I. and Moir, M. (2014) Event Sponsorship, Oxon: Routledge.
Papadimitriou, D., Apostolopoulou, A. and Dounis, T. (2008) ‘Event
sponsorship as a value creating strategy for brands’, Journal of Product
& Brand Management, 17(4), pg.212-222.
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References
Preuss, H., Seguin, B. and O’Rielly, N. (2007) ‘Profiling Major Sport Event
Visitors: The 2002 Commonwealth Games’, Journal of Sport & Tourism,
12(1), pg.5-23.
Raj, R., Walters, P. and Rashid, T. (2009) Events Management: An
Integrated and Practical Approach, London: Sage Publications Ltd.
Richards, G. and Palmer, R. (2010) Eventful Cities: Cultural Management
and Urban Revitalisation, Oxford: Butterworth-Heinemann.
The Guardian (2008) Boris Johnson shakes up funding for capital's
cultural events [online]. Available at
http://www.theguardian.com/politics/2008/nov/06/boris-johnson-
london-culture [Accessed 09.11.14].
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Contact
• Twitter @chrisaustin87
• linkedin.com/in/chrisaustin87
• slideshare.net/christopheraustin