Event Sponsorship and Small Business

Is event sponsorship a winning marketing strategy for small business?

By sponsorship we mean “the acquisition of rights to affiliate or directly associate with a product, person, organisation, venue, cause, team, league or event” (Marsden, 2014.) Think Virgin Australia and Melbourne Fashion Festival, Lexus and the Melbourne Cup and Kia and the Australian Open . These examples are all big brands though, what about the SME’s?

The short answer is…. it depends. On quite a bit as it turns out;

  • The event

We just need to look to the Fyre Festival to see how badly this could go. The problem however is that most successful events and festivals now have too high an entry point for small business. So small business needs to take a risk with an up and coming event that may or may not succeed. Sure they can promise 5000 visitors but what if only 1000 actually turn up.

  • The package

It may seem obvious but it all comes down to the sponsorship deal itself, even if the event is awesome. Here’s a real life example ; Careflight Rescue were looking for event sponsors for their Gala Ball. Awesome cause, awesome event; around 500 affluent attendees from business and industry. However what they offered their potential sponsors was; a logo on a ticket, and a logo on a big screen throughout the night. That’s it! That’s rubbish. No-one was ever going to take notice of those logo placements and even if they did, they’re meaningless.

Many small businesses don’t have the luxury of in-house sponsorship and partnership executives who can go in and negotiate hard for the best damn partner package ever.

  • The activation

The rule of thumb needs to be for every dollar that the sponsorship costs, a business must allocate a minimum of the same in activation. Otherwise it’s a missed opportunity. So if the sponsorship fee was $5000 than another $5000 needs to be allocated towards promoting or leveraging the sponsorship so people can actually be made aware. It’s not a $5000 sponsorship but a $10000 and that’s gone from manageable to a fair dint in the budget. This is a crucial step that is almost always ignored.

  • The contract

“Sponsorship works by association rather than persuasion. The general idea is that a sponsored event elicits a strong positive emotional response will have a ‘halo effect’ that rubs off on the associated sponsor” (Marsden, 2014.)

But I’ve seen events run so poorly leaving attendees and sponsors alike reeling - plenty of emotions here, none of them good. Massive queues, not enough toilets, confusion and chaos. Without a killer contract though, it’s too bad so sad for the sponsors. Their brand may be tainted by the association and they paid money for it!

Again though, small businesses don’t have legal teams on retainer to nut out a contract that protects them from false promises and shortchanging.

Back to our original question then about whether event sponsorship is a winning strategy. It’s a lot more involved than it appears. There’s big risk involved and it’s nowhere near as affordable as it may initially seem.

Reference:

Marsden, 2014 “the-psychology-of-sponsorship-7-digital-opportunities”

Mia Fileman