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Published:  23 July, 2008

Sponsorship of prestigious sporting and social events is now a key fixture on the marketing calendar of many major drinks brands. So what advantages does event sponsorship offer over conventional marketing? John Stimpfig investigates

Ask your average Scotsman to list a few of his favourite things and it's a fair bet that rugby and Scotch will be fairly high up on his tartan wish list. So, when Famous Grouse decided to sponsor the Scotland rugby union team back in the early 1990s, it seemed like a marriage made in marketing heaven. Ten years on and it's still a state of wedded bliss on both sides. While money has poured into Scottish rugby, Famous Grouse has recouped a massive increase in brand awareness and recognition,' says Nigel Currie, sponsorship consultant at Craigie-Taylor. You could say that the deal has been a Grand Slam success (except, perhaps, on the pitch). Similarly, the whole sponsorship sector has had something of a dream run over the last 30 years. Back in 1973, some $500 million was being channelled into global sponsorship. That figure is now five times greater, at over $2.5 billion, and it's still growing. According to ESCA (European Sponsorship Consultants Association) chairman Tony Rudge, this figure is set to rise to over $3 billion by 2005 and over $5 billion by 2020, effectively doubling again within the next 18 years. The net effect of all this is that sponsorship is now all-pervasive in the corporate/commercial world; so much so that it's virtually impossible to think of a major national or international brand that doesn't have one or several high-profile sponsorship deals in place. The booze business is no exception to this. Indeed, historically it was one of the great pioneers of sponsorship, along with the tobacco industry. Brands such as Cutty Sark, Mackeson, Whitbread and Hennessy led the way in those early days of the 1960s and 1970s. More recent famous deals included Beefeater Gin and the Oxford-Cambridge Boat Race, Johnny Walker and the Ryder Cup and, of course, Carling and the Premier League.

A successful marketing tool Today, sponsorship can be a sophisticated and expensive business, as the marketing stakes have risen in exponential leaps and bounds. Nevertheless, the rash of newly spawned sponsorship consultancies justify their existence with consummate ease. For instance, as Barrie Gill, of the now publicly quoted CSS Stellar agency, points out, Sponsorship can be the quickest and most cost-effective way of making a major marketing impact.' He's got a point here, if not several, as he numbers sponsorship's selling points over more traditional marketing approaches: Brand awareness, media visibility, direct consumer contact, image building, corporate and retail hospitality, a platform for creative advertising, direct marketing spin-offs' Then, just for good measure, Gill adds that sponsorship crosses national frontiers and gets companies into new markets almost instantaneously, because there's no language barrier with a logo or product name. No wonder the industry now proudly claims that sponsorship is outperforming levels of growth by PR, advertising and sales promotion. Moreover, the national and global drinks businesses have more reason than most to play the sponsorship card. This is most obviously because of legal restrictions on how the sector can advertise its wares from country to country. And the legal barriers are only going to get worse, not better. At the same time, many brand managers have also come to regard sponsorship as a more proactive and empathetic form of marketing compared to in-your-face advertising, however slick or creative the latter may be. If you get the right link between your brand and the target market, sponsorship can be incredibly powerful, dynamic and focused in building empathy and loyalty,' explains Mike Jackson, director of sponsorship research at IPSOS, the global marketing research agency. Sponsorship is all about association and implying positive, emotional images on to your brand. The downside, though, is that there's more of a risk because you can't always control sponsorship. Advertising doesn't have that problem,' he added. For some organisations, sponsorship is now becoming a major linchpin in their overall marketing strategy. For instance, when Carling patronised the Premiership, it virtually stopped all other marketing activities and focused its efforts exclusively around football. That included everything from advertising, PR and on-trade promotions right down to signage on ashtrays. It signalled a real change of emphasis. Suddenly the sponsorship tail was wagging the dog,' says Currie. It worked, too. The award-winning campaign cleaned up in terms of brand recognition and established Carling as the UK's number-one lager. Even today, many still associate the Premiership with Carling rather than its current sponsor, Barclaycard. In many ways, sport and drink are ideal bedfellows for sponsorship to bring together. Informally, the two have gone hand in hand for generations. And, because both are so culturally interconnected, the big-money sports, such as football, rugby, cricket, yachting, golf, horse racing and so on, have taken full advantage - and vice versa. In fact, at 422 million, sport still represents over half of the UK sponsorship spend of 750 million. In spite of sponsorship's telephone number figures, most drinks brands still reckon they are getting their pound of flesh out of the bargain. Hennessy and horse racing have been synonymously linked to the Gold Cup for nearly four decades. The deal costs Hennessy 100,000 per year in fees alone but, according to Mot & Chandon's PR representative Susie Harris, in the week of the race it attracts over 1 million worth of editorial coverage in return. There are other obvious benefits for drinks sponsors, such as sole brand exposure, sales and sampling at sponsored events. Similarly, corporate hospitality and the opportunity to entertain and network while showcasing your product with key customers and journalists is another essential spin-off. This is very sophisticated now, and part and parcel of the sponsorship industry,' says John Smither, international vice president of Lanson UK.

and a PR exercise to boot Drinks companies haven't been slow in realising other, more strategic PR benefits of sponsorship in improving their image to employees, local communities and opinion formers. When alcohol in general is under attack from certain quarters, sponsorship's cash injections, good deeds and a responsible approach to drink-related issues can only assist in setting producers and their alcoholic products in a more positive light. All of which underpins appointments like that of Nicole Lovett, recently installed as corporate citizenship manager at Guinness UDV. Her new role is to identify a range of community sponsorship initiatives to enhance Diageo's image of corporate responsibility. Diageo gives 1% of its pre-tax profits to community projects around the world and part of Lovett's role is to identify appropriate causes worthy of its sponsorship and support. Brand sponsorship can also deliver these sorts of benefits. In 2000, Bell's re-established its links with Scotland via a three-year, 2 million deal with Scottish football. One objective of the deal was to restore the brand's dented market share north of the border, while another was to get Bell's back in the community at the grass-roots level. However, a third goal was to rebuild a number of bridges after the upheaval of Diageo's UDV-Grand Met post-merger rationalisation - both internally and externally. Clearly, it was very important for UDV Scotland to re-establish its credentials as the major employer in the country's leading export industry.

Is there more to life than sport? Sport, however, is just one of many sponsorship options. In fact, one of the biggest market changes in recent years has been the rapid development of creative sponsorship alternatives, which have pushed back sport's overall prominence. Rudge at ESCA points out that a lot more cash is being channelled into areas such as education, culture and the arts, broadcast media, music and new technology. TV programme sponsorship is one of the most high-profile and expensive options. As such, it's essential to get the right association and synergy between brand and programme. Two inspired examples include Bailey's sponsorship of Sex and The City on Channel 4 and Martini's previous sponsorship of the James Bond Film Season on ITV. (Interestingly, Bailey's doesn't always go for the sexy sponsorship deals. A couple of years ago it also sponsored Ireland's National Ploughing Competition in County Cork. Why? One reason was that Bailey's accounted for 40% of Ireland's total liquid milk production.) Although TV sponsorship is the exception to the rule, most major (and minor) sponsorship deals do need time to bed down in order to make a sustained impact. Despite the fact that sponsorship 'churn' is increasing as programme life-cycles shorten, the longevity factor is critical. Currie argues that there is a minimum period of about four years to establish a successful programme. But it varies from scheme to scheme and depends on ever-changing marketing priorities,' he says. Generally, it takes one to two years to get into and, during that period, it may require a bit of tinkering around to get it right. But when it ends, it doesn't mean it hasn't worked, it just means it's time for a change. Unless they are refreshed, some deals become a bit like wallpaper and aren't really noticed. That is when you have to watch out.' This year, Berry Bros & Rudd ended its Cutty Sark sponsorship of the International Tall Ships race after an unbroken 30-year association. Berry's wasn't displeased with the sponsorship, but it no longer addressed the company's marketing objectives in key countries, so the decision to break the tradition was relatively straightforward. However, there are no plans to take on new sponsorship programmes. Similarly, Smither called time on Lanson's racing sponsorship at Goodwood, worth 150,000. It worked very well for 27 years, but we felt the time was right to do something new. It wasn't an easy decision,' says Smither, whose annual UK sponsorship budget runs to 250,000 a year and includes several smaller schemes, such as the Prix du Champagne Lanson Awards for UK wine writers. Lanson is by no means the only Champagne brand heavily into sponsorship. Indeed, almost all the big names, with budgets to match, have been into the sponsorship game for many years now. Most recently, Allied Domecq has moved Mumm into the fast lane of Formula One motor racing for a large, undisclosed sum in an effort to raise its profile to that of a globally recognised brand. Mot & Chandon effectively monopolises London Fashion Week and operates several other fashion-related sponsorship deals in Milan, Paris and New York. One objective is to re-position the brand as hip, modern and wincingly fashionable. Meanwhile, Veuve Clicquot sponsors the Business Woman of the Year Award, while Taittinger co-sponsors The Independent's Foreign Fiction Prize. And so it goes on.

Wine enters the fray Until now, unlike Champagne, beer and spirits, wine hasn't played much part in the sponsorship merry-go-round, for one obvious reason: wine has never been a branded product with sufficient distribution or budgets to justify the bigger sponsorship deals. In most cases it still isn't. But for some global wine players, the situation is changing fast - especially, it seems, on the golf course. BRL Hardy sponsors the Golf Seniors Tour, while this year sees Pernod Ricard/Orlando Wyndham launch a major new Adelaide golf tournament in March, The Jacob's Creek Open. The tournament will be part of the USPGA tour and represents the latest and biggest addition to Jacob's Creek's growing sponsorship portfolio, which already includes the Australian and British Open Golf Championships, the Wimbledon tennis championships and The Jacob's Creek Tour Down Under (cycling). Stephen Couche, marketing and international director at Orlando Wyndham, says the new tournament will ensure a huge television audience in the United States, which is a priority development market'. As you might expect, the mighty Gallo began to include sponsorship in its UK marketing mix in 1997. Now it has several schemes up and running, including deals in tennis, cricket, racing and the performing arts. Although Gallo wouldn't say how much it pours into sponsorship, its spokesman Arthur Miller, brand manager for Turning Leaf, comments, The role of sponsorship has been growing for the last three years. There is a number of reasons for this, including increased awareness of our brands in niche markets, encouraging trial, building databases and public relations opportunities. We feel it is extremely important. It's a way of reaching a new audience.'

How to get ahead in sponsorship But what do you do if you haven't got the financial clout and marketing muscle of a big wine brand? According to the experts, there are still avenues open, providing you use appropriate economies of scale. At the other end of the spectrum, there are smaller sponsorship opportunities connected to minority sports, arts, charity, regeneration and community activities. You just have to think smart,' explains Barrie Gill. But you need to get the right fit and you still have to make it work. Apart from the sponsorship outlay, professional consultants suggest that an equivalent amount needs to be spent on marketing to maximise the benefits. Simply handing over a cheque is almost entirely a waste of money,' adds Currie. Whether people actually follow this advice is open to question. However, there's no doubt that many smaller-sized wine companies are sponsoring some well-considered schemes besides charitable fundraisers such as Wine Relief. Take Errzuriz's role as principal sponsor of the MW Institute, or Pol Roger's ten-year relationship with the Oxford versus Cambridge Varsity Blind Tasting Competition. A new, more off-piste' angle is Chteau de Sours' surprising sponsorship of the Irish bobsleigh and skeleton teams in the recent Winter Olympics. You may ask where the link is between the Scottish proprietor of a French chteau and a team of Irish olympians. The answer is that Esme Johnstone, who owns Sours, is the uncle of one of the Irish team members, who also happens to be a former Cresta Run world champion. In recent times, Hatch Mansfield has also conducted a number of highly targeted and relatively inexpensive sponsorship schemes for several suppliers, including Villa Maria (arts and photographic exhibitions) and Santa Carolina (London Food Film Fiesta). According to Lynn Murray, marketing controller at Hatch Mansfield, I often get requests to support various causes. Almost invariably, people want free Champagne as well as a financial contribution to help with a launch. I judge each case on merit and decide whether the exposure and linkage work for us. Then it has to be commercially viable, which involves negotiating a deal and benefits. It can be time-consuming but also very worthwhile. We don't have much marketing budget for clients, and events like these can be incredibly targeted in getting our wine into the right people's hands. In that respect, this kind of promotion is much more accurate than advertising. Not only that, but you can also measure it, because you know exactly who and how many people you have reached.' Michael Cox at Yalumba will also indulge this kind of soft sponsorship for the right event (he has even provided wine for a Spice Girls' book launch). However, he has mixed views about bigger, more overt forms of sponsorship. I wouldn't rule sponsorship out for Oxford Landing. But I think that, in order to make an impact, it has to be high profile, and that can be extremely costly. I see a lot of Australian wineries tying themselves up as the official wine of Wimbledon or whatever, and I wonder whether it has such a positive effect. This is partly because there is so much sponsorship these days that the overall effect is diluted. I also have a somewhat jaundiced view because I think that, for Yalumba at this moment, there are better ways of spending margin in the UK. For me, wine is a lifestyle product and I don't think consumers are really ready for the Gallo Premiership. Although - who knows? - the time may yet come when wine is considered a commodity akin to beer or spirits.' In the meantime, there may be some bigger clouds on the horizon for drinks sponsors to really worry about. Under the infamous Loi Evin', all promotional sponsorship of alcoholic drinks on broadcast media is banned in France. Currently, this is only a minor headache for the likes of Famous Grouse, as Scotland only plays in Paris once every two years. However, the European Commission is currently considering whether or not to extend the Loi Evin across the whole of Europe. So far, its deliberations have been delayed and remain ongoing. At present, Tony Rudge and ESCA are lobbying hard against this potential outcome, which would be extremely serious and damaging for alcoholic drinks brands involved in high profile, pan-European sponsorships. Of course, the ruling and any resultant imposition is likely to be several years away. Moreover, it is by no means certain that the European Commission will adopt the worst-case scenario French model'. But equally, there can be no room for complacency. Rudge quite rightly points out that, ESCA lost its lobbying battle with the EU Commission on tobacco sponsorship. There is a real danger that the alcohol industry could be next in line.' And that could really derail the sponsorship gravy train.