What you need to know about the new direct marketing guidance note
Nadine Mather and Chloë Loubser
Room for improvement in the SA sponsorship market
Is there enough room for additional players in the Sponsorship Market in South Africa? Global Sports Connections believe so, having launched in September this year.
The sponsorship market in South Africa has an average annual compound growth rate of about 20.6%. In 2002, R2731 million was spent on sports sponsorship (as opposed to R2308 million in 2001), R1492 million on rights fees and R1239 million on leveraging. This is compared to R10 554 million spent on advertising in South Africa - the ratio of sports sponsorship to ad spend being 14.1% (Source BMI Sporttrack 2002).
The advertising industry on an annual basis, through AD Focus, reports on billings, top agencies, etc, but not the sponsorship market. What/who makes up this sport sponsorship market?
There are approximately 19 sports marketing agencies in South Africa, with essentially two (maybe three) main players. These agencies have the lion's share of the market and in some cases handle more than one event or client in the same category as a result - conflicting accounts - maybe? Why is this? The answer would have to be a lack of credible alternatives. The main functions the Sports Marketing companies get used for, according to respondents of BMI's Sporttrack 2002, are:
They are also used for consulting purposes, merchandising and licensing. Evaluations virtually play no role.
Are companies looking for more than this? An old colleague used to say... "Sponsorship in like buying a new house. Once you buy the house you still have to move in". This is the role of the sponsorship agency, ensuring that the 'move' is a smooth one and that the property is leveraged to its optimum level. As a result, I see the primary functions of the sponsorship agency as:
A Consultant - to act as an consultant and advise the client on all their sponsorship requirements. The sponsorship agency can proactively deliver more value as opposed to reacting to a bad situation. Too often a rights package is signed with a rights holder and only once this has happened, is a sponsorship agency is appointed. By this stage it is usually too late as the client has signed away most of their rights.
Adopting a Brand-Led Approach - everything a sponsorship agency does should be with a view to building the client's brand. To often a property is sponsored which has nothing in common with what the sponsors' brand stands for! This makes it extremely difficult to build the clients' brand off the back of a bad sponsorship property.
Measurable - putting measurable criteria in place. If you can't measure something, you can't manage it! Too often, this is the case and at the end of the day the client does not know what return they have got on their investment. (They also ask where all their money has gone?)
Leveraging the Property - to effectively leverage a sponsorship property, the sponsorship agency must create a platform from which all communication activities are launched. This platform will determine what message is conveyed to the market and ultimately what experience is created.
The functions as reported above by BMI, are an integral offering of any sponsorship agency and ideally would fit into the services offered once the above functions have been put in place, ie, look at the macro picture before the micro.
With the reported figures in the industry and the growth rate, it seems there is a lot of room for new players and a new approach - a consultancy led approach? Companies that want to create a platform to build their brands and use sponsorship as a legitimate marketing tool need to appoint the right partners in order to do so. Partners that understand the sponsorship market, as well as they understand their clients marketing requirements.
Room for improvement, you be the judge?
