In July, Dow Chemical Co., the world’s second-largest chemical maker, agreed to become a worldwide sponsor of the Olympics through 2020 to gain construction sales in host cities and boost brand awareness in emerging markets.
The deal requires Olympic hosts to give Dow products preference as long as they meet a project’s technical requirements and are price competitive in the region
CEO Andrew Liveris said at an IOC event in New York that Dow’s board approved the sponsorship after Heinz Haller, an executive vice president, pitched it as a $1 billion sales opportunity through to 2020. Earnings before interest, taxes, depreciation and amortization may reach $180 million which makes the average $72-90m rights fee a good investment without even considering the value the sponsorship brings Dow outside of the Host Cities market.
When it comes to Olympic sponsorship, supply rights are often overlooked by the wider world. For b2b sponsors, the Dow/IOC partnership may just prove a well-thumbed case-study.
‘Grübel was planning to get in with Sauber1’ was how impeccable veteran F1 journalist Roger Benoit broke the news that UBS Group CEO Oswald Grübel had been planning once again to sponsor Sauber F1 in Swiss magazine Blick. Following a few days after the announcement of UBS sponsorship of Formula 1, the timing couldn’t have been much worse.
What happens when the CEO likes F1?
The return of UBS to the international stage of sponsorship was meant to signal a turning of the corner from the black days of the sub-prime crisis. It followed closely on the heels of the new advertising campaign, We will not rest, which positions UBS modestly as a part of the support team that even the highest achievers need.
Making the business case
The sales proposition for most sponsorships is premised on three things: media exposure, hospitality and… potential. And many of our clients struggle to convert this into any sense of business value. How on earth do you scope… potential?
So many client commissions, especially since in the last 18 months, have revolved around opportunity assessment and business case development. The good news is that no-one any longer questions the principle of presenting a business case; and mercifully the days of using the AVE / Purchase price ratio do appear to be on the decline, allowing more sophisticated techniques to take its place. The biggest challenge is defining the scope of sponsorship impact ahead of time.