Red Thread

The danger of being dazzled by the latest shiny objects in digital marketing

I imagine the entire marketing industry is now considering the impact of Proctor and Gamble’s Chief Marketing Officer, Marc Pritchard’s, groundbreaking presentation at the recent IAB Annual Leadership meeting on the issues around digital marketing.

Marc’s speech was refreshingly open and Mark Ritson in his recent Marketing Week piece describes it as the “biggest marketing speech for 20 years.” Marc Pritchard confesses that P&G has traded its usual rigour for the first mover advantage that “these shiny objects” might confer.

I don’t know whether you respond as I do, but having worked for over 30 years in advising clients about how to use sponsorship effectively, it struck me that there were parallels with the concerns Marc raises in digital marketing with issues facing brands investing in sponsorship.

Sponsorship has lots of “shiny objects” to dazzle a brand’s leadership and marketing teams and the usual rigour in marketing investment to which Marc refers can often go out of the window.  All too often there is a real lack of investment in time and internal or external experienced resource in:

  • strategic planning
  • appropriate audience segmentation
  • ROI modelling
  • clear target setting
  • evaluation methodologies

This assessment and ongoing audit process takes place for most major marketing investment but why do we still see massive investment in sponsorship assets without this process being adopted prior to, or during, significant investment in sponsorship?

Marc says “There is no sustainable advantage in a complicated, non-transparent, inefficient and fraudulent media supply chain”. He raises four major concerns for brands in their investment in digital marketing – viewability, supply chain transparency, fraud, and measurement verification. It strikes me that leaving aside potential fraud, three of these issues apply equally to investment in sponsorship.

Viewability 

Sports events’ ‘viewability’ is often represented by rights holders as ‘potential homes viewed’ or ‘broadcaster reach’. This is meaningless because it refers to the maximum potential viewers of a programme as opposed to the actual number of people viewing the programme.

Not surprisingly, those without a real understanding of programme audience measurement methodology get confused by the base data on which so much of the value of sports sponsorship platforms is still based. Compounding the problem, there is no consistent global audience measurement system, as audiences are measured differently in different markets.

Measurement verification

The problems with viewability and measurement verification are linked. We know the challenge of sponsorship value measurement – and the use of ‘equivalent media value’ as verification of value measurement. The many methodologies in calculating equivalent media value with discounts for ‘limited viewability’ or contrived justifications for premia are a complete smokescreen for assessing the measurement of the value of a sponsorship platform.

Measurement of any sponsorship must be based on an assessment of the actually anticipated outputs of a partnership for a brand whatever they may be, for example – relevant exposure in a new market, the targeting of a key audience, an association to move brand perceptions leading to consideration and purchase, supporting a clear CSR positioning, providing a powerful platform for retaining and recruiting talent etc.

These are the measurable outputs from a sponsorship partnership which must have ongoing measurement processes in place, prior to the securing of sponsorship assets, to enable the monitoring of progress and the finessing of campaign strategies and execution.

Measurement verification costs money and maybe even jobs if things don’t quite work out as planned, but as Marc Pritchard says, responsible marketers investment in any marketing investment must be transparent and accountable.

Supply chain transparency 

Even companies as sophisticated as P&G were unaware of the dissipation of their money i.e. what is actually spent on digital media, once the fees have been paid in the execution of digital media campaigns, in an opaque media placement process.

P&G were also were surprised at the assumptions they had made about their media agencies; they wrongly assumed they were batting exclusively on their side which, upon closer examination of the structure of their contracts with agencies, was not quite how it was in reality.

If clients looked at the activation of their sponsorship campaigns they may well find potentially a similar picture. Sponsorship campaigns are often complex and multi-channeled. A lead activation agency may frequently sub-contract to specialist agencies unbeknown to the client. Are there clear lines of responsibility to avoid unnecessary duplication, between the lead agency and the sub-contracted agency in terms of delivered outputs? Are contracts transparent between a lead activation agency, acting as the principal in the negotiation with rights holders? Are fees the agency may be receiving from the rights holder for securing a sponsor, disclosed?

The worst cases have been recent scandals around sponsorship managers collaborating with agencies to circumvent their own personal sign-off levels or funnelling money through their agencies to rent houses or pay for entertainment at events for their personal benefit.

More sophisticated clients are starting to identify the value that a company’s procurement team can bring in helping to address their assessment of how they approach the planning, activation and measurement of sponsorship, as long as they have an appropriate understanding of the reality of how the sponsorship market operates. Greater transparency in the sponsorship area would mean that clients would understand exactly what money is reaching its target and what is being diluted by undeclared management fees, commissions etc.

This will also highlight to clients the nature of the relationship they have with their sponsorship activation businesses and indeed the relationships their agencies have with rights holders. Does this issue over the transparency of agency remuneration sound familiar? As P&G have found to their cost – if you are not asking the right questions of your agencies you may be labouring under false assumptions.

Whether clients will be so distracted, trying to get their heads round exactly what digital marketing and their digital agencies are delivering and at what real cost, that sponsorship’s less than rigorous planning, execution and measurement processes will remain outside the radar of scrutiny, I do not know. I rather hope that the issues raised by Marc Pritchard may be an early warning siren for all participants in the sponsorship business to sharpen up their acts and deliver real measurable and importantly sustainable value to all parties through a more rigorous and professional approach. As Marc Pritchard said, better advertising drives growth. This equally applies to sponsorship.

So what is to be done? Let us see the more rigorous planning of sponsorship using best practice approaches adopted in other areas of marketing investment such as:

  • developing a strategic framework
  • proper audience segmentation
  • identifying a clear business case
  • clear target-setting
  • detailed negotiation strategy
  • developing a compelling sponsorship proposition and messaging hierarchy
  • organisational development and capability building
  • ongoing evaluation methodologies
  • transparency and accountability on activation delivery
  • transparent contracts and between all key rights-holders and agencies

We know how powerful, strategically driven and creatively executed sponsorship campaigns can be. But there are still too many sponsorship campaigns which simply do not make sense to the consumer and therefore have minimal impact because they have not been thought through properly. Marc Pritchard’s next groundbreaking speech may be addressed to the sponsorship industry, although it will probably come from the marketing leadership of another major global advertiser as P&G were responsible for ‘Thank You Mom!’ one of the most outstanding Olympic sponsorship campaigns of recent years.