Red Thread

Alfred Kelly’s big decision

McDonald’s exit from the top echelon of Olympic sponsorship created a media opening for anti-IOC narrative.

But the sponsorship issue that McDonald’s exit raises is not about the travails of the IOC, it’s about whether or not the sponsorship of both the FIFA World Cup and the Olympic Games can be justified – at a combined annual cost of somewhere between $50 million and $100 million.

McDonald’s, Coca-Cola and Visa were in a highly exclusive subset of sponsors of both. And then there were two.

Steve Easterbrook, McDonald’s chief executive, clearly decided that the company’s energy and investment needed to be focused on its core product. But for Coca-Cola, with its heavy dependence on its main iconic brand and drink (increased by its recent move to a one-brand strategy), departure is simply unthinkable.

Nearly 90 years of Olympic heritage and over 40 with FIFA mean that both properties are completely institutionalised within the ecosystem of bottlers, distributors, major retail partners and brand teams.

Exit is often hard to countenance for any business, because it leaves such a huge gap. Like Brexit. For Coca-Cola it’s particularly unthinkable because of the huge impact it would have on every part of that system, and the immense challenges it would impose – in terms of global and national market budget management, brand and financial governance and operations across all parts of that system – to replace them.

But Visa’s business model and structure is entirely different. In 2016, it had over 54 per cent of global card transactions. The value of 2016 Visa transactions totalled US$8.2 trillion. It has approximately 3.1 billion Visa cards in use and accepted by 44 million merchants. Unlike Coca-Cola, it is not a luxury, a treat or a comfort, it’s integrated within the daily fabric of our lives.

Now the IOC and FIFA are both great for global brand-building, the World Cup in particular, with the global TV exposure it offers. But Visa’s challenge in most markets isn’t awareness, but relevance. And a major quadrennial appearance on the global stage doesn’t deliver.

So the question for Visa has to be: do we need both and what is the opportunity cost?

Beyond the World Cup’s TV exposure, both properties offer promotional and incentive opportunities to drive card spend and recruit merchants and member banks. They both generate revenue from official merchandise and refreshment sales. The World Cup offers an exclusive ticket pre-sales window to Visa card holders, while the IOC contract notoriously allows Visa to impose its exclusive use on all ticket sales. For the London 2012 Olympics, this will have generated between £5 million and £7 million in interchange fees.

More significantly, the structure of the IOC’s bid city criteria offers Visa a direct opportunity to influence the payment infrastructure around the games, and an opportunity to showcase innovation which the FIFA World Cup doesn’t. London 2012 was used to accelerate the uptake of contactless payment technology. Visa used Rio 2016 as a platform for wearables, in the form of ‘the Ring’, a ring worn on the finger that allowed Team Visa athletes to make purchases by tapping their rings at enabled payment terminal.

There are no comparable examples from Visa’s World Cup sponsorship – and its ambassador for both the Olympics and the World Cup since 2012 has been now-retired Olympian Usain Bolt. Of the two, FIFA sponsorship looks by far the most vulnerable.

Interestingly, Visa’s sponsorship portfolio has grown in recent years, in pursuit of diverse objectives. In May 2015 it signed a partnership with motor racing’s Formula E series and in January this year, it launched into eSports with sponsorship of Germany’s SKGaming, before expanding into surfing in May with The Boardmasters Festival, described on Visa’s site as ‘part of Visa’s evolving sponsorship strategy aimed at engaging the millennial audience’.

Despite the millennial characterisation, Visa’s evolving sponsorship strategy looks driven by closer targeting and more regular relevance – where $100 million of rights fees from the IOC or FIFA could usefully be deployed.

When FIFA dumped MasterCard for Visa in 2006, it was hard to imagine what MasterCard could do next – because there was no substitute. Despite the $90-million compensation FIFA was obliged to pay to MasterCard, it looked as though Visa had dealt a major body blow to its rival by occupying the category with both the IOC and FIFA. And indeed, MasterCard has not been able to reassert its global stature on the sponsorship stage.

MasterCard’s post-FIFA strategy has predictably been to use sponsorship assets to deliver loyalty benefits and drive usage. And, although this delivers far less reach – it offers enviably more frequent relevance.

Visa’s memory, on the other hand of replacing Amex as an IOC partner in the late ‘80s, will underscore the value that FIFA could hold for its challengers. Amex’s decision not to renew its IOC partnership unquestionably created a different trajectory for both Amex and Visa.

Fast forward to 2017: AliPay and PayPal are both growing aggressively. China’s UnionPay – larger than Visa already in cards issued and as of 2016 the largest provider by global transaction volume – still has a far smaller global network, which a FIFA partnership could build.

McDonalds decision to exit TOP was so momentous that only the CEO could ultimately confront it. Visa CEO Alfred F Kelly Jr will inevitably be faced with a similar challenge. Ironically, Alfred spent 23 years of his career at American Express, joining in 1987. As such, he will have personal memory of the notorious 1988 Calgary dogfight between both businesses that is now part of sponsorship ambush legend.

Despite the huge cost of FIFA sponsorship, and its relative inability to fulfil a useful marketing function for three years out of four, Mr Kelly will be a brave man indeed if he follows the sign marked exit.

Red Thread

how does big business satisfy consumer appetite for integrity?

Brand psychotherapy: In an age when people are hungry for integrity and meaning, how does big business satisfy that appetite?

We published a blog on purpose in 2014, which we revisited last week on reading Trinity Mirror’s new study on consumer trust The study reports the unsurprising figure of 43% of consumers claiming to mistrust brands and 69% claiming to distrust advertising. Nothing particularly noteworthy there. More interestingly, the research also identified found that nearly 40% of consumers view major businesses as part of the ‘Establishment’ and a majority are actively sceptical about brand purpose: 58% of adults don’t believe brand purpose until they have seen ‘real world proof’ with their own eyes.

Our 2014 post did its best to look at the glass half-full and cheers to that. Here’s more of a glass half-empty look…

Watching the concept of Brand Purpose spread has been very reminiscent of the 80s when Tom Peters relentlessly and almost single-handedly pushed Excellence and Big Hairy Audacious Goals up every Boardroom agenda. We should have all suspected at the time that Tom’s ambition for corporate excellence was the product of his personal psychology rather than the intrinsic power of any one idea.

And businesses are like people. They have their own personalities, their own psychologies and their own pathologies. Manfred Kets de Vries has explored business culture for over 30 years through the lens of business leaders and his output includes titles such as ‘The Neurotic Organisation’, ‘Organizations on the Couch’, ‘Essays on Irrational Organizations and their Leaders’ and more. Much of de Vries’s work is based on taking a psychoanalytical approach to organisational behaviour.

At the heart of both, people and business, are relatively immovable psychological structures. For people, belief systems based on early years parental influence: for businesses, the enduring mark of the founder. Individuals and businesses both share core beliefs, such as life is a competition or hard or, more positively, life is an opportunity. For both, the financial model, and its relationship to our identity, and security. Just like people, businesses can be extremely resilient and, just like people, once their personality structure has crystallised, they resist change fiercely.

Fritz Perls, the originator of Gestalt psychotherapy, described two routes to change.

The first was an implosion, the mini-death which precipitates personal change, and growth. It’s the conclusion of realising that our routine behaviours, including the relationships we create, are no longer delivering for us. In business, it’s called the burning platform. As far as I’ve read and experienced, a burning platform is the only sure-fire lever for real change.

The second was acceptance (simply expressed here by The Bristol Therapist). The foundation of Gestalt is that self-acceptance dissolves the internal tensions and external facades which bind us to these patterns of behaviour. But for most of us, there’s a mini-death along that path….

Where’s all this heading?

To the simple point that a cognitive concept like Purpose remains a concept unless it’s felt and lived by the CEO. Unless it’s personal, in the way it became for Ray Anderson of Interface, Paul Polman from Unilever or, to a lesser extent, Ian Powell of PWC. Once again, we’re at the juncture between emotion and cognition.

Purpose – in this sense of an emotive force within a business – is not something you can operationalise. You can place it in your values, you can print it on your documents, you can use it to reframe your CSR, you can repeat it to your customers, but that’s not Purpose.

You can hyper-rationalise what you do and audit every single positive externality to demonstrate clearly, beyond doubt, that your presence within the business community is a cornerstone of society. But that sort of purpose doesn’t get you out of bed in the morning. It doesn’t galvanise employees. It’s not enough to rest a credible case on or build a robust communications platform. And, as Trinity Mirror findings suggest, it has precisely the opposite effect on consumers, who just see another attempt by businesses to feign a commitment and values which in many many cases aren’t really there. And then you’ve just erased another connection with … people.

As we wrote in 2014, people need a sense of purpose. Viktor Frankl’s short but powerful account of life in a concentration camp, Man’s Search for Meaning, relates how only meaning and purpose made survival possible. A sense of purpose, aka meaning, is a ‘human given‘ – a sine qua non of existence, every bit as much as a sense of attachment or sense of self,  or a need for responsiveness.

Coincidentally, last week also saw the launch announcement by EY Global President and CEO Mark Weinberger of The Embankment Project, in partnership with Inclusive Capitalism. The ambition of The Embankment Project is to create a framework to measure Long Term Value – based on organisational purpose.

LTV, as defined in the White Paper, is: ‘the value created for and perceived by stakeholders through the effective development, preservation and deployment of strategic capabilities in line with the organisation’s stated purpose’. Purpose is the organisation’s ‘aspirational reason for being, grounded in humanity and inspiring a call to action’.

It’s a great exercise in reimagining financial reporting to make it more relevant, more timely, more realistic, and – its third ambition – to restore the public’s trust in (big) business. In the words of Lady Lynn Forester de Rothschild, Founder of the Coalition for Inclusive Capitalism: ‘We have reached a critical point in history when popular opinion of capitalism is very low… This will worsen unless trust between business and the public improves.’ Global businesses such as Allianz, Du Pont, J&J, Pepsico and Unilever will be piloting the reporting framework developed by EY.

Like most thought leadership exercises, of course, its main value is to stimulate debate and engagement – and in that, I’m sure it will succeed.

But a final plea for emotion. Trust is not built on reporting systems: it’s based on a far more complex web of (personal) judgments based on an organisation’s largest (governance and ethics) and its smallest (daily) actions; and it’s based on perceived motives.

Professor Glenn Reeder, whose work focuses on how we perceive others, knows that we use multiple inputs and cues to assess motives; and that we attribute three fundamental flavours of motive to behaviours: free choice, no choice (obligation), and calculative choice (ulterior motive). Interpretation of motive is a key determinant of the traits we ascribe to others. In other words: suspicion of ulterior motives = distrust.

Although this research is conducted in the field of personal psychology, the parallel again between individual and organisation is obvious. So the question here is how big businesses can convince people that their motives are positive.

Tom Peters understood the connection between business passion and inspiring purpose. He preferred to talk about the power of being unreasonable, for example: customer service beyond what’s reasonable. Psychotherapy refers to authenticity.  Now the power of sponsorship is its ability to give a real-world display of brand values. Big, bold, purposeful sponsorship and partnership has the power to inspire belief better than any framework. But I’m not championing sponsorship as the way to rebuild trust in big business – far from it. I’m making the simple point that trust is built on emotions, not numbers. And… for many categories and business leaders, sponsorship can be… a very useful tool to work with emotion.



Red Thread

Tokyo 2020: The challenges facing Partners

Organising Committees famously misrepresent the value of Games Partnership. ‘The country needs you to step up.’ ‘It’s a once in a lifetime opportunity.’ ‘The Prime Minister needs your help on this one.’ And the favourite: ‘It will be so good for your business.’

In London, LOCOG employed McKinsey to develop an elegantly simple model to show how modest uplift (not forgetting ‘halo effect’ and ‘legacy uplift’), applied across sales, employee productivity, absenteeism, and even reductions in resignation could easily recoup the Partnership investment. Beautifully seductive, but far from reality.

The truth is that these dials can indeed be moved – and dramatically, but, like shares, the value of Partnership can go up or down. Between 2008 and 2012 we analysed over 30 Partnership campaigns from the Sydney, Beijing and London Games. We interviewed key stakeholders, we reviewed online descriptions, we looked at the numbers. Generally, the passing of time meant that interviewees spoke more candidly about their actual experiences. What was most striking was how some businesses – such as GE, Samsung, Visa, AMP, VW China, EDF (to some extent) – were able to drive real strategic value out of their Partnership, whilst many others – including Cadbury’s, BMW and BT for example in London, struggled to generate sustainable uplift.

The challenge for Partners is that they’re starting from scratch on a journey without parallel or precedent. The power relationship with the Organising Committee is a shock. The landscape of sport is alien. Procurement departments – if they’re even allowed close to the Partnership Agreement – cannot begin to rationalise a rights fee which delivers just one hard asset – a logo. It’s a sponsorship – but it feels more like a merger. The intrinsic challenge of sponsoring the Olympic Games is one of the greatest facing any marketeer – because the impacts of Partnership far exceed the domain and influence of marketing. So every Games Partnership represents an unprecedented organisational challenge, especially for first time Partners.

In the words of Erica Kerner, formerly Global Olympics Games Director for Adidas ‘A lot of first-time Partners spend the first years of Partnership just figuring out the sponsorship. And of course, the Organising Committee has never done it either’. She meant it, of course, literally.

This situation is perennial. But Tokyo 2020 has its own unique set of challenges.

Famously, there’s little distinction between the rights of Tier 1 and Tier 2 Partners: both traditionally secure the full right to run consumer-facing promotions. And with a total of 42 Tier 1 and Tier 2 Partners to date, Tokyo has precisely three times the number of London. In effect, that means three times as many brands competing for attention – not just in consumer-facing activity, but also in more targeted business communications. This is a very real issue because brand equity gains (in particular) require a solid foundation of Partnership awareness. Not only will the presence of so many Partners aggravate that particular challenge, it’s almost certain to increase misattribution.

The answer is clearly not just advertising. BP was the largest spender on media, spending £14.2m to communicate their Partnership to consumers: by 2012, it had achieved just 25% awareness (Hall & Partners, 2012).

The presence of so many Partners presents another dilution of practical value: with three times as many Partners, ticket allocations for Partners of Tokyo 2020 will be proportionally smaller. Ticket numbers sound a mundane issue, but a Partner’s ability to guarantee a ticket to Tokyo 2020 to their oldest, or closest, or most profitable, or largest, or prospective clients is one of the largest direct benefits they receive. Tier 1 Partners at London were on average taking over 10,000 guests to both Games. Tokyo Partners will face some very tough decisions about their invite lists.

Category sharing is another issue which directly affects ten Partners in banking, aviation, security (and, to a lesser extent power supply and toilets). Now category exclusivity is customary in sponsorship for very good reason: it guarantees sponsors competition-free access to a target audience. But for the Olympics, lack of exclusivity is far worse, because a large part of the communications value is based on the notion that the Partner makes a unique and practical contribution to the delivery of the Games. This feeds into showcasing, into credentials, into client conversations, into employee engagement. This facet of Partnership is almost unique to the Games (shared only with ‘Expo’) – and completely impossible to maintain when your competitor is providing exactly the same contribution.

For a Partner, choice of Category is highly significant for two reasons. Firstly, because it creates a supply right: Partnership Agreements commit the OCOG and incentivise Partners to purchase the Category products and services from within the Partner network. Aggreko reputedly paid £5m for a Tier 3 position at London 2012: and billed LOCOG £15m. Secondly, because it broadly determines the product communications platform for the Partner. Ideally, the Category carries the flag for the entire business. Hence Atos use their role as IT Integrator to promote their ability to deliver the most challenging systems and Deloitte used their role at London 2012 to communicate their ability to handle complex programme management.

But many Partners of Tokyo 2020, in their desire to become a Partner and to support Tokyo 2020, and Japan, have bought Categories which have relatively little value, commercially or A quick look at the list of 2020 Categories reveals a number of Partners who will struggle to tell a story which helps their broader business. The narrow segmentation of IT across six Partners hurts all six.

The impact of all of this is aggravated by Japan’s corporate communications model.

Japanese businesses take a very integrated approach to brand – by which I mean that its primary drivers are seen as business reputation and product quality. (From my culturally bigoted position, reminiscent of the dominant B2B approach of 30 years ago.) There are intrinsic conservatism and formality about Japanese corporate communications. If the general direction in the west is for business communication to move toward the norms of peer to peer, Japan remains, by contrast, very ‘corporate’, with a marked resistance to stepping outside of the established protocols of business behaviour. The concept of brand in the west is generally closer to that of individual identity, with a clearly defined personality and attributes; and a recognition that corporate behaviour and communication needs to be a reflection of that identity.

The upshot is that many Japanese Partners of Tokyo 2020 will find the need to transcend the limitations of their Category culturally challenging. The best way for Partners to improve their corporate reputation is the thing they are most nervous about doing – standing out.

Looking back to 2012, each Partner looked for a unique way to express its identity or its message – for Lloyds Bank, it was taking the spirit of the Games around the UK, for BT, it was bringing the public together in celebration, for McDonald’s, it was supporting and celebrating the unsung heroes who make the Games such a success. Western brand methodology was applied to each distinct positioning to generate and shape each individual campaign – all in the service of achieving cut-through and superior levels of recognition and appreciation of the role played by the Partner.

It’s almost a platitude of Olympic marketing that the value of Partnership doesn’t derive from the six weeks of the Games (Olympic and Paralympic) but from the years before. What that means in practice is that Partners need to develop a campaign which leverages the Games association to increase relevance, and generates repeated touchpoints with key business audiences. But Tokyo 2020 Partners will find this particularly hard without unique, ownable stories. Their default cultural preference will be to adopt the position of ‘proud supporter’ of Tokyo 2020. This generic sponsor positioning no longer works outside of Japan. There is little to suggest it will work within Japan either.

It truly will be an exceptional Games and Partners are applying themselves wholeheartedly to the delivery challenge. I’m confident that Japan will demonstrate levels of innovation during Tokyo 2020 that surpass any Games, anywhere. The challenge I would like to see Partners embrace would be the challenge of communicating effectively outside of Japan.

The challenges facing Partners

Seductive ROI modelling suggests success is guaranteed

  • Modelling suggests that incremental improvements across sales, brand, employee engagement can easily pay the cost of Partnership investment.
  • This is misleading because even marginal incremental gains do not happen easily. There is no simple positive correlation between Olympic Partnership and commercial value.

They have less time than they believe

  • It is a common mistake of first-time Partners to waste two to three years of Partnership because, fundamentally, they believe there is no hurry.
  • The value of Olympic Partnership cannot be generated during the Games but requires four or five years of planned activity before the Games. Without timely planning, many will fail to recoup their investment.

They under-staff

  • Helen Nugent, Westpac Senior Exec, and later Macquarie Group Board member described Sydney 2000 as ‘the hardest challenge of her career’. Games Partnership cannot be ‘managed’ by a lower executive team.
  • Partnership cuts across every aspect of corporate life and requires active leadership with Senior Exec authority.

They have to create a five-year programme out of nothing

  • The marketing assets of Tokyo 2020 Partnership are largely limited to a logo, a designation and tickets. From that, Partners need to create an integrated, five-year campaign which touches every part of their business. Many Games Partners have unrealistic expectations of Organising Committee support and fail to take early responsibility for the success of their investment.

It is difficult to stand out

  • Tokyo 2020 has more Gold and Official Partners than any other Olympic Games, ever, many, with non-exclusive or very narrow Categories.
  • This means that achieving salience and cut-through for Tokyo 2020 Partners will be extremely hard; and harder with time.

Image credit: Night View with Tokyo Tower Special Lightup by t-mizo (CC BY 2.0)

The Olympic Baby

We were a little surprised when we saw the IOC was planning on reforming its Rule 40.

Rule 40 currently imposes commercial purdah on Olympians for nearly a month around the Games, preventing any use of name or likeness in association with non-Games partners. Penalties for contravention include disqualification and stripping of medals (although the reality is closer to a rapped knuckle for the superstar breaches that are the legends of ambush: Johnson, Christie, Phelps)

There’s a popular case for change. Dozens of athletes launched a Twitter campaign – #WeDemandChange2012 – during the London Games, to urge an end to the rule. Rule 40 limits the commercial potential of athletes at the greatest moments in their season or even their careers. Only the very top athletes, sponsored by official Games partners, would make real money in Olympic years.

But a change is still surprising. Not only because the IOC is a conservative beast…but because this reform is potentially … radical.

The premise is to allow pre-existing marketing campaigns based on Olympians to continue, providing they are ‘generic’ ie non Olympic. But as we saw clearly in the controversies about Scotiabank’s 2010 and Honda’s 2012 campaigns, it can be extremely difficult to differentiate between ‘generic’ and Olympic marketing. The strict IP of the IOC and Games are well-protected: the marques and designations. But … mood, colours, words even.: Champion, heroic, pride… The Olympic brand is way too big to be reduced to a few protected terms.

So it’s difficult to see how ambush marketing would not be encouraged by this move. And while simple cease and desist letters are effective in blocking flagrant breaches of Olympic legislation, rights protection teams would struggle to cope with multiple negotiations of the protracted sort required by the more subtle approach of a Honda or Scotiabank.

Although LOCOG successfully restricted the ability of non Partners to use outdoor or field marketing in ambush, Games-time clutter across multiple channels is also a real risk, with the threat of Atlanta-style backlash against excessive commercialism.

But it will be the NOCs around the world who are most likely to suffer, with the dilution of their main asset. Brands will have the option to steer clear of bulky rights packages and head, instead, straight to the athletes.

And the potential is for so many brands to develop ‘non-Olympic’ campaigns that official sponsors will have to reassess the value of official Olympic turf. Or for undesirable or controversial brands to tarnish the halo of the Rings. How much did Bodog offer Tiger? Any ISFs who already accept gambling partners will be hard-pushed to take a stand when the same brands turn to athletes…

The change surely has the potential to shift the entire Olympic sponsorship landscape. Sponsors in the Olympic family will be faced with the need to develop stronger, more differentiated sponsorship propositions. The marketing landscape would be shaken up, there’s no question about that.

An apocalyptic picture. Life rarely pans out exactly as predicted, but here at Redmandarin, we’re left asking ourselves: which is the baby and which is the bathwater?

Red Thread

brand purpose and sponsorship

Whatever happened to vision? It used to be a fundamental part of how businesses described themselves. I grew up with it…. Nowadays though, business vision is really hard to find. It’s been well and truly eclipsed by purpose. How a CEO responds to the ‘purpose’ question is currently one of the acid tests of leadership quality.

From the abundance of ‘purpose’ now visible, it would appear that the goal of ‘increasing shareholder value’ is no longer (sufficiently) defensible, and that the Zeitgeist is obliging businesses to embrace a more holistic, and more relativist view of their own existence. By relativist, I mean simply recognising their interdependence with the society and environment which surrounds them.

Definitions of brand fall out of date almost as soon as they’re codified – because brand is simply the name we give to our changing relationship with the commercial entities around us. Are the CEOs of major global organisations such as Unilever responding to a shift in public values and what we expect from a brand? Are they simply responding as human beings to those same changes?  The Damascene Conversion of Interface’s Ray Anderson is well recorded; and PwC’s Ian Powell is widely quoted as seeing the future of women in work through the eyes of his daughters. Even Richard Branson, whose early entrepreneurial existence was hardly characterised by a triple bottom line, is waxing messianic in later life. Or are they caught up in a C suite groupthink, the likes of which we experience with each fresh corporate scandal? Only time won’t tell because, like sponsorship, there are just too many variables.

Psychology helps us of course. There is plentiful evidence to indicate that people respond well to a sense of individual and of shared purpose. Viktor Frankl’s short but powerful account of life in a concentration camp, Man’s Search for Meaning, relates how only meaning and purpose made survival possible. A sense of purpose, as much as a sense of attachment or sense of self,  or a need for responsiveness, is a ‘human given‘ – a sina qua non of existence.

For all that it feels like a trend for Millennials, brand purpose has to be a good thing. The whole exercise of looking at purpose is healthy. It helps organisations look beyond the usual horizons of business as usual, and re-examine their customer relationships, with all the opportunity that brings to tap into the creativity, innovation and reinvention, writ large or small, that offers. Carol Cone, founder of the world’s most ‘purposeful’ brand agency, Cone LLC (and now at Edelman Business + Social) summarises nicely: it enables meaningful engagement with all an organization’s stakeholders, from employees to consumers to communities (see: Starbucks, Chipotle, PNC Bank); it drives growth, demonstrated by Jim Stengel in his book GROW; it inspires innovation, compellingly articulated by Michael Porter. ‘It transforms (B2B) sales conversations from price-based ‘beat up the vendor’ sessions to high-level strategy partner discussions. It turns senior managers into industry thought leaders.’ I’m not so sure about the intention behind this description, Sense Worldwide, but you land the point.

The debate about the commercial value of brand purpose is just a replay of the tired argument around the value of CSR. Writ larger of course, because purpose in this context is de facto integrated systemically. Like sustainability for smarter businesses, it has evolved from a separate, into a distributed function.

We have an opinion of course. It’s easy to get distracted by the rules of engagement of CSR: but CSR is sponsorship. We’ve alluded to the twin-like nature of the two in earlier Threads. They both play out in the real world, on the brand – audience relationship, they both live or die by the brand’s ability to add its own unique value. They both offer the opportunity to create proof-points for a brand’s values. Purpose, CSR or sponsorship without proof-points are just more rhetoric. They each require businesses to be emotionally intelligent enough to understand the proof-points which have the broadest relevance for its key audiences.

Our sense of purpose here at Redmandarin… is plural, not singular. As mistrustful as we are of the seductive soundbite… To push the boundaries, to add real value to our clients, to stand for something better within our sector and, if pushed, to help organisations deepen their understanding of their relationship with customers and employees alike.

Red Thread

Is O2 suffering writer’s block?

At Redmandarin we love storytelling. We tell stories in the office and at home, we even write whole articles about it. It cuts to the heart of what a good campaign does – engaging your audience emotionally and taking them with you on a journey.

Stories capture the imagination. They create anchors in our minds; carefully crafted points of reference, illustrations of behaviour, memorable articulations of values/actions, and they make ideas stick.

We’ve found storytelling a great discipline for developing strong and impactful sponsorship campaigns. A good campaign will have a strong narrative flow that carries chapter to chapter and allows you to evolve and add nuance to your messaging over time.

And a good campaign, like a good novel, is always driving you forward.

We use the O2 as one of our best practice case studies, a lesson in how to reposition a brand and a key contributing factor in O2’s tremendous success over the past decade. It was a fantastic launch vehicle, it spawned Priority which reshaped the sector and led to a hundred copycat briefs from other brands wanting in, and it’s still one of the most widely recognised sponsorships in the UK.

It was brilliant, but it’s been 8 years now and the story hasn’t changed.

It hasn’t changed because the O2 story was never structured as a narrative; it never had a clear moment where the initial campaign came to a natural conclusion and allowed the story to move on. The problem with ‘added value’ offers like O2 Priority is that over time they stop being something special and unique and just become part of what you do. You find yourself constantly innovating, adding new offers, spending more money just to stay where you are and to deliver the same meaning you used to have.

That original campaign needed a defined end point; a target to reach, or an event to serve as its great climax. A clear indicator internally as much as externally that one chapter had completed and now was time to move on. That’s particularly important with naming rights deals where the length of the term can distract brands from the need to be continually adding value through the actual campaigns they run. The O2 was brilliant for its first few years but it’s now living on past glories.

Even the very best campaigns have a natural life expectancy. Orange Wednesdays was a brilliant offer (our work for Orange on their global film platform is still one of our proudest moments) but it worked only because the advertising managed to refresh it every single time. It costs a huge amount of money to keep producing funny and engaging creative work that maintained a sense of relevance. Mother did an excellent job of playing and twisting the format – as soon as they were replaced and the quality of that creative dipped the campaign started a slow decline.

As an industry we tend to focus so much and expend so much effort on the launch of a new idea that we often don’t consider the whole life cycle. Consider Ford Maddox Ford’s page 99 test – continuously delivering something worth reading not just a snappy launch or ending. Whether it’s through setting specific goals, developing characters, evolving audiences, or seamlessly linking to the next instalment, your audience wants to know that they are going somewhere. Or they’ll follow a more interesting story elsewhere.

For every campaign we create we set ourselves a challenge. How is this business, this audience, or this community going to be different in 3 years time? It provides a focus for the campaign narrative that ensures you have a clear narrative in place and you never run the risk of a campaign drifting off and slowly petering out.

Red Thread

The holy grail of standard evaluation

The debate about standard evaluation metrics has crawled around for years.

There are two typical responses to the question of course.

One is a Borges-like, labyrinthine exercise in homogenising and framing assessment criteria, and multi-variable plotting, with an inevitably large dose of rounding and subjectivity. This approach generally emerges from a desire to appropriate a methodology: either small research agencies wanting to differentiate, or large agencies wanting another ‘bespoke tool based on the largest benchmarking and analysis exercise ever conducted’ to reassure clients and provide a substitute for actually thinking. It suffers from the classic research mistake – data without insight.

The other response is laughter of course.

After all, we haven’t even been able to standardise visibility metrics successfully. To argue that the difference between TV exposure and local print is simply a difference in rate card value completely sidesteps the whole question of channel planning and forgets the old maxim: the medium is (a big part of) the message.

The bane of the standardised solution is that it presupposes the big broad world of business would agree, or even see the sense in agreeing, on a common vision of brand – what it is, how it works, and then, how you measure it? Brands appeal in completely different ways. They sell completely different products through completely different channels to completely different people.

Standardised solutions – obviously – don’t work. And yet the idea still appeals. Because we’re all looking for certainty, re-assurance, some tangible way of knowing whether what we’re doing is working.

But maybe we’re asking ourselves the wrong question.

What if, instead of entertaining the thought of standardised evaluation, we could instead find an audience and a metric that might act as a lead indicator, or offer some predictive value. Something that’s easy to measure and without which you are almost guaranteed to fail. For us, that metric would have to be: do employees feel proud of this sponsorship? A few conditions:

  • the employee sample needs to be drawn from different levels and functions of an organisation, from top to bottom
  • the stimulus would consist simply of a business case, articulated in writing in one page, accompanied by a full budget, and activation plan…. why and how, in other words
  • the metric would be very simple, along the lines of – ‘is this a good way for us to do business?’, ‘does it make you feel proud in any way?’ and ‘how does it make you feel proud?’

Why pride?

Very simple.

Pride, in the positive sense, is associated with a fulfilled sense of belonging – engagement. It has also been shown, according to researchers, to enhance creativity, productivity, and altruism – performance. Not that we need research to tell us that – we have all experienced it personally. It’s also strongly linked to the concept of social identity: how we feel those around us view us, so it’s inevitably an unconscious assessment of external approval ratings.

On a more human level, when we feel proud of our employer – not just in the context of sponsorship or CR, but more broadly in the context of corporate performance and reputation – we are better able to integrate our personal and our work life, more likely to become an advocate for the brand and more likely to enjoy our work. Ask anyone in the banking sector the impact on social identity. As ‘reputation as a good corporate citizen is increasingly recognised as a real driver of brand’ (Tom Murphy, Microsoft), the reaction of employees is an incredibly sensitive barometer.

Many factors affect our happiness at work: the level of fulfilment it offers, a sense of direction – both individual and collective, our working conditions, the quality of our relationships, confidence in our ‘leaders’ and many more. Many of these areas sponsorship can’t touch – but many it can.

When we interviewed him for Working the Olympics, Tom Shepard, formerly Executive Vice President of International Marketing, Partnerships and Sponsorship at Visa International, told us: “I remember HR coming in and saying: ‘You know, one of the big reasons that people join Visa is because we’re an Olympic sponsor’. And I remember thinking, shouldn’t it be the job description, or the compensation package, or the opportunities?” It’s easy to treat the Olympics as an exception because it is such a powerful property – but many sponsorships have the potential to make employees proud if they’re managed right.

Lead indicator is over-stating the case. And we’re not seriously suggesting that employee pride is the determinant of sponsorship success. But what we are clear about is that, unless employees are proud, your sponsorship is under-performing.

Red Thread

Missing Identity

It’s funny how corporate identity as a phrase is associated with just about the most rigid of branding challenges – making sure a logo always looks the same.

Because identity in a psychotherapeutic sense is anything but rigid. In fact, current thinking in most psychotherapeutic schools views identity more as a fluid process than a rigid structure: we never stop changing.

The fluidity of corporate identity is in itself an interesting subject … but it’s the relevance of psychotherapeutic insight to corporate identity that interests me.

There’s a generalised recognition in psychotherapy that our sense of identity rests heavily on our ‘ego ideal’ – the idealised image of ourselves we’d like others to share. And this is the classic domain of corporate identity: how we’d like our company to be seen.

While good brand development practice ensures this is based, at least in part, on reality, (by polling inside and outside of the organisation to understand prevailing perceptions), the concept of positioning of course hints at the superimposing of characteristics which are more influenced by ‘how we’d like to be seen’ than ‘how we actually are’.

Brand architectures tend to reduce this further into a very finite number of attributes – responsive, flexible, professional etc which create even more rigid parameters for brand messaging.

And then, in terms of psychotherapy’s view of identity, there are those characteristics which we deny or try to hide (from ourselves as well as everyone else) – if we even acknowledge their existence, that is. Arrogance, selfishness, jealousy, vanity, greed, sins both carnal and venal. And subtler feelings to boot: fear of informality, closeness, loss of control, impatience, levity, playfulness. This is the territory of Carl Jung’s famous ‘shadow’, the unspoken elements of identity – and the elephant in the room of corporate branding.

Because if we as individuals struggle to recognise these aspects of our identity, most business brands fly in the face of the reality. Even the process of agreeing on a corporate image is unconsciously undermined and shaped by our human inclination to maintain self-image.

Brands can be inflexible, aloof, superior, conservative, paranoid or intolerant, misogynist, boring, hierarchical, scared even…and even widely seen as such inside and out – while the official brand lives in complete denial.

One overarching goal of psychotherapy is to accept and integrate these different parts into our identity – which sounds like an unwholesome task: who wants to embrace laziness, greed, lust and anger?

But all these characteristics are part and parcel of human nature, of what we’re born with – and however much we deny them, they’re in us. That’s not to say we’re entirely greedy, just some times, about some things.

So let’s say I can’t stand … frivolity – after all, I take my work seriously, I’m accountable to shareholders, people depend on this business, for Pete’s sake. When I deny my own sense of playfulness, two things happen: firstly, I disapprove of it in others, reducing my ability to connect with playful people. Or angry people. Or arrogant people. Or… the list is long, and each disapproval is a two-way barrier to relationship.

Secondly, by pretending I’m immune to these characteristics, I cut myself off from many powerful qualities : the creativity of play (in the case of frivolity) but equally (for example, in the case of arrogance) the ability to hold authority; for weakness, read humanity; for failure, human warmth.

Corporately, this not only impacts relationships – internal and external, it shrinks the resource pool the organisation has to draw upon. Creativity for sure exists outside of play – but it has a different quality. So while I can easily summon up obedience or authority from within, I’m likely to struggle with the ability to innovate or challenge.

There’s no easy answer of course. While OD attempts to address these challenges – the route to organisational self-awareness is slow.

One of sponsorship’s most undervalued benefits is the ability to catalyse change – in this context by allowing behaviours which fall outside of Business As Usual.

I’m not breaching confidentiality in talking about Lloyds TSB’s delight at the enthusiasm, energy and openness of its staff to take to the streets and host the Olympic Torch on its journey around the UK. An exceptional example of course, but for tens of thousands of staff who are required to be business, product and indeed sales focused in their daily interactions with customers, the invitation to take to the streets was an acknowledgement of their need to bring themselves more fully into work.

Returning to the notion of fluidity, brand models and structures which embrace the implicit, or even a qualified external view of the business would represent a step forward in acknowledging the balance between the ego ideal and a much broader reality of external perceptions, and the fluid tension between both.

Red Thread

In search of community

Community as a marketing term really started buzzing back in the 90s.

It was .com days, the world was alight with online content propositions and ‘building community’ was all anyone had to do. Building community was a great phrase for that era, because it had an optimistic ring and easy promise which ‘building a customer-base’ just couldn’t match. Unfortunately, all too often, website traffic and an online community became a substitute for actually making any money.

It never went away of course, gradually rewriting for itself an unspoken definition of an audience somewhere between ‘aware’ and ‘considering’ – all shades of warm. Likes, in other words, clustering around around the role of the brand as an experiential meeting place: how was the product for you?

Community’s recent resurgence into the world of marketing, on the other hand, wears a different face.

Community, since 2008, simply means the public. Generally speaking, it’s the same people of course, just described from a different relational perspective. The public is no longer one big audience to be aggregated but instead the fabric of society which makes business possible, and community this time around carries with it a clear sense of social responsibility.

Most corporate websites now talk about community.  Classic CR use relates to the communities around operational bases, where the business is rooted in employees and, in these days, suppliers. For brands with a definable audience, such as Nickelodeon, or  McDonald’s even, it’s relatively easy to identify representative groups of that community: no matter what  you think of Ronald, he ticks the community box.

But how does a retail or an online brand define community? How to demonstrate a meaningful commitment  to community when your customer base spans many economic and geographic segments?

Like many totem words, community layers like an onion. It has a slightly retro feel, and overtones of collegiate responsibility. Community can also – easily – message social disadvantage, poverty. Community shops flourish where no profit-minded retailer would tread. Community groups all too easily represent support for the unsupported. Despite a slightly socialist ring, it’s a preferable alternative to the rabble-rousing ‘people’ – and sounds more definable than ‘public’…  And that’s the trouble: in the world of shmarketing, it’s a power-word: it sounds targeted but actually means anyone and everyone.

From a sponsorship POV, the challenge is of course to define and then sell in an approach to community, because the broad church of community has to translate into a channel. A media channel, an organisation, an interest group – because targeting everyone with the current premise of community is a fatally flawed concept.

Take Pepsi. Pepsi’s much-feted, ill-fated Refresh Project was the epitome of targeting everyone. It proudly and loudly stood out the 2010 round of Super Bowl advertising in support of its community commitment. Refresh offered US$20 million of corporate largesse across the original criteria of Health, Arts & Culture, Food & Shelter, the Planet, Neighbourhoods and Education – just about everything. It had a very simple application process – for everybody. It successfully garnered 61 million online votes in the course of its two year life. But Refresh was a social media experiment pretending to be a brand play: sorry, ‘a long term equity play’, in Pepsi’s own words. The programme design was flawed from the outset, but its biggest failing as a brand play is that it targeted… everyone, every single community it could. Even US$20 million spreads very thinly across the entire US of A.

NatWest’s Cricket Force, by comparison, feels small. The programme, which encourages its staff to volunteer to refurbish cricket clubs up and down the UK, is hardly at the cutting edge of social impact. It doesn’t aspire to change the Planet, or help Health, or offer Food and Shelter, like Pepsi did: it just makes cricket clubs look nicer. But in every dimension bar one, it’s smarter. It’s perversely on brand. It supports NatWest’s longstanding association with cricket. It hits NatWest’s customer heartlands. It’s easy, inexpensive and, hey, it’s sustainable. It’s targeted, in other words: the basic stuff of sponsorship, nay marketing. It only loses in one point of comparison: it isn’t headline material, but we can forgive that.

And once again, we have to hail Red Bull for showing the full potential of building a community around a proposition which is almost as narrow in content – action sports, but universal in relevance: freedom, rebellion, expression. The whole freesports promise.

The word community has become a crutch, a catch-all term and a substitute for actually defining and understanding audiences. Communities aren’t made up of everybody, they define themselves based on who is in and just as importantly who is out. There are millions of communities – they exist in geographies and they exist online, they’re built around shared passions and shared loathings, they can emerge spontaneously or be built and sustained over millennia. They ebb and flow, gain new members and lose old ones, but they never encompass everyone.

Identifying, defining, and working with a community should be used as the basis for great and impactful sponsorship campaigns, it’s the foundation of sponsorship at its very best. But you have to make sure the word community actually means something – because if your community is meant to include everyone, then you don’t have a community at all.

Red Thread

Sponsorship Storytelling

It’s that time of year again – and the question: is Father Christmas real?

It’s not my question, of course, but my son’s. And although my wife – who’s from a country which doesn’t believe in the first place – wants to put him on the straight and narrow, I resist: the figure of Father Christmas is so compelling.

The term ‘figure’ actually has a special meaning in psychology and psychotherapy, which is relevant to both sponsorship – and storytelling. A clumsy segue into sponsorship storytelling? Yes and no.

Two Faces form the image of a Candlestick

A Butcher and a Baker

Gestalt psychology, articulated by Kurt Goldstein, established simple truths, laws and principles about perception. Gestalt psychology maintains that the human eye sees objects in their entirety before perceiving their individual parts. The Gestalt effect is the capability of our senses to create coherent patterns from disparate visual cues, as exemplified by the quite famous images displayed here. In other words, the mind has an innate tendency to make sense of what it perceives, and this tendency leads us to fill in the gaps in what we see, hear, and know – to make educated guesses, to establish predictive and interpretive patterns.

Black or White dot grid optical illusion

Gestalt psychotherapy was developed by Fritz and Laura Perls and Paul Goodman in the 1940s and 1950s. Besides other things, it borrowed these concepts from Goldstein and extended their application to behaviour: when we become aware of being thirsty (identify the figure), we drink, closing the figure. If we become aware of loneliness, we quieten it with company. The concept of ‘closure’, as popularised in American movies of the 80s, is perhaps Gestalt’s most annoying cultural legacy.

Dalmatian camouflaged against background

But the thought that our innate tendency is to create patterns and meaning from life’s disparate events, or brand touchpoints, applies to sponsorship as much as to anything else – and at many levels. At the macro, it might relate to the importance of creating a clearly defined relationship between brand and property, its purpose – to which self-promotion is not a satisfactory answer to the questions of why, why this, why like this?

The point is, it’s not only natural to want to understand what a sponsorship is about, it’s part of our programming. If we’re not given a figure, we’ll do one of a number of things: we’ll come up with our own – which might or might not align with brand messaging intentions; we’ll dismiss it – at some level, because it doesn’t make sense; or it will become a subconscious irritant. Each of these responses effectively reduces the emotional impact of the sponsorship.

The figure of the relationship between npower and football is ill-defined and unclear. npower’s sponsorship of the Championship, for example, never began to explain: why football, why the Championship for npower? Likewise Aon’s relationship with Manchester United.

On the other hand, Castrol’s performance index was a clear attempt to create and call out a relationship.

Investec is a great example of a sponsor which defines a clear relationship between itself and what it sponsors. Beginning with the Investec Challenge, it moved on to Investec Derby Festival and latterly the Investec Ashes. At the micro level, its activations also have a clearly definable shape: the Investec Derby Day.

Figure also applies to sponsorship narrative: the beginning, middle, end of simple storytelling wisdom.

It’s all too easy to think of sponsorship as an exercise which begins with a contract and ends with an exit, that we can forget to consider how it looks from the outside. Sponsorship is the story of a relationship, a relationship between sponsor and property, or whatever names we choose to give these two characters.

From the perspective of the storyteller, the sponsorship narrative needs to explain how – and why – the relationship came to be, what brought these two characters together, what was the attraction, or the driver, and what were the consequences – what emerges from the partnership, and how it all ends. Building on the storytelling practice, one would say: a compelling beginning, a point of tension and a resolution.

Although we, as sponsorship practitioners, are rarely responsible for brand, we’re frequently given the freedom to establish partnerships which give us huge brand accountability. And, as architects of the sponsorship narrative, we can ensure or neglect to ensure that the brand has a clear role and that it is allowed to express its character through its relationship.

If you try to tell your sponsorship as a story, you’ll spot very quickly whether it’s a showbiz wedding, or something deeper. Storytelling is a useful exercise, a model to stretch your brand and sponsorship thinking.

Is this over-complicating something which should be kept simple? We don’t believe so. The levels of engagement achieved by Games sponsors hinges on a sponsorship story with a large, glorious finale, an entirely different narrative model from most other sponsorships.

Why shouldn’t a technology company enter into a football partnership with the goal of helping the club transform its digital comms? bring in support from the wider agency world to coach and mentor the team? help supply and fund any tech restructure? Why shouldn’t it exit with job done? As a fan, your appreciation is going to be both clearer and sharper, you’re going to receive a direct business message, you’re going to be in a mood to celebrate the achievement of a three year programme rather than cry dependently at the loss of a sponsor.

Why shouldn’t an airline partner do the same with regard to international expansion, the community programmes which all top league clubs are doing to build their global franchise? Why shouldn’t a beer sponsor actively link itself to fanbase development? Why shouldn’t sponsorship plan its exit from the word go, turning exit into a celebration rather than ignominious and often embarrassed departure?

The figure of Father Christmas is so compelling because he comes with his own closed loop of a story. Justice, fairness, care and love are all wrapped up in his own Christmas narrative. Why do we give presents at Christmas? Father Christmas is the easy answer.

Season’s Greetings

This is an extract from a fuller presentation ‘Sponsorship and storytelling’ presented at Sponsor Tribune, in Amsterdam on 29 November.