"Redmandarin really helped us to develop a group wide strategy that can be applied across our diverse international markets and family of brands. By designing tailor-made tools to focus ourselves on our business needs and brand drivers, they not only supported us in making sponsorship decisions on a strategic basis, but lay the groundwork necessary to demonstrate ROI, and improve the efficiency of our sponsorships."

Stephan Althoff, Senior Executive Vice President Corporate Communications & Group Sponsoring

Deutsche Telekom - the whole story

On average, according to our last Sponsor Survey, in 2004, sponsorship accounts for around 10% of marketing budgets, and for most brands the sponsorship budget is dwarfed by adspend. So for any brand operating across multiple markets, especially without a centralised sponsorship function, it can be a challenge to clearly separate out sponsorship spend.

For many brands, sponsorship can be adopted more enthusiastically at territory level than corporately, as it offers markets the freedom to address local market needs which centralised advertising often does not.

This was the case for Deutsche Telekom. With four main operating divisions and a presence at that time in 50 markets, operating in 22 countries Deutsche Telekom realised (trigger or catalyst?) it had no clear picture of its sponsorship portfolio, and less idea of its global investment in rights and activation. More worryingly, there was little internal sense of how territory sponsorships contributed to the global brand.

Our objectives were therefore very clear: to provide a clear picture of sponsorship activity across the broader business, and to implement a process to rationalise activity - in order to leverage the investment. The challenge was in creating a strategy capable of responding to corporate objectives of Deutsche Telekom, without stripping individual markets of all the flexibility they prized – whilst managing the sensitivities of the 50 markets in question.

Working with a direct report to the Group Board, our preliminary audit of all sponsorships revealed a global spend of €300m across 250 different sponsorships and a range of properties from Tutankhamen to Bayern Munich. The findings re-enforced the growing belief that sponsorship investment could be better leveraged, and CEO Kai-Uwe Ricke sanctioned a fuller audit of all sponsorship.

Our situation analysis provided many of the inputs for a corporate sponsorship strategy, which also needed to take into account the particular group structure of Deutsche Telekom, overall brand strategy, and various business and brand objectives – to define a clear role for sponsorship within the business. The outcome was clear alignment for each of Deutsche Telekom’s main operating areas with distinct – and distinctive - sponsorship platforms.

The second phase of our work consisted of a deeper audit of properties across three tiers of markets. In order to demonstrate clear and transparent parameters, we developed a filtering system to test strategic fit and determine a business case for sponsorship. In sensitive cases, we visited many national companies to support them in the audit process. The systems allowed RM to review on sponsorship criteria and then make recommendations on whether to continue, adjust or try to exit sponsorship. Where the sponsorship met the strategic criteria, we also made detailed recommendations regarding activation or contract renegotiation to strengthen Deutsche Telekom’s ROI.

An additional element of our work has been to enhance internal capabilities through the production of training materials tailored specifically to Deutsche Telekom’s needs. We’re currently in the third year of our work with Deutsche Telekom, reviewing Category 3 territory sponsorships in an annual review process that Redmandarin designed and rolled out. In consultancy terms, a classic efficiency improvement / cost saving programme, applied to sponsorship.