HOW TO UNLOCK THE POWER OF SPONSORSHIP

Tips on how to unlock the power of sponsorship with Ken Ungar

  • Companies get into sponsorship for a variety of reasons: brand awareness, entertain a prospect, employee engagement, generate leads, provide product sample. All of those things could be accomplished with the right sponsorship.
  • So, generally, those lower-profile events, those events that are not perceived to be as commercial, the benefit to those sponsors is greater at those smaller, more localized events.
  • Ensuring that the sponsor gets what it paid for, and, more importantly,  fully leveraging what it paid for is a critical thing.
  • If you spend $50,000 for the right's fee, you want to plan on spending around $50,000 inactivation for a total budget. If it's a lot less than that like if it's 0.25 to 1, don't do it.

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When it comes to sponsorship, there are all kinds of benefits to telling your story and just telling it appropriately. That's really the only guideline.

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Doug Morneau: Well, welcome back, listeners to another episode of Real Marketing Real Fast. Today, we're going to talk about all things sponsorship marketing. And in the studio, I've got joining me Ken Ungar, who is an author, speaker, and sponsorship expert.

Doug Morneau: Ken is the president and founder of a company called CHARGE. And prior to founding the agency, Ungar worked as a marketer, a league representative, event promoter, and a business leader at the highest level of professional sports. He is an attorney and a member of the American Marketing Association and the Sports Lawyers Association.

Doug Morneau: His experience in sports business, personal branding, media training, sponsorships, and endorsements, as well as agents and legal issues, led him to author Ahead of the Game, What Every Athlete Needs to Know About the Sports Business.

Doug Morneau: Ungar has worked with marquis brands on sports sponsorship and endorsements, including Bridgestone-Firestone, Coca-Cola, Disney, General Motors, Honda, Jim Beam, Microsoft, Reebok and more. Ungar's media interviews have been carried on outlets including ABC News, CNN, ESPN, Forbes, Fox, Good Morning America, LA Times, New York Times, Chicago Tribune, Washington Post, Sports Journal, Sports Illustrated, USA Today and World Tonight. He's also had a position or held a position as chief of staff of the Indianapolis Motor Speedway and the chief marketing executive for IndyCar.

Doug Morneau: So, I am super excited to dive into this conversation about how sponsorship works and how to cut through the clutter for our marketing messages and get ROI from our sponsorship. So, I'd like to welcome Ken Ungar to the Real Marketing Real Fast podcast today. Well, hey, Ken, super excited to have you in the Real Marketing Real Fast podcast. So, welcome to the show today.

Ken Ungar: Thanks, Doug. It's really great to be here.

Doug Morneau: Well, I was super excited to see that you are involved with IndyCar, being that I've done a little bit of work in that space years ago. But I think it's going to be a great conversation and just want to turn it over to you to share a little bit about what your company does at CHARGE in terms of helping people understand and leverage sponsorship marketing.

Ken Ungar: Yeah. Well, thanks, Doug. I feel that I'm a Sherpa guiding clients through sponsorship. Our agency helps them identify opportunities and also helps them avoid the pitfalls so they can really use this marketing tool to accomplish a lot of their business goals.

Doug Morneau: So, I mean, the first thing is an opportunity. So, I guess, you can't be everywhere so do you normally suggest or recommend to your clients when you start working with them that they look at one or two or three areas opposed to trying to be “Hey, I'm going to sponsor everything”?

Ken Ungar: Yeah, that's a great question. So, what we do is we ask our clients to start with their audience. So, who are the people that they sell goods and services to? That's their target audience. Then, we have them go out and look for properties or look for places to sponsor that have that exact same target audience, because really what they're trying to do is use this tool to connect with their customers, but in a really different context. At a sporting event, for example, the context is much more relaxed. They could talk to race fans or they could talk to fans of football or rugby or any sport in a way that they can't when they're just talking to customers as the brand.

Doug Morneau: Right. Well, one of the things that I've experienced and because we've done some sponsorship stuff, we had sponsored our local hockey team, the Canucks, for a few years. And one of the things that were immediately noticeable to me was how the volume of inbound calls came from all the other NHL teams all across the country saying, “Hey, do you want to name a building? Do you want to be a sponsor? Do you want to be in the ice here?” So, definitely raise visibility and it attracted more opportunities as well.

Ken Ungar: Yeah, you got on their target list.

Doug Morneau: Yeah, I did. That's right. I say, “Hey, somebody can write a check for $600,000. Phone this guy.”

Ken Ungar: Yeah, exactly. But we see companies get into sponsorship for a variety of reasons. So, for example, some of the goals that sponsors are trying to attain are building brand awareness, they want to increase brand consideration or brand preference. A hockey game could be a great place to entertain a prospect. We have larger clients that want to use sponsorship for employee engagement. Then, of course, there's the old-fashioned “while we're in business,” so we're going to generate leads, we're going to sample our products and we are going to sell things. So, you have companies in sponsorship for a variety of different reasons, but all of those things could be accomplished with the right sponsorship.

Doug Morneau: So, for our listeners that have never gone down this road before, so they might have sponsored, they might have had someone knock at the door, call them, and ask for a donation for a local charity, which is kind of sponsorship. But those who are in your expertise, where do they start? So, for listeners, they go, “Hey, our company's doing fairly well. We're looking at branding and expanding. Where's the first point to start?”

Ken Ungar: Yeah, the first point to start is to really understand their customers and really… So, you ask yourself, where are your customers hanging out? So, if they're hanging out at a hockey game, then that's the kind of sponsorship you look for. If they're hanging out with the arts, and they're music fans or they are fans of another type of entertainment property, that's where you start about whether there's a sponsorship opportunity, because you're trying to connect with the audience. That's the same audience that you sell to. So, that's really the first step is to understand where that audience is hanging out.

Ken Ungar: After that, you approach the property, and properties that sell sponsorship are more than happy to entertain any kind of conversation about creating a relationship that makes sense for you. Now, I think, at this point, I like to underscore the fact that it's a relationship. So, the difference between sponsorships and advertising is sponsorship is a relationship between the sponsor and the property.

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When it comes to sponsorship, there are all kinds of benefits to telling your story and just telling it appropriately. That's really the only guideline.

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Ken Ungar: So, when you were a sponsor of the Canucks, you had a relationship with that team. It wasn't that the logo of your agency was being hung on a dashboard. It was that you actually had a relationship with the team. That relationship is really important for a couple of reasons. When the fans of that team saw that you had a relationship with their favorite hockey team, there's what we call in sponsorship “image transfer.” So, the good feelings that they have for that team are then transferred to you and you're held in higher regard as a result of the sponsorship.

Ken Ungar: But it's really about the relationship because it's something that just a logo on a wall can't do alone. The property is, in essence, vouching for you as a company. That's where the real power of sponsorship comes in because it transforms the way that those fans look at you after that sponsorship.

Doug Morneau: Well, and for us, it was a learning experience because admittedly, it was the first time we had done anything like that, that we probably could have started it a little bit smaller. So, to your point of a relationship, I mean, we learned a lot of stuff. We learned that they were willing to create opportunities for us. I mean, we have to pay for them, but they're willing to create opportunities that were in alignment with our values.

Doug Morneau: So, we did a lot of charitable stuff. We still do a lot of charitable stuff. So, the 50/50 draw that raises money for Connect Place for a hospice, they let us brand that because they knew that charity was important to our company.

Doug Morneau: So, you're right. That was something new. I never expected that. I thought it was like advertising where you get the data card and you pick the things that you want. And to their credit, they said, “Well, how could we best serve you based on your values and where you want to go?”

Ken Ungar: Yeah. And that's when the best sponsorships happen. So, you raised two important points in that example, Doug. But first of all, it's customizing the relationship as time goes on. So, that's why you'll see these sponsorship relationships are generally multi-year because they need time to develop as a real relationship, just like a friendship develops over a series of years. Just having these conversations with a property like the Canucks will yield opportunities for your business that you couldn't have imagined at the start of the relationship primarily because you didn't know how the relationship would work in the first part of it.

Ken Ungar: And the second thing you raised is that it's really customized to you. So, if CSR and charitable issues are really important to your company, things can be tailored to you to help you achieve, because that's one of the goals of your business, it helps you achieve that goal through the sponsorship relationship. So, it's really important that it'd be that two-way brainstorming, give and take, between the sponsor and the property that they're working with.

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Doug Morneau: It makes sense. You're saying, number one, to identify your target audience, so where are your customers hanging out. And then number two, realize it's a relationship, you're not just buying an ad. And beyond that, how much do you invest with your clients in terms of helping them leverage that? Because one of the things that became very apparent was, I was looking at the other sponsors in the arena, for example, there's Best Buy, and there's Budweiser, and there's TELUS, and there are all these big national brands and I was surprised at how little… I'm not picking on them. But as a marketer, I was surprised at how little engagement or effort they put into engagement with the fans other than having their logo on the board or on the ice or on the screen.

Ken Ungar: Yeah, that's a really great point, and that's what we call leverage. It's what does a sponsor do to leverage the relationship? Because the least successful sponsorships are what I call “set it and forget it,” where they either don't show up at all. It's just their logo or they run a 30-second ad on the video board and they really don't take advantage of the relationship. And so, those leverage activities, which sometimes is called “activation” is the most critical part of the sponsorship because it's really where you create that relationship with that target audience.

Ken Ungar: There are lots of great examples of what happens. But generally, if you're creating a relationship with the target audience that somehow benefits that audience and they believe that you fit into the sponsorship, meaning that your brand and the properties brand fit together and that you're there for a sincere reason that you really want… For example, you want to make the audience experience better. You're the sponsor who's bringing to them free WiFi. You're the sponsor that's bringing to them a kids' midway area at a sporting event where a family could bring their toddlers, and they can have a great time. You're the sponsor that made that happen.

Ken Ungar: So, when an audience sees that your presence is benefiting them, they let their guard down, really, in terms of why you're there. They're now accepting you as an integral part of their experience as opposed to a company with a commercial message that they have to go, “No, no, no, this is a commercial and I'm not going to listen to this.” So, now, all of a sudden, they're like, “This is great. This company is here to make my experience, as a fan, better.” Or, if they really feel that you're there to commercially support the team, to make their team a reality, that's going to be transferred to that sponsor with all kinds of benefits including higher purchase consideration, better brand awareness, and fans remember when you've done a good deed as a sponsor for an event.

Doug Morneau: That's interesting. I mean, a lot of the sponsorship opportunities that we've seen in the sense have been… You've got the opportunity to use the brand or use the team logo and branding, which is huge and so, to your point, take that and leverage that. And with the reach of a lot of these companies, even with social, what caught me off guard was like, why aren't they promoting game day? Why aren't they promoting victories within the organization? A lot of them are just silent. So, I guess, that's a non-activated partnership. But that's, obviously, not the route that you guys are taking your clients.

Doug Morneau: Is there a case study or an example of a client that you want to share with us? Maybe you name them or not name them. Totally up to you.

Ken Ungar: Yeah. For example, we work with American Honda with its Honda and Acura brands, and they do an amazing job of bringing an experience to all of their sponsored events. For example, they bring a two-seat IndyCar to the IndyCar races that they sponsor called the Honda Fantasy Sports and it's driven by a championship racecar driver. And really, in the backseat of this IndyCar, a fan is given the experience of a lifetime, where they really get to on the track, at speed, experience what it's like to be in a real race car.

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When it comes to sponsorship, there are all kinds of benefits to telling your story and just telling it appropriately. That's really the only guideline.

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Doug Morneau: Oh, that'd be cool.

Ken Ungar: Yeah. So, things like that really bring the event to life and I have no doubt because I've seen the expression on fans' faces when they take that ride. It's a once in a lifetime experience, something they could not have gotten for the sponsorship that Honda was involved in. So, that's an example of how you leverage an event and how you bring to that event a great fan experience, which then is transferred into an enhanced image for that sponsor.

Doug Morneau: Well, I think what happens lots of times, like you said, with someone like Honda who's done a good job with Indy is they give access to what I call “rare air,” there's opportunities that people just don't get. So, to be able to get even close to a kart, let alone sit in one or go for a ride on the track, is the stuff that people dream about and just don't have access to. So, as you said, the sponsor is the hero for making that possible.

Ken Ungar: Yeah. And that's a really important point, Doug, that access feature, whether it's a B2B sponsorship, so whether it's a company that wants to speak to other companies that they sell to, or to B2C, to consumers, giving that behind-the-scenes access. Because in some sports like baseball, it's almost impossible to get into the dugout. But if you could lift that velvet rope and you could either give your employees, your prospects, your customers, the consumers, give them that special experience, again, that's what sponsorships are built for. And that's why we find that in terms of the effectiveness over other marketing channels, many times it can't be beaten because of that one to one relationship and experience that really changes people's feelings.

Doug Morneau: And we saw the sponsorship, we've experienced that on both levels where it's corporate sponsorship like you said, so it's that relationship, but it's a business for a business relationship. And then, there's the charitable sponsorship. And we've seen that mixed.

Doug Morneau: I mean, at one point, it sponsored several large charitable golf tournaments and the reward, if you want to call it that, as being the title sponsor was we had the top athletes from our football team or hockey team or the foursome. So, again, they give access to players that you would normally see at a distance or see on TV, which was a reward, if you will, for the sponsor who wrote the check.

Ken Ungar: Yeah, and that's really an important point. As part of that, because of the trend in corporate social responsibility that we're seeing across the world, we're seeing the rise of sponsorships that benefit not for profits. And so, yes, as part of that, whether it's like you said, a charitable golf tournament where a celebrity attends, or even what we've seen is sponsors are mandating that the properties that they work with have some demonstrable CSR policy, like what is their policy to give back to their community? What charities do they work with? How do the charities benefit from the events that they run?

Ken Ungar: And even it's going so far as there's a new trend in this area called event social responsibility, where sponsors and properties working together are requiring that events have sustainability goals, and have recycling goals, and have carbon-neutral footprints, and all these things which benefit society. But we're really seeing the rise of the not-for-profit influence in the sponsorship world, for sure.

Doug Morneau: Yeah. For me, that's really exciting to see those changes because, I mean, obviously, that was not a conversation we would have 10 years ago. But now, it's a conversation, like you said, that we're having and that's an expectation in a lot of cases.

Ken Ungar: Yeah, you're right. It's been about a 10-year trend. It started where you would see a lot of events, for example, the larger events couldn't man all their hospitality and concession stations. And they would give those stations to not-for-profit groups to man and then give them a cut of the profit. So, if a Boy Scout troop was at a certain concession stand at the end of the event, they'd get a cut of the proceeds from the sales of that day.

Ken Ungar: So, that's what I saw as the start of this not-for-profit interaction with events and with sponsorship. But, yeah, over the last decade, it has exploded. And again, I'm happy to see that as well. Because now, you not only have an entertaining event, but you have an entertaining event that has some socially important purpose to it.

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When it comes to sponsorship, there are all kinds of benefits to telling your story and just telling it appropriately. That's really the only guideline.

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Doug Morneau: Yeah, that's really neat. So, what are you most excited about? Where do you see the trends… so, one of them, you said, was the event social responsibility. But I mean, the world is changing so quickly now and with digital and online and everybody watching, it seems like more people watch the sporting events through their screen than they do watch it live, which I don't get. But where do you see the trends coming in the marketplace?

Ken Ungar: Yeah, I think the digital and online areas will benefit the most from all this because there's such integration. So, you mentioned the second screen and now there's the third screen and new stadiums that are being built have to have sufficient bandwidth for WiFi to ensure that the fans could have device accessibility for their phones or tablets, or however, they want to enjoy the event using the digital experience as well as the live experience. Those types of things are really exciting to me.

Ken Ungar: But perhaps the most exciting is the data that we have at our disposal, especially digital online, really give us the ability to understand our audiences better. And as part of the sponsorship, both from a demographics perspective and from a psychographic perspective, you have to understand your audience, what they like, what they enjoy, what they do, what their beliefs are, all of those things. Now, not in an intrusive way, right, it's not invasive to privacy, but understanding so that sponsors and properties can tailor the experience to what their audiences love to do.

Ken Ungar: What I'm really excited to see over the next year, two years, three years, is we are enhancing our understanding of audiences and we're getting to know better what they really want to see out of sponsored events, and that gives us the ability to deliver to that need. So, we're not just interested in selling things to them, obviously, that there's some benefit to that as part of the sponsorship, but we want to deliver to the experience because once they have that better experience, that relationship is enhanced, and that relationship extends far beyond the sponsorship.

Ken Ungar: So, as technology gives us the tools to better connect with them, it gives us the ability to speak with them more profoundly and over a longer period of time.

Doug Morneau: Now, do you think that the consumers understand the financial benefit of sponsorship in terms of how much revenue it actually generates for a sporting team or a particular event? And how that… Really, that's a benefit all on its own in that somebody else is picking up a really big piece of the budget.

Ken Ungar: Yeah, I think that there's a lot of sophistication on the fan side as to that revenue stream. I mean, they see all the large brands and they understand that they are paying for the right to be present at those events. It's interesting, you say, there's actually a downside to that for the sponsor at times. What we've seen in terms of positive image transfer, that fans think less of brands that are at bigger events than brands that sponsor smaller community events because they feel…

Ken Ungar: So, their survey data is telling us that the fans feel that, “Oh, yeah.” Of course, they're at this prestigious event, like the Super Bowl or whatever because they want to talk to us. They're trying to talk to us and sell us something. That's why they're here.

Ken Ungar: So, generally, those lower-profile events, those events that are not perceived to be as commercial, the benefit to those sponsors is greater at those smaller, more localized events. For just that reason, Doug is that because fans are savvy to why sponsors want to be at certain events. That's why authenticity, sincerity, really doing something that benefits the fan is so important, or it can actually boomerang on the sponsor.

Doug Morneau: Do you see companies or have you seen companies actually that have a policy or statement around that? I mean, when social media came on the scene, I was volunteering with some government boards, and we had to address all the issues around how do we deal with staff and how do we deal with pictures and how we deal with everything else. So, are you seeing companies out drafting policies around and sharing that with their audience or their consumers of what their policies are on sponsorship?

Ken Ungar: Yeah. So, the larger companies will have their sponsorship policy on their website, usually in a special category describing their community involvement. And so, they're sharing their policies very explicitly for a variety of reasons. One is they're announcing to the world the types of sponsorships that they will consider and the types of sponsorships they won't.

Ken Ungar: For example, we see a lot of the larger banks will only deal with things that are involved in education, community development, and economic development, and that's it. But we're seeing companies be very explicit about that, which is good. I mean, whenever there's clear communication between the sponsor and the community, that's always a benefit and it gives them a little bit of space to brag. Because if no one knows you done it, you hate you done it.

Ken Ungar: And so, it gives them the opportunity to speak authentically about, “Here's this great event or here's this great charity that we support through sponsorship, and here's why.” And so, it's really important for a company to do that as well.

Doug Morneau: Yeah. And I think sometimes… I mean, I've seen it both on the not-for-profit and the corporate side. So, the not-for-profit doesn't want to tell the community everything they're doing because they don't want to seem like they're bragging, or the company doesn't want to do that. But like you said, I mean, we looked at it a different way. If we can invite people into our story and what we're doing, what we'd like to do is have more people join us. So, it was more about how can we build, like I shared with you before we started, how can we build a team of people that wherever we go put money, people follow and write bigger checks.

Ken Ungar: Right. And that's the perfect approach, right, because whether you share… It's a quasi-case study, or here's what we did, and here's the impact that we had, so if you do the same, you can have even more impact in a positive way. Everything that we do is not about keeping secrets. Right?

Ken Ungar: And frankly, in terms of the formal definition of sponsorship versus donation, a donation is, by definition, a secret. Sponsorship, by definition, is there's a commercial benefit going to the sponsor, whether we want to admit it or not. The sponsor benefits by being affiliated with a not-for-profit, for example.

Ken Ungar: So, as long as we do it appropriately and not in a really braggadocious way like you said, it can encourage further action to support that cause, especially if it's really cool, it's really novel. It's a creative approach in terms of how the not-for-profit and the sponsor work together. There are all kinds of benefits to telling your story and just telling it appropriately. That's really the only guideline.

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When it comes to sponsorship, there are all kinds of benefits to telling your story and just telling it appropriately. That's really the only guideline.

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Doug Morneau: So, we've talked about one side, so identify your audience and look for and identify good sponsor opportunities. How much of your effort is spent now in helping the company to do two things, first of all, make sure they get what they paid for, and then secondly, that they activate?

Ken Ungar: Yeah, we spent a lot of time doing that. So, sponsorship fulfillment is often for larger companies, not so much for the smaller companies, involved in sponsorship is difficult because you'll have a relationship and it could be an NHL hockey team, it could be a major league baseball team or sponsorships that are larger like the Olympics, for instance. Those will have thousands of deliverables and they will have many, many different programs that are going on at the same time.

Ken Ungar: So, ensuring that the sponsor gets what it paid for, but more importantly, is fully leveraging what it paid for is a critical thing. And so, we would help some of those companies, on the fulfillment side, get the benefit of what they paid for in order to have those great benefits we talked about, like brand awareness or lead generation.

Ken Ungar: So, that's part of it, but we're also going to help us… A company, for example, some of the larger companies have multiple sponsorships. So, one question is, do those multiple sponsorships live together appropriately in the same portfolio? Do they fit together? Do they help promote the brand image of the company or do they conflict with each other?

Doug Morneau: That's interesting. I hadn't considered that yeah.

Ken Ungar: Yeah. So, the sponsorship fit within a portfolio is so important because it's got to fit not only the personality of the brand, but the categories got to be right as well. So, sometimes we'll find very family-oriented, sedate brands all of a sudden find themselves in extreme sports sponsorships. And not only doesn't it work, but it's also actually counterproductive because it confuses your audience like, “What's this family brand doing at the X Games?”

Doug Morneau: Or the MMA or whatever.

Ken Ungar: Right. Exactly, exactly. So, we'll help brands especially… Sometimes these sponsorship portfolios get to be like unruly gardens. Right? It's just the weeds take over. I didn't plant that, and how did that grow here? And so, we'll come in with some pruning shears or at least just a way to organize your garden better to help them get the most out of what sponsorship can offer them.

Doug Morneau: So, who do you… Maybe I'm putting on the spot when I asked for any help. And so, in terms of leadership, are there any brands that you can think of that you see taking a real leadership role in activating sponsorships and doing an excellent job?

Ken Ungar: Yeah, I'm glad you asked that.

Doug Morneau: You mentioned Honda is one.

Ken Ungar: Yeah, Honda's definitely one. So, their sponsorships really ranged from, obviously, IndyCar is where they've been for over two decades, but also everything from the Tournament of Roses Parade to Little League to a variety of different sponsored events. But what I really want to mention, because the genesis of this is one of my favorite sponsorship activation stories is Procter and Gamble, who I think is a real leader in the sponsorship area and does a great job. And this goes all the way back to the 2010 Winter Olympics. Do you remember where that was?

Doug Morneau: Yeah, we're just looking at all our pictures. We had a house party and we're talking about hockey and we had the tickets for the game, so it was great. It was in Vancouver.

Ken Ungar: It was at gorgeous Vancouver, British Columbia. And Procter and Gamble did what I think was one of the best campaigns around a sponsorship that I've ever seen. So, at least half the people who watch the Olympics are female and a good chunk of those are mothers, either they have a mother, they are a mother. And Procter and Gamble rolled out a campaign which we should continue to use in subsequent Olympics because it was so successful called “Thank you, Mom.”

Ken Ungar: Really, what Procter and Gamble said about its sponsorship of the Olympics, starting with that Winter Olympic Games, was that “We're involved in the Olympics because we want to thank the moms of the athletes who made the Olympics possible. And so, all the sacrifice that moms have made around the world, the financial sacrifice, the living sacrifice, everything that a mom did that made it possible for her son or her daughter to be in the Olympic Games, thank you, Mom.” And that campaign, which resonated throughout all… Everything that Procter and Gamble did in that Olympic Games and in subsequent Olympic Games like in London in 2012 was all about “Thank you, Mom.”

Ken Ungar: Now that, I call that a double, almost a triple bank shot because not only was Procter and Gamble fully activating their sponsorship where they spent probably well over $100 million sponsoring the Olympics being a top Olympic sponsor in the International Olympic Committee, but they were really resonating about what their brand was all about. All the products within their portfolio brands had that same common theme, and I thought that was just brilliant.

Ken Ungar: So, when you talk about leadership, I would love every brand to be as creative and insightful and effective as what Procter and Gamble did in Vancouver.

Doug Morneau: Yeah, that's amazing. I mean, when you think about it, who can hate on the moms, right?

Ken Ungar: Right.

Doug Morneau: I mean, it's a pretty safe audience to cheer on. And I mean, it doesn't take too many minutes to have some nice warm feeling as you're thinking of your mom, your grandma, and all the people that supported you to get where you got to.

Ken Ungar: Yeah, I tell my team all the time, I said, “If you could make the client cry with a great story, you've done the most amazing thing,” and watching that campaign rollout of… I'd encourage anybody to go to YouTube, the commercials for [inaudible 00:31:55] resident on YouTube. It's really an amazing thing because it demonstrates sponsorship can move feelings, sponsorship can make you feel something. So, that's clearly a leader.

Ken Ungar: But there are all kinds of stories about fantastic ROI. For example, let's focus on Canada, another great Canadian company, Bombardier Aerospace. When they're in auto-racing, which is a target-rich environment if you're trying to sell leader jet, or a challenger or global express, race teams need those types of aircraft to shuttle around the world. Race team owners, high net worth individuals. So, Bombardier, as part of its B2B sponsorship… so this is another type of sponsorship, not B2C like Procter and Gamble, but B2B. So, Bombardier, for every $1 million it spent on sponsorship, it earned $32 million back.

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HOW TO UNLOCK THE POWER OF SPONSORSHIP

When it comes to sponsorship, there are all kinds of benefits to telling your story and just telling it appropriately. That's really the only guideline.

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Doug Morneau: Wow, that's amazing.

Ken Ungar: So, a 32 to 1 ROI was absolutely brilliant. And so, you look at, if I'm a business, why should I sponsor? Well, no one could promise you a 32 to 1 ROI on what you spend in sponsorship, but it's possible.

Doug Morneau: Yeah. Well, the other thing that I was thinking when you're saying B2B and B2C, it got me thinking back of our days working with the NHL, was that there's a couple of audiences in the arena that you could address. There's the consumer, the person who goes to work every day and works for someone else as an employee, which is the B2C. And then, there are all the other brands. So, if you're marketing to the other brands while your ad appears there, you're now on par with them so that makes that a B2B opportunity.

Ken Ungar: Yeah, it really does. And especially a lot of those brands will show up, say, in the suite. So, they're watching a game, so they show up in the suite. When the chief executive of one brand meets the chief executive of another, there are stories upon stories of that's the start of a beautiful relationship that ended up in business being struck as a part of being in the same place at the same time supporting the same team.

Doug Morneau: So, for our listeners that are enjoying our conversation saying, “Okay, that sounds all well and fine. How do you start in terms of preparing a budget and ROI?” Because at some point, you're going to have to sit down in front of your CEO or your CFO and you're going to pitch your case and ask for some money.

Ken Ungar: That's a great question. So, there are really myriad numbers of budgets. So, there are local sponsorships in the tens of thousands, there are international sponsorships in the hundreds of millions, and everything in between. So, there isn't one size fits all. There isn't one budget that's going to work.

Ken Ungar: But here's how I'd have people start. Say, for example, you find the right property. It has the same audiences, your customer base, and you want to engage in product sampling or let's just say lead generation. So, you estimate how many leads by working with property, so you would… In the case of the hockey example, talking to the Canucks, how many leads do you hope that you can generate as part of being on-site at a game in an arena? In terms of the price, the question for you would be, what would it take for you to do that on your own without a hockey event sponsorship?

Ken Ungar: And so, start with… That's going to be what's called the “right's fee.” You're going to end up paying a fee to a team or to an event for the honor of being their relationship. So, that's the first part. Then, generally, you're going to leverage. There's going to be a cost to leverage that event. It'll be the cost of buying advertising of social media, of hiring a publicist, of doing an onsite display, whatever plan that you have to make your relationship a reality, that's generally called leverage or activation.

Ken Ungar: Now, the ratio between fee and that, you probably want to aim for one to one. So, if you spend $50,000 for the right's fee, you want to plan on spending around $50,000 inactivation for a total budget, you're going to your boss and you're asking for the budget, total budget of $100,000. If it's a lot less than that like if it's 0.25 to 1, don't do it.

Ken Ungar: Or if you have to spend all your money… Sometimes we have sponsors and a lot of times with the local major league team, whatever sport, it's like it was a $300,000 sponsorship, but they don't have any other budget. They spent it all on the rights and they have no budget to make it a reality. Don't do it. You're really not getting any kind of return on investment that you'll be proud of. So, just scale if that's your… If $300 is your budget, scale it down. Right?

Doug Morneau: That's a piece of great advice because I never looked at it that way. We learned that “I fought trial by fire” that while you get the rights, there's no activation there and you really need to put together a marketing plan on its own to leverage the rights.

Ken Ungar: Right. And the right's fee plus that marketing plan costs, that's your total budget. But again, you want to look at and you want to measure upfront like what am I trying to accomplish? So, if I'm trying to increase brand consideration by 50%, that's your goal going in. So, everything that you're spending should be spending around that goal.

Doug Morneau: And I guess the right's fee is probably the easier sell because that's the ego piece. “Hey, I got my logo on the IndyCar,” so I can tell all my friends and I can point to my logo on the IndyCar. So, that's easier to sell. The tougher sell, I'm guessing, and feel free to tell me I'm wrong, is that the activation where now you need to create as I said about publicist and a plan, money, and media pointing to the logo on the car might be a bit tougher to sell.

Ken Ungar: Yeah, that's exactly right. And so, we see that… Actually, so colleagues of mine, you mentioned ego, there's a nickname for that, we call it “execuwhim,” where it's the whim of the executive, that ego to want to be on that car. So, they end up spending what is most of the budget just to obtain the rights, and some of this is crazy-expensive.

Ken Ungar: So, primary sponsorship on an IndyCar could be anywhere from $2.5 million to $5 million. PGA sponsorships could be $7 million, $8 million, $9 million, $10 million for one tournament. So, when you have ego-driven decisions to do that and then no budget leftover because all of it was spent to get your name in lights, that's crazy. And as a professional in the sponsorship industry, I hate it. Because then after the fact when the sponsorship doesn't work, it wasn't because of the bad strategy, it was “Sponsorship doesn't work. We put our name on this and nothing happened.”

Doug Morneau: Yeah. That's funny.

Ken Ungar: So, that's the big pitfall. We've now shared with your listeners one of the biggest pitfalls in sponsorship.

Doug Morneau: That's great to know, and we know that even from doing some of the smaller community events. And what we learned very quickly as we had to create a rule set if you will, and an audit list. So, if you've asked me to sponsor, fill in the blanks, local charity event, let's say it's a $10,000 event, and you're promising me these things, we need to audit back and make sure we get those things because they have less staff and probably less experienced in the larger sponsors too, and they do no activation.

Doug Morneau: So, I think that's a huge win for our listeners is just to understand that good advice. Cut your budget in half, half goes to right's fee, half goes to activation so you can leverage that relationship with the brand, whatever the brand is, that you sponsored.

Ken Ungar: Yeah. And you raise another good point, Doug, and that's whether you're buying a sponsorship as a sponsor or you're a not-for-profit or other property selling a sponsorship, you got to also make sure, not only the budget, you got to make sure you got a staff that can handle the sponsorship. These things take a lot of work. And so, not only is there a budget attendant to making these things happen, you have to have the people in place to do it. So, if you're not-for-profit and you sold a sponsorship, you have to fulfill it. You have to deliver what you promised.

Ken Ungar: And an overworked executive director is probably not a good candidate for the person who's going to deliver the sponsorship benefits. So, question, do you have someone on staff who can do this and have you estimate the time it'll take? Again, if the answer is no, don't do it. Sponsorship is fantastic and works magic for a lot of people, but it's not for everybody.

Doug Morneau: Yeah. And with the not-for-profits, I mean, a lot of the volunteer work we've done, we're really sometimes is trying to get them to understand that you can ask for more money. This isn't a social event where $75 isn't… Charge $500 or charge $1,000 a ticket or $ 2,500. Make sure that you're accomplishing your goal so, as you said, you can attract bigger sponsors and you can deliver what you promised.

Ken Ungar: Absolutely. These are often value-based transactions, right? It isn't about the cost. Like, the cost of your dinner is only $10 a plate so I'm going to charge $20. Now, as you said, charge $50, charge $500 because it's the value of the association that's really what's at risk right here.

Doug Morneau: Well, it's about getting the right people in the room, which is the same thing as sponsorship, right? I mean, there's nothing wrong with sitting up on the 300 seats watching the game but if you want to deal with corporate guys, you need to be in the suite. It's just a different location.

Ken Ungar: That's exactly right. That's exactly right.

Doug Morneau: So, what's some of the bad advice that you hear aside from sponsorship doesn't work for the people who didn't know what they're doing in the industry?

Ken Ungar: I think the bad advice involves the “set it and forget it” tactic that we talked about that people undersell what it will take to make a sponsorship successful. So, that advice usually comes from properties that want to sell sponsorship.

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HOW TO UNLOCK THE POWER OF SPONSORSHIP

When it comes to sponsorship, there are all kinds of benefits to telling your story and just telling it appropriately. That's really the only guideline.

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

Doug Morneau: That's easy. Just write a check, we'll do all the work. That would be easy.

Ken Ungar: Exactly. Exactly. So, I wouldn't say they purposely underestimate, but they underestimate for the new sponsor what it will take to make that sponsorship a reality or they promised to do the fulfillment. And so, in either case, what you have is you have a sponsor that doesn't control fulfillment, they're surprised by what they get, or in many cases, what they don't get. Because, again, set it and forget it is not a strategy in sponsorship, it takes work, right? These results like Bombardier having that 32 to 1 ROI, which takes a lot of work. She did get great results, but you're not going to sit back and let that logo work for you on that racecar. So, the bad advice is, “Hey, this is easy. Don't worry about it.” Do worry about it. But you'll get a great result if you do.

Doug Morneau: Well, I look at it, it's not maybe a fair comparison, but I compare it to a trade show. And so, if I registered in a trade show, I'm registering there for a bunch of reasons, but I don't expect the organizers to bring me my audience because most of them do a poor job of that, and they have 100 people or 500 people or 1,000 people to serve. So, you have to take responsibility to make sure that I get my audience in that building.

Ken Ungar: Yeah, that's exactly right. Some other advice that I've seen over the years is sponsors that don't do their due diligence in terms of the properties that they're getting involved with. What you see is this happens a lot with athletes. You find bad behavior happens during sponsorship. Some of it's not very surprising. It should have been known to go in or not having protection for it going in, like the ability to cancel the sponsorship. But sometimes you see, sponsors just go in headfirst to sponsorship without doing their homework.

Ken Ungar: And you've seen some really spectacular failures as a result of that thing where the sponsors not only do they not get what they wanted, they got hurt. I mean, they get really hurt by being with a property or an athlete that ended up just in a PR mess. So, that's another kind of buyer beware applies in sponsorship as much as in anything.

Doug Morneau: And that may be a great point for planning is you're looking at these things to go through the what-ifs. What if something goes offside, as you said to your point, what's your contractual obligation? Okay, fine. That's out of the way. Now, what are we going to do from a PR point of view if something goes offside?

Ken Ungar: Right. Because just as it could go really, really great, it can go off the rails. And if you don't believe me, ask the sponsors who sponsored Lance Armstrong before the performance-enhancing drug scandal broke or Southwest Airlines who sponsored SeaWorld until the movie Blackfish came out. So, you have all these different sponsorship relationships. And I'm not saying those were due diligence issues, but these things happen. Again, like in any relationship, there's a bit of unpredictability. And so, just going in eyes wide open is super important.

Doug Morneau: Well, that's amazing. I really enjoyed this conversation and I like this whole world of sponsorship. I'm not an expert at it, I've dipped my toe in it a few times and had some experience and they enjoyed it and enjoyed more on the not-for-profit side because that's an area that we're passionate about, but obviously everyone's got their vision, mission, and purpose for their business. So, I just want to say thanks for sharing with us today.

Ken Ungar: You're very welcome, Doug, and you can expect that call from the NHL. I'm going to have them call you because you're experienced in the area

Doug Morneau: Yeah. Well, I got experience inactivation because they called me, “So, what are you doing? You're getting all this attention,” I was like, “Doesn't everybody do this? I'm just a little guy. Aren't the big…” Apparently not. So, I did learn the activation level but what I didn't know in advance to your point was I didn't realize the cost of activation and staff and additional media budget to leverage the rights. I hadn't considered it at all. I'm like, “Okay, just enjoy and check the sponsorship and that's…” I was like, “No, because nothing else happens.” You need to make it happen.

Ken Ungar: You need to make it happen. Exactly.

Doug Morneau: So, two questions and I'll let you get back to serving your clients. One is who's one guest I absolutely have to have on my podcast?

Ken Ungar: David Baker.

Doug Morneau: David Baker. Okay. And are you able to introduce me to David?

Ken Ungar: Yeah. So, David Baker is called the expert's expert and he is someone who helps entrepreneurial creative agencies really find their way in the area of positioning. David is brilliant. I think that anyone who's listening who's involved in any type of creative agency, digital online, any of them would benefit from David's advice. He's totally awesome.

Doug Morneau: Well, super cool. And the most important question today, Ken, is how can people connect with you or your company, learn more about you, learn more about sponsorship, and get their foot in the door?

Ken Ungar: Yeah, if anybody's interested, we have a free eBook that walks you through how to get started in sponsorship. It's available at freeebook.chargesponsorship.com. So, just check it out. It's free because we won't really everybody is successful in sponsorships so that people can know the joy of this great marketing tool.

Doug Morneau: There you go. Sounds good. Hey, I appreciate you. Thanks again for taking the time out of your day to share with our audience. So, listeners, I hope you enjoy this episode. It's a different style and different direction we've gone. I've experienced both sides of sponsorship and I would just encourage you to head over to Ken's website. Have a look. Take a look around, reach out, have a conversation with him, see if this is a good fit for you. And at least, explore and ask the right questions so you start the process correctly. So, we appreciate you for listening and I look forward to serving you in our next episode.

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HOW TO UNLOCK THE POWER OF SPONSORSHIP

When it comes to sponsorship, there are all kinds of benefits to telling your story and just telling it appropriately. That's really the only guideline.

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