Nearly two years have passed since London celebrated winning the right to host its first Olympic Games in more than 60 years, and the impact on the UK sponsorship market has extended far beyond the two multimillion-pound domestic partner deals already signed with Lloyds TSB and EDF Energy.
Offering neither access to athletes for promotional purposes nor in-stadium ad opportunities, the Olympics have forced brands to think harder about how to use sponsorship. The London Organising Committee of the Olympic Games and Paralympic Games (LOCOG) has gone so far as to ban the term 'sponsorship', preferring 'partnership'. Tom Silk, managing director at Velocity UK, says sponsors can benefit not just from greater brand recognition, but also a boost in employee engagement. 'Companies must recognise the need for high internal morale, and the fact that employees are their ultimate brand ambassadors,' he says. 'LOCOG is placing its focus on the value and reward to sponsor organisations of using Olympic partnerships to increase workplace productivity.'
While LOCOG will continue to protect official partners vociferously, the opportunities for brands reach well beyond official ownership of the rings. Fear of our athletes failing at the 2012 Games will continue to ensure sport rides high on the public agenda and brand-backed Olympic-themed programmes have already emerged. Male grooming brand King of Shaves is running a 'Young Blades' scheme to encourage the next generation of sports stars. Virgin has a similar 'Flying Start' programme, and Group 4 Securicor has just unveiled a G4S 4teen initiative. Global Olympic partner Visa is also continuing its 'Team Visa' activity ahead of the 2008 Beijing Games. 'It is about working within the Olympic economy and being respectful of the regulations,' says Rupert Pratt, managing partner at Generate.
Perhaps the Games' biggest sell for brands will be the chance to promote their environmental credentials at the 'One Planet Olympics'. Enticing brands to polish their green halos has become a key strategy for sporting events. Sir Keith Mills is hoping responsible-minded brands will partner his Origin America's Cup team, while the British leg of the Tour de France wants to find an environmentally sound brand to sponsor its green jersey, awarded to the most consistent cyclist.
Honda has led the way in motor sport by stripping its F1 cars of branding in favour of an environmental project called 'My Earth Dream'. However, Nigel Currie, chairman of the European Sponsorship Association, believes Honda has been unwise in doing so. 'It was reported that it couldn't sell the advertising. But it is a very valuable piece of media space. Even if you don't get the big sponsor you could sell it off in bits,' he says. As far as green credentials go, Max Mosely, president of global racing body FIA, has pledged to clean up F1 by 2011, but until it becomes more environmentally sound, such schemes will have their critics. While Adam Wylie, managing partner of agency 23red, is not against the promotion of green issues through sports, he says the deal must be part of a genuine eco-commitment. 'I would love to see more brands doing something in the environmental space, but no one stands out at the moment'.
Last month, football's world governing body FIFA put social responsibility at the core of its brand, with the unveiling of its 'For the game, for the world' positioning, and similarly, utilities brand E.ON, which has helped Ipswich Town become the UK's first carbon-neutral club, is also putting CSR at the heart of its sponsorship strategies. Again, however, it is essential that these strategies are followed through with action. 'The biggest problem is that the people who own cause-related programmes are often the wrong people,' says Tim Crow, director of consulting at Karen Earl Sponsorship. 'It should be owned by the brand rather than an internal lobbyist or PR department.'
The growing value of the sponsorship market has alerted the wider marketing industry, which has manifested itself in a round of agency consolidation, often with the 2012 Olympics in mind.
Havas Sports, the global sports-marketing division of Havas Media, acquired agency Sponsorship Media to gain a foothold in the UK, while 2012 has also inspired the coming together of four existing agencies - brandRapport, Sportsworld, Spring and b-focused - in the founding of Olympic marketing agency Rings Marketing. In late-2006, Karen Earl Sponsorship previously owned by Media Square, was bought by The Engine Group, while IMG has acquired the quartet of sport and entertainment companies Quintus, CSI Sports, BSI Speedway and Art + Commerce. And in March, Chime Communications bought Fast Track, which will, according to the agency's managing director John Ridgeon, benefit from its sister agencies within the Chime network. 'Our focus will remain in sport, but we may look at other opportunities,' he says.
As with so much marketing communications strategy now being put in place, digital is leading many brands' sponsorship activity. Heineken ran its biggest-ever viral game around its Champions League sponsorship, giving 60 winning consumers a trip to Iceland to coincide with the final. Hans Erik Tuijt, global brand activation manager at Heineken, argues that 'if you don't have a digital component you are missing out on huge opportunities. It gives you a chance to build a connection with consumers who are fickle.' The Dutch brewer is planning a similar strategy to promote its sponsorship of this year's Rugby World Cup in France. It will launch a rugby viral game and vodcasts presented by Australian rugby legend Michael Lynagh.
Away from sports, investment in music sponsorship shows no sign of decline. Last month, Carlsberg, which signed up as the official beer of Glastonbury in March, increased its investment in outdoor events through a deal with live events firm Live Nation, which has interests in festivals such as Reading, Leeds and Homelands as well as venues including London's Wembley Arena. However, the most interesting element of music sponsorship lies in content creation. 'The days of interruption are dead. Today it is about the creation of things that wouldn't have happened without the brand involvement,' says Garry Dods, marketing services director at Octagon. 'Brands need to get in there earlier, co-create and engage consumers in what they love doing'.
Vodafone's series of TBA gigs and the Innocent Village Fete are two good examples of events that would not exist without the brands themselves. But Paul Phillips, director of advertising and media services at AAR, also envisages more sub-sponsors getting involved with content creation, such as the Strongbow Cider House and O2 Blue Rooms at festivals, and Cafe Heineken at European rugby matches.
The opening of Wembley Stadium and The O2 will provide further facilities capable of attracting top sporting and music events to the UK. US American football league the NFL, for example, will play its first regular-season game at Wembley in October, and is seeking a range of ties, such as a transatlantic airline partner as well as an overarching sponsor for the International Series of overseas games it plans to run in the future.
The sponsorship market is flourishing and there are more opportunities for brands than ever. If there is a worry, though, it is the clamping down on categories under pressure, such as alcohol. Last month's self-imposed ban by the Portman Group on alcohol advertising on children's replica sportswear follows a total ban on tobacco advertising from Formula One. Gambling, food high in fat, salt or sugar and fizzy drinks brands may soon also feel obliged to introduce self-imposed restrictions in coming years.
TOP SPONSORSHIP AGENCIES - 1-13
Rnk Agency Fee income Fee income Chng
2006 2005 (%)
1 Fast Track 5,332,319 4,398,481 21
2 SBI 3,416,735 2,409,871 42
3 The Works London 2,701,418 2,717,756 -1
4 Karen Earl Sponsorship 2,536,400 1,981,304 28
5 brandRapport 2,427,366 2,163,393 12
6 M&C Saatchi Sport & Entertainm't 1,448,000 1,103,000 31
7 WSM Sponsorship 1,300,000 1,450,000 -10
8 Velocity Sports & Entertainment 937,583 725,387 29
9 Capitalize 920,272 1,047,449 -12
141 Sport & Entertainment* n/a 720,177 n/a
10 23red 680,000 350,000 94
11 Four Sports Marketing & Spon'ship 675,222 185,663 264
12 Generate 336,963 114,500 194
13 Threepipe 112,011 n/a n/a
Rnk Agency Turnover Turnover Chng
2006 2005 (%)
1 Fast Track 8,917,717 6,086,915 47
2 SBI n/a n/a n/a
3 The Works London 11,373,379 10,842,290 5
4 Karen Earl Sponsorship 7,707,049 4,686,000 64
5 brandRapport 6,499,091 5,175,106 26
6 M&C Saatchi Sport & Entertainm't 2,904,000 1,847,000 57
7 WSM Sponsorship 1,520,000 1,580,000 -4
8 Velocity Sports & Entertainment 1,043,558 769,296 36
9 Capitalize 3,780,057 3,019,363 25
141 Sport & Entertainment* n/a 1,094,568 n/a
10 23red 9,000,000 800,000 1025
11 Four Sports Marketing & Spon'ship 1,117,475 199,024 461
12 Generate 760,208 287,691 164
13 Threepipe 7210,000 n/a n/a
Rnk Agency Staff Brands Rights
1 Fast Track 90 50 50
2 SBI 43 90 10
3 The Works London 32 100 0
4 Karen Earl Sponsorship 37 100 0
5 brandRapport 38 93 7
6 M&C Saatchi Sport & Entertainm't 21 100 0
7 WSM Sponsorship 10 45 55
8 Velocity Sports & Entertainment 7 100 0
9 Capitalize 20 85 15
141 Sport & Entertainment* 12 n/a n/a
10 23red 40 80 20
11 Four Sports Marketing & Spon'ship 8 61 39
12 Generate 9 70 30
13 Threepipe 12 100 0
1 Fast Track
Founded 1998. Subsidiary Chime Comms. MDs Jim Glover, Jon Ridgeon.
15% PR, 45% consultancy/rights negotiation, 10% integration, 30%
event management. Clients include GSK, UK Athletics, Member ESA.
Founded 1985. Subsidiary IMG. Managing director Nick Massey. 15% PR,
10% consultancy/rights negotiation, 50% integration, 25% event
management. Clients include Scottish & Newcastle, Britvic, Telegraph
Group. Member ESA. www.sbi.co.uk
3 The Works London
Founded 1996. Subsidiary Omnicom. Chief executive Ben Pincus. 40%
consultancy/rights negotiation, 40% integration, 20% event
management. Clients include Canon, Heineken, Walkers. Member ESA.
4 Karen Earl Sponsorship
Founded 1984. Privately owned. Managing director Karen Earl. 25% PR,
25% consultancy/rights negotiation, 25% integration, 25% event
management. Clients include RBS, Diageo, Coca-Cola. Member ESA.
Founded 1982. Subsidiary Passhold. Managing director Andrew Dwyer.
7% PR, 7% consultancy/rights negotiation, 71% integration, 15% event
management. Clients include Vodafone, E.ON, UBS. Member ESA.
6 M&C Saatchi Sport & Entertainm't
Founded 1997. CEO Steve Martin. 35% PR, 10% consultancy/rights
negotiation, 40% integration, 15% event management. Clients include
Orange, Coca-Cola. Member ESA.
7 WSM Sponsorship
Founded 1999. Privately owned. Chairman Andrew White. 7%
consultancy/rights negotiation, 60% integration, 33% event
management. Clients include Brit Insurance, Aberdeen Asset
Management. Member ESA. www.wsmsponsorship.com
8 Velocity Sports & Entertainment
Founded 2003. Subsidiary Aegis Group. Managing director Tom Silk.
50% consultancy/rights negotiation, 25% integration, 15% event
management, 10% other. Clients include Eli Lilly, Visa, Abbey.
Member ESA. www.teamvelocity.com
Founded 1996. Privately owned. Chairman Richard Moore. 30% PR, 20%
consultancy/rights negotiation, 20% integration, 30% event
management. Clients include Bacardi-Martini, T-Mobile. Member ESA.
141 Sport & Entertainment*
Founded 1996. Subsidiary WPP. Managing director David Farrow. No
work breakdown given. Clients include AIG, Coral.co.uk. Member ESA.
Founded 2000. Privately owned. Managing director Adam Wylie. 5%
consultancy/rights negotiation, 15% integration, 2% event
management, 78% other. Clients include Bacardi-Martini, Abbey,
11 Four Sports Marketing & Spon'ship
Founded 2005. Privately owned. MD Alun James. 58% PR, 18%
consultancy/rights negotiation, 14% integration, 10% event
management. Clients include Accenture, UBS, Transport for London.
Member ESA. www.fourcommunications.com
Founded 2003. Privately owned. Partners Rupert Pratt, Andy
Muggleton. 10% PR, 40% consultancy/rights negotiation, 25%
integration, 25% event management. Clients include Timberland.
Member ESA. www.generatesponsorship.com
Founded 2004. Privately owned. Managing director Eddie May. 85% PR,
15% event management. Clients include Umbro, UK Online, Scalextric.
Member ESA. www.threepipe.co.uk
THE SARBANES-OXLEY EFFECT
The US Sarbanes-Oxley Act restricts the financial information US-owned
firms can disclose. For affected agencies, we have used the latest
Companies House data, researched by Willott Kingston Smith. However, for
several agencies no data could be sourced, either because there is no
recent Companies House data or because they are part of a bigger group
whose results do not distinguish between sponsorship and other income.
Agencies unable to be included in the table include IMG and Octagon, two
of the biggest sponsorship agencies.
TOP 5 FOR GROWTH
Agency Fee income Fee income % chng
2006(pounds) 2005(pounds) 05-06
1 Four Sports Marketing 675,222 185,663 264
2 Generate 336,963 114,500 194
3 23red 680,000 350,000 94
4 SBI 3,416,735 2,409,871 42
5 M&C Saatchi Sport 1,448,000 1,103,000 31
NOTE: does not include Sarbanes-Oxley-affected agencies
This article was first published on Marketing