At a time when marketers obsess over delivering their messages digitally and scrupulously calculate the return on every ad dollar spent, many businesses are pursuing a more low-tech strategy -- hosting really fun parties. North American businesses are expected to spend $16.8 billion sponsoring events in 2008 -- charity galas, athletic contests, concert series, and the like -- according to IEG Sponsorship Report, a trade publication. That's an increase of 12.6 percent over 2007, the biggest jump since 2000. Why the interest? Chalk it up to so-called experiential marketing -- the idea that the best way to deepen the emotional bond between a company and its customers is by creating a memorable experience. "Today, it's all about interacting with brands," says William Chipps, the Sponsorship Report's senior editor.
But sponsoring events is not for the faint of heart. Success can depend on an array of variables, such as weather, catering, the number of seats in a room. There are endless options from which to choose, and prices range widely (see "A Buyer's Guide to Events," below). Industry data are scant when it comes to local and regional sponsorship deals, which means that measuring an event's impact can be tricky.
To get the most out of a sponsorship, decide at the outset what your goal is. If it's brand awareness you're after, select an event that draws a large crowd, ask for ample signage, and make sure you set up some sort of display of your product, preferably with free samples. If you want to drum up sales leads, focus on an event heavy on networking opportunities, and make sure you have a booth where people will gather. If it's prestige you seek, you might serve as a sponsor for an upscale event, such as a sit-down dinner with a prominent keynote speaker -- introduced by you, of course. Whatever you want, there's bound to be an event for you -- as shown by the four examples below.
Getting your product out there
The sponsor: The McCormick Distilling Company of Weston, Missouri, maker of 360 Vodka
The event: Sundance Film Festival, Park City, Utah
The cost: $400,000
When the organizers of Sundance Film Festival approached McCormick about paying for the privilege of being the festival's "official spirit," the company didn't take long to say yes. Like any self-respecting liquor company, McCormick sponsors a slew of cocktail parties. Its new vodka, 360, was promoted at more than 80 such events last year, at a cost of $1.5 million.
Sundance was a good fit, says Vic Morrison, McCormick's vice president of marketing, both for its Hollywood glamour and for its association with environmental issues. That's because 360 is billed as an eco-friendly product. Bottles are made from 85 percent recycled glass, labels are printed on 100 percent recycled paper, and McCormick's plant has all but eliminated its emission of sulfur dioxide. "What we try to do is align ourselves with environmentally friendly projects that also are about a certain lifestyle," says Morrison. "Sundance covered both of those for us."
Festivalgoers ultimately went through 150 cases of 360 Vodka at more than 50 events. The vodka's logo was also displayed all over Park City. Though the sponsorship consumed a fifth of the brand's annual marketing budget, Morrison was willing to take the leap, in part because he liked having 360's name appear alongside those of Sundance's other sponsors -- heavy hitters that included Microsoft, Delta, and Adobe. Morrison was pleased with the results and is in talks to sponsor other film festivals.
Building brand awareness
The sponsor: Kelly Benefit Strategies, a company in Hunt Valley, Maryland, that helps businesses set up employee-benefits programs
The event: BikeJam, a series of cycling races in Baltimore
The cost: $15,000 -- $20,000
John Kelly loves sports and always looks for ways to mix his personal and professional interests. His company spends $200,000 on athletic events, from a few thousand dollars to sponsor the singing of the national anthem at Orioles home games to nearly $20,000 to sponsor BikeJam, a cycling eventin Baltimore.
Kelly, an avid cyclist himself, got his feet wet by sponsoring an amateur team. Then he got involved with BikeJam, a citywide event that draws 10,000 spectators a year. The Kelly Cup, a 40-mile professional cycling race around Baltimore's Patterson Park, is part of BikeJam. From a branding perspective, the benefits of the race are obvious: It aligns the business with the concept of wellness and places it in the company of Toyota and Blue Cross Blue Shield, BikeJam's other sponsors.
Lately, Kelly has expanded his efforts, sponsoring a 13-person pro cycling team that competes nationally in 45 races a year. To coincide with a big race in Chicago last year, Kelly set up meetings with potential customers there. Kelly's team won the race, and the business signed up several new accounts, which covered the cost of the sponsorship many times over. This success has led Kelly to cut back on other marketing efforts. "I'd rather put my money into sponsoring an event than in traditional advertising, especially in new markets," says Kelly. "I don't know why more businesses aren't thinking along these lines."
Garnering sales leads
The sponsor: Tutor.com, a New York City company that creates online educational services
The event: The annual conference of the American Library Association
The cost: $10,000
Each year, George Cigale invests a big chunk of his marketing budget to spend some quality time with 21,000 librarians at the American Library Association's annual conference. From a sales perspective, it's a target-rich environment, because Tutor.com sells online tutoring services to public libraries.
Given the more than 7,000 exhibitors, it can be hard to cut through the clutter. Tutor.com sponsors the event at the same level as Google, LexisNexis, and Target -- which means that, for $10,000, it enjoys plenty of signage and a discounted rate on booth space as part of its package. Tutor.com, which has just over $10 million a year in revenue, spends an extra $50,000 on travel costs for the seven or eight employees who come to the event, as well as to host a breakfast symposium during the week. Last year, more than 300 library directors attended the symposium. Rather than putting on the hard sell, Cigale sets it up so that customers talk with sales prospects about online tutoring. "Too many salespeople at these events fear that they'll lose control of the message," says Cigale. "But giving that control over to our customers has been a huge benefit."
Sponsoring the conference has paid off. A woman Cigale met there in 2001 hired the company to create a pilot program for California's library system. That relationship has helped Tutor.com land projects worth nearly $3 million a year in revenue.
The sponsor: Pods, a company in Clearwater, Florida, that rents containers for moving and storage
The event: A PGA Tour event
The cost: An estimated $5 million to $7 million, according to IEG research
When Mark Calcavecchia won the Pods Championship by just one stroke last year, Pods founder and CEO Pete Warhurst had the honor of presenting him with the championship trophy. That the tournament had an exciting finish was good news for Pods. The company had bet a lot of money on the sponsorship, its first foray into this kind of marketing.
When Warhurst heard that Chrysler had dropped out as the event's title sponsor, he was intrigued. Pods was growing fast but was by no means a household name. Warhurst wanted to change that. The PGA's fan base seemed like a good fit for Pods, which markets some of its services to corporations for executive relocation. "Their demographic matches up perfectly with our customers," says Mike Gavelek, Pods' chief marketing officer.
To capitalize on the exposure the tournament would bring, Pods blanketed the venue, the Innisbrook Resort and Golf Club, with 200 of its 1,500 employees. Workers staffed a booth at the site and served as ushers, directing spectators from hole to hole. The company also arranged to have one of its shipping containers placed rather conspicuously near the 18th green -- the site of Calcavecchia's nail-biting win. And Gavelek struck a deal with the PGA's television production unit to create local TV ads for the event, bearing the Pods name and logo, virtually at cost.
Did the company get a good return? Gavelek thinks so. The PGA Tour event drew 75,000 spectators and was seen by an estimated 4 million viewers on NBC and the Golf Channel. Pods' logo was given ample airtime during the TV broadcast. After the tournament, the company conducted a survey of potential U.S. consumers. The percentage who said they were familiar with Pods more than doubled. "We've never seen an increase like that," says Gavelek.