Jul 29, 2009 at 06:19 PM
written by Michael Munson

Blowing Money on Sponsorships?

Last week’s column topic was about how Wal-Mart and other large retailers are commanding vendor brand marketing budgets in the same proportions those brands sell of their total sales through retailers. Since this action reduces the amount of dollars a brand has influence over spending, it logically follows that brand marketers will have fewer dollars to earmark toward sponsorship marketing initiatives. They will need their partners to make those decisions on their behalf.

After seeing the post, a veteran of Wal-Mart chimed in with an interesting perspective, suggesting Wal-Mart is just being smart. But she also added in her comments that Wal-Mart doesn’t “blow money on sponsorships.” This was an interesting choice of words. Does Wal-Mart really believe sponsorship investments are a waste of money? If so, does Wal-Mart feel there are better and/or proven ways to realize more ROI with marketing dollars than through sponsorships, or does Wal-Mart just plain see them as wastes of money?

Perhaps not surprisingly, Wal-Mart appears to have gotten involved in sponsorship just one time. The retail behemoth sponsors the FLW Bass fishing tour, but that is the extent of its sponsorship involvement, at least on a national level. This is baffling to a degree because sponsorship rights are extremely valuable to retailers. When a retailer sponsors a property and has the sense to acquire pass-thru rights, it can self-liquidate and pass the cost of its rights fee on to its vendors and probably make money off sponsorships. So why would Wal-Mart be so “anti-sponsorship?”

I asked the previous question with a calm curiousness over the weekend, numb to the fact I run across so many people questioning the value of sponsorship or otherwise executing it poorly. Then I read this story in the New York Times about how media companies like Disney are spending untold dollars researching the eye movements, heart rates, sweat glands, and other emotive human body machinery, of people looking at web ads to understand what advertising works. Then, I was apoplectic!

You mean to tell me spending money on sponsorship executions that have the ability to appeal to six senses – site, hearing, touch, taste, smell, and emotion – and drive quantifiable behavior is a waste of money, but measuring where my eyeballs go on a computer screen is a great investment to get more value from advertising? Are you F$^&#@! kidding me?

Isn’t it interesting that on the same day there was a story in the L.A. times about a new iPhone app backed by Silicon Valley VC heavy Kleiner Perkins Caufield & Byers called Booyah! that at it’s core is a sponsorship activation application, not an ad-serving platform. I wonder if guys that funded Amazon and Google know more than Disney about advertising and sponsorship?

The first person that can explain why where my eyes go on a computer screen, and how my heart rate changes while looking at that certain place, is a much better investment than a well-executed sponsorship that turns on the emotions and creates a call to action to drive voluntary behavior, please take a sponsorship marketing course. And stop wasting your company’s or your client’s budget!

I’m not saying advertising is worthless. As a branding and awareness tool nothing beats advertising. But it flat out sucks as a direct response vehicle for brands that are in competitive market spaces and essentially are commodities. I mean you might find a local window installer listening to the radio driving your car. But are you really going to hear the three mobile service ads on the same drive and respond to any of them? Doubtful. What’s in it for you to become a wireless customer? The brand that knows how to push your buttons through sponsorship will be more than likely to get your business, price be damned.

Of course this isn’t easy to find what properties appeal to what consumers. As this page has pointed out on a few occasions (and will continue pointing out), sponsorship information is difficult to come by. Who’s the audience? What do they like? What assets are there to leverage? These are questions no sponsorship initiative can commence without. Maybe Wal-Mart, being number one on the Fortune 500 list, doesn’t need to “do sponsorship” because it really isn’t worth the effort necessary to get results?

A few weeks ago in my interview with ADC Partners, the best example of a sponsorship this consultancy had ever put together involved Wal-Mart and its partner Brita water filters. So maybe Wal-Mart does know how to do sponsorship. It is just smart enough to realize you can’t go it alone and make it work.

Mike can be reached by email at mike@sponsorpitch.com and on Twitter at @mjmunson.