May 03, 2011 at 03:47 PM
written by Michael Munson

The Long Tail of Sponsorship is Coming

If I demanded the Earth was round today, you would say “duh!” There was a time however, that this notion would have made people question my intelligence. It was also once accepted to think sneezing was the act of ridding your body of an evil spirit. The fact we will still today say, “bless you” after one sneezes is just a vestige of a long since unproven myth. It is now pretty widely accepted that sneezing is caused from an irritation of our nasal hairs, not us trying to rid our bodies of unwanted evil, unless of course you consider a dust particle evil.

The point is paradigms change as our knowledge evolves. Just as at one time it was acceptable to believe Earth was flat, so to do I believe a time will arrive that it used to be the accepted truth that properties with great media reach offer more value than sponsorship properties without significant media reach. To me in fact, that time has already arrived. An evolution is underway that is going to change the way the sponsorship marketplace functions. As with any other burgeoning trend, those that are ready for this change to occur first will capitalize on it the most.

This week’s Ahead of the Curve interview with Marty Teller of the Trenton Thunder is a great example of someone ready for this change and why it is only a matter of time before a giant sea change in the way sponsorship dollars are spent, and for that matter, how sponsorship programming is executed, is upon us. The notion that the best way to execute sponsorship was to by the NFL shield or the Olympic rings, a bunch of ad media, run a contest, and fork over tens of millions of dollars for the privilege, is going to be laughed at by future generations of marketers in much the same way we now scoff at those that questioned Magellan, Aristotle, Pythagoras, etc. for believing the Earth was round.

I’ll say it now, those NFL and NBA players and their team owners had better get used to doing more with less, because as I mentioned in my post last week, the real value is the consumer, not the players and the teams. Guys like Marty Teller understand this. If properties like his (there are thousands) can deliver better results on a dollar per dollar basis than his media heavy brethren (because they can make greater impacts in local communities), it is simply a matter of time before the mentality switches in corporate marketing operations from “bigger is better” to “better is better.” I mean if you can increase your margins by 10% with more, locally based and activated sponsorships over what you can with national based and locally activated sponsorships… do I even need to finish the thought?

No, activating more deals isn’t going to be easy, but it is going to produce results. I know large numbers of people don’t like to work hard or do difficult things, but when the CFO knows you can take $10 million of the $20 million you are dumping into one NASCAR deal, and increase sales by 10% if you put it into 100 small deals instead…well, you can figure it out how things are going to change.

What we are going to see is the market moving to equilibrium between the large, media rich properties and the smaller, more personally and contextually relevant ones to people, especially where they live. The NFL isn’t going away, not by a long shot. As the market is educated and technology facilitates more market efficiency though, it and other “Tier One” properties will be reduced as more local and frankly, more affordable properties like the Trenton Thunder make their cases for their value. I just ran this by a veteran major league team executive, and he agreed. It just makes too much sense not to happen.

In the end, sponsors will switch the course they have been on for a decade and create larger sponsorship property portfolios. They will engage in more, smaller deals as a long tail dynamic is created in the sponsorship market; more revenue will be generated from more, smaller deals than fewer large ones.

In order for this to become a reality, more sponsorship-educated brand marketers will be needed. My guess would be many of these brand marketing sponsorship jobs will be filled by people who are now on the sales side, because there simply aren’t that many people in business schools or that are in corporate marketing jobs that really understand how sponsorship works and how to maximize the value it can create. The people selling it for their livelihoods are developing skills and knowledge that are making them quite valuable to the evolving marketplace.

The paradigm may not completely flip from sponsorship being sell-driven to buy-driven and there may not ultimately be more brand marketers soliciting sponsorship properties than sales people soliciting brand marketers. But it will definitely even out as more brands realize they need to do more locally relevant deals. Will we one day scoff at the notion brand marketers once hid from sponsorship sales people? Only time will tell.

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