“The Future Landscape of Sponsorship” Recently Published in IFEA’s i.e. Magazine
Paula Beadle was recently invited to share her insights on The Future Landscape of Sponsorship in an article to be featured in International Festivals & Events Association’s “i.e.: the business of international events” quarterly magazine. The premier association supporting and enabling festivals and events worldwide. To view the full published article, click here.
The festival and events industry is made up of talented, driven, and fiercely dedicated professionals who are not easily rocked by uncertainty and change. These days, it’s easy to become discouraged, but we are growing in different ways, and the challenges we face will make us better when calmer days arrive.
I’m often reminded of a favorite quote from Dolly Parton, “We cannot direct the wind, but we can adjust the sails.” We adjust the sails by controlling our response to the situation – taking full responsibility for our thoughts, behaviors, and actions.
In the wake of the COVID-19 pandemic, the sponsorship industry will have a dramatic transformation… a transformation that is long over-do and that will evolve at an accelerated pace. We will need to do a better job delivering solutions and showing value. Our future sponsorship success will require fearless and unchartered thinking.
Now is the time to collaborate with industry colleagues and sponsors, freely exchanging ideas, sharing experiences, and learning from each other in real-time so we can prepare, and our industry can thrive. Steve Schmader, President and CEO of International Festivals & Events Association’s (IFEA) recently invited me to share my thoughts on “The Future Landscape of Sponsorship” with IFEA members. I enthusiastically welcomed the opportunity. For a PowerPoint from that webinar that will also help guide you through the information below, click here.
I admit my insights are rapidly changing and evolving, based on marketing research, talking with industry leaders around the nation, and my experience working with partners. As a place to start, I have summarized and updated the information I shared with the IFEA audience to spark positive and informed conversations about how your organization will prepare for the future of sponsorship.
We asked the audience to share their thoughts about the most significant changes in sponsorship, revenue projections, and their most valuable strength during the presentation. Here’s what they said:
Predicting the future is challenging in an uncertain and quickly changing environment, but it’s important we take the information available at the moment, play-out various scenarios and take action. It’s not the time to toss out the anchor and wait for calmer and clearer days ahead. Below are my predictions on what the future of sponsorship may look like:
- Sponsorship spending will decline.
Sponsorship spending will decline through 2021. That’s not a news flash. I estimate 25% reduction as the result of companies reducing sponsorship budgets, events lowering or renegotiating smaller sponsorship fees, and the exit of a few traditional sponsors. Although I believe at this point in time, we should expect a 25% reduction in our sponsorship revenue, when developing a sales plan, I would encourage you to plan for an estimated a 50% reduction. By managing your sales efforts for a 50% loss, the right level and focus of activity will be put into action. This approach also encourages a new way of thinking and more collaboration.
- Collaboration and merging of event resources.
I believe similar events will gather together and have one team selling for multiple properties. This is not a new idea; it has just been challenging to organize in the past. These challenging times will force us to think differently and find new solutions that we just didn’t need to in the past.
- New sources of revenue will emerge.
Events are developing more integrated sponsorships that will bring multiple departments together for funding and participation. New departments will seek sponsorship opportunities. For example, HR will look for employee engagement opportunities, and the giving/foundation arm will seek social good programs along with diversity and inclusion initiatives. We will begin to work outside of marketing departments.
- Sponsor expectations are going to change dramatically.
It’s critical to your success to understand the wishes and expectations of brand leaders now and moving forward. A rich, deep understanding will come from asking questions and doing your homework. To help you prepare, I want to share what I believe brands will be seeking from partners:
Sponsors will seek creative ideas.
Sponsors will require unique, innovative ideas to connect with audiences. It may be time to go back to the drawing board and look at your assets through a new lens. Be prepared to think outside the box, while also challenging yourself to see how you can create a truly unique and integrated sponsorship campaign that meet your partner’s objectives.
Sponsors will demand stronger partnerships.
Sponsors will demand stronger partnerships that showcase their brand and extend their current marketing campaigns to align with their brand and audience perfectly. Think about how you and your partners can tell a story to your shared audiences.
Sponsors will assess value differently.
Brands will spend more time and money to determine the value and effectiveness of sponsorship programs. Sponsor budgets will likely diminish if brands do not see or understand the value. We all know this is the #1 challenge in the sponsorship industry. We need to help sponsors access quantifiable value so they can understand the ROI and champion the partnership.
Sponsors will welcome employee engagement opportunities.
Companies will be focusing their attention on rebuilding culture and connecting teams. Opportunities for employees to get involved and rally for a cause or event will be a significant shift as employees begin to find normalcy in their new work culture.
Sponsors will highly value social and digital assets.
The desire and value of digital and social assets will increase in all areas. Brands are interested in how your partnership will enable you to leverage your digital and virtual reach, influence, and engagement as a result of their investment. They are keenly aware and invested in prospective digital and virtual ROI opportunities.
- The intersection of sponsorship and social good will be a defining factor in the changing landscape.
In a post-pandemic world, brands will have to shift their broad advertising strategies to meaningful interactions that genuinely support the communities they serve. If brands are going to form trusted connections with customers, they will have to think locally and adapt their marketing approach in new ways to meet audiences where they are at. Sponsors will seek opportunities to align with events that serve their communities.
- Selling will significantly transform.
The way we sell sponsorships will significantly transform. We have needed to make changes for a long time – now they will happen quickly and out of necessity. You will need to build more valuable partnerships and improve your performance regardless if you are a seasoned pro or a sponsorship newcomer. There has been a longtime servicing gap between brands and properties. We need to close that gap by better understanding our partners’ needs, improving our sales skills, gaining a deeper marketing knowledge, and being true marketing partners by taking the long-term relationship building approach.
There has been a shift in how we typically have conversations with our partners. The days of in-person lunches, boardroom meetings, jumping on a plane, or site walk-throughs are not currently in the cards, and that may not change for the foreseeable future. This may be a tough realization for some to accept, and a welcome change for others, but it’s certainly part of our new reality.
Shift to virtual platforms.
Now is a good time to get comfortable with virtual presentations. Make sure you are camera-ready before and during your meeting. This means not neglecting your meeting preparation but also bringing your best professional self in front of the camera. If you need to improve your camera skills, consider practicing, taking lessons with an on-screen professional, or researching technology best practices.
Sales process improvements will be accelerated.
Although the selling landscape has dramatically shifted in the past few months, the sales process has not changed. You may need to make slight adjustments, but the same principles apply. The gap I talked about between brands and sellers lies in the sales process. The number one concern is the lack of preparation on the part of events.
Pricing models and audience data will drive decisions.
Brands will have a higher level of accountability for sponsorship decisions. Pricing structures will need to be clearly defined and defended. We may be heading down a road of itemized pricing – will we continue to assess the pricing process.
Brands will place a greater emphasis on audience alignment, and events that can provide robust audience data will benefit in the decision-making process. As a sponsorship seller, you will need to make the business case that your event reaches sponsors’ desired audience.
Transparency about how sponsorship funds are allocated.
Brands will seek more transparency into how the sponsorship fees were determined and how the revenue is allocated. For example, if your sponsorship fees fund the organization’s operations on a year-round basis, you need to be prepared to share that allocation in a contract – these are funds that would be retained if the event was canceled. Allocating a price for individual benefits may serve the event well during the negotiation, where in the past, our tendency was to include certain benefits as “value-added”.
Contracts will change.
More contracts will be issued by brands. This change could potentially be to your disadvantage due to legal review costs and the propensity to want to sign contracts quickly.
Below are some key actions I’ve put together to help sponsorship leaders prepare for the shifting landscape.
Focus Your Attention. Turn your focus to 2021 regardless of the current standing of your event. While events have been canceled, postponed, or placed in a holding pattern, many sponsors are planning for 2021 and exploring sponsorship opportunities.
Improve Sales Skills. Regardless if you are a seasoned pro or newcomer, reflect on your experience, identify areas of growth and seek learning opportunities to improve your skills.
Shore-up Systems & Process. Now is the time to undertake that asset inventory you’ve been meaning to tackle. Also explore CRM tools, evaluate your sales process, update sales materials and make a video, revise contract templates, and create activation plans.
Generate New Ideas. Brainstorm new ideas on how to integrate sponsors with social good and employee engagement. A zoom brainstorm session is a great way to involve your colleagues in the process and even better to have a facilitator.
Determine Goals. Plan for sponsorship revenue decline in 2021 and dive deep into marketing and operational trade opportunities.
Conduct Research. Don’t make assumptions about your audience or your sponsors. Gather information to help guide your planning.
Connect & Engage. Gather information from sponsors, colleagues, and your audience. Be prepared by asking thoughtful questions to gain a greater level of understanding.
Realistically, sponsorship marketing will take a step back as it has in past crises. However, sponsorship marketing is effective and efficient and has its place in brand marketing strategies. Sponsorship is the best way to reach people’s hearts and minds, connect to their passions, and will continue to be a smart marketing strategy for brands.
As published in the International Festivals & Events Association’s “i.e.: the business of international events” quarterly magazine. The premier association supporting and enabling festivals and events worldwide. For more information on the IFEA, go to: www.ifea.com.