MEDIA & MARKETING:The challenge facing firms is to come out of the recession with a brand people still desire
DESPITE ITS plans to let go 750 employees at First Active, and after signalling that it will shortly announce the largest loss in British history, for Royal Bank of Scotland (RBS) it’s business as usual on the sponsorship front.
The banking group has pledged €21 million to extend its sponsorship of the Six Nations rugby championship until 2013. The deal means that British taxpayers, who own 70 per cent of the troubled banking group, are now effectively subsidising professional rugby.
“The RBS Six Nations sponsorship has been selected to meet very specific business objectives within the six competing nations,” said the bank.
The RBS commitment illustrates that, even in tough times, sponsorship remains high up the agenda for marketing directors. In fact, Dublin consultants Onside Sponsorship claims that sponsorship spend in Ireland will increase by 3 per cent this year to an estimated €134 million.
John Trainor, managing director of Onside, said: “Major global brands like Coca-Cola, McDonald’s and RBS have recently made public their strategic intent to continue to use sponsorship to demonstrate their commitment and strength to their consumers in these uncertain times.”
However, not all marketing directors are convinced that sponsorship activity will escape the chop when marketing budgets are being reviewed.
Car brand Kia, which used to sponsor the X Factor on TV3, has no commercial sponsorships in Ireland, according to head of marketing and public relations Aidan Doyle. “Advertising spend is more flexible. If I book a big TV campaign, I can always pull it if I have to. But I can’t pull out of a sponsorship contract. Marketing people want to have flexibility with how they spend their money in 2009.”
In Onside’s poll of 50 sponsors and rights holders across the Irish market, O2’s sponsorship of the renamed Point concert venue in Dublin was rated by industry peers as the best sponsorship of 2008.
One man who would agree with that finding is John Hayes, deputy director of Audi Ireland. The German car marque is a founding partner of the The O2, in a deal that means the VIP members area is now called the Audi Club.
The O2 association is one of many such deals that Audi engages in. The car company also partners with the Irish Open golf tournament, racing at the Curragh, the National Concert Hall and events such as Style in the City and Top Gear Live.
The strategy appears to be paying dividends for the company. As new car sales declined by 19 per cent through 2008, Audi limited its slippage to 4 per cent.
But in a crunch, which gets cut back first, advertising or sponsorship? “In challenging times savings can and need to be made in both areas. However, natural supply and demand factors lead to better terms, additional discounts and attractive package offers,” says Hayes.
Bigger car brands like Ford focus on pan-European or even global sponsorships. Ford Ireland uses the marque’s association with the Champions League to source match tickets for consumer promotions, while marketing director Joanne Sheehan believes that product placement of Ford models in two recent James Bond movies also helped drive sales on Irish forecourts.
According to Sheehan: “In tough times, the temptation is to stack them high and sell them cheap. But the challenge is to come out of the recession with a brand that people still desire. This is why the Champions League and film associations are very important . . . alongside tactical advertising.”
Land Rover doesn’t have Ford’s resources and has to pick its sponsorships carefully. To reach its target market, the brand has a presence at the Dublin Horse Show and Punchestown Festival, as well as partnering with Goffs Bloodstock Sales.
New for 2009 is sponsorship of TG4’s reality TV show Feirm Factor. The premise of the show is that 12 young farmers compete in a series of farming-related tasks and other challenges to win a Land Rover Discovery.
“Now more than ever, it’s about being smart with the marketing budget and prioritising,” according to Damian Hughes, Land Rover Ireland’s marketing manager.
Renault Ireland is undergoing a strategic review of its sponsorship policy. A few years ago, the brand threw millions at sponsoring the Late Late Show but recently its activity has been more low key.
Meanwhile, Volvo has just one sponsorship on the go at present – the Volvo Dún Laoghaire Regatta. “With only sponsorship in place, advertising has had to take any initial cuts at Volvo Ireland,” says Adrian Yeates, sales and marketing manager.
siobhan@businessplus.ie
