Navigating sponsorships in times of uncertainty: Lessons learned from COVID-19
The COVID-19 pandemic has forced sponsored properties (such as sports teams, charities and the Olympics) to make fundamental changes to event and programming plans, which will be felt both in the immediate and in the long-term. Social distancing and health & safety measures have had a significant impact on consumer behaviours and interests, along with pre-pandemic marketing and activation plans, requiring brands to rethink sponsorship strategies in order to maintain relevance and to optimize for what looks to be an uncertain future.
The impact of COVID-19 on sponsorship plans has been varied:
- Suspension and/or cancellation of events are impacting contractual obligations to sponsors.
- The inability for the public to gather in large groups means on-premise assets and activations are no longer feasible.
- With many properties transitioning to digital-only events, web-based assets are the new currency for sponsors.
- Due to the economic climate, small and medium-sized properties will suffer greatly—brands that can provide help to those in need during this time will build equity and win consumers in the long term.
In addition to the impact on live events, consumers have drastically altered their behaviours, habits and attitudes, in multiple areas. It is important that both sponsors and properties are continually keeping an eye on the following areas, in order to continue to provide consumers with content and experiences that will truly break through:
Increased use of digital platforms
- Smartphone usage has increased significantly, specifically across social media apps.
- Social distancing has resulted in a 20% increase in video calls, web browsing, and use of streaming services (Source: Angus Reid COVID-19 Weekly Monitoring of Canadian Perceptions & Behaviour – Wave 2, March 24, 2020)
Constant demand for additional at-home content
- IMI research shows that 95% of consumers say they’re spending more time consuming in-home media.
- Three quarters of consumers are interested in participating in live streams of postponed events.
In the short-term, there are three general scenarios that properties and brands are facing as both continue to explore what is possible with sponsorship and activation.
Situation. The property is proposing an adjustment to their event or programming (eg. shift to digital), due to inability to deliver as planned.
Recommended response. Work with the property to ensure sponsorship value is maintained by altering and optimizing assets.
Situation. The event or program has been cancelled and will not occur in any capacity, rendering ability to generate ROI impossible.
Recommended response. Assess ability to recoup sponsorship fees in a manner that is understanding and empathetic to the property’s needs, or explore a contract amendment to account for lost value and/or defer assets to a future contract year.
Situation. The property has moved the event or programming to a later date (within or outside this calendar and/or fiscal year).
Response. Determine if the new timing aligns to strategic objectives of the partnership; assess financial impact based on fiscal year timing; begin renewed activation plans with brand and property objectives in mind.
Taking the above into consideration, there have been innumerable lessons that we’ve all learned as a result of this pandemic – as a society, as a country and as an industry. Below are just a few key takeaways to help guide planning and strategy moving forward as we continue to navigate these unprecedented and challenging times:
- Be creative and open to evolving your offerings. While the pandemic has presented significant obstacles, every one of those obstacles can also present new opportunities.
- Be transparent and over-communicate with your partners. The foundation of building partnership is found in true honesty and transparency.
- Be proactive with offering solutions. Provide activation recommendations that align with sponsors’ objectives.
- If deals are re-structured/contract amendments negotiated, avoid ambiguity and ensure accountability (report back on metrics).
- Stay relevant with your fan base and evolve along with consumer expectations.
- Leverage the assets available to you (eg. athletes, influencers, digital content, etc.).
- Be authentic. This of course applies outside of a pandemic as well, but authenticity is more important now than ever before.
- Say something meaningful (or nothing at all).
- Be transparent and over-communicate with your property partners. As above, the foundation of building partnership is found in true honesty and transparency (from both sides).
- Scenario Plan, Scenario Plan, Scenario Plan…our environment is no longer changing year-to-year, quarter-to-quarter or even month-to-month. We are in a state of constant change and rigorous scenario planning is necessary to future success.
- Show up for your partners and your consumers. Continue to invest and activate to make an impact.
- Right-size expectations and revisit KPIs if you decide to scale back investments and activation plans.
- Protect your investments and ensure the necessary clauses (force majeure, etc.) are included if and when you negotiate contract amendments and/or new agreements with property partners and vendors.
Consumer insights (for all of us!)
- Consumers are empathetic towards properties and the actions they’ve taken to deal with COVID-19.
- Consumer engagement with and passion for properties remains strong.
- Canadians want to see sponsors involved in sport and live events through meaningful and supportive activations or programs.
- There is pent up demand for live sports and events and future intention to attend live events continues to grow.
Kelly Cranston is the Director, Sponsorship Marketing at Visa Canada and Mark Thomas is the Director, Brand Marketing at RBC. Both are members of the Sponsorship Advisory Group, a joint initiative between the Canadian Marketing Association and the Sponsorship Marketing Council of Canada.
By Kelly Cranston and Mark Thomas