Working Together: Successful Ideas to Create Cross-Promotional Opportunities Among Existing Sponsors
Wed, 12/01/2004 - 09:19 — Dan Migala
Designing multi-dimensional sponsorships that benefit more than one sponsor and a property are becoming more common deal structures as properties look to exploit revenue potential and sponsors face increased pressure to maximize their return on investment.
The aim of this Report is to use a new relationship among Arlington Park horse racing track and three corporate partners as a guideline for how to create similar relationships in your organization.
The concept initially started when Anheuser-Busch contacted Arlington Park to expand its current involvement with the facility by stressing the need to have ownership of a specific piece of inventory. Arlington Park executives initially developed an opportunity to feature live music during Saturday races but in order to activate the event, Anheuser-Busch required the facility to tie in a retail partner to help give the promotion the proper marketing support.
Arlington Park Manager of Corporate Sponsorship Rich McGill contacted Jewel-Osco, the Chicago-based grocery retailer operated by Albertsons, Inc., to determine what elements they required to sign on to the promotion.
“The juggling act is a necessary step to secure deals with more than one sponsor,” McGill said. “It much more of a balancing act than a traditional one-off sponsor but the dividends are that much greater for everyone involved.”
Jewel-Osco Director of Advertising Jay Kramer said he embraced the program for two primary reasons. First, Arlington Park had a general idea of how the promotion would work and they discussed it with Jewel in the early stages to get what he called “enthusiastic buy-in.” Secondly, McGill and his staff communicated and followed-up during every step of the planning.
Kramer said retailers generally have two primary expectations for every multi-faceted property relationship.
“It has to be easy for customers to understand and participate and it has to create extra sales,” Kramer said. “No one has time to run a promotion that just makes people feel good. We need sales building events.”
The need to generate business was the primary reason Arlington Park was able to secure a third partner: Vienna Sausage Manufacturing Co., whose Vienna Beef hot dogs are already sold at the facility.
Vienna Vice President of Marketing Tom McGlade said that under normal circumstances the Chicago-based company would not be interested in a sports sponsorship but because of the value potential of a multiple partner relationship, the company took a more serious look at it.
“What the sponsorship sellers need to understand is that a multiple partner offering shows me that they are not just looking for dollars but really trying to help us sell more food,” McGlade said. “The world is changing and we’re still looking at sponsorships as a way to generate profit and not just branding. Properties need to not only understand this but react to and programs like these are a great way of doing just that.”
McGlade said that tighter budgets have forced the company to walk away from a number of sponsorships that netted only single-digit growth percentages and in some cases a loss.
For example, according to McGlade the company was recently pitched a traditional sponsorship package for a $200,000 rights fee for the sausage category to a facility that annually sells $200,000 worth of hot dogs.
“The property doesn’t understand that in this scenario we only make a $40,000 profit and are losing money,” McGlade said. “We just can’t do deals like that and the properties that understand this will have the business to show for it.”
This story was originally published on Sep 1, 2004.
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