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London 2012 – As Partnership Race Ends A Relationship Marathon Begins …

July 25, 2011

Its Only Just Begun..

LOCOG (the London Organising Committee for the Olympic Games) reports in the FT today that their race to secure £700 million of sponsorship for the 2012 games is nearly complete – with its current roster now including 41 domestic sponsors and 11 tier one partners from the IOC‘s ‘family. With the overall return to the UK economy now projected to be just 0.1% increase – on the back of £9.3 Billion of public sector investment – and in the middle of a deep recession, securing the support of valuable partners is a massive achievement from the LOCOG team led by Paul Deighton. However, as anyone who has managed large sponsorship, partnership and collaborative marketing projects realises – getting the deal signed is not the end –  it’s just the start. As the race to acquire sponsors is nearing its end the relationship and partnership marathon is about to start…

I am sure LOCOG has the best possible marketing, relationship management and PR teams in place and that their contracts and proposals will be as tight as can be. But one thing is sure, managing sponsors and other partners who have paid millions and who need to see a return on their investment – will be a long, hard marathon, that will make the partner acquisition phase appear the easy part. In the current climate marketers will be expected more than ever to show that the investment in sponsorship can provide tangible returns, be it sales, publicity, brand recognition or PR.

Big sports sponsorship can sometimes lead to some tricky situations ...

My experience in large sports sponsorship extends from my time managing Licensing deals for the America’s Cup in the 90’s. It was exciting, fast and dynamic project – that built from being a carefully managed, systematic job – to being a full on race to juggle multiple promotions, reporting, legal briefings, negotiations and sensitive relationships. It was best described by my boss at the time as ‘hanging on to the Tigers tail’. Despite all the management processes put in place, a full on global sports event and the marketing surrounding it seems to gather a momentum and power all of its own – and its difficult to stop once it gets moving. Logistics change, timings alter, campaigns shift in tone and style. Once the various sponsors, official suppliers, media channels, licensees and sub-contractors pick up speed – and realise the window of opportunity is both limited and highly rewarding, the need to balance the rights and priorities of one partner with those of another inevitably emerge. Ah, but that is what the contracts are for – isn’t it? Its simple – they only do what they say they are going to do? Don’t they? Well, yes – and no. The choice of the metaphor ‘family’ to describe a collection of sponsors and partners is apt. They can sometimes get on great and work together collectively but sometimes there will be spats and disputes between them. And of course, ‘you can’t choose your family’. Away from meeting rooms and contracts written six months previously, sports marketing practicalities can become very fluid. Try telling a major global brewery that they cannot build a x-promotion to recoup some of their $20-odd million of investment they’ve made – because their schedule of rights (in the literal sense) – does not include selling certain trinkets. A senior lawyer told me “yes, you’re completely in the right Mr Armour, to challenge our major sponsor, but if you go in and start waving a contract around, you’re going to win the battle and create a much, much bigger and nastier war. Do you really want to do that?”. In the end, you have to reach a compromise and try to creatively build a solution that works for all parties. A big sensitivity when managing a property that includes multiple partners is the balancing and overlapping of rights, permissions, approvals and activities. The role of principal, rights owner or licensor – is not just to secure the deal but to manage the sensitivities. It’s the ‘art of the possible’ rather than what is written in stone. Even the most carefully crafted definitions in agreements and schedules can come unstuck and shaky. In an interview with The Financial Times – Deighton points out that ‘category exclusivity’ is vital to attract London 2012 sponsors who wish to stand out in a crowded market place. Most of the time, this should be clear, but inevitably, despite exhaustive lists of activities and plans – there will emerge a different interpretation and view of how this works and what it looks like. The rise of hijack marketing, social media and complex channels of communication will only make this more sensitive and more complex. However such potential issues need not result in horrific, lawyer infused, revenue threatening firestorms. The key is on-going, two-way, collaborative communication – and in this respect the job of principal changes from one of sales consultant – to relationship manager. A smart tactic for any sponsorship team is to help build cross promotions and communication between partners, rather than just leave them to it and move on to something else. Nobody likes nasty surprises – especially only a few weeks out from the limited window that a sports property has. But good marketers often do like interesting ideas to emerge from a sponsorship – that can perhaps help them achieve their aims better. The secret is flexibility, a willingness to use a bit of ‘marketing judo’  – and keeping the communication lines clear. Sponsors and partners for large events need to invest in understanding the other players and how they may be able to help rather than hinder what they want to do and rights owners need to encourage  a culture of collaboration between partners to help smooth they way for any possible conflicts. After all, for London 2012, securing the sponsorships is just the start…

For more on partnership management and collaborative marketing, see www.benchstone.co.uk

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