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Event Sponsorships Connect Companies and Consumers in Ways Traditional Marketing Can’t

By Lisa Floreancig

We live in a 24/7 world. Today we are tuned in, wired up, always reachable to family, friends, employers, and advertisers.

With all the communication, and, well, static, that has enveloped modern-day life, how does an insurance company market its services. Come on. Marketing property/casualty insurance isn’t what most deem “sexy.” It’s not like hawking a Mercedes Benz or a luxurious vacation on some tropical isle.

Event sponsorship is the fastest growing form of marketing in the United States today. And data supports not only its popularity but its overall effectiveness in motivating potential customers to buy.

A new study by the Advertising Research Foundation showed in-person events can boost purchase intent as high as 52 percent among consumers who attended brand-sponsored events, including sporting events, walkathons, and theme parks.

“If you are trying to establish relevancy, an event may be a really good way to do it,” says Bill Cook, senior vice president of research and standards for ARF. “What we found was that knowing about your participation at a consumer event, knowing about the sponsorship of something people felt emotionally connected to, like a cancer walk or run, really makes them feel that you are relevant to them – the same way they felt the walk or run was relevant to them, even if they didn’t participate in the event.”

For more than 90 years, Rhode Island-based Amica Mutual Insurance Company relied solely on word-of-mouth marketing, which worked well until the business environment became more competitive. To counteract the growing competition within the market segment, the company implemented an advertising program in 1998, incorporating event sponsorships into the mix about three years ago.

“We are using a much more integrated approach. In our target markets – we write in all states except Hawaii – we tend to focus on 10 markets at a time, and our campaign includes print, TV, radio, Internet search, and event sponsorship,” says Vincent Burkes, senior assistant vice president. “The reason we incorporated sponsorship is that it can give you that more personal, in-person, local-market presence than the other forms of media.”

Companies build event sponsorship marketing into their business strategy for various reasons, but two in particular stand out: to increase brand awareness and to establish, strengthen, or change brand image. Other reasons include building visibility, demonstrating good corporate citizenship, generating potential business from co-sponsors, and entertaining employees or customers by providing event tickets as part of a sponsorship package.

Cook warns, however, if a company is looking for brand awareness through event sponsorship, two primary goals need to be met. “If you are looking for increased awareness, you will actually have a dual awareness goal. You have to make them aware of your brand and make them aware that you are the sponsor of the event,” he says. Cook also cautions that if counting “eyeballs” is important to the overall marketing goals, most event sponsorships don’t rank up there with advertising in a national magazine or television. “But if there is an increased sense of measuring beyond impressions, sponsorships fill that void,” he explains. “With an event structure, you can have events that reach into a particular sector of a population. Selecting events in those markets where you have agents becomes a win for them and the insurer.”

During the past six years, State Farm Insurance has upped its ante with its marketing strategy through a more robust event marketing platform. For State Farm, sponsorship is a key tool in making its brand more relevant to consumers in memorable ways.

“We know we have to reach consumers in a lot of different ways. We have to touch them both emotionally and rationally. And we have to do it in manners that are fresh and unexpected for our brand,” says Mark Gibson, assistant vice president of advertising and marketing communications for State Farm. “There has been an explosion in this area [event sponsorships].”

According to Chicago-based IEG’s Sponsorship Report, North American companies spent more than $14 billion nationally last year on event sponsorship, an 11.5 percent increase over 2006. This increase, according to IEG, reflects corporate America’s growing interest in sponsorship as a means to build their brands, demonstrate their products, and highlight their local and regional involvement. This year will experience a greater increase in dollars spent with this marketing tool. In 2008, it is projected that North American companies will dole out nearly $17 billion for event sponsorships.

“Marketers understand that there is more consumer control today, therefore, bashing them with your message at your appointed time is not the way to win friends and influence people. It’s very much in response to the perception that consumers desire and, in fact, have more control over what brand message gets to them out of the thousands that are projected at them each day,” says Cook. “If you want to reach them, you have to reach them on their terms. Sponsorship is more about going to where their heads and hearts are rather than where the mass audience is.”

A few years ago, Amica’s Burkes and his colleagues were searching for a sponsorship opportunity to highlight the company’s 100th year in business, and they knew they wanted a Rhode Island event. Finding its way into the selection process was the state’s rich and storied relationship with the U.S. Navy dating back to the mid-1700s. The perfect event? Tall Ships Rhode Island 2007, an international celebration of world-class tall ships, culminating with an extensive maritime festival.

“We wanted to choose a sponsorship that would speak to our employees and also Rhode Islanders and people who would be coming from all over the world,” Burkes says. “Tall Ships was the perfect event because it was so much focused on family. It is majestic. There was a special classic New England grace that we wanted to be a part of. It was a natural for us.”

Bill Glenn, vice president of insights and analytics of Millsport, part of The Marketing Arm, based in Dallas, says corporations sponsor an event to get the affinity a consumer has for a team or event to transfer to the brand. “Teams and events are ‘passion points’ for consumers and fans,” he says. “When the brand reflects the values of the consumers’ passion, they are more willing to engage with that particular brand.”

Before any company considers sponsoring an event, Glenn advises serious thought about overall brand alignment, long-term property value, and long-term ability to activate around the event and drive revenue.

“In selecting an event there are obvious factors such as overall brand strategy, key markets, target demographics, and competitive landscape,” he says. Also, it’s important to evaluate the ability of an event or sports property, such as the NFL, to create distinctiveness for the brand.”

Amica looks for sponsorships that match its demographics or psychographics, typically higher household income, evenly split male/female, educated, driven, committed, value-oriented, 25 years to 55 years of age. Family-oriented “taste” events, such as Taste of Rhode Island, Taste of Boston, and Taste of Atlanta have proven highly successful for the company as they provide an opportunity to create special kid-friendly activities while the parents learn about the insurer. “If, while the kids are doing the activities, mom and dad want to talk about insurance, great,” Burkes says. “If not, we don’t push it, but we try to get some collateral materials in their hands so they remember us after the event when they are thinking about insurance.”

Other events Amica sponsors include the Seattle Marathon, the New England Auto Show, New England Patriots special events, and the Iron Man contests. “The household income for tri-athletes is huge,” says Burkes. “They have to have the money to be able to participate in these events. They are driven, committed, serious-minded people.”

Maximizing the dollars invested in sponsoring an event is as simple as follow up. “It was a head slapper for me to realize that this research pointed very clearly that after the show or event is over,” ARF’s Cook says slowly, “you…continue…to…market. It’s like you sold the suit; now, you have to tell them how great they look in the suit.

Communicating with participants or attendees in rather simple yet important ways allows the company to rekindle the emotional experience of the event.

Of course, as with any business strategy, there will always be challenges and times when you have to be careful for what you wish.

“Our goals through our media and sponsorships were brand awareness, impressions, name recognition, and to be viewed as a big player out there, which is great,” Burkes says. “But the challenge on my side now that we are being viewed as a big player is we are being inundated with sponsorship requests.”

According to Burkes and State Farm’s Gibson, there are many challenges to sponsorship marketing other than selecting an appropriate event and the number of requests received. A company considering this marketing tool must understand the business objective and desired results.

“I think having measurable goals going into a sponsorship is absolutely crucial,” Gibson says. “And stay true to your overall brand strategy. You have to think about what your association with the event says about you and your brand. What are the pros and cons? How will this affect your current policyholders? Will our brand move forward or will it suffer.”

From a philosophical standpoint, State Farm uses sponsorships as another way to touch consumers outside the traditional 30-second advertisement or billboard. “It is a way to bring the State Farm brand to life and do it in a relevant way in an atmosphere that is unexpected and fresh, and in a manner that helps them interact with our brand differently and see State Farm as a company more for them,” Gibson explains.

State Farm uses a variety of different events on the local level, such as concerts for young people, college football tours, professional sporting events such as the NFL and MLB, and health events.

Smaller companies, too, can invest in event sponsorship marketing, but Burkes cautions that these companies should be cognizant of what is considered an “impression.” “It is more of a challenge if you have a limited budget, and it becomes more important to measure the value of the sponsorship,” he says. “Again, it is multiple impressions and multiple quality impressions that cause someone to pick up the phone or buy the product. If your name is on the back of a tee-shirt, no one is going to see it.”

In evaluating the success of the sponsorship, there should be a rate on investment strategy that aligns with the initial objectives of the sponsorship. This can range from measuring actual sales to determining overall change in the key brand attributes and awareness to basic collections such as generated calls and click throughs on a company’s website.

“It’s hard to measure; it’s one of the toughest things that we do,” says Burkes. “We sponsored the Seattle Marathon in November. We track all the calls that come in, and we had a spike in calls in the Seattle market ever since the race. It’s great. Our advertising hasn’t changed; what changed was the sponsorship.”