Emily Rogers, senior vice president of Chicago-based IEG Advisory Services & Research, would like to see associations rethink the way they approach sponsorship opportunities by offering integrated sponsorships.spoke with her recently to find out how an integrated sponsorship overhaul can result in big increases in revenue.
AM: Just how big is the sponsorship pie in North America?
Rogers: Sponsorship spending in North America is expected to reach $16.78 billion in 2008, according to the IEG Sponsorship Report, which tracks, analyzes, and forecasts sponsorship spending. Since 2002, sponsorship spending overall in North America has increased 72 percent.
In terms of where the money goes, this year we’re projecting about 69 percent will go to sports, which is no surprise. We expect that associations will see 3 percent of that overall spending this year, or $482 million, a 4.6 percent increase over last year. That’s pretty healthy.
Since 2002, spending on associations has increased 85 percent, so it’s actually outpaced overall industry spending.
AM: To what do you attribute this growth in association sponsorship spending?
Rogers: While many associations are still selling one-off events and sponsorships of program books and lanyards, as they’ve always done, some are getting much more savvy in how they’re packaging their opportunities and understanding the value they bring to these sponsors. Many associations are leaving money on the table and selling packages for less than they’re actually worth in terms of fair market value.
The traditional gold, silver, and bronze programs give sponsors some visibility, and theyalso help the association to underwrite expenses, because when they sell the lanyards or coffee cups or napkins or whatever, they’re basing those on what it costs the association to provide those items to members. Flip that model on its head and look at the association more holistically and strategically, Think about the many ways sponsors can access members through live events and trade shows, and leadership within the association in the industry, and all the communication vehicles an association has, from its Web site to its magazine to its newsletters. Then think about all of the assets that an association has and look at opportunities for the company to become engaged on a higher level, then you’re automatically driving more value.
We find that associations that go down this more holistic path, while also still selling the smaller things so the smaller companies still have ways to get involved, find that their revenue skyrockets. It’s not about paying for things anymore; it’s about increasing non-dues revenues and having more money for mission-driven programs for the association--and getting the sponsors aligned with the mission of the association.
AM: Do you have any examples of how associations are using this sponsorship model successfully?
Rogers: We did a program with the Golf Course Superintendents Association of America in 2006 that resulted in a six-figure increase in revenue. They already had a pretty healthy sponsorship program, selling lots of inventory in their publication and making a good amount of revenue in their exhibit sales with their shows throughout the year. But they needed a strategy to find ways to upsell existing partners and motivate them to spend more money, because in the golf course industry there’s a narrow field of sponsors to approach. They decided to go with the platinum-, gold-, and silver-level sponsorships, which somewhat goes against what we recommend, but they spun the idea a bit.
In the association world, the various departments are very siloed. You have your events group, your advertising group, and your exhibits group, all trying to generate dollars and all going to the same companies over and over and getting relatively small amounts of revenue for their particular program.
GCSA got all their departments together at a table to talk about how to work more collaboratively, They talked about an awards programs for companies that spent a lot collectively in order to make it easier for sponsors to buy all this at one time. They discussed how to identify ways to more strategically service the companies that were spending a lot of money with them and offer benefits that would get them up to the platinum level.
It’s been really successful. In 2007, they already were seeing a $200,000 increase in revenue. By the end of 2007, they were expecting to see a $300,000 increase. This year they’re expecting to see a $1 million increase in spending, mainly from existing sponsors, just by being much more strategic in how they’re bundling their opportunities.
AM: We’ve heard that some meeting industry associations have had success using this model. Would you explain how you worked with them?
Rogers: We worked with ASAE and The Center for Association Leadership several years ago. ASAE had over 200 sponsors, most of which were very low-level, $5,000 to $10,000 or less. We created a strategy that had two levels of year-round partnerships, then a level where we bundled several of their premier events over the year. So there were three tiers, one that was the very high-level premier year-round, a second-tier year-round, then a bundled event package.
The premium assets were year-round alliance, positioning, and recognition through all the communication vehicles. We also tied companies to what we like to call proprietary platforms, which for ASAE included leadership groups where sponsors can have access to C-level association managers. ASAE has been very strategic about carving out these proprietary platforms. Other platforms would be diversity, hospitality, and meetings and conventions. This gives their year-round partners a chance to be aligned with the organization’s big picture year-round, but also to get in front of the audiences that they really need to speak with and have one-on-one dialogues with through the proprietary platforms.
Within a year, they shifted from all these little deals into 17 high-level year-round partnerships. These partners were paying between $50,000 and $350,000, and they were generating more than $2 million in revenue. They had reduced the number of sponsors by 85 percent and increased revenues more than 100 percent. That was all within a year. By the end of 2007, they had 21 partners and revenues of over $3 million a year.
ASAE’s big concern was what to do with all these 200 little guys who are spending small amounts of money but who were still important to the organization. So came up with value-added advertising, exhibit, or hospitality opportunities for companies that wanted to spend that $5,000 to $15,000. But we reserved all the really valuable opportunities for the packages for companies willing to spend $50,000-plus. (Click here for information on how the Professional Convention Management Association revamped its sponsorship packages and ramped up its revenues.)
We developed a similar program for the American Dietetic Association. Because they’re a health-related organization,they have lots of programs, but they had been selling programs piecemeal, without a lot of structure behind the packages or the pricing. We developed two year-round sponsorship packages for thatcould be tied to a specific health-related program within the association.
Within one year, they saw a 24 percent increase in sponsorship revenue. In 2007, they were on track to double their revenue. That was within two years!
AM: What are the biggest challenges in implementing this type of sponsorship approach?
Rogers: The biggest challenges are breaking down the silos and getting everyone in the organization to understand how much more valuable the association is as a whole than it is in bits and pieces. We also do training and executive briefing, because once we’ve delivered the findings and recommendations, our clients must have the training and executive-level buy-in to make it work throughout the organization. Unfortunately, not all of our clients are successful, and the ones that aren’t typically are the ones thathaven’t gotten executive-level buy-in, haven’t identified a really high-level stakeholder who will make sure the initiative happens, and haven’t created this organizationwide partnership culture, where everyone in the association understands why they’re going down this path, and why it will benefit the organization, the sponsor, and the members.
There will be a lot of [defending fiefdoms] going on if you don’t have exec-level buy-in and a high-level champion. The other key is getting your staff in place. We often recommend that they bring in a new person to sell these high-level integrated packages, because it requires a different skill set. Existing staff can still sell the ads and exhibit space and all that stuff. And also, from a staffing perspective, it’s important to remember that because these are more integrated relationships and they’re year-round, they’re going to take more time to keep these sponsors happy.
Another challenge is to get the organization to understand the goals and objectives of corporate partners--what are they trying to get out of this, and how can they build packages and opportunities that will be meaningful to corporations from a business andperspective.
While the ADA is a nonprofit, they had to take themselves out of that nonprofit mind-set and into a marketing and business mind-set to be able to communicate the value they can bring to a corporate partner and how they can deliver a return on investment to the partner.
AM: What should associations know about working more effectively with their corporate partners?
Rogers: It’s important to have a conversation with the corporate partner so the association can understand what audience they are trying to reach. Is it seniors? Is it teens? Is it a group that has certain financial assets? It’s also important to identify what products and services they want to promote and how they want to promote them to your audience. It’s important to understand how important visibility is to them versus building alliances and loyalty with the organization. How important is corporate social responsibility versus driving people to a retail location to buy their products? It can be a wide range of objectives that any particular corporate partner can have. It’s a matter of having those conversations and really probing to find ways to build a package that’s going to meet those objectives.