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Why Absa and BMW pulled out of sponsoring the Springboks

by Chris Moerdyk
December 3, 2015
in Advertising
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Why Absa and BMW pulled out of sponsoring the Springboks
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More than a century ago, a cynical fellow called John Wanamaker bemoaned the fact that while he knew half the money he spent on advertising was wasted, he couldn’t work out which half.

One wonders what facetious remark he would have made about the hundreds of millions of rands companies such as Absa and BMW have spent on sponsoring the Springbok rugby team?

Probably something like, “… sponsorship is nothing more than an outrageously expensive way for corporate executives to goof off at the game and call it work”.

And to a certain extent he would have hit the nail right on the head, although Absa and BMW would never admit to this. Both companies have given reasons for pulling their sponsorships and the explanations were reasonably plausible and diplomatic. It has to be said, though, that neither owed anyone any explanation. It’s their money and they can do what they like with it. So, why did they withdraw and for that matter why did Standard Bank withdraw their massive sponsorship of SA cricket a few years ago?

My personal opinion is that if anyone at Absa or BMW did the maths, they would have found that the return on investment for these sponsorships was actually appalling.

The thing is, sponsorship is both difficult and expensive to quantify.

But there are companies that get it right. Unfortunately, there are a lot more who get it wrong and end up spending millions that would most likely have earned them a far better return on their investment if they had chosen instead to buy fleets of un-oadworthy pirate combi taxis with armed AWB members in full uniform as their drivers.

Those who get it right look at event sponsorship as part of an overall and on-going marketing strategy. They know that it is highly unlikely that just having billboards dotted around the field will do the job.

Wise sponsors will also not be in the least concerned about the fact that pitifully few die-hard football fans are able right now, to remember who all the sponsors were for the most recent Soccer World Cup.

Because the point of sponsorship is not about anyone remembering who sponsored the Olympics or even last night’s episode of Isidingo. Or just having a logo on a TV screen or slogan on a player’s shirt.

Sponsorship, they’ll tell you, is about long-term brand recognition and loyalty as well building relationships with customers, suppliers and employees. Sponsorship works only when it is persistent, consistent and leveraged to the point of getting blood out of every possible stone in sight.

And it also only works when enough budget is put aside to use good old-fashioned qualitative and quantitative research, using a big enough sample of the target market to measure attitudes, awareness and perceptions.

Combined with broadcast delivery, peripheral publicity and sales results, research not only provides answers to effectiveness but, if the right tools are put in place from the start, it can also nail down a credible return on investment number.

But only in time. The big picture takes time to emerge. And money and patience.

Interestingly enough, when the now defunct Marketing Federation of Southern Africa published its comprehensive and I might add, first class, guidelines to sponsorship about 20 years ago, it titled the tome an Investors Guide to sponsorship’. With a significant portion dedicated to measurement.

Event sponsorship is now a very serious business. So much so that no country will get past first base in its bid to host the Olympics or a World Cup if they don’t have ambush marketing legislation in place. And then be prepared to apply the law with gusto. As South Africa did with the Cricket World Cup and Soccer World Cup. With lawyers threatening to sue everyone making use of the world cup logos.

But, getting back to the nitty gritty, I am convinced that many of the world’s major sports bodies, such as SARU here in South Africa, have pushed their sponsorship rates far too high. So much so that companies such as Absa and BMW simply cannot justify being involved.

Tags: ABSABMWChris Moerdykcosts of sponsorshipreturn on investmentsponsorshipSpringboks

Chris Moerdyk

Chris Moerdyk is a marketing and media analyst and advisor and former head of strategic planning at BMW SA. He serves on the editorial board of The Media Magazine and is non-executive chairman of Bizcommunity SA and the Catholic Newspaper and Publishing Co Ltd. Chris is a Fellow of the Institute of Marketing Management and a member of the Chief Marketing Officer Council.

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