Sponsorship Leagues

As the World Cup kicked off earlier this month, four years of meticulous preparation swung into action.

And not just for governing body FIFA; for the army of World Cup sponsors, using their hard-won rights to the tournament effectively has never been so vital. Brands such as Coca-Cola, Budweiser, Gillette, MasterCard and Adidas are leveraging their associations across the marketing mix, from TV advertising to sales promotions to online activity. Whatever happens on the pitch, there is no doubt that from a commercial perspective, this is the most sophisticated World Cup to date.

Given the sums being paid for top-end sponsorship deals - upward of ú15m a year for World Cup rights - it has become vital for companies to make their tie-ups deliver. 'Brands' relationship with FIFA is far more business-focused now,' says Rob Mason, managing director of SBI. 'There is a drive to make deals worthwhile from a business perspective.'

For specialist sponsorship agencies, the opportunity to demonstrate their value has never been greater. And with London due to host the Olympics in 2102, sport sponsorships should remain firmly on the agenda. 'The 2012 Olympics has had a major impact on corporate thinking and brand strategies,' says Karen Earl, managing director of Karen Earl Sponsorship. 'Companies will be incorporating Olympic sponsorship into their long-term plans.'

There is certainly no shortage of demand for big sponsorship properties. In April, US insurer AIG paid ú56.5m for a tie-up with Manchester United. It secured the deal after Mansion - one of several gaming firms using sponsorship this year - pulled out of a deal with the team, before going on on to agree a ú34m partnership with Tottenham Hotspur. Vodafone, meanwhile, became sponsor of UEFA's Champions League, switching its spend from United.

The 2012 Olympics have already shown the huge amount of clutter that surrounds the top properties. Although the London Organising Committee of the Olympic Games (LOCOG) is the only body that can sell official rights to the Games, more than 90 organisations have been offering 2012-related packages. The potential for confusion, both for brands and consumers, is clear. Similar problems face World Cup sponsors; with so many non-sponsors running football-related marketing campaigns, it has become harder to exploit official rights.

'The World Cup is everywhere,' says Ben Pincus, chief executive of The Works London. 'As a consumer, I often find myself wondering how official sponsors can get cut-through. You have to ask whether they really need to pay all that money for sponsorship rights.'

It is no surprise, then, that many brands are looking elsewhere for tie-ups that offer more value for money. Mid-tier sports deals have not been subject to the same price inflation as the big properties, providing opportunities for sponsorship-savvy brands willing to invest in an effective activation programme.

Brands are also looking beyond sport. Music has been a growth area in the past few years, as has film, which has a similar target audience to sport, meaning there is now sponsorship activity across the arts and entertainment world.

Orange, for example, sponsors the British Academy Film Awards and the Orange Prize for Fiction through M&C Saatchi Sport and Entertainment. Canon added to its sports tie-ups by investing in fashion sponsorship through The Works London, UBS has used Four Communications to tie up with the London Symphony Orchestra, and Citroen backed a run of La Boheme at the Royal Albert Hall in a deal set up by SBI.

Several agencies are gearing up for more business in this area. M&C Saatchi Sponsorship changed its name to Sport and Entertainment earlier this month to reflect the nature of the broadening of its horizons. 'The same tricks apply in entertainment as in sport, and that's where our next wave of growth will come from,' explains chief executive Steve Martin.

The obstacle that brands face in areas outside sport is that they are not nearly as well set up for sponsorship. In music, for example, it is often much harder to secure access to stars than it is to sportsmen. So it will take time for entertainment and the arts to become as big as the sports market.

One solution that brands have come up with is to create their own properties, rather than sponsor an existing event. There is limited scope to carry out this type of activity in sport - it is only really possible in minor sports or mass- participation activities such as running. But in entertainment, there are plenty of opportunities. Again, music has proved to be a particularly profitable area in this regard; Heineken, for example, has set up a global music platform called Thirst.

Toby Hack, head of OMD Fuse, which brokered 118 118's sponsorship of Lost on Channel 4, says that creating your own property is preferable to linking with an existing event that does not sit well with your brand. 'Too often, sponsorship is about shoe-horning one thing into another,' he says. 'If there is nothing appropriate to sponsor, go out and create something.'

Media sponsorship is also growing, and agencies have been quick to spot an emerging sector and move into it. Businesses such as OMD Fuse, Drum PHD and MEC Sponsorship have been formed to specialise in sponsorship and expand beyond simple media tie-ups into areas such as branded content. Some are also looking at sports and entertainment - a sign that traditional sponsorship agencies cannot rest on their laurels.

Agencies from both backgrounds now sit on the COI's sponsorship roster, whose overhaul was one of the big industry events of the past year. The COI split its roster into partnership marketing and sponsorship in anticipation of greater activity in both areas. It shifted many of the direct agencies on its list into the partnership marketing group, and for the first time brought in sponsorship specialists such as Karen Earl and brandRapport. It is a reflection, says COI head of sponsorship Daphne De Souza, of 'the industry's growing professionalisation'.

Yet there are still those who believe agencies are not professional enough. 'Agencies are hugely complacent. They have failed to keep up with evolving marketing techniques,' says Tom Silk, MD of Velocity UK. 'There are a lot of doers in the market, but not a lot of thinkers.'

There is plenty for agencies to think about. As sponsorship develops from a peripheral marketing to a central part of many brand strategies, expectations of agencies are growing. A growing number of firms want more than simple brand awareness exercises. At the same time, the growth of digital channels means making the most of sponsorships is more complex than ever. Evaluating the value that sponsorship adds continues to be an issue - more so now that the amount being spent is rising.

'Too much sponsorship has previously been based on perimeter boards, shirts and corporate hospitality,' says Alan Pascoe, chairman of Fast Track Sales. 'The challenge is to put forward a business case based on more than media cuttings and airtime. Sponsorship can, and must, work harder for companies.'

TOP SPONSORSHIP AGENCIES 1-16

Agency Fee income Fee income Chng
2005 (ú) 2004 (ú) (%)
1 Fast Track Sales 4,398,481 4,178,363 5
Octagon Marketing* n/a 4,263,000 n/a
2 EdComs 2,703,202 2,945,484 -8
3 The Works London 2,560,360 2,800,549 -9
4 SBI 2,400,000 2,020,000 19
5 brandRapport 2,163,393 2,391,759 -10
6 Karen Earl 1,981,304 1,869,997 6
Sponsorship
7 Redmandarin 1,600,000 1,200,000 33
8 WSM Sport 1,450,000 1,190,000 22
9 M&C Saatchi Sport 1,103,000 804,000 37
and Entertainment
10 Capitalize 1,047,449 887,499 18
Premiere Sponsor- n/a 994,000 n/a
ship Marketing*
11 Velocity Sports 725,387 318,947 127
and Entertainment
12 Double Quick
Marketing 380,000 141,000 170
13 Threepipe 238,000 n/a n/a
Communications
14 Education 222,296 210,528 6
Connections
15 Four Sports Marketing 185,663 n/a n/a
& Sponsorship
16 Generate Sponsorship 144,500 39,275 268


Agency Turnover Turnover Chng
2005 (ú) 2004 (ú) (%)
1 Fast Track Sales 6,086,915 5,426,189 12
Octagon Marketing* n/a n/a n/a
2 EdComs 5,142,460 5,686,491 -10
3 The Works London 10,956,124 9,550,938 15
4 SBI 5,200,000 4,400,000 18
5 brandRapport 5,175,106 5,233,738 -1
6 Karen Earl 4,686,000 4,478,000 5
Sponsorship
7 Redmandarin 1,600,000 1,200,000 33
8 WSM Sport 1,580,000 1,380,000 14
9 M&C Saatchi Sport 1,847,000 1,335,000 38
and Entertainment
10 Capitalize 3,019,363 2,157,043 40
Premiere Sponsor- n/a 1,248,000 n/a
ship Marketing*
11 Velocity Sports 769,296 364,143 111
and Entertainment
12 Double Quick
Marketing 395,000 158,000 150
13 Threepipe 527,000 199,000 165
Communications
14 Education 746,725 938,259 -20
Connections
15 Four Sports Marketing 199,024 n/a n/a
& Sponsorship
16 Generate Sponsorship 287,691 84,190 242


Agency Staff Brands Rights
(%) holders
(%)
1 Fast Track Sales 80 40 60
Octagon Marketing* 32 81 19
2 EdComs 37 100 0
3 The Works London 30 100 0
4 SBI 34 95 5
5 brandRapport 40 96 4
6 Karen Earl 35 100 0
Sponsorship
7 Redmandarin 18 100 0
8 WSM Sport 8 70 30
9 M&C Saatchi Sport 17 100 0
and Entertainment
10 Capitalize 20 85 15
Premiere Sponsor- 9 n/a n/a
ship Marketing*
11 Velocity Sports 7 100 0
and Entertainment
12 Double Quick
Marketing 4 90 10
13 Threepipe 13 100 0
Communications
14 Education 10 100 0
Connections
15 Four Sports Marketing 6 80 20
& Sponsorship
16 Generate Sponsorship 6 70 30


Agency
1 Fast Track Sales
Founded 1998. Subsidiary Quink Music. MD Alan Pascoe. 30% PR, 40%
consultancy/rights negotiation, 10% integration, 20% event
management. Clients include UK Athletics, GlaxoSmithKline. Member
ESA. www.fast-track-events.com

Octagon Marketing*
Founded 1998. Subsidiary Interpublic. Managing director Nick Massey.
10% PR, 45% consultancy/rights negotiation, 15% integration, 30%
event management. Clients include Vodafone, NatWest, Tesco. Member
ESA. www.octagon.com

2 EdComs
Founded 1995. Privately owned. Managing partners Nick Fuller, Martin
Finn. 95% integration, 5% event management. Clients include BP,
E.ON, NSPCC. Member ESA. www.edcoms.co.uk

3 The Works London
Founded 1997. Subsidiary Omnicom. Chief executive Ben Pincus. 10%
PR, 30% consultancy/rights negotiation, 30% integration, 30% event
management. Clients include Heineken, Canon, SAP. Member ESA.
www.theworkslondon.com

4 SBI
Founded 1985. Subsidiary Quintus Group. MD Rob Mason. 15% PR, 15%
consultancy/rights negotiation, 40% integration, 30% event
management. Clients include John Smith's, Robinsons, Telegraph
Group. Member ESA. www.sbi.co.uk

5 brandRapport
Founded 1982. Subsidiary Passhold. Chairman Marcus Robertson. 15%
PR, 16% consultancy/rights negotiation, 69% integration. Clients
include Powergen, Vodafone, UBS. Member ESA. www.brand-rapport.com

6 Karen Earl Sponsorship
Founded 1984. Subsidiary Media Square. Managing director Karen Earl.
25% PR, 25% consultancy/rights negotiation, 25% integration, 25%
event management. Clients include RBS, Diageo, BA. Member ESA.
www.karen-earl.co.uk

7 Redmandarin
Founded 1999. Subsidiary Media Square. Managing director Sally
Hancock. 100% consultancy/rights negotiation. Clients include
Philips, SABMiller, T-Mobile. www.redmandarin.com

8 WSM Sport
Founded 1999. Privately owned. Chairman Andrew White. 1.3% PR, 11.3%
consultancy/rights negotiation, 65.4% integration, 22% event
management. Clients include Brit Group Services, UK Sport. Member
ESA. www.wsmsport.com

9 M&C Saatchi Sport and Entertainment
Founded 1997. Subsidiary M&C Saatchi. MD Steve Martin. 25% PR, 40%
consultancy/rights negotiation, 10% integration, 25% event
management. Clients include Coca-Cola, Orange, Carlsberg.
www.mcsaatchi.com/sportandentertainment

10 Capitalize
Founded 1996. Privately owned. MD Richard Moore. 30% PR, 20%
consultancy/rights negotiation, 20% integration, 30% event
management. Clients include Bacardi-Martini, Yamaha, Hastings
Direct. Member ESA. www.capitalize.co.uk

Premiere Sponsorship Marketing*
Founded 1996. Subsidiary WPP. Chief executive Jim O'Toole. No work
breakdown given. No clients given. Member ESA. www.premiere.co.uk

11 Velocity Sports and Entertainment
Founded 2003. Subsidiary Aegis. Managing director Tom Silk. 40%
consultancy/rights negotiation, 40% integration, 20% event
management. Clients include Visa International, Eli Lilly,
Herbalife. Member ESA. www.teamvelocity.com

12 Double Quick Marketing
Founded 2003. Privately owned. Managing director Rob Quick. 5% PR,
65% consultancy/rights negotiation, 30% event management. Clients
include Artemis, Volvo. Member ESA. www.doublequickmarketing.com

13 Threepipe Communications
Founded 2004. Privately owned. Managing partners Eddie May, Jim
Hawker. 60% PR, 5% consultancy/rights negotiation, 10% integration,
25% event management. Clients include Umbro, UK Online. Member ESA.
www.threepipe.co.uk

14 Education Connections
Founded 2001. Privately owned. Managing director Alex Leask. 5% PR,
10% consultancy/rights negotiation, 85% integration. Clients include
Eon, Royal Navy, COI. www.educationconnections.co.uk

15 Four Sports Marketing & Sponsorship
Founded 2005. Privately owned. Managing director Alun James. 50% PR,
20% consultancy/rights negotiation, 15% integration, 15% event
management. Clients include Sony Ericsson, UBS, Accenture. Member
ESA. www.fourcommunications.com

16 Generate Sponsorship
Founded 2003. Privately owned. Managing partners Andrew Muggleton,
Rupert Pratt. 50% consultancy/rights negotiation, 25% integration,
25% event mngmnt. Clients include Timberland, Drambuie. Member ESA.
www.generatesponsorship.com

* Companies House data provided by Willott Kingston Smith for agencies
affected by the Sarbanes-Oxley Act

THE SARBANES-OXLEY EFFECT

For agencies affected by the US Sarbanes-Oxley Act, which restricts the financial information US-owned companies can disclose, we have used the latest Companies House data available, researched by Willott Kingston Smith. Unfortunately, no data could be found for a number of agencies, either because there were no Companies House figures available or because sponsorship income could not be extracted from group turnover. These include: IMG, Performance Sport & Entertainment, Hill & Knowlton Sports Marketing & Sponsorship, Prism, Carat Sponsorship, Drum PHD, OMD Fuse, MEC Sponsorship and SponsorCom.

TOP 5 FOR GROWTH

Agency Fee income Fee income % chng
2005 (ú) 2004 (ú) 04-05
1 Generate Sponsorship 144,500 39,275 268
2 Double Quick Marketing 380,000 141,000 170
3 Velocity Sports 725,387 318,947 127
and Entertainment
4 M&C Saatchi Sport 1,103,000 804,000 37
and Entertainment
5 Redmandarin 1,600,000 1,200,000 33

Note: does not include Sarbanes-Oxley-affected agencies

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