The Sponsorship Dilemma: Who do you really want to associate with?

There’s been a dual dilemma facing marketers in the sports sponsorship area over the past decade. Brands have become wary of sports stars, clubs or leagues who’ve found themselves in controversy — whether that be failed drug tests, drink driving, polarising points of view, betting and salary cap scandals, or other on-field or off-field issues.

Conversely, some sports stars, clubs or leagues have become more wary of the brands and companies they associate with, as increased scrutiny abounds over those companies’ corporate social responsibility efforts, or the categories they operate in become less socially acceptable.

For brands sponsoring sporting entities, the positive is that sponsorships can quickly drive brand awareness of new or little-known products and services — Etihad Stadium and Qudos Bank Arena, to name two. They can also work well from a brand-fit point of view: IGA Supermarkets’ many local community sponsorships, for example; or to drive sales, KFC’s long-running integrated sponsorship of cricket.

On the other hand, sponsorships have created reputational issues for some brands. The Transport Accident Commission’s deals with the Collingwood and Richmond football clubs in the mid to late 2000s were terminated after players were charged with drink driving, and Magellan ended its sponsorship with Cricket Australia over the ball-tampering scandal.

Similarly, many brands associated with Tiger Woods decided to end their partnerships with him following his scandal-plagued years in 2009 and 2010. Yet Nike stuck with him. And still does. “It doesn’t matter how many people hate your brand as long as enough people love it,” Nike founder Phil Knight said last year. While he was talking about Nike’s polarising 2018 campaign with NFL player Colin Kaepernick, it could just as easily have been about Woods a decade earlier.

And this is the dilemma for marketers considering sponsoring people, events or organisations. What is the risk of populism swinging the brand association from positive to negative? From more people loving it, to more people not?

A recent study by Australian company True North Research into sports sponsorships and the fans’ emotional connections to them looked at these dilemmas. It showed that the Victorian Responsible Gambling Foundation and Alcohol Think Again campaigns have strong positive outcomes among those aware of the sponsorships; 58 per cent of those who were aware of their sponsorship of AFL teams had a positive reaction to the brand. Yet those aware of Lottoland’s sponsorship of Manly in the NRL had significantly fewer positive reactions.

Likewise, for alcohol. With Think Again’s sponsorship of the West Coast Fever netball team, 63 per cent of those aware of the campaign had a positive reaction. However, for beer brands Carlton, XXXX and Tooheys, the average positive reaction scores to these sponsorships sits at just 25 per cent.

On the other side of the fence, for those seeking sponsorship money, the dilemma can often be ethical as well. Given these findings, does a sporting team take $750,000 of sponsorship from a beer brand, or is it better to agree to a lower amount of $500,000 from a body promoting responsible drinking? Or go with the beer brand but ask it to dedicate half of its sponsorship to responsible drinking initiatives?

Similarly, does an e-sports team with a strong base of millennial and Gen Z fans, who care greatly about sustainability and animal welfare, take sponsorship money from a blue-chip brand that’s under scrutiny for its poor environmental and sustainability record? Marketers need to weigh up these ethical dilemmas, analysing the reputational risk of such a sponsorship versus the financial opportunity.

The positive news for marketers in the sports sponsorship space is that they have as much information at their fingertips as their consumers do, to weigh up these dilemmas and make appropriate decisions. The trick going forward is to be aware that social sentiment can swing quickly, and to have thought through the risks and scenarios. There is no doubt the right sponsorships are still an effective marketing channel for certain brands. Marketers just need to be ready for the ever-increasing scrutiny of today’s media and consumers, who have higher and higher expectations of people, brands, companies and sporting organisations doing the right thing.

First Published in The Australian

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