When describing the 2009 recession, my long-time mentor, Paul Pfanner, once called the period “times of crackling instability.” After navigating the COVID-19 sponsorship storm into an economic rebound, I feel the crackling again with an almost inevitable global recession.
With many companies rebounding from economic damage, now is not the time to pull back. The key is to move forward with courage and a clear vision while not overextending or taking unnecessary risks.
If clouds turn into storms, we have some advice to share with friends and clients.
- If you don’t have a robust measurement program, now is the time to establish one. When programs face challenges in tough times, you need to answer your CFO’s question, “What did this sponsorship buy us?”.
- It may be tempting to accept easy money. In today’s market, deals involving crypto, CBD (Cannibidiol), gaming, and other newer categories dominate headlines. However, as we’re already seeing with an economic downturn in crypto, new or untested categories are the most unstable in times of instability.
- Now is the time to consolidate your list of case studies. Build a portfolio of proof that past sponsors have enjoyed success with you in the past. When it’s harder to sell deals (like during a recession), these case studies go a long way in helping buyers feel there’s less risk involved in your arrangement.
- When the economy is more challenging, brands need to market harder, not less. However, do shorter-term deals offering flexibility, even if the rights fee is a bit higher than longer-term deals.
- We recommend the opposite for properties. When sponsors look for expiring deals to shed, you want a longer-term agreement to help you ride out tough economic times.
- With your existing marketing budget, experiment with sponsorship marketing technology that may offer substantial ROI in the future. Think about projects involving NFTs, the metaverse (including virtual reality, augmented reality, artificial intelligence, and new social media strategies. Your success (or lack of success) will guide you better when budgets are tighter down the road.
- If you don’t have your tech house in order, use this time to get ready. Ensure that your customer relationship management systems and audience profiles are up-to-date and impactful. Your ability to tie sponsors to your audience grows in importance when sponsorship dollars are scarce.
Whether we’re ready or not, the sponsorship market will reflect the economy in both good times and bad. However, if the recent Pandemic offers us any insights into the future, we know that creativity and courage fuel success for those that are prepared.