For the privilege of bandying corporate logos about the Olympics in Beijing, the 12 main sponsors paid a total of $866m (€556m) for a four-year deal, $200m more than for the previous four-year sponsorship package. According to consultancy IEG, companies will spend more than $43 billion globally on sponsorships this year, up nearly 15% since 2007. More than two-thirds of the spending will be devoted to sports.
Such large sums undoubtedly make finance chiefs nervous, especially as determining a return on investment can be tricky. But marketing experts say that sports sponsorships can be more targeted than traditional advertising and, with a limited number of sponsorship slots per event, they’re also more exclusive. Another attraction is the emotional connection that people have with particular sporting events.
Amid the gloom that pervades the financial services sector, a sponsorship deal has been a welcome bright spot for Dutch bank, ING. The Renault Formula One team may not have been on the winners’ podium for a while, but ING claims that it is seeing a positive impact from its three-year sponsorship deal, worth between €150m and €300m.
Isabelle Conner, ING’s head of marketing, describes how, when the bank decided to back the Renault team two years ago, “our main mission was to become a household name.” F1 is watched on television by 850m fans in 185 countries, so emblazoning logos across Renault’s cars and drivers managed to get the bank’s name into living rooms around the world.
But more important, Connor says ING has picked up new business through “activation” of its F1 association. In its Postbank division, a F1-related direct-mail campaign led to 14,000 new accounts in two weeks, three times more than a traditional campaign in the year. In Belgium, 15,000 new customers opened an F1 credit card account and in Spain, 118,000 customers participated in a Grand Prix ticket draw, which required that they deposit €500 or more into their accounts.
Connor says the bank is not ready to provide an overall ROI, “but we’re expecting it to be an outstanding number.” If true, that would mean more to CFOs than any of the posh corporate boxes, souvenirs and other perks that come with sponsoring sporting events.