This article originally appeared in the Spring issue of Business Ireland
Dean Van Nguyen meets the businessmen behind some of Ireland’s most lucrative sponsorship deals.
Attaching a company name to a magnificent arena or venue has long been common practice overseas. Starting exactly a century ago when the owner of the Fenway Realty Company, John I. Taylor, developed local land into Boston’s now famous baseball stadium Fenway Park, firms have seen the commercial benefits of naming rights and large sponsorship deals. These days millions are invested annually in the US and the UK by some of the world’s most recognisable brands who wish to be associated with major sporting events, concerts and other large scale events that take place within these venues.
While corporate sponsorship has been present in Ireland for quite some time (Eircom’s longstanding association with the Irish national football team, for example), only recently have naming rights to buildings and other structures become prominent. But with many modern architectural projects being recently completed in Dublin, there was a gap in the Irish market for a firm to help large companies form the most effective sponsorship deals possible.
Onside Sponsorship was established in 2005 with a specific purpose to service the sponsorship industry in Ireland. Traditionally a company’s sponsorship decisions had relied on a chairman’s preference, but Onside was formed with a view to helping to make sure that all decision making that goes into sponsorship is based on solid research and scientific business information. The company has already worked on many of the premier sponsorships deals that have happened in Ireland in the past seven or eight years, including representing Aviva in negotiating the naming rights to the Aviva Stadium, working with telecommunications company O2 on their sponsorship of Irish rugby and the O2 music venue and, more recently, they’ve worked with Bord Gais Energy in helping them secure naming rights to the former Grand Canal Theatre.
“Essentially we built a business with a view to helping to make sure that all decision making that goes into sponsorship is robust, rigorous and is grounded in real business information,” says Onside Managing Director and Founder, John Trainor. “We principally work on the sponsor side of the fence, helping [our clients] to do everything from defining sponsorship and helping to decide what areas they should be in. A huge part of what we do is measurement and evaluation around sponsorships so it’s about providing sponsors in particular with information and numbers to make sure the way they approach the sponsorship is sound business practice.”
Onside generally has four or five consultants working on various projects at any given time and currently work with approximately 25 clients, many of whom are premier brands in the Irish market. “If you collectively took all of our clients and put them into one bundle and took the total level of spend they’re investing in the Irish market it would exceed €50 million,” says Trainor. “The industry in totality is in the region of €120m and the clients we represent would probably make up €50m of that total market price, so in our own minds we would be the leading experts on sponsors in the market.”
Rather than just brokering deals, Onside develops entire sponsorship strategies for their clients. According to Trainor, these strategies are very much tailored to the objectives their customers are trying to achieve. “It’s very much dependent on the client, but typically [sponsorship strategies] would ultimately be grounded in their business objectives; what they are ultimately trying to achieve. They’d be defining very clearly upfront who their target consumer is or who their target audience is and then they’ll be helping us understand, within those different segments, what types of outcomes they’re trying to achieve. Some will be trying to maintain their existing customer base and just deepen the level of affinity their customer base has towards their brand. For some other clients, they might be looking for a fast track brand awareness build, so they might be looking to very quickly get from zero to a very high level of brand awareness. For other brands, their objectives are a bit more commercial and they’re looking to ensure that the sponsorship delivers brand equity building outcomes but also commercial benefit as in sales volume and being able to deliver back to the business proven bottom line revenue from the sponsorships.”
While a firm’s intentions can be varied, Trainor has seen a recent shift in what many of Onside’s clients wish to achieve. “Two years ago we found there was a swing towards a commercial sales driving ‘we want a quick sale’ mentality,” he explains, a trend that was no doubt a reaction to the economic slaughter firms were then facing. “Whereas right now, what we’re finding with our clients is that it’s more about maintaining brand affinity and brand image and making sure that’s correct rather than aggressively going after a hard sales objective.”
John Trainor, Founder and Managing Director, Onside Sponsorship (centre) with Bernard Brogan, Dublin GAA All-Star Footballer (left) and Olympian Paul Hession (right) at the Irish Sponsorship Summit 2012.
Building large scale sponsorship strategies is something Kevin Moore of global PR agency Fleishman-Hillard has significant experience in. As the company’s Head of Sports Brand Marketing he’s been involved in some of Irish sport’s most recognisable sponsorships including Ulster Bank’s support of Irish Rugby and the GAA Senior Football Championship. While Moore would have a role in organising sponsorship negotiations, more often his job is to counsel advice in terms of what are the right sponsorships for a company to choose and, once a scheme is chosen, then to activate it by developing strategies that will ensure the sponsorship is effective in achieving the company’s goals. In the case of Ulster Bank, Moore faced a real challenge in enforcing their brand on the GAA Championship as Bank of Ireland had long been established as its sponsors, but describes some lateral thinking as being key to achieving the firm’s objectives.
“[Ulster Bank] had spent a couple of years before that sponsoring the higher education championships, so student football and hurling,” explains Moore. “That was their main entry into GAA; that’s where they established themselves before they took on the larger sponsorship. The difficulty was they didn’t [originally] have the naming rights whereas Bank of Ireland would have had that luxury for 12 or 13 years. Ulster Bank had to work an awful lot harder to activate the sponsorship after the outlay of purchasing it. The first challenge was as simple as trying to create awareness. That moved very quickly on to the need to drive business and drive products. There’s a programme being established that will activate the sponsorship around the country but will also link specific products to it, so there will be events happening around the country that will have targets too, for example, becoming a member of a certain programme which gives you discounts of GAA tickets, so there’s a real product link.”
A Risk Attached
While the renaming of the O2 and the Aviva Stadium came after the sites had gone through huge redevelopments, there are still those who question the renaming of beloved venues for commercial purposes. In July 2009, Chicago’s famous Sears Tower was renamed the Willis Tower when London-based insurance broker Willis Group Holdings obtained the building’s naming rights, much to the chagrin of the city’s residents and just last year in Newcastle, after 120 years, St James’ Park was renamed the Sports Direct Arena. Such has been the uproar from the general public that some have resorted to criminal damage in an attempt to restore the stadium’s previous guise.
With these recent examples falling flat there has been a certain risk attached to O2 and Aviva’s decision to attach their names (as well as lay down significant capital) to venues. But according to Trainor, OnSide’s market research shows the public’s reaction to be largely favourable. “In general we’ve found that the Irish public is favourably disposed towards sponsorship of venues. We’ve carried out surveys and polls to test how the consumer feels about it and the majority across various studies we’ve done display a positive disposition towards venue naming rates. For example, when we – on an annual basis – ask the general public what their favourite sponsorship of the past 12 months was, sponsorships like the O2 and the Aviva in 2011 sat in the top ten more appealing sponsorships. The general public has given their thumbs up to it.”
There are even greater risks in sponsoring teams and individuals. In these cases, a company’s reputation is firmly in the hands of others. Sports stars can suffer loses in form or, worse, can behave in a way unbefitting of the brand they represent. They’re only human, after all. Throughout his career Moore has seen the best and worst examples for linking brands with individual sports personalities. “We’ve looked after Gillette for the past 20 years and Brian O’Driscoll has been an ambassador for the past six or seven years. Year after year he researches as one of the best sportspeople in the country in terms of recognition and suitability for brand. But the on a global scale Gillette have faced challenges with their investment in Tiger Woods and Thierry Henry, when the pair had a backlash from the public for obvious reasons.
A Deeper Relationship
The success of Dublin’s O2 followed the triumphs of the venue’s London namesake. The UK-based mobile phone carrier worked with naming rights company AEG to banish the unhappy memories of the much criticised Millennium Dome and rebrand the impressive arena. Today, the new venue’s success and its positive impact on the O2 brand is a major sponsorship success story. “Part of the reason it worked so well is because O2 got into the stadium from the ground up,” AEG President of Global Partnerships Todd Goldstein told CNN Money last year. “We’re not splashing up signs and logos; we’re incorporating our brand as part of the core component.”
This idea of establishing a brand as part of the central ethos of a venue is something that’s echoed by John Trainor. “What’s happening now is we’re starting to see third and fourth generation evolutions of naming rights, and I think the Bord Gáis Energy Theatre is an example of that,” he explains. “For Bord Gáis Energy [it’s not] about having their name over the door but rather its about having an ability to offer their customers rewards and experience because those customers are loyal to them.”
He continues: “The sponsorship in its own right is reinforced by the Bord Gáis Energy rewards program which they have put in place and allows customers to gain access to discounted ticketing, and that’s where venue naming rights is likely to succeed and progress going forward. It helps to achieve a deeper relationship between a brand and their consumers because of this new way of talking to each other outside of the pure product-based discussions they generally have on a daily basis.”
This is echoed by Moore, who has helped Ulster Bank best utilise their sports sponsorships by linking in customer loyalty programmes. “They’re not really done for brand awareness, they’re done for customer retention. That’s the business logic; it’s not just about a name change. It’s sound business reasons and they get the results in terms of new customers from it.”
Ultimately, the intentions of schemes like this reflect why venue sponsorship and naming rights prove so popular for large scale companies. It’s because sponsorship is not about passive awareness generation, but about active engagement where a brand and their customers talk to each other in an active way about something that benefits both parties.