How Long Should Your Sponsorship Agreement Last? - Event Marketer

How Long Should Your Sponsorship Agreement Last?

Thanks to advanced data analysis and filtering software choosing which property to sponsor isn’t always as difficult as it used to be. After the property is identified the brand faces several challenging decisions including how long the sponsorship agreement should last. Before signing on the dotted line consider these three things.

1. Staying Power. If it’s a major sports property like NASCAR a longer-term commitment might not only be ideal it may be required to seal the pact. For less competitive properties think staying power. The longer a property has retained a loyal fan base the more comfortable you can feel committing to a five-plus year deal.
A newer trendier property might be appealing and offer great opportunities for exposure but that newness might also mean that the property’s fan demographics will change dramatically over the first few years. “It might be an edgy [property] at first and then become more mainstream ” says Michael Polydoroff director-sales promotion and licensing at Denny’s. “But if you’re there for the beginning you can capture that edginess before it becomes more generic.”

2. Flexibility. Short-term deals can give you a chance to get a feel for a lesser-known property and create a little flexibility for your overall event portfolio. (Think of it as salary cap room for your sponsorship roster.) “By engaging in short-term sponsorship deals we’re able to evaluate the benefit to the company our associates and customers—as well as shift and change our programs in response to the changing marketplace ” says Scott Rolf director-regional and sports marketing at The Home Depot.

3. Activation Plans. For Denny’s prospective sponsorship properties must have the clear and present potential for a national platform with in-restaurant and grassroots extensions. A three-year commitment like the one the QSR currently has with the Professional Bowlers Association gives the company time to entrench itself with the property and then roll out programs around it. “The first year is about awareness but then it’s about building equity in the second and third years by engraining yourself in the property in the community and with the fans ” Polydoroff says.
The long-term commitment also works well for The Home Depot and its partnership with Joe Gibbs Racing’s NASCAR team which includes driver Tony Stewart. The multiyear investment enables the company to activate at stores and get the associates involved Rolf says.

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