MKTG Insights: With Great Power Comes Great Responsibility – Examining the Role of the Sponsor as a Moral Advocate
World class brands spend a great deal of time and effort to cultivate trust with their target market. Those that have done so have typically achieved this by standing for something greater than an individual product. Examining top brands and their behavior we can see a clear commitment to social good, which translates to their brand development internally (culture) and externally (attributes/equity). Sponsorship is one such area where brands can tangibly demonstrate what they stand for; it’s a platform where they can walk the talk. This in many ways has created a new dynamic in the sponsorship industry – Sponsors as moral advocates, and customers as constituents.
We’re not half way through 2014 and we’ve seen numerous examples of Sponsors entangled in moral dilemmas related to the properties they sponsor. From the Sochi Olympics, where IOC partners were called upon by consumer advocates and media members to take a position on Russia's anti-LGBT legislation, to major beer sponsors pulling out of the New York City St. Patrick's Day parade after gay and lesbian groups were not allowed to march openly, to - most recently - the firestorm created in the wake of Los Angeles Clippers owner Donald Sterling's racist remarks, where nearly 20 sponsors either suspended or cancelled their marketing agreements with the NBA franchise.
The range of issues at play in the moral landscape include: discrimination, adultery, drug/alcohol abuse, and even athlete/event safety. As the Sterling - Clippers scandal reinforced, brands live in an era where news can spread in an instant by an everyday citizen with a smart phone. Sponsors must be prepared to either take a position related to the scandals in their sponsorship portfolio, or face scrutiny for their silence.
While there are those in the marketing community who attest to the moral responsibility of brands, sponsor response to scandal is not simply an issue of morality - it represents an opportunity for brands to be strategic about communicating their values and contextualizing their brand. MKTG examines why sponsors have such a prominent seat at the table in responding to property-side crisis and how external forces have inflated the influence of the modern day sponsor:
We’ve reached a Societal tipping point for Social Issues – There is a huge momentum behind mass appeal/acceptance of what have traditionally been perceived as niche marketing opportunities. As our cultural fabric becomes increasingly diversified, it’s no longer a siloed approach to communicate a brand's diversity strategy. Whether interracial marriage or LGBT support, smart brands are coming to the forefront to teach love, not hate. According to Susan Krashinsky's recent article in the Globe & Mail on diversity in advertising, "Major brands such as Maple Leaf, Coca-Cola Co., Amazon and Mondelez International Inc. are betting marketing dollars that supporting gay rights will attract more [reward]."
Sponsors by way of Smart Brand/Culture Building have created an expectation - Publically communicated brand values, commitment to mass philanthropy, integration of cause related programs as core sponsorship activations; all of these behaviours are highly admirable (and highly advantageous for brands looking to develop brand loyalty). The only potential downside is that they have inserted the sponsor in the middle of a conversation around social good. Leading brands are built on values that extend beyond simple product attributes. Great examples of this are brands like Unilever and Johnson & Johnson, whose goal is to create a better world through their products and services. For LA Clipper sponsors who invested in the team to reach a diverse demographic, silence on the issue wouldn't have been accepted by both consumers or employees.
Rising Financial & Marketing Influence – Sponsors, through their financial contribution and marketing clout, have a legitimate influence over the properties they sponsor. Specifically in sport, where ticket prices have reached a ceiling and have limited elasticity remaining, properties have become increasingly reliant on sponsorship dollars as a revenue driver. Further, as rights fees increase for sponsors, they are demanding a seat at the table in matters related to property governance and oversight. While fans can protest, they often do so in vocal minorities, and lack the leverage andfinancial influence of powerful sponsors.
Keys To Success:
Act with urgency, not haste: While there is often pressure from consumers to act, smart brands often need to stay disciplined and wait for facts to emerge in a controversy. Getting too far ahead of an issue can backfire and emerge brands in the centre of a controversy. While sponsors should avoid being a follower on a certain issue, excessive speed in their response can lead to carelessness.
Be clear on why you’re a sponsor and what you stand for: Moments of controversy represent a rare opportunity for sponsors to articulate why they originally got involved with a particular property. After the Sterling scandal broke, brands like State Farm didn't just exit. They took the time to thoughtfully explain why they were dropping their sponsorship, and in doing so, communicated to consumers and employees what their organizational values were.
Take a stand, not hostages: While brands have the power to hold sponsors accountable, public threats to boycott are PR-tactics that do not act in the spirit of partnership. In 2011, following a violent on-ice incident between Zdeno Chara of the Boston Bruins and Max Pacioretty of the Montreal Canadiens, Air Canada threatened to pull their sponsorship of the NHL unless violence in the game was addressed. The end result was a public exchange between Air Canada's CEO and NHL Commissioner Gary Bettman and no changes to any NHL player safety rules. Sponsors must uphold their brand values, but public threats can damage the relationship and dis-authenticate the partnership.
Be proactive, not reactive: While sponsor response to controversy cannot be templated - there is no silver bullet solution to issues of morality - smart brands must prepare for moments of controversy. Sponsors must force themselves to articulate response plans so they are not left scrambling in the wake of a brand crisis. The recent Sterling-NBA scandal should be an indicator to all brands that controversy rarely comes with a warning sign. Strategic planning will yield greater value for brands.