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Unlocking the power of data under new EU Regulation

The biggest change to direct marketing could be around the corner.

Happy Birthday India!

 The largest democracy in the world celebrates its 60th birthday this week. For many of us, reaching this milestone may be a time to reflect on what we’ve achieved in our lives to this point and what lies ahead of us on our journey on this planet.

For India, it’s just getting going!

While independence was granted by the UK on 15 August 1947, it wasn’t until 26 January 1950 that India got its written constitution. On that day, six decades ago, India declared itself a secular, socialist democracy, promising equal rights to all its citizens regardless of religion, language, creed or culture.

India today is a beacon of hope for the rest of the world. It’s not perfect and of course has its fair share of problems such as grinding poverty as well as caste and communal tensions.

But whilst domestic markets in developed economies went into free fall as a result of the credit crunch started by the collapse of the banking system in the US and then the rest of Europe, India was experiencing 6.9 percent growth in GDP and consequently according to the influential Forbes magazine recorded the fastest growth in number of millionaires on the planet.

And the Indian Government hasn’t lost any time on pursuing its business-friendly agenda to support its phenomenal business growth.

This year, the ruling Congress Party – that was swept into power on a business-friendly agenda in May 2009 – will pursue a number of key growth strategies.

These include fiscal stimulus measures to increase consumer spending in its growing domestic market – which offers a fantastic opportunity for new business for companies here in the UK.

So India is a land of opportunity. But it’s also a land full of contradictions, too.

You may think that luxury Western brands will fly off the shelves.

But that would be to assume – wrongly – that brand owners need not bother “glocalising” their offerings to appeal to a very discerning and brand literate consumer class.

The opportunities are of course abundant.

But brand owners mustn’t ignore what management consultants McKinsey dubbed the “seekers and strivers” that together will represent a customer segment of 120m households by 2025.

And by then, India will be getting into its stride at the ripe young age of 75 years-old!

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Sponsorship industry puts on a brave face despite slowdown in growth

According to the latest figures by The World Sponsorship Monitor (TWSM) Annual Review for 2008, produced by Sports Marketing Surveys, sponsorship deal volume of new deals recorded a 17% increase on 2007 deal flows, from 1,196 to 1,446.

These results reflect reported sponsorship deals with a minimum value of $75,000 (£52,000) and don’t take account of any expenditure incurred in activating those sponsorship rights.

The figures also show a rapid decline in new sponsorship deals in Q4 as the credit crunch started to bite into marketing budgets on a global basis.

In the US, researchers IEG estimated that spending on sponsorship rights fees globally was around $43 billion but this figure included pre-existing sponsorship deals rather than just new deals so looks inflated.

And in June last year, PWC provided an upbeat global outlook for 2008-12 that placed the value of the global sponsorship market at $60 billion by the end of that period.

However, PWC is sensibly in the process of revising its predictions for 2008-12 given that these were based on research and analysis that would have started in October/November 2006, running up to the publication date last year before the global economy went into meltdown.

Given that GDP and corporate profits are core underlying assumptions in any advertising or sponsorship forecast, then its likely PWC’s new predictions in June this year will give the sponsorship industry less to cheer about.

But this hasn’t stopped the sponsorship industry putting a positive spin on the market.

“Sponsorship can perform many marketing functions and is also a very effective way of tackling today’s important issues such as Corporate Responsibility, social education and sustainability” trumpeted Karen Earl who was recently listed as one of the most influential voices in the world on sponsorship.

But with respect to Karen, she’s not quite right on two points.

First, sponsorship is a basket of intellectual property (IP) rights – not marketing functions.

Sponsorship is a platform for marketing and requires a level of activation – using above and below the line activities – in order to achieve a return on objectives and a return on investment for the brand owner/sponsor. Fundamentally, sponsorship is a subset of marketing, not a substitute for it.

Second, Corporate Responsibility is often the by-product of a sponsorship programme rather than the focus for it.

Given that the sponsorship market is dominated by sports – around 84% of all new reported deals – and most of these are to do with football team sponsorship which is largely about brand marketing/awareness – then there’s still a long way to go.

One area which is growing (albeit modestly) is education sponsorship, with the value of new sponsorship deals at around $7.8m, up $1m from 2007.

The marketing support and sponsorship of educational material and education ‘product’ provides brand owners with a highly targeted and cost effective route to a well defined but notoriously difficult to reach customer segment of children, families and young people.

The other advantages are reputational as having access to these customer segments through the school gates helps brands build trust with these groups well into the future.

But perhaps the biggest wake up call for the sponsorship industry is found in the length of sponsorship deals that brand owners are prepared to commit to in the current economic climate.

In terms of all new deals analysed last year, TWSM reported that 53% (766) of these deals were for 12 months, with 11% for two years and 15% for three years.

This may reflect the growing trend amongst marketing directors to think of sponsorship as a short-term tactical fix rather like the marketing tie-in with a Hollywood film that can help shift product over a six month period.

The problem is that in many cases the benefits of sponsorship may come in year two or year three rather than immediately in year one.

And there’s also the question of dialogue that the brand owner has built with fans, spectators, supporters and the public at large – and the trust it has created as a result of its sponsorship activity. All of this can evaporate if the brand owner isn’t seen to be in it for the long term.

This is a key challenge that the sponsorship industry needs to address if it’s to sustain the kind of levels of growth it has enjoyed over the previous decade.

By demonstrating how it can achieve a return on objectives and a return on investment, I believe the sponsorship industry will weather the current storm and ironically emerge stronger for it.

Ardi Kolah is the author of Sponsorship Works: A Brand Marketer’s Casebook, available from www.sportbusiness.com He is CEO of Guru in a Bottle, a new sales & marketing training and mentoring company www.guruinabottle.com

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Obama’s ‘Message of Hope’ and what this means for us here in the UK?

It’s easy to become cynical about politics and politicians. I was in conversation with Sir Paul Judge on this subject just this week.

High up on the 18th floor of his magnificent London pad that overlooks the River Thames in Pimlico Sir Paul was waxing lyrical to me about the need for politics and politicians to get back to what really matters – what’s best for the UK and for the constituents who elected them rather than the direction of a political party.

And this is coming from someone who was Chairman of the Conservative Party!

But I couldn’t help thinking Sir Paul had a point.

Do we really need to indulge in discussions about the allowances claimed by Home Secretary Jacqui Smith for her second home rather than thinking how many low income families will be able to afford to pay the rent next month?

Very quickly our conversation turned to the film I made for a special event at the House of Commons commemorating the inauguration of Barack Obama. You can view this in high definition by clicking on the following link:

Read more on Obama’s ‘Message of Hope’ and what this means for us here in the UK?…

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