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Dee Madigan 00:07

If you think about, say, Mac's versus PCs, there's probably much better value in PCs. But people pay more for Mac's because of how it kind of makes them feel and then sense that's what a brand is. It's that bit that makes people want you and they're happy to pay a little bit more for you. But also forgive you a little bit as well. That's essentially what a brand is. I always say the best example is a brand is a promise and a good brand is a promise kept.

Dr Juliet Bourke 00:33

How do you bring a brand to life?  

How do you evoke that deep feeling of connection with your customer – and make it stick? 

Finding the things they already love… and showing that you love them too could be part of your strategy.Ìý 

Enter: sponsorships.Ìý 

I’m Dr Juliet Bourke, and this is The Business Of, a podcast from the University of New South Wales Business School.Ìý

Dee Madigan is an advertising expert – she's been in the industry for 25 years, and now runs her own creative ad agency Campaign Edge.Ìý 

For Dee, there are a few things sponsorships do for a brand that other forms of marketing can’t.

Dee Madigan 01:13

Where sponsorships are really valuable for companies is in the brand space. And I think a lot of people get branding wrong. They think that a brand is a logo or a strap line. And it's not. A brand isn't even what you say about yourself. It's how people feel about you. And we know how important particularly sport is in Australia. So if you can align your brand to something that people love that's going to help your brand and it's not like a short term hit like you might get from an influencer, where they've got you know, a hashtag to give people a cheaper deal. It's about the long term feelings of it. So I know companies get a lot of flack for where they, the term now is sports washing, where they're using sponsorships to help improve their brand. But I'm a little loath to just do that as well. There's no doubt that's part of it. But equally a lot of the times these are companies that are existing in regional areas where they're helping local sports and I think there's a difference between grassroots and just sort of sticking your logo on a big team. And when they're doing both, I'm happy to sort of take them at face value. And when they're not. I'm always a little sceptical.

Dr Juliet Bourke 02:19

So it's all about the feeling. It's all about the emotion.Ìý

Dee Madigan 02:23

Oh, yeah, yeah. 100%. So we, you know, with Optus say, for example, they were one of the Matilda's sponsors after the data breach, their brand value dropped nearly a billion dollars. And after they mature to sponsorship, it literally went up again, it's of course plummeting back down. But so yeah, and the banks, the same sort of thing, particularly if you're on the nose a little bit. You know, linking a sponsorship to something people feel good about is a smart way to improve your brand image.

Dr Juliet Bourke 02:52

Just one question on that, then are the risks associated with it.

Dee Madigan 02:56

Anyone who's ever sponsored a rugby league team knows there are, you know, you can't control people. I can probably break it down into the factors, there are four probably different types of sponsorship you can do, there's individual athlete that has its own, that's probably the biggest risk because you're relying all on one person. And when they stuff up, and rugby league players have a tendency to do that. That's got real implications. And then you've got team, you've got code, and you've got an event. And you actually, you probably can put in a fifth one, which is awards as well. So each of those has their own risks team, we've seen situations where team members have been unhappy about a particular sponsorship and have spoken out. And in the past, it was almost like, no, they're our sponsor, you have to keep your mouth shut. And with social media, now, that just doesn't happen. And that can be quite good. So the Australian cricket team does it very well with alcohol sponsorship, where two of their players who are Muslim don't want to wear the logo, so they don't and all that is okay. And that's where sponsorship done flexibly and smartly is good. And then we had Gina Rinehart, you know, pulling her $15 million from netball, because one of the indigenous players refused to wear her logo, and she just pulled in, I think, then it looks like it's just too much about ego, which was, I think, unfortunate, because I said she actually genuinely has given a lot of money to female sport.

Dr Juliet Bourke 04:17

If you're defining your brand identity, why would you pursue sponsorship as opposed to something else closer to a traditional ad campaign?

Dee Madigan 04:27

Where a standard ad campaign is you buy your 30 second spots, sponsorship is different in that your logo is seen every time the game is played. So in a sense, you're not saying any message about your company, but you are aligning values and enjoyment with that. So it gives you like the eyes say on the Matildas it gave you an audience that no ad would have given you. So that's the difference I think as well as is just that sort of the visual and we underestimate How important visuals are in people's minds, they actually circumvent critical thought and they become truth in your mind much faster than words. So if you're watching the materials, and you're feeling good about the materials, and you're seeing the Commonwealth Bank brand, they're in your sort of heart, they kind of linked together. That's why it works.

Dr Juliet Bourke 05:18

Now, a number of times, you've mentioned sport. And so I'm curious about that. Why are brands so obsessed with sport? Is that a particularly Australian thing? Or is that actually global?

Dee Madigan 05:30

It is global. But in Australia, particularly, we have a you know, sport is just so much a part of who we are. But it's also televised, like most other things aren't televised. So in a sense, it's getting your message out to the broadest amount of people. And it's the broadest target market. But if you're a particular kind of brand, like say, you were a brand that was going after high income individuals, you, you might look at sponsoring the ballet or the opera, and it would obviously cost you a lot less, but you'd be getting a lot less. You know, you're only sort of going just for the people, the margin that matters, we call it just the people who count for you. But for brands where they're going for like a really broad appeal, spreading it wide is probably a really smart way to get as many eyeballs onto your brand as possible.

Dr Juliet Bourke 06:22

I get the eyeballs that makes a lot of sense. But the way that branding is done with those at the higher end, like you talked about Sydney Dance Company, or the opera or whatever. I mean, I don’t see them wearing logos on their leotards.

Dee Madigan 06:34

And it’s actually the people that they're trying to attract would hate that. So it's actually understanding where they want the branding to be as well. So it's beautifully done on the programmes. Instead, it's really about understanding what your target market likes. It's like with logos, right? They're really, really high. And people will never wear something with a logo over, it's just not who they are. Because, you know, they're old money, and they don't need to show off sort of thing. So it's just again, it's understanding who you're talking to, before you start saying anything to them as a brand.

Dr Juliet Bourke 07:04

Are there risks in sponsoring too much? So I'm what I'm thinking about here is over saturating the market with your brand.

Dee Madigan 07:12

There is a danger in oversaturating, because you don't want to be you know, the person for everyone. Just as there's a danger for brands using someone else that other brands sponsor as well, you kind of want a little bit of an exclusivity relationship as well. And for the big brands, the more people you sponsor, the more risk you are taking. So you really want to pick wisely. And just where the alignment is there. Unless you’re a brand, you know, like Nike, where it is about selling your clothes as much and then then probably wider is better.

Dr Juliet Bourke 07:43

What you're making me think is how do brands at the beginning of that journey make that choice?

Dee Madigan 07:48

Sometimes it's about looking at the zeitgeist. And I think with CommBank, it wasn't just the Matildas, it was women's cricket, as well. So they really saw that there was a push to the broadcast stations to make sure that women's sport was getting enough airplay. So it was actually pretty smart to get in early then because they knew regardless of how many people watched at least it was going to be on broadcast. And it's one of those things like people say about women's sport on it, you know, not as many people watch it. It's like, because you didn't broadcast it. It's a chicken and egg thing. So yeah, they took a risk, but it wasn't too big a risk, I think they could sort of see where the world was going. And that's where it's smart. It's like the really good sponsors, find the athletes at 12 and 13, you know, and they pick them up for big 10 year deals and things like that. So they're always kind of, I guess it's about looking to the future.

Dr Juliet Bourke 08:38

Are they even shaping the future, by actually doing the sponsorship, it sort of has a positive cycle around it, you know, then people in the audience are wanting to see that brand.

Dee Madigan 08:50

And when they do it really cleverly, they then try to take it a little bit further than just sponsoring the brand and getting their message in. So we saw that with I think it was Uber Eats during the Australian tennis, where then they did ads about the Australian tennis in a really clever, interesting way. So they actually leverage their sponsorship, a lot more and we see it with the Commonwealth Bank. It's the trouble with doing sports sponsorships is you have to get sports people in your ads. And I used to do Rexona, which used to sponsor sports people, and Powerade again. And sports people are sometimes really, really good on the field, less good delivering lines to camera. Sometimes real people are terrible at playing real people.Ìý

Dr Juliet Bourke 09:33

So it sounds like there needs to be a certain level of alignment between the brand and what they're supporting, so that consumers buy into it does an authenticity to it.

Dee Madigan 09:46

That is true. And what has changed though, is that if you are sponsoring a team of 40 people, the chances that there is a person within that 40 people who has a problem with your brand is actually really high and I think where they've done it best to other sponsorship deals like as I said with the cricket one, where it's been okay for the player to say, look, I'm really uncomfortable with that and it’s easy to demonise sponsors, and it's easy to demonise players and that but it's, it's, I think it's getting better in that we're listening to the players, and we're understanding that good sponsorships are flexible and need to be. And it's okay to sponsor a team. And if a player speaks out against you, that's actually okay, too.

Dr Juliet Bourke 10:27

So does it mean then there's more socialisation of the potential for sponsorship? So what I mean is, would the Matildas have been asked, ‘Hey, we're going to be sponsored by CommBank - how do you feel about that?’ before it happened?

Dee Madigan 10:40

There's been cases where they have been asked, and there's been cases where they haven't been asked, I'm not sure with that one, I would think they would have been asked because it would be really risky now to do a sponsorship without talking to the place, but that's how it used to be done. It used to be done look, this you are being sponsored by this, this is your jersey, you put it on, but yeah, with and the player could, you know, complain to their 10 closest friends, but now thanks to social media, they can complain to you know, 500,000 people they've never met before. So the implications of doing that are bigger, so it is smarter to talk to them. And if one or two of them is not okay with it, you know, I think it's smart for the brands to say, well, we'll do a different jersey for you that doesn't have our logo that that I think is, is okay too.

Dr Juliet Bourke 11:21

Just to take this sort of in a slightly different direction. I'm just, it makes me think of Rocky Balboa and the first movie where he walks into the ring, and he's got branding across the back of his, his cape. So what I'm thinking about there is players themselves, organising their own sponsorship, you know, is that was that just Rocky Balboa?

Dee Madigan 11:41

No, no, that happens all the time. And it's a really, really tricky field because players have their individual sponsorship. And then sometimes their team has a different sponsorship, often with a rival. So with Adidas and Nike, of course, that happens. And then the event as well can have sponsorship. So it's who's got hierarchy. And usually, it's, you know, event first, and then team and then player and they might have to not, you know, where they choose the one that they like, you know, if they're going to be part of this tournament, but then you've got the added problem of equipment. So if a tennis player uses a particular racket, and he uses that, because that's the racket he likes, even if it's a sponsor or not, generally, the event will be okay with them using that racket, because it's actually kind of their equipment. But as I said, there's no black and whites. And so there's a lot of highly paid lawyers spend a lot of time, you know, talking between each entity, if you like, trying to figure out a way through it.Ìý

Dr Juliet Bourke 12:35

This is sounding far more complex than when we started.Ìý

Dee Madigan 12:40

This is incredibly, incredibly complex, because you are dealing with, you know, people and people are complex.Ìý

Dr Juliet Bourke 12:47

So thinking about sponsorship in other areas. Now, we've talked a lot about sport, but what I'm thinking about, do the calculations and the payoffs change when you're sponsoring, say, a big music festival compared to the Matilda's?

Dee Madigan 12:59

Because it's experiential, you'd say rather, so you're not going to get the broadcast thing. But what you will do is, if you're sponsoring it, and people are getting emails about the festival that you're still getting to people, but it's more, you're probably, if you're sponsoring a music festival, you're probably got a target audience of, you know, 15 to 40 year olds, which is different to say, a CommBank, which is probably going 10 to 60. And you're looking for people who are probably not in far regional areas, because they need to get there. So it's a different way of looking at it that usually gets done by the bigger ones are things like Coke, and with alcohol and things like that, because you then what you do is you use those as a way of getting your product sometimes into people's hands. And that's a different way of doing it as well, as you know, with sponsorship, it's about a Coca Cola tent that also sells Coca Cola is a kind of a different sponsorship.

Dr Juliet Bourke 13:56

Let's talk about money. What are these deals worth? What does it cost to sponsor a club or name a stadium?

Dee Madigan 14:02

It's like it's how long is a piece of string like you can't work it out. And that can be anything from a couple $100,000 or you know even less, if you're sponsoring a 13 year old sports person, you're probably giving him $3,000 a year or you're giving them some free equipment is often the way that they sort of get into it. And then as you get up to the you know, world superstars then you're talking in the millions and millions of dollars, but I'm the one that always interests me and I'm not sure quite why they've done it is the Accor Stadium. Because Accor is a corporate brand like the AccorHotels are what Novotel, Mercure Sofitel. So most of the people walking in that don't know Accor it doesn't really do them any value. You know, I mean, I guess you know, every time the cricketers are every time that stadium is talked about it is the Accor stadium. I just don't know what value it gives Accor being a corporate brand. Whereas I would have thought pick one of your hotels call it the Novotel stadium or so that the people going that go, Oh, nobody told that's a good brand. I'll stay at that hotel.Ìý

Dr Juliet Bourke 15:07

Could it be as simple as sponsorship is just about brand recognition, not the emotion? 

Dee Madigan 15:12

Well, that kind of linked but like getting brand recognition for a corporate brand, you sort of got to wonder why. Whereas you understand it for consumer brand, because you're trying to get consumers to stay at your hotel or to think well of your hotel, but you've consumed a corporate brand is different, it sort of further up the chain, if you like, it's further away from emotion. So I'm not sure for me why they were doing that. But there must have been a reason.Ìý

Dr Juliet Bourke 15:36

So really, I'm curious, how do you measure the success of a sponsorship? How do you know it's worth the investment? If the Matildas were one to two million how do you measure that?

Dee Madigan 15:45

So they reckon that the value of a company brand is about 60%, or 67%, I think of the actual company's value. So how people feel about the brand is actually hugely important. And what it does do is it it gives you protection, when as well as helping rebuild your brand, it gives you protection for when things go wrong, as well. So if you can get people to like you, it's that as an emotional buffer, that's what good branding does it is about feeling. So if you think about, say, Mac's versus PCs, there's probably much better value in PCs, but people pay more for Mac's because of how it kind of makes them feel. That's what a brand is, it's that bit that makes people want you and they're happy to pay a little bit more for you. But also forgive you a little bit as well. That's essentially what a brand is. I always say the best example is a brand is a promise and a good brand is a promise kept.

Dr Juliet Bourke 16:38

So then if you're a brand, what are the key things that are going to make this sponsorship successful to you?

Dee Madigan 16:44

I think it's coming in early, where you sort of see value from the beginning and being there through the hard times. And it's also, I think it's being there on the grassroots level of it. People really appreciate brands that aren't just there on the opening nights, if you like, or the grand final games, but can see them in, you know, when their kids are playing or you know, with all this little plays happening, that sort of thing. But again, people are really careful about who's there, particularly when it's children's sports. So we've seen clubs, Australia always sort of say we, in a way of justifying their massive profits from pokie machines, you know, your local sport wouldn't happen without us. And then you see West Australia has the highest youth participation per capita in the country, and no pokies. So both those things are possible. So brands, you know, sometimes when they're trying to make themselves look good, they can actually just annoy people, because they're like, no, no, we're not. We can see what you're trying to we can see the brief here.Ìý

Dr Juliet Bourke 17:39

We've seen the diminution in ads around cigarettes. Yeah. But there seems to now be that that gap has been filled by gambling.

Dee Madigan 17:47

Well, I think there's probably when it comes to sponsorship, particularly sports sponsorship in Australia, there's sort of two groups there is the fossil fuels and the gambling now sponsorship partnerships in Australia are between fossil fuel companies and top level sports. But um, I'm loathe to just, you know, bag all fossil fuel companies, because a lot of times it was sponsorships in mining towns where it's local teams. And a lot of them have been there for a very, very long time. And I think the problem where they get in trouble is if they've got no transition to renewables plan, then I think, no, they're just sports washing. But if they are genuinely trying to change things, and they've got lots of money to sponsorship, I'm kind of okay with that. Gambling not so much. Because we know that, um, gambling, they do it, because they're not allowed to have ads in certain times of the day, unless they're a sponsorship of a team. And then they’re allowed to have ads during that so not only are the kids seeing the gambling sponsorship all over the backs of the sports teams and all over the stadiums, they're also seeing the ads, so I don't think they should even if you want to keep gambling sponsorship in sport, I don't think they should be allowed to have their ads in the same ad. While that while the game is being played. I think gambling is becoming so normalised to kids and it's a huge problem.

Dr Juliet Bourke 19:04

Why aren’t we seeing a backlash amongst consumers? Therefore the politicians? Why is this allowed? 

Dee Madigan 19:11

Well, I think the backlash is partly because gambling companies have overplayed it, which is sort of good in a way like they've been so prolific in terms of their output that people are like, whoa, you know, you couldn't look away from branded ads if you try it. Whereas if they'd been a little bit more subtle, they might have got away with it. But I think we're really conscious about you know, what we do put in front of our kids and you know,I have a flutter occasionally, but they've normalised it so much and made it sort of seem like a very normal social thing. And again, it's you know, I'm not a Puritan, but it's like they're just pushing it too far as.

Dr Juliet Bourke 19:49

Are sponsorships only worthwhile if you're a huge company with a six figure budget, or is there something in it for local businesses who are just wanting to sponsor the hockey fields?

Dee Madigan 19:58

Local businesses, I think that's where your best bang for buck is because the locals who are there, the parents saw the players are there and they see that your name is there and you're sponsoring them and they're in town. They're going to so it's probably less about the big brand. But what it does do is translate into more immediate sales straightaway. Because if you've got a choice, say there's a butcher shop that sponsors you know, the Wonthaggi Tigers or whatever. And there's two butcher shops in town, and you either play for the one Wonthaggi Tigers or your parent or you're a friend of Bla bla bla, and you go in, there's two butcher shops to choose from, they'd probably same-same price wise, which one do you go to the one that you've got good feelings about? Because they sponsor you? And that's so for small towns, localized sponsorship is really, really important. But then again, you get RSL clubs and things as well. So yeah.

Dr Juliet Bourke 20:51

And how do you feel that as the business owner who's sponsoring? How do you feel I'm getting 10% more customers than the butcher shop next door? Is it over time since I've taken the sponsorship. I mean, how do you how do you evaluate that feeling?

Dee Madigan 21:08

This is one of the trickier things because it's not quantifiable, like, say, an influencer a sponsorship, where they actually say to people put in this code when you're buying, so it's not like that. But brand building is never like that. But in the long term it is. So even if you can't sort of say, Oh, look, it's improved this week, you will notice an uptick. And I think good business owners. You know, if you're doing your numbers, you think Well, I started sponsoring then and my business has improved by then it's sort of so it is quantifiable.Ìý

Dr Juliet Bourke 21:39

We've seen the success, the CommBank Matilda story. And I guess the question is, how do you forecast the next CommBank Matilda story? You said that people saw a Zeitgeist could feel the zeitgeist in CommBank that there was positive associations between women's sport and community feeling. How do you go about predicting that is that sounds like a sort of a black science or something?

Dee Madigan 22:03

No, it's actually some people's jobs to be future forecasters, which always sounds sort of like bizarre, but it's true, who look for trends and things like that. But nowadays, you can kind of see things out as well, to see where interest is. And TikTok is actually great for that. Just sort of, you know, you see a lot of collaborations there with brands and people and they'd be keeping an eye on which ones are taking off and which ones aren't. And, and that, but yeah, you look at what's happening in the world where the social movements are. And, like, brands can't create things out of nothing. But what you can do is try to jump on top of it. And I always sort of equate that with politics as well. You can't create something out of nothing, but it's about looking at what's out there and where you fit in. And that's essentially what good sponsorship does.

Dr Juliet Bourke 22:47

What skills do you need as a marketer to make brand sponsorship work? 

Dee Madigan 22:51

A really good eye for the future and where things are going to be. Um, you don't want to be one of those people who jumps on sees other people sponsoring something I want to do that you actually kind of sniffing out with where the interesting things are. First, and it look, it's a really crowded place out there. So you want to make sure that your sponsorship stands out. Even in things like jerseys, right? Fans, jerseys sponsors have got in trouble for having too much of themselves on there because people have really strong feelings about jerseys. So you need to think okay, how can I sponsor this in a way that is going to be beneficial for me and where are the dangers. Probably work out your dangers first, you don't want to be the rude guest. So it's really thinking about things I always say to people, any sort of marketing, it's never about you. It's always about the person you're talking to and think about how are they going to feel about this and what they need to do is feel that you are being helpful to the thing they love and not diminishing it in any way.

Dr Juliet Bourke 23:57

If your brand is about creating a feeling, sponsorships can be a great way to make that emotional connection. They work in part because they successfully humanise and otherwise nameless, faceless business. Professor Frederik Anseel is Senior Deputy Dean at the University of New South Wales Business School. He explains how brands can leverage a sense of personality and humanity to achieve that prized heart to heart with consumers.

Professor Frederik Anseel 24:31

So the sort of personification where you want basically people to identify not with the abstract concept of a business, but when directly with a person. It's attractive. It's very hard for people to associate themselves or identify with something as abstract as a bank, or a manufacturer. We don't have any sort of strong feelings with it. We do have strong feelings about famous golf players and athletes, a successful soccer team. And we can identify with that. And so it's almost sort of a shortcut that these businesses want to take. But it's also a hard one, because sometimes businesses are, I think a bit overconfident about the extent that the positive associations with that one person will generalise to their business. And so they think that they can get into people's brains. And that becomes a one to one relationship. But they underestimate that a lot of people already have preconceived notions why they liked that golf player, why they liked that football team. And sometimes people can also get a bit annoyed with that, if they find that the claim is not genuine.Ìý

If for instance, they would find the company is taking credit for successes, achievements that are not really theirs. So this is what to think about the sort of endorsement deals in a bit of a strategic and tactical way. So first of all, I think, before you're ever considering this, they need to think about fit, right, there needs to be some sort of an alignment between what your business is about what your customers are about, and then what the team or the person that you're endorsing or sponsoring is about, if there's a misfit, there's quite a high likelihood that something will go wrong down the line, right. The second aspect is that every company needs to do their due diligence, right, I'll give an example of companies that will endorse or associate with rock stars, right.Ìý

So you know that some of those rock stars are quite unpredictable, right? The type of behaviour they engage in, sometimes risky behaviour, they are loved for being provocative, sometimes doing dangerous things, or exciting things that you do not want to have associated with your brand. So due diligence means that you walk into this partnership with your eyes open. And again, we see a lot of companies failing at this point, probably taking too many risks or being overconfident in the way they'll be able to manage that relationship. And then I think at the third, the third stage of managing that behaviour is that you have built in mechanism to distance yourself without damaging your your brand, right.

And so there's a lot of cases here. And there are cases for, for instance, of universities, business schools, libraries that have been sponsored by, let's say, pharmaceutical companies, and then something goes wrong with a product. And then you see that dilemma. People have not built in an escape mechanism, right and have not built in sort of an orderly way of retreating from that. And then you come into the sort of embarrassing situations that the media is all over you. And basically, the public is forcing you to withdraw to distance yourself from it.

And that is not the way you want it. And so I would say that is a third stage that companies need to think a bit about that responsibility. So build in a disengagement strategy that can happen in an orderly way that you can explain to the public that will be acceptable to your customers, to your employees. And so it's a sort of three stage act that you would need to go through. I would never advise, if I would be in that position, I would never advise any company to put sort of all their money on that one strategy to sort of endorse that one person, that one team, because that would be very temporary and a very risky sort of strategy. But it certainly has a place in an overall sort of marketing strategy or a marketing plan, as history has shown. And there's a lot of examples where sports brands have become big because they were associated with one team that suddenly became big, and so it can certainly be a successful factor, but I wouldn't have put all my money on it.

Dr Juliet Bourke 29:17

Most brands, big or small, have a mix of marketing strategies. And they only work in the long term if they're authentic. Sponsorships are a high risk, high reward approach, where the highest reward is reserved for those marketers who can spot the next big cultural moment without breaking their brand's promise.Ìý

The Business Of podcast is brought to you by the University of New South Wales Business School, produced with Deadset Studios.Ìý  

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