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The big headline as 2006 came to a close was Cadbury’s surprise decision to end its association with ITV1’s flagship soap Coronation Street. But while that £100 million partnership may well be remembered as the defining broadcast sponsorship deal of the last decade, the industry has changed almost beyond recognition since Cadbury’s commissioned Aardman to produce a chocolate version of Britain’s best-loved street.
Arguably, the most dramatic change is media fragmentation. With hundreds of digital TV and radio stations and thousands of commercial websites now available to UK audiences, would-be sponsors no longer require blue-chip budgets.
True, you still need a seven-figure sum to secure ITV1 and Channel 4’s headline properties (BT, for example, paid £5m to link up with C4’s Deal or No Deal). But the fact that anyone from Alton Towers to the Royal Society for the Protection of Birds (RSPB) can afford to sponsor a show on Sky One demonstrates that the sector has been thrown open to the most unlikely newcomers.
While the downside of fragmentation is that it is now tougher for brands to get a big audience in one sitting, the upside is that it is easier to find a show that fits the profile of the brand. It’s hard, for example, to imagine tighter targeting than Johnson & Johnson’s sponsorship of Nick Jr’s Bathtime Hour – or AutoTrader’s link up with Men & Motors’ The Used Car Roadshow.
Just as significant as tight targeting is the rise of digital interactivity. Whether you’re talking red button, mobile or internet, it’s now possible to add depth to a TV sponsorship by encouraging participation through competitions, giveaways, promotions or direct marketing mechanics.
And, it’s not just new technology that has made media sponsorship more sophisticated. As the medium has matured, so sponsors have learned to treat their association as more than just a straight media buy. Alongside the digital extensions outlined above, it’s standard practice now to have support activity in key off-air environments like retail. No longer a short-lived, soft-focus brand-building tool, sponsorship can be – and often is – the gateway to a detailed marketing campaign.
A good case in point is Iceland’s link-up with the sixth series of ITV’s I’m A Celebrity… Get Me Out Of Here! In this case, the deal covered broadcast sponsorship on ITV1 and ITV2 as well as exposure via interactive TV, mobile and online. There were also mobile clips on ITV’s WAP portal, off-screen licensing/promotions and on/off air marketing.
The relationship between the two parties was also strengthened by a couple of other key factors. Firstly, TGI ranks I’m a Celebrity as Iceland shoppers’ favourite show. And secondly, Iceland’s on-screen spokesperson Kerry Katona is a former winner of the show. All this on top of the fact that the average audience for series five was 9.6m viewers – a 40% share of the market.
The good news is that all of the major sales houses (radio and TV) are now very receptive to beyond-the-spot marketing activity. Channel 4 has shown itself to be highly-effective when it comes to driving sponsorship value – notably through reality hit show Big Brother which has been sponsored by Carphone Warehouse for the last three series. It was also C4’s coverage of the 2005 Ashes which provided the marketing platform for Betfair – winner of last year’s Hollis Sponsorship Award in the media category.
Viacom-owned music channel MTV is another well-oiled machine when it comes to cross-platform activity. In the case of its recent MTV Europe Music Awards, for example, Replay Blue Jeans, the Opel/Vauxhall Corsa and Sony Ericsson signed up as partners in order to reach a potential worldwide TV audience of 1.4 billion via TV, mobile and internet. But that’s not all.
Other key elements of the deal included on-air billboards attached to all MTV Europe Awards programming, pan-European competition and promotion spots, online opportunities, including logo integration, banner presence across Award microsites and branded wallpaper for download from the Awards WAP site.
Sponsors were also included in Awards marketing and PR and were integrated into surround events in the lead up to the show and at the post show party. No wonder Melisa Quinoy, European VP brand solutions, felt able to call the Awards an “unparalleled opportunities for our sponsors to reach their audience in a targeted and powerful way across TV, PC and mobile screens and on the ground.”
Over at Turner, there is a similar sure-footedness when it comes to new media exploitation. Recently, for example, Philips agreed to sponsor all of CNN’s new media news delivery services, including newsletters, video streaming, RSS alerts and mobile news. In addition, it signed up as launch partner of a news microsite. Dubbed The Briefing Room, the microsite is a magazine-style digest which offers bite-size chunks of the day’s international news backed up by shortcuts to sources of global intelligence.
Available as a daily e-mail, the proposition is right on brand for Philips – which likes to emphasis the way its products make life simpler for people. “CNN has been able to offer Philips more than an advertising platform,” argues Jonathan Davies, executive VP CNN International ad sales. “This is about communication and engagement with the consumer online in an experiential format.”
Factors such as those outlined above have helped sponsorship grow when overall advertising revenues have been under pressure. This point is overwhelmingly borne about by the figures.
In the first half of 2006, for example, ITV reported a 19% rise in sponsorship revenues at a time when overall revenues were going into freefall. It was also able to sign up not one but two broadcast sponsors for its World Cup coverage (Budweiser and EDS). There has been a similar story in commercial radio – where a two-year slide in advertising revenues contrasts with a 16% rise in branded content (aka sponsorship and promotions) revenues. Branded content now accounts for 20% of total radio revenues.
Similarly, business news channel CNBC Europe saw ad revenues grow by 63% year-on-year for the first half of 2006 – with 22 new advertisers coming on board. A key reason for this, says channel MD Mick Buckley, is “a growth in creative client solutions – with interesting campaigns from Shell International, IBM and NYMEX. We expect that to continue as corporations look at integrated solutions which enable them to engage their audience on-line and at events as well as via traditional TV activity.”
While the above developments have all contributed to sponsorship’s success, there are other reasons why the medium has blossomed. One is that there has been a trend towards the greater use of product details in sponsorship - which means that sponsorship can increasingly shoulder some of the advertising burden.
Nokia, for example, used The X-Factor as part of the launch programme for a series of new handsets last autumn while Opel/Vauxhall used the MTV Europe Awards to promote its Corsa model. In radio, the AA used Virgin Radio to promote its van insurance product – again underlining the way in which media sponsorship can be used to match niche products with specific audiences.
More important than this is the fact that sponsorship is viewed as a potential shield against ad-skipping. While there is a tendency for viewers to channel hop during ad breaks, sponsorships are often used as a warning that the break is about to end and a show is about to start again. Hence they can actively engage audiences.
Inevitably, the closer sponsorship comes to editorial the more interested marketers become in fusing their brands into the DNA of shows. This is what has given rise to the field of advertiser-funded programming – where clients pay for shows directly in order to get greater control over their exploitation. [Note: In TV, AFP is sometimes referred to as branded content. But this creates confusion when also talking about radio – since branded content in radio covers traditional sponsorship, promotions and AFP).
Once again, any of the major sales houses can accommodate AFP projects if they are perceived to enhance the quality of the schedule. IDS, one of the largest sales houses in the multichannels sector, says AFP “has grown up and taken its place alongside sponsorship as an effective solution for commercial objectives.”
Recent examples to come out of the IDS camp include the link between Old El Paso and UKTV Food on a the six-part series Gino D’Acampo – An Italian in Mexico. Teen channel Trouble, meanwhile, teamed up with J&J’s Clean & Clear to create a short-form series called Hang With… in which teens get to spend time with celebrities. Underlining the cross-demographic potential of this sector Cow & Gate also used AFP to target new parents via UKTV Style show Baby Squad.
Radio has also taken strides in this direction – using sponsorship budgets to create added-value programming. Examples include a campaign for Disney which ran on Heart stations as well as via the company website and podcasts. In this case, Heart ran vignettes with Rik Mayall and Lisa Tarbuck reading cut-down versions of classic stories like Pinocchio.
The idea was to drive DVD sales at Christmas while giving something of interest to listeners. Shell, meanwhile, financed the production of a series of two minute shows in which F1 icon Murray Walker provided a round up of the action in the most recent F1 weekend. That was aired across 98 stations.
If there is a limitation on branded content in the TV space, it is that current regulations prevent the integration of products into the story-line of shows – which means clients have to find some way of leveraging their investment off-air.
This issue of product integration (known as product placement) has been the subject of a review by broadcast regulator Ofcom in recent months. There are three reasons for this. Firstly, US programming aired on UK TV carries highly visible product placement – because the rules are not so strict in the US. So there is an argument that UK audiences are used to this approach.
Secondly, some broadcasters believe product placement would help combat the threat of ad revenues being lost as a result of digital video recorder-enabled (DVR) ad-skipping. Finally, the European Commission is also looking at relaxing restrictions on product placement – which is currently prohibited by the Television Without Frontiers Directive.
At the end of its consultation period, Ofcom concluded that, in general, “broadcasters favour a controlled introduction of product placement while consumer and viewer groups are opposed.”
Ofcom’s findings were that: “Paid-for product placement is seen by many in the broadcasting industry to be the logical next step in the evolution of commercial television in the UK. It is however an issue that divides opinion sharply. Those calling for its introduction cite the need to exploit new potential revenue sources as pressures on traditional broadcast advertising revenues mount.”
 “Opponents are critical of broadcasters’ likely ability to maintain editorial integrity when faced with the demands for prominence by advertisers. It is clear that before any controlled introduction could be contemplated, there remain a significant number of issues on which further detailed work would need to be undertaken. Predicted economic benefits also appear to remain modest.”
None of that sounds particularly encouraging for the product placement lobby. Nor will advertisers welcome the introduction of new Ofcom rules which ban the advertising of foods that are high in fat, sugar and salt (hfss – aka junk food) to children aged under 16.
Although the real pain will be felt by hfss spot advertisers, hfss sponsors will only be allowed to link up with kids shows if they use their corporate name – rather than attempting to market specific product lines.
Having said all this, it would be wrong to portray Ofcom as hawkish with regard to sponsorship regulation. While it doesn’t look likely to move far on product placement and could have been softer on the hfss lobby (under 9 not under 16 restrictions), it has simplified its sponsorship code dramatically and looked for ways to cut broadcasters more slack.
A case in point is the issue of channel sponsorship. Until now, it has not been possible to sponsor an entire TV channel or radio station’s output in the UK. But that has been changed thanks to amendments to Ofcom’s sponsorship code. Ofcom’s goal is to give broadcasters a little more wiggle room when it comes to raising revenues – though it has laid down safeguards ensure to preserve editorial independence and protect viewers.
For example, no channel which carries news and current affairs can be sponsored in its entirety – which rules out any terrestrial TV channel. Equally, certain inappropriate relationships are expressly banned – such as alcoholic drinks linking with children’s channels. Also significant is the fact that broadcasters cannot let sponsors take the name of a channel.
Of course, Ofcom’s role is limited to TV and radio. So for sponsors which feel that the regulatory framework is too restrictive, there’s always the prospect of linking up with mobile, online and in-game platforms – where regulation is currently much looser.

Articles written by Hollis correspondent Andy Fry.

If you would like to send in news or comment, please email rosie@hollis-publishing.com.

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