In the space of just two years, the sponsorship agency Livewire has been making successful inroads into the growing sponsorship market here in Ireland. The founding partners, Jill Downey and Jamie Macken tell John McGee about Livewire’s success to date and their ambitions for the business.
Estimated to be worth in the region of €135-€140m in 2016, the Irish sponsorship market has grown substantially in recent years with further growth on the cards forecasted for 2017 as more and more brands look beyond traditional marketing and media channels towards sponsorship.
As the industry matures, sponsorship will continue to grow and increasingly form an essential element in most organisations’ marketing mix while for rights holders, revenues derived from sponsorship and the sale of rights are also expected to increase.
While sponsorship is increasingly recognised as a powerful marketing tool, it is imperative that the sponsorship industry addresses some longstanding challenges, that is the view of the co-founders of Core Media’s sponsorship consultancy, Livewire.
Chaired by the well-known sponsorship expert, Professor Tony Meenaghan, Livewire has grown from its two initial employees – Jill Downey, the Managing Partner and Jamie Macken, Partner- to 10 employees.
“In many ways the only thing holding back sponsorship is the sponsorship industry itself,” says Downey.
As the sponsorship market continues to grow Downey and Macken believe that there is a need for greater cohesion in the marketplace in the same way that digital, radio, TV and press have their own united voices when it comes to highlighting their various merits.
“I think there needs to be a better cohesion within the industry as there’s a fragmentation in it that needs to be fixed. It’s a massive challenge. As an industry, we are under selling what sponsorship can be and I don’t think the industry is putting its best foot forward. There’s no over-arching professional organisation representing the sponsorship industry like you have for, say, advertising and the Institute of Advertising Practitioners in Ireland. I can honestly hold my hand up and say we should be pushing for this more and we would love to play a role. And it’s not all about Livewire trying to pull this together as we are still the new kids on the block. It’s about getting the industry together for the benefit of the industry,” says Downey.
Downey believes passionately that the industry needs unity. An organisation independent of egos and brands where everyone contributes to its evolution and money made by its events goes back into the industry and running the organisation. The ESA is a shining example of this, and effectively we need our own version – the ISA. This organisation should celebrate success and best practise with prestigious awards – ADFX is a great model here. It should also promote best practise in learning and developing the industry in a summit or conference. While we have both a summit and an awards ceremony for sponsorship – the industry is not fully behind them both. This is a real shame for all of us who believe in sponsorship.
As the best sponsorships tend to involve long term relationships like SuperValu’s sponsorship of the Tidy Towns Competition or AIB’s sponsorship of the GAA, arguably one of the biggest challenges the industry faces is overcoming the marketing industry’s increasing fixation with short-termism where gains are recorded and expected swiftly.
Sponsorship is best worked, best used and best leveraged when pointed at longer term objectives
“We need to get a better understanding out there that there is always going to be short term goals and objectives and if that’s the case, then sponsorship might not be the right platform. It may be a media solution or something else that can deliver the short-term objectives and that’s fine. Sponsorship, however, is a medium to long term play that can reap considerable benefits for a brand but that’s not going to happen overnight. Sponsorship is best worked, best used and best leveraged when pointed at longer term objectives,” says Macken.
The other challenge the sponsorship industry faces is measuring the success, or otherwise, of a sponsorship. Gone are the days when a sponsorship revolved around free-tickets for the CEO and his family and a logo splashed across a jersey or a lectern on a stage.
“Measurement is a challenge for everyone but that is not to say it cannot be done effectively. When you strip it back, sponsorship is an exercise of adding value to a community of people – normally fans. Therefore, Livewire’s measurement tool, LSI, focuses on measuring the impact of this experience. From here we can analyse how a sponsor’s influence drives commercial KPIs such as propensity to churn, NPS or purchase intent. For clients that want to wholly isolate the impact of sponsorship on ROI we offer LSI Total, our econometric solution. Our measurement capabilities are backed by Core Media’s data science team, great research from our sister company Ignite Market Research and of course the group’s media and digital experts. LSI is a complete package and, we believe, the best sponsorship measurement solution in the market,” says Macken.
In many ways we are a start-up within an established and supportive business which has a very strong client base, and we’re very lucky to have this because most start-ups don’t get that kind of support
In fact, the genesis of Livewire was this desire to provide robust measurement and strategic consultancy to the sponsorship market. Not even two year’s old, Livewire is certainly making its presence felt.
“In many ways we are a start-up within an established and supportive business which has a very strong client base, and we’re very lucky to have this because most start-ups don’t get that kind of support,” says Downey.
Although reluctant to divulge a full client list for obvious commercial reasons, Livewire has worked with a wide range of companies and brands over the last two years including the likes of the GAA, the IRFU, Munster, the Royal Dublin Society, AIB, An Post, McDonalds, Lloyd’s Pharmacy and Nissan, to name but a few.
“We’ve worked with about 40 different brands in the last 11 months this year and we have completed over 30 projects across the arts, sport, AFP and B2B,” says Macken.
“We see ourselves as sponsor specialists; we work with sponsors to enhance brand equity, establish consumer engagement and deliver bottom line impact. We work with rights holders to grow sponsorship revenue through brand-centric solutions. We also provide clients with the full sponsorship offering – that being media and non-media sponsorships. We cover everything from sports, arts and entertainment. So, we offer the full range of services and I believe we are the only sponsorship consultancy that has expertise across the full spectrum of sponsorship,” he says.
While Livewire does act as a stand-alone business with its own client base, being part of the largest media buying group in the market does comes with some benefits.
“We’re lucky in that respect because Core Media’s agencies have an amazing list of clients and we are spoiled in that regard. We do rely on our colleagues to help with the initial introductions to those clients and then, given that the standards of the group agencies, we are under pressure from the get go to make sure that we deliver the level of expertise that is expected of a Core Media entity,” says Downey.
“The biggest service demand is in strategy and measurement from both rights holders and sponsors. With sponsors, the work is exhaustive, our consultancy process involves getting very close and personal with the stakeholders within the sponsor’s organisation, market and competitor analysis, a deep dive on existing and new data and then coming back with clarity of purpose for sponsorship to work across the entirety of the business” she says.
“With rights holders, the demand there is really for a market understanding and the valuation of assets. What we do is we bring brand thinking to rights holders and we give them a perspective on the market that allows them to be better equipped to understand their properties and what they can sell. We also use our extensive resources to value sponsorship rights and assets” adds Macken.
In terms of where the money is being invested by brands, approximately 70% goes on sports sponsorship with the remaining 30% invested in a wide range of things like music, B2B and CSR initiatives.
“I think the 70% is a pretty loose figure that’s been out there in the market for a while but when we analyse our numbers and our revenue figures we do see a lot coming through from sports related sponsorship. The interest levels and the excitement in the sports market is huge, particularly when you look at the kind of money that is being paid for sports rights at the moment- it’s dizzying” says Downey.
Given the group’s prominence within the media buying space, this has helped Livewire develop a strong presence in media sponsorship, something which rivals have struggled to do. Where once media clients might have expected a media sponsorship element bolted on to a media plan, the reality is the market has moved on considerably.
“With regards to media sponsorship, we stress to clients that it is not another form of ‘media buy.’ To think of media sponsorship this way limits its potential. We are working with media owners on a daily basis to break away from the standard assets of programme stings and promos. We are excited about the potential for licensing, product placement, content and so on. Its challenging but the clients and media owners who embrace this concept stand to reap the rewards,” says Downey.
“We have done some of the biggest media sponsorships in the market while we have also been involved in exciting areas like advertiser funded programming which is still relatively new in the Irish market,” says Macken, a former television and radio producer.
One of the most interesting developments to take place within the sponsorship space in recent years is in the whole area of advertiser-funder content with productions like AIB’s The Toughest Trade, widely regarded as a best-in-class example.
“In fact, we’d refer to The Toughest Trade as an ACP – Advertiser Created Programme, because AIB and its agencies were fully responsible for the concept and execution. It is a fantastic example of an ACP and we were involved with the recent series, negotiating the deal with RTE. Advertiser funded or created programming has got massive potential in the market and it will continue to grow. But it also comes with a lot of risks and challenges which need to be negotiated and navigated very carefully,” says Macken.
“One of the challenges, for example, is around ownership and funding. Does this come into commercial or editorial? And can this been viewed as influencing the editorial and is this a problem if it is a public service broadcaster? So there’s a lot of negotiation, a lot of management and a lot of time that needs to be used in order to get to a point where you have a winning formula. This is something we’ve spent a lot of time on but it’s really exciting because it’s new and involves creating brand new content for TV. But it’s not just TV because AFP also involves PR, social media, digital and events. It’s a very holistic approach and you have to have buy-in from a lot of stakeholders” says Macken. Perhaps the biggest challenge brands face here is the cost – it can be expensive to produce good programming, it costs roughly the same to produce quality TV content here as it does in the UK but they have a massive TV market compared to our own. So the reward is exponential for the same investment.
“It is definitely a growth market but I think it’s going to take a little bit of time to grow it because of the risk and the different challenges. The manner in which is it currently sold will also need to change, the TV stations and production companies need to crack this as its not fit for purpose right now. But the old cliché that with risk comes reward is true but brands have to hand over the keys a little bit and not every brand is comfortable with that,” he says.
Notwithstanding some of the Brexit-related uncertainties in the marketplace, particularly concerning advertising, the sponsorship market next year will continue to grow, says Downey.
“I think it will be modest because of the uncertainty that’s out there in terms of the wider macro-economic sentiment but we do see growth and potentially more modest than the 8-10% growth we’ve seen in recent years. From Livewire’s point of view I think we are in a place now where more and more sponsors understand how we can add value and rights holders can see the benefits the full Core Media resources through Livewire can bring for them and that’s a good place to be, but we have assembled a great team and we are hungry to grow and to just keep getting better and better” concludes Downey.
First published in Irish Marketing Journal (IMJ November Issue 2016)© to order back issues please call 016611660