Sports sponsorship: A sporting frenzy

The glamour of sport is undeniable. Just think of England footballer Wayne Rooney thundering down the wing at Old Trafford, England cricketer Kevin Pietersen smashing the Australians for six or, even, Norwich City's Grant Holt tapping in a penalty or two for his team.

Great images, but what do they have to do with insurance? Well, there is a link — and it's the small number of insurer-sport partnerships across the UK. The lure of a big-name team is evidently becoming a draw to any insurance company wanting its name known outside of the financial services' circle — and these partnerships are becoming big business.

The testosterone-fuelled world of professional sport may not be the logical bedfellow of the insurance industry, but insurance has quite the hold on its advertising opportunities. It is certainly now rare to visit a local sporting arena and take in the pie-filled, beer-fuelled spectacle of a weekend football match without encountering corporate sponsorship.

As with television, insurance companies have flooded the sports market, adorning shirts, billboards, stadia and match coverage. They range from the huge to the small — Aviva sponsoring premiership rugby and Brit England cricket, to smaller deals, such as One Call Insurance's sponsorship of Doncaster Rovers Football Club.

Think global
Insurers, it seems, have a near-endless appetite to delve into their marketing kitty for sporting events. Take the largest sponsorship deal in the world, for example: having been home to stars like David Beckham, Cristiano Ronaldo and Eric Cantona, the appeal of Manchester United football team is obvious. But how can a brand logo on a jersey materialise into big-ticket insurance policies? And what are the risks of paying big money at a time when nearly all businesses are making big cuts?

Despite the misfortune suffered by Manchester United's previous sponsor, AIG — which had nothing to do with football — such endorsements remain the 'holy grail' for corporate firms. To put the deal into context, the team has sold approximately 1.2 million shirts per season between 2005 and 2009. Its new sponsor, global broker Aon, signed an £80m four-year deal with United beginning June 2010. The firm insists the deal will provide it with a gateway to international business, particularly in the Asian markets, and rejects the idea it is "just another name" on a Premier League shirt.

David Prosperi, global head of public relations at Aon in the US, says the United deal fits in with Aon's global market: "We don't see them as an English team. We look at them as the number-one brand, in the number-one global sport." When asked why Aon chose football over high-profile US sports, the answer, Mr Prosperi says, is simple — football has universal exposure: "It is a global sport, recognised around the world. Close to 70% of Manchester United's fanbase is outside the UK. Manchester United are powerful in emerging areas of the world where insurance demand is on the rise."

As anyone who has travelled to far reaches of the globe can testify, Premier League football shirts have a global reach. Mr Prosperi insists the Aon board did not have to be convinced to invest in a sports team based in Greater Manchester: "There are 23 members of the Aon risks board who hold non-US passports. They recognised the opportunity."

The broker, widely known as one of the 'big three' believes the United deal can take the company even further. Mr Prosperi, who reveals the broker entertained close to 200 clients at each game of United's recent North American tour in July, says the power of the team's sponsor has commercial advantages too: "For example, in the first year of AIG's sponsorship, it jumped from 87th place to 40th in Barron's [magazine's] annual ranking of brands. We hope to mirror that success."

Aon's pursuit and seemingly happy marriage with a UK sporting institution will no doubt increase its brand exposure. Mr Prosperi refutes claims that such deals are a waste of money. "No, to the contrary," he says, "people are excited about what we are doing with this brand. We are creating more opportunities for the business.

"In our global office in Madrid they have even named the conference room the 'Manchester United Room'. All 36 000 of our employees received a Manchester United shirt. The stakeholder response has been very positive."

The firm even operates a 'skills and drills' soccer school for the children of its clients and prospective clients — something it sees as a positive community aspect of the deal. Aon's sponsorship will run to end of the 2014-15 season, although it appears the company is already smitten with its new partner. Would it consider extending the deal? "We'll just have to see what happens. We hope we have the opportunity to do that."

For another insurer, Allianz, its most recognisable piece of sports sponsorship is the Allianz Arena, the home of footballing powerhouse FC Bayern Munich. The deal sees the group gain exposure within Germany, as well as recognition in the UK through competitions like the UEFA Champions League.

"Football is an International commodity now", says Allianz Retail's head of market management, David Keel. Cornhill Insurance, prior to its takeover by Allianz, also sponsored test-match cricket in England. Mr Keel claims the company was a "trailblazer" for insurer-sport sponsorships with the deal, which lasted from 1978 to 2000. "It was probably the reason most people came across Cornhill. It really helped get the brand out there. We focused on a particular segment of the population we felt our products were suited to."

It took a great amount of effort to ensure the 22-year deal was not just a "name" associated with the sport. He adds: "It needed a great deal of developing over the years." Referring to Brit's existing cricket deal, Mr Keel believes Cornhill's legwork was key in laying the foundations for cricket-insurer partnerships: "We had done the groundwork to prove the basis for cricket sponsorship."

He believes the mark of a good sponsorship is breaking into the amateur, grassroots elements of sport: "It is about having impact across the sport, rather than just getting TV rights."

Act local
As any broker worth his salt will know, insurance companies often also benefit from hospitality, entertaining, and wining and dining, through their business partner hosts. "One element of the sponsorship was entertaining broker clients. At test-match grounds we actually owned property," Mr Keel adds.

Sporting deals are not all global, however. Bridle Insurance, an Oxfordshire-based broker, sponsors League Two football team Oxford United, and says the deal is crucial to its hopes of winning regional business. Bob Turley, business development manager at the firm, says the deal has been put in place with community spirit in mind: "A lot of the senior team are big Oxford United fans. This is a way of getting the local community involved. We also give half of our revenue generated by the partnership back to the club. If we can break even, we are very happy.

"We would be kidding ourselves if we expected to get a lot of business off the back of the deal this year; however, if we get our name out, then commercial businesses that are also fans will notice. In a 3-5-year period we expect to attain more clients, as we are targeting businesses who have had the same broker for 20-25 years. The ball is in motion."

DAS Legal Expenses, based in Bristol, sponsors the city's top football team, Championship side Bristol City. The legal expenses insurer has had an affiliation with the team for 10 years, and for the 2010-11 season signed a deal that, once again, puts the DAS brand on the team's kit.

Paul Jacobs, its marketing communications manager, says sponsoring a football team does not have to be expensive: "There are lots of things you can do with a long-term relationship with a football club, regardless of the level. There isn't always a lack of value for money."

A name synonymous with cricket in the UK is Brit Insurance. The insurer began its affiliation with the sport in 2004, sponsoring Surrey County Cricket Club; it also sponsors live test-match cricket on Sky Sports as well as the England national team and Oval cricket ground.

Mark Jones, group marketing and communications director, says the average cricket fan fits the bill perfectly as an insurer's target audience: "There is a very strong crossover between those who purchase and advise on insurance and the cricket audience. It is a great fit.

"It is a cost-effective way of raising brand awareness. Football doesn't offer the value for money that cricket does. People are more likely to have heard of us because of the sponsorship and they are more likely to place business with a company they have heard of."

He agrees with others that sponsorship deals are an effective way of generating long-term business leads: "For the full benefit of a sponsorship to come about takes about three years. Compared with advertising, there is longevity."

Mr Jones says a key part of the deal involves community work: "Clearly, the objective is commercial. However, it is also important to get involved to support wider community activities and grassroots projects."

Plan your strategy
LV's sponsorship manager Brendan Williams, agrees that "giving back" to the community is an important, often overlooked element, of sponsorships: "Financial-services companies are often criticised for their sponsorship activities because they don't have a tangible role in sport other than advertising to the fans. An investment in driving grassroots participation or increasing access to the sport can create a warmer dimension for people to connect with."

LV, which sponsors the Anglo-Irish cup in rugby, as well as the English county cricket championship, admits businesses need to tread carefully on making a number of sponsorship arrangements in times of austerity and cutbacks: "Regardless of the economic crisis, every business needs to be responsible with its marketing budget and commitments. Sponsorship can be seen as a flippant investment when it is not backed by sound strategy, good management and accurate measurement.

"Many firms make the mistake of not applying adequate discipline and rigour to a sponsorship deal, which can lead to confusion about how to extract value for the business. For this reason sponsorship is often justly criticised as being a superficial activity rather than a sound marketing investment that can help increase profitability."

England's second sport — or third, depending on your loyalties — is rugby. The general demographic of the average rugby fan — middle class and often linked in some way to the commercial sector — has proved quite the lure for insurers. QBE, for example, has its logo on the back of team shirts in the Premiership matches, European competitions and the Anglo-Welsh Cup. The Premiership deal was launched with a giant rugby-ball stunt in the heart of the City of London. The insurer has also embarked on an association with the England Rugby Football Union, becoming the official insurance partner from grassroots level to England's elite squad.

Building relationships
Helena Christopher, QBE's head of corporate communications, said the insurer conducted research on its client base and broker partners and rugby came ahead of other sports as the perfect match: "We had about 70 different opportunities. We considered football and tennis among others but felt, in our space, rugby would make the most impact."

Ms Christopher says QBE's intentions are simple — to improve the recognition of a fairly unknown brand: "We are one of the largest commercial insurers in the UK. Not a lot of people around the UK know who we are, and we will use this brand awareness to build relationships with more potential clients."

Other insurers, including LV, Amlin and Aviva, all have significant partnerships with rugby, but she dismisses the idea that the rugby advertising market is overcrowded. "I find it heartening. It is great that the industry can support rugby," she says and adds that the insurer's rugby partnership goes beyond looking to raise brand awareness: "We also raise money for charity, donating kits for auctions, as well as supporting the development of rugby from a grassroots level."

There are clearly a number of incentives to enter into such deals. However, FTSE 100 firm Admiral claims its three-year arrangement with the Welsh Rugby Union was made with no commercial gain in mind. An Admiral spokeswoman describes the Wales partnership as "significant", but labelled its current deal as a "motivational prize factor" for its staff: "We are Cardiff based — rugby is the biggest sport in Wales. This is a motivation for our staff, in terms of tickets, prizes, discounts, events and functions."

The spokeswoman says any revenue gained from its deal would have a "knock-on" effect, adding: "We are not entering into our deal for the same reasons as others."

Fellow rugby fan Ecclesiastical admits it is not in the "big league" of sports advertising as the non-primary sponsor of premiership side Gloucester. The team is a five-minute walk from its headquarters. The insurer supports Gloucester with a number of community initiatives, including an historical heritage project with local schools. Chris Pitt, head of corporate communications at the firm, says that the commercial gains can be driven by smaller, community sponsorships: "Sports sponsorships can be very simple. An association with a club that is successful is a great way to draw in customers."

Mr Pitt is critical of the strategy taken by certain big-spending companies on the sponsorship front: "Some businesses throw cash at a sponsorship and expect to be recognised. Yes, you get your logo in print, but what do people really understand about your business?"

Legal expenses insurer ULR sponsors invitational rugby side Samurai Rugby Sevens and takes a similar line regarding the benefits of sponsorships. Paul Cosh, commercial director at the firm, says its deal, which began in 2001, is fully supported by its staff: "The staff like to get behind it, and become associated with something that is successful." He adds that ULR's particular partnership is not driven by a commercial incentive but it recognises that broker clients enjoy the association: "Brokers say, 'Crikey, ULR are on TV'."

Sponsorships, however glamorous, are not entirely risk free. There have been notable scandals in sport over recent months involving cheats, drugs, and the odd kiss-and-tell exposé, to name but a few. Being closely linked to the frivolous and scandal-ridden world of sport could risk a firm's reputation — as companies that previously sponsored golfer Tiger Woods can undoubtedly testify.

Mr Cosh agrees the main risk of becoming associated with any sport is the potential damage that off-field controversy can cause: "Firms have to be careful about associating their brands with something that could be damaging. There have been a number of scandals in sport. It is important to make sure you are working with clean people in a clean sport. You have to ensure you are not supporting something that is not pleasant. Rugby is widely seen as a decent sport."

As one of the largest insurers in the world, Aviva is a major proponent of investment in the sporting arena. The Norwich-based insurer backs its hometown football side, Norwich City Football Club; has sponsored UK athletics since 1999; and has recently become the sponsor of premiership rugby in England — a four-year deal worth £20m.

Mass visibility
Heather Smith, head of sponsorship at Aviva, says: "High-level sponsorships enable us to further raise our brand profile. It is important to develop our brand, and sponsorship deals also provide us with commercial opportunities." She agrees that the demographic of the standard rugby fan is a perfect fit for insurers and reveals that research conducted by the company confirms that: "We know rugby appeals to consumers, commercial customers, and our staff; 30 million people will watch premiership rugby online this season."

Ms Smith also insists that rugby is worth the investment, despite being a crowded market: "It depends what the end objective is. We know of the other insurers in this space, but we also know it appeals to brokers. We have been delighted with the reaction." She adds the insurer is fully aware of the commercial benefits a sponsorship can bring: "Customers who know we sponsor the athletics are more likely to renew with us, knowing we are a trustworthy brand."

She also insists the significant costs of corporate sponsorship are not an issue with the majority of its staff: "You have to have a balance and get things right. You have to invest in sponsorship, even at times of financial uncertainty. Staff know we have to do it. Without question, there are some people who feel differently."

So, it would seem insurers and athletes have more in common than meets the eye. Insurers and sports personalities, despite the obvious differences in physique, at least share commercial interests. For sports teams the incentive — money coming in — is simple; for the industry, it could be seen as a gamble over whether payments reflect the new-business generation. However, as long as insurers continue to throw cash at high-profile sports, they will no doubt continue to keep that small spot in the limelight.