We've heard a lot about the 2004 Summer Olympic Games recently, mostly about fears of terrorism and the scramble to get Athens ready by the opening ceremonies on August 13. Security and readiness aside, there's also been talk about the top dollar sponsors paid for the rights to bear the telltale Olympic rings. Twelve companies including Coke, John Hancock, Kodak, McDonald's, Visa, and Xerox signed on at the highest level for the 2004 summer games, reportedly paying as much as $50 million each for top billing.

Yet even before the first tumbling pass or pole vault, at least one sponsor—Xerox—has already announced its decision NOT to renew its Olympic sponsorship deal. Of the eleven others, three remain uncommitted for future Olympics, while 8 have extended through 2008. Some—Visa, for example—have even expanded on their Olympic relationship with title sponsorships of Olympic sporting events, such as gymnastics, that take place post-games.

So who among the 12 sponsors is making the right call for their brand? The more we think about it, the more we wonder if the Olympics is an effective marketing investment—$50 million, after all, is a good size chunk of change, the equivalent of about 4000 prime time GRPs. What's more, is it better than some other sport alternative, a major golf or tennis tournament? For that matter, is it better than a non-sports event, say, sponsoring the motion picture industry's Academy Awards or the network television broadcast of a Faith Hill concert? Does effectiveness differ by brand—in other words, is the Olympics a better carrier for Coke than for Xerox? What about the effect of an Olympic sponsorship among prospects open to one of the top 12 sponsor brands versus prospects that aren't?

That's a lot of questions and we're sure we're not the only ones pondering them since sponsorships and event marketing in general have become more and more attractive as alternatives to TV advertising and increasingly perceived by senior management as legitimate marketing programs. Budgets for these programs have grown exponentially; according to SponsorClick's Sponsorship Marketing Global 2004 Report, brand marketers worldwide will spend $37.8 billion on sponsorships in 2004 and anticipates that figure will close in on the $50 billion mark by 2006. Likewise, the PROMO 2004 Event Marketing Study reported in January that companies plunked down $132.3 billion on event marketing—including promotions such as mobile marketing tours and guerilla marketing—in 2002 with an average event marketing budget of $827,911, expected to rise by 15 percent to 20 percent in 2004.

As interest in opportunities and spending increases, sponsorship and event marketing opportunities have likewise proliferated. There are the Olympics, Triple Crown horse races, the MLB All-Star Game, NASCAR races and drivers, golf tournaments and players, all forms of professional sports leagues and players, and collegiate sports. There's entertainment like concert series and tours, Broadway shows, museum exhibits, special TV programs, and county fairs. Don't forget all the creative ideas agencies have for guerilla marketing and other events and promotions like mobile marketing tours, sampling, product placements in movies and on TV shows, and contests.

Growing budgets and abundant opportunities sound great, but, naturally, it comes with high expectations for accountability. As a result, the demand for demonstrable ROI from sponsorships and event marketing has never been higher. Unfortunately, tools for assessing the performance of sponsorships and event marketing in terms of contribution to sales and profitability continue to be in short supply. According to the PROMO study we cited earlier, 60 percent of marketers say they are not satisfied with their ROI tools.

Picking the ace of diamonds—our metaphor for an exceptional sponsorship or event opportunity—from the thousands, sometimes tens of thousands, of global, national, regional, and local options is rife with anxiety. Brand marketers get the vital stats on the audience size and composition of different programs along with the costs for every opportunity, but these details, while important considerations, don't reveal anything about the potential effectiveness or ROI of one sponsorship or promotion versus another. Other than a testimonial from another sponsor that may or may not be in the same industry, marketers are left with little more than intuition to guide their sponsorship and event choices. Again according to the PROMO study, 55 percent of marketers report sponsorship planning needs to be enhanced.

Some brand marketers have turned to traditional sponsorship research. Unfortunately, traditional research for the most part involves exposing study participants to a few sponsorship concepts and letting the results stand on having picked the best to test in the first place—and the probability of doing that is about one in 1000 (one in 10,000 or more if we're talking about a brand with global reach). As any gambler would tell you, those aren't great odds.

An alternative approach that's transforming the way brand marketers develop sponsorship and event marketing plans is to use a combination of cutting-edge marketing science tools including computer-aided analytical techniques, optimization modeling, and simulated test marketing. Think of it as "sponsorship engineering"—marketers build the most profitable plan with the most effective sponsorships and events for a specific brand and for specific buyer targets. The more sophisticated engineering processes we've seen expose study participants to different sponsorship configurations in a competitive context and use a battery of measures to capture consumer behavior and, ultimately, ROI. The more sophisticated systems also consider potential interactions between different options—the true effectiveness of an Olympic sponsorship and an in-movie brand placement in a summer blockbuster, as an example, may be greater (or less) than the sum of the two opportunities individually.

Though it's true there's nothing marketers can do to 100 percent guarantee the sponsorships and events they choose will return the highest ROI possible, sponsorship engineering dramatically improves the odds of marketing success. And as management guru Peter Drucker says, "I'd rather be approximately right than precisely wrong." Using it could make the difference between experiencing, to quote ABC's Wide World of Sports, "the thrill of victory or the agony of defeat."

Back in the day, Henry Ford could say, "people can have a Ford in any color they want as long as it's black," and mean it. Buyers had few choices between products and services so companies could get away with a mass marketing mentality, where everyone got the same product, service, and advertising message, and it didn't matter if they liked it. Marketers didn't have to worry about tailoring strategies, programs, and messages to a particular group—everyone bought the same thing regardless because they had no other choice.

But those days are gone and today most marketers realize that focusing on subsets of buyers is the most efficient way to develop a marketing program such as an ad campaign. Though most would agree that mass marketing no longer works, vestiges of the mass marketing mentality remain. As evidence, take the approach many companies employ when advertising to the gay and lesbian market.

True, there are companies that advertise directly to this market, for example Absolut, American Express, Cadillac, and Subaru, among many others. And yes, many companies do regularly purchase space in exclusively gay and lesbian magazines or ad time on gay and lesbian exclusive networks. However, most advertising dollars are still spent on "gay vague" messages in mainstream media. Advertising Age reporter Michael Wilke coined the term "gay vague" referring to ads, "that covertly speak to gays or seem to imply gayness with a wink—an intention advertisers often deny or sometimes don't intend." Gay vague means an advertising execution is so subtle, the general consumer does not pick up on the hints that what he or she is seeing is intended for a gay/lesbian audience.

As an example, a recent print advertisement for a global computer services firm showed pictures of different employees from the company, a mix of men and women. Next to each pictures was the city or town the person was from and the list included San Francisco, CA, and Provincetown, MA, two gay/lesbian hubs. We would've missed the reference to the gay market entirely had we not been told the ad was an example of gay vague.

Now many marketers might think this is a hugely effective and efficient means of killing two birds with one stone, hitting the general AND gay/lesbian market at the same time. But while the general consumer may be oblivious, the gay consumer is likely offended. In its landmark study, "Understanding the Gay, Lesbian, Bisexual, and Transgender Market and How it Influences Marketing Communications", Harris Interactive exposed straight, gay, and lesbian consumers to different advertising executions, some of which were explicitly gay or lesbian, others gay vague. The study found that though straight respondents felt indifferently towards gay vague advertising, the gay/lesbian respondents felt much more negatively towards the gay vague ads and the brands featured in them.

While a small group relative to the total population, the gay male market—estimated by some experts to be worth $500 billion—and the lesbian market—which has sustained the Subaru brand among others—are hardly anything to poo-poo or to lump into general consumer marketing efforts. More than a decade ago, the Wall Street Journal proclaimed the gay and lesbian community "a dream market." Members of this market likely have unique needs, attitudes, and brand preferences from the general consumer market, and meeting their unique needs could represent significant profit potential for companies. Unfortunately, removing the mass mentality from marketing has proven easier said than done.

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The U.S. presidential election has been in full-swing for months as the two candidates, challenger Senator John Kerry and incumbent President Bush, and their campaigns trade barbs, make accusations, and lay blame for one failure of some such or another. While we know the two campaigns intended to excite supporters and sway undecided voters with their not-exactly-positive rhetoric, it seems their disapproving antics have inspired a completely unexpected group: beer manufacturers, specifically Miller and Anheuser-Busch. Yes, Miller and Bud have engaged in the kind of back-and-forth finger pointing normally reserved for political candidates, only the campaign for the hearts and minds of beer drinkers everywhere has taken a much more negative turn than the presidential campaign has to date.

It all started a few months ago in typical early campaign fashion when Miller unveiled a campaign for its Lite beer that claimed it had fewer carbs than Bud Light. Next came Bud's response: a spot saying all light beers are low in carbs, so drinkers should choose taste. Though the Bud ad did not mention Miller specifically, it was a clear response to Miller's ad. Not about to let sleeping dogs lie, Miller came right back saying, hey, Bud has a point, taste is important and Miller tastes better. Then came the straw that broke the camel's back: in an ad featuring a mock presidential debate, Miller poked fun at the iconic Clydesdale horse and joked about Bud's "King of Beers" tag line with a bit about its preference to be known as the "president of beers" because, "This is America! We don't kowtow to a bunch of tiara-wearing crumpet eaters."

Now royally pissed, Anheuser-Busch announced a companywide "Unleash the Dawgs" campaign, "our strategic response to some of the desperate tactics Miller Lite is using." The company launched an aggressive campaign referring to Miller as "the queen of carbs" and taking issue with Miller's South African ownership. In one radio spot, for instance, Bud's Frankie and Louie the lizards talk about the Miller presidential ad they saw and wonder how Miller's man could run for president when he isn't even from America. Miller responded saying they are American and filed suit (which they later dropped in part) for false advertising.

Clearly Miller and Bud are under the mistaken impression that the ubiquitous negative advertising during political elections makes sense for their brands. Obviously neither firm did much investigating into how negative advertising works in a political context. According to Dean Michael Mexay of DePaul University, "what negative advertising does is get your supporters committed and excited. Those who are indifferent are so turned off that they are less likely to vote, as are people who are for the other candidate—so not only does it help you, but it depresses turnout. The ideal, rational goal is to turn out your most committed supporters and make sure nobody else turns out." Note that he does not say negative advertising persuades undecided voters or an opponent's followers to switch their votes, it just convinces them to opt out of the process altogether, impacting long-term involvement in the political process. Voters time and time again report being turned off by negative ads and generally tuning out campaign messages—be they positive or negative—as a result.

Now getting brand loyalists fired up isn't necessarily a bad thing—cultivating excitement among loyalists has worked much to the advantage of companies including Apple and Harley Davidson—but negative advertising doesn't win over new customers and may even shrink overall category sales as people are just turned-off and tuned-out to category advertising. This last point appears to have occurred to Miller; Norman Adami, president of Miller Brewing, recently cautioned that the two companies should keep their rivalry "fun spirited, not mean spirited because that might turn consumers off." Wouldn't it be a much more productive use of marketing dollars to find a compelling positioning that get loyalists AND uncommitted drinkers buying the brand and buying it more often?

The consequences of these ridiculous and wasteful campaigns extend beyond the brands and category. At a time when consumers are tuning out advertising in general, the Miller and Bud campaigns are making matters worse. What's more, at a time when marketing's ethics are under scrutiny, appearing to attack foreign ownership smacks of xenophobia. The Miller and Bud campaigns help no one—least of all their brands—and are hurting the practice of marketing.

For more insightful marketing discoveries, visit http://www.copernicusmarketing.com/discover/index.htm

Have a hot discovery for our next release? Contact us at info@copernicusmarketing.com

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For the past few years, marketers have been obsessed with capturing the hearts and minds of the Gen X and Gen Y crowd of younger consumers. So it was with great relief we saw a book dedicated to "the New Customer Majority—middle-aged and older adults who make up the biggest percentage of the buying public." We look forward to reading the results of what's billed as the definitive study of this 40+ market and, importantly, what distinguishes this group in terms of needs, wants, interests, buying habits, and attitudes from other age groups. Ageless Marketing also includes examples of companies that have appealed to the 40+ market with great success.

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Personally, we have a tough time when it comes to finding business-to-business case studies that include marketing success stories. So we decided to put together our own.

In the "Case in Point" section of the July/August edition of Marketing Management, a publication of the American Marketing Association, we culled together an illustrative composite of several B-to-B clients with whom we work to create the case of Standard Industrial Lubrication. The story we impart describes the approach many of our clients have taken to avoid commoditization, maintain—even sometimes raise—prices, and remake the business.

Visit http://www.marketingpower.com/live/content1050C345.php to find out how to get a copy of the July/August edition.

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