The 2012 World Yacht Racing Forum opened with a discussion around sponsorship Activation. Activation, or utilisation, is the activity undertaken by companies to actually generate the returns from sponsorship. This article first appeared on YachtRacing.biz

The panel featured; Josephine Edwall-Bjorklund, Senior VP Corporate Communications for SCA – who recently announced they would back an all female team in the Volvo Ocean Race, Lena Alvling, General Manager, Marketing and Corporate Events, Stena – who have extended their title sponsorship of Stena Match Cup Sweden and Sven Osterberg, General Manager, Volvo Event Management Sweden who was involved with the switch from the old event owners to Volvo taking over the event.

Defining Activation

DF: Lena. How would you define activation within Stena?

LA: Stena being a bigger group of different kinds of companies, we have to do it in different ways. We do CSR, we do family days for the employees. For the people of Marstrand where we are, we try to do things for them. Stena Metal Group for instance, they are there, taking care of recycling products and then we have our customers and clients that we invite to Marstrand to follow the sailing and we get some important time with them – so many different ways.

DF: Do you have a different strategy for consumers or business partners?

LA: Yes we do. Within Stena Group we have Stena Line, which talks business to consumer and we have business to business companies as well. With consumers we might use new technology like Social Media for instance. For business to business, we use relationship marketing. We also sponsor the RC44 event in Marstrand. It’s definitely more of a business to business (B2B) event for us. We don’t invite that many guests to watch the sailing. You have to have a boat to watch. A lot of the sailors, skippers and owners are our own customers, so we have a chance to interact with them and have a good time together.

Factoring Activation Into Sponsorship Decisions

DF: Josephine, SCA is a brand new sponsor to sailing, which we are very happy about, when you evaluated the proposal, did you have a number in your head about how much it would cost for activation versus sponsorship, or is it something that you are still working on as the project develops?

JE: SCA are on a journey, and the brand itself – if I was to ask people – how many people know about the products that SCA do, the number might not be very high. Not a lot of hands up. We are known for being a forest company, which we are and it is a great heritage, but 80% of our sales come from the hygiene business. So we are on a journey and the Volvo Ocean Race is a journey. We see the Volvo Ocean Race as a great platform. Of course, before we jumped on this we did an analysis. What can we choose in order to increase our brand awareness? We know the costs and we know what we want to have out of it – before we said yes. This is included in the marketing budget. It is not a big add-on, we are just taking from other marketing activities that we would normally do locally to focus on the big global platform. We can take this around the world and we can target employees, consumers, retailers and media. So that’s why we did it.

DF: Sven, do you have a number in your head about activation versus sponsorship. We’ve heard some numbers in the past.

SO: An old rule that we use is that for every dollar of sponsorship you need to invest another dollar in utilisation – as we call it in Volvo. If you don’t do that, it’s money spent for nothing. We really try to have budgets for the activation as well as the sport – it’s very important.

DF: Lena, does Stena have a rule of thumb as to how much you spend on each component?

LA: I agree with Sven. You have to invest as much at least as much in activation as you do in the sponsoring fee – depending on what kind of sponsorship we are talking about. Dollar for dollar is about right.

DF: Do you think that sponsorship seekers – people asking you to sponsor events understand that the budget could effectively be double for what they are asking for?

LA: I’m not sure. I get a lot of phone calls every day about sponsoring, but I don’t think so. It’s a lot of money that we have to add on to the sponsorship fee that they don’t think about.

Activating Sailing Versus Other Sports

DF: Sven, Volvo is involved in other sports, like Golf. Does the activation differ from golf to sailing or can you replicate it?

SO: We entered into yachting in 97 after the acquisition of, shall we say ‘The W’. At the time, I would have said that we were 20 years behind golf. I went out to the various European championships and saw a perfect world of golf. Almost too perfect – you have to have some heart. It was a bit plastic. When you do yacht racing, it is full heart, it is wind, sunshine and nature, but perhaps sometimes less perfect. Over the last 12-15 years we have caught up. We are closer to golf, but we don’t want to bring it too far. Golf is very expensive, and yacht racing is still cost effective to use as a commercial platform. It’s two different worlds. You never get to talk to a mega-star in golf. We saw that from our people working for the events. In sailing, you can become friends with the stars immediately.

DF: Did SCA look into other sports when deciding to go into the Volvo Ocean Race?

JE: When we do sponsorship, we want to think of it more as a partnership. Because it’s not like you spend 100 million and then you put your brand ‘up-there’ and then not do any more. This is more than a partnership. We don’t sponsor a boat. We need to put some money in to help build the boat and support the sport – that’s 13-15 million euros – or something! So we evaluated it and what we liked was the team aspect. There is a team effort to set a goal, you have a strategy and then when you are racing something unpredictable can happen and then it is very much how you work together and that’s what we liked because that’s how it is in a business.

Extending Value Using Activation

DF: One of the advantages of activation is that it allows you to extend the period that you get coverage of an event. In the case of the Stena Match Cup Sweden, the event itself only lasts a week.

LA: It is only a week and it is a lot of money put in. We’ve been the title sponsor for three years and we’ve just signed for a further five year period. We have not been so good at using the event for the whole year in the past, but that is something that we are really working on. We are using to use Social Media better and try to make people interested in the event before it really starts.

DF: SCA has been lucky. You’re getting coverage already.

JE: Yes. That’s an advantage of this race. The event is not until 2014, but we can start already. We can start with social media, we can start with employees to tell them why the campaign is so important. Being at events like this.

The Role of Social Media in Sponsorship Activation

DF: Tell us a little bit more about how you use social media. Is it different for your B2C brands and your corporate brand?

JE: It was much easier when I started out as Head of Communications – there was no social media. You used to be in control. You could steer the information. Social media is a fantastic channel, but not everyone is using it. Things can happen very quickly and you need to be able to respond to it.

DF: Sven, Social and B2B is still emerging. The Social Media gurus tell us that social is just as important for B2B brands. Is that something you see or are there still other more effective methods to activate for B2B brands?

SO: I have an example of a film for a truck that we launched a few months ago. It’s a ballerina walking a tightrope between two trucks and so far it’s been seen over 7 million times. Yes. It’s a way of launching a truck, on social media, on youtube. We’ve just launched a new thing which is called transporter. It’s a game where you can play on your mobile phone. It’s a truck game. My kids got hooked, I got hooked – and there have been a few million downloads on that one too. Of course we have the Volvo Ocean Race game with 200,000 players.

DF: What Stena, are the old ways still the best – inflatable ships for kids versus apps?

LA: I think you have to do both. Social Media might attract a broader Audience and then you can use traditional methods of mingling with your clients and customers.

Question from the floor about internal communication and activation.

JE: You are touching on a very important point there. At SCA we have around 37,000 employees, so we can’t send everyone to a Volvo Ocean Race stopover. So it is very important that we start to communicate now to the business why we are doing it, to explain what it can give us and to allow them to meet with the team when they are appointed. We can also link our business targets to this. And if we launch a new product, whatever we do, we can get people involved. SO: We have done a few things. In the last Volvo Ocean Race we had a blogger in all the ports – a quite experienced media guy who did interviews, made films and took photos and sent it back to Sweden internally for the blog. Some of that was telling business stories – like how can we treat our customers better? If they can’t go to the race, bring the race to the people.

Question from the floor about resourcing activation.

SO: We have lets say 10 people centrally at Volvo Group and maybe as many again at Volvo Cars talking to people around the world in the different markets. The markets need people – so a market like Portugal where we stopped in Lisbon last time – they probably put in 5 people or so for a year to plan, invest and make sure the campaign works. So it takes quite a few people. JE: Since we haven’t done this before we have brought in Altant Racing. They will guide us. They have a small project team. Within SCA there is someone in my team who doesn’t dedicate much time at the moment, but when we go to the stops we will have people working locally too. LA: We are a steering group that handles Stena Match Cup Sweden centrally, then in each company there is one or two people dedicated to the event, but those people work on other things during the year as well. At the event itself we try to use as many of our own staff as possible because we think that Stena is the best person to talk about Stena, but we also use an agency to help us with the communication and the displays on site. SO: We have a company within the Volvo Group which is Volvo Event Management – it’s been working since 1986 with golf and since then with other events. So we do all the activation.

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