We've recently been tasked by a brand to evaluate whether title sponsorships really deliver added value compared to more standard sponsorships and the results have given some clear indications. Do title sponsorships work? Let's look into that.
The main difference between a title sponsorship and a standard sponsorship is naming rights that are included in the first one and thanks to that the sponsor can put his name as an integral part of the team's name. These rights are the ones that are supposed to generate that extra value, however, this is not as straightforward as it might seem. Let's look into the conditions that can make a title sponsorship successful or not.
Be the Only Title Sponsorship: Formula 1 has become a highly sought-after sport, with several teams having more than one brand as a title sponsor. As a brand, it is important to ensure that you are the only title sponsor, as the success of a title sponsorship lies in being the sole title sponsor, completely replacing the previous naming.
Less brand equity, the better: Based on our analysis, we found that a title sponsorship tends to be more successful if the team's original name doesn't have a strong brand equity. This is because it's easier for fans to associate and identify the team with your brand's name when there isn't a strong attachment to the old name.
Think long-term: Our data suggests that it may take up to 24 months for a new team name to gain widespread recognition and acceptance among fans. This is influenced by several factors, including the team's history, fan sentiment, and media coverage. Therefore, to achieve the desired outcome, a title sponsorship should run on multi-year agreements.
There are also additional factors that contribute to the success of a title sponsorship, which are also shared with more traditional sponsorship agreements. These include genuine integration into the team, authentic storytelling, brand alignment with the team's personality, access to the right assets, and a well-structured activation strategy.
In conclusion, if you are a brand looking to invest in a title sponsorship, it is crucial to prioritize the first three points as they should be the starting point for any discussion.