Evaluation of the first European cultural sponsorship market survey, from the perspective of cultural institutions by Causales – Cultural Marketing and Cultural Sponsoring Ltd.
How sensitive the relationship between culture and the market can become can be seen in the heated debate regarding the Transatlantic Trade and Investment Partnership between the USA and the EU and the hitherto unforeseeable consequences for European cultural institutions and producers. The dropoff of publicly supported investment (1) because of an unrestricted market economy is haunting the minds of many cultural creatives. Culture needs a protective zone, in which it can move by economic market mechanisms and evolve freely. Culture-promoting companies respect this protected zone and contribute with their investments, which are an extension of public funding, to maintain it. This is just one of the conclusions drawn from the first European Cultural Sponsorship Survey, carried out in February 2014 by Causales – Cultural Marketing and Cultural Sponsoring Ltd.
1. The culture sponsorship market potential in respective European countries is at an average of around EUR 166.6m (3)
Culture is an extremely attractive cooperation partner, as it possesses aspects missing from general economic markets: emotion, energy and passion. The motivation for investing in culture is not exclusively based in the assuming of social responsibility, but it equally rests upon corporate communication strategies such as image and brand maintenance. The establishment of a cultural brand (4) is the basis for appealing to professional sponsor and the successful courtship of the limited communication budgets of private companies.
Among a company’s most important selection criteria for a cultural sponsorship engagement are the strategic positioning, unique selling proposition (USP), a distinctive market presence, qualitative performance, competitive reach, media reach and relations, along with a transparent sponsorship concept based upon convincing business arguments.
2. European cultural institutions are increasingly banking on sponsorship as a financing and communication instrument
Sponsorship has gained in significance in the finance and communications mix that has been shown by previous studies within the German-speaking cultural sponsorship market in 2005, 2007, 2010 & 2013: cultural institutions continually increased their income from sponsorship in this time. A benchmark figure for Europe has been unavailable, but a similarly positive outlook is forecasted here. Sponsorship, with 11.3%, is the third-most important component of the financing mix, ahead of foundation money and donations. Public investment and primary and secondary operating income (for an explanation of terms please see Gerlach-March p. 98) are the two sources ahead of sponsorship in Europe.
Also worth pointing out is the meaning of sponsorship as a means of communication. 5.6% of German-speaking cultural institutions indicated that strategic sponsorship activities were a form of brand maintenance in 2013. In 2014, 11.5% of European cultural institutions said that the conveyance of more positive image components of the sponsors to their own brand was common practice.
It is likely this trend will continue. 95% of the surveyed cultural institutions are currently working with one or more partners from the private economy. 74% of them are of the opinion that the importance of cultural sponsorship as a means of finance and communication will increase.
3. At a European level focus lies increasingly on compliance
Because of a close link between communication and sponsorship, the coordination of sponsorship activities has, at 22.4%, settled comfortably into the marketing and communication activities of cultural institutions. 19.2% of the surveyed said that sponsorship appeal and maintenance is a top priority. In 6% of these cases there was a specialised department dealing with the management of sponsorships. In contrast, 4.5% of cultural institutions had no dedicated sponsorship activity.
Before the sponsorship appeal is made, only 32% of respondents defined a sponsorship concept with respective services. Other preparations, such as the definition of strategic targets (15.3%) and ethical guidelines (36.8%) were relatively rarely looked at. Further crucial factors in a cooperation agreement were based on the fit between sponsor and cultural institution in terms of target markets (67%), image (59%) and location (58%).
From the perspective of the companies, incentives to enter a sponsorship partnership, apart from to the above-mentioned relevant target groups, image and location, are the communication efforts of the cultural institution and the reach of the communication channels used. Proof of reach is a decisive marketable factor for the company's sponsorship activity as an operational expenditure in order to fulfil the company's communication targets.
Overall, and in direct comparison to the previous studies of the German-speaking countries, an expansion of the gross marketing reach of cultural institutions can be observed. More print media (+3.5%), radio (+3.4%) and TV (+2.3%) is being used, which is registered as media data through media companies. The most commonly used communication channels are still online and social media (92.2%), the recommendation market or word-of-mouth advertising (87.8%) and the classic public relations (84.3%). The integration of the brand values of the sponsor in PR (58%) and in printed media (66.7%) constitute the main part of services offered and enable the sponsors to gain a better access to the consumer market. The significance of free or VIP tickets (58%) and access to special events such as previews and meet-and- greets (55%) is worth pointing out. Sponsors use these aspects to further develop their direct contacts to customers, suppliers and distributors and to set up meetings in an artistic and sophisticated environment.
In order to ensure an effective sponsorship engagement that appeals to the target markets, most of the surveyed cultural institutions (60.5%) use a three-way synergy between themselves, the sponsors and media companies. Media partners, with their reach capacity, extend the presence of the sponsorship engagement into the public realm. The added value of a sponsorship makes working with media partners attractive to 24.4% of the cultural institutions who are not yet tied in to such an agreement.
For a mere 2.3% of cultural institutions, partnerships with media companies are excluded on the basis of journalistic objectivity and neutrality. A professional media partnership will be agreed on an advertising level (classic ad slots) within a cross trade agreement with a publisher or media sales department, which includes the sponsorship information without threatening the editorial integrity of the publication.
A further potential stumbling block of sponsorship management, mentioned by some 15% (+3% on the previous year) of cultural institutions, is that compliance guidelines of companies prevent passing on free tickets, special discounts or other material benefits, an issue that posed a negative aspect of sponsorship for 7% (+2% on last year) of cultural institutions working with sponsors. For cultural institutions themselves the compliance (9) field can lead to complications.
If the advertising value and sponsorship services should not be in an appropriate relation to each other, severe taxation consequences may apply and have a direct impact on the cultural institution (e.g. withdrawal of its non-profit status, private liabilities for the board, possible loss of jobs); even a non- specific sponsorship contract may attract the attention of the financial authorities to initiate an investigation (10). With the exception of a few - Austria is one example - there are still no mandatory frameworks (11) for compliance. To ensure that companies do not withdraw from sponsoring altogether because of fear of legal ramifications and image damage,the development of a European compliance standard is highly desirable. They would contribute to ensuring a protective zone for culture, as mentioned earlier, which would be supported by an entrepreneurial cultural promotion.
How valuable sponsorship investments are can be seen in the figures of specific means of support. 20% of cultural institutions say that without the involvement of sponsors, some projects or events would not be possible. In 20% of the cases, investments were directed to the umbrella brand to cover rising overheads such as rent and personnel. But investment in content-related projects (42%) is still the most common form of engagement. 94.4% of cultural institutions assured that the presence of a sponsor would not automatically have an influence on the artistic product or within the framework of a cultural event. The sponsor's involvement in juries or the availability of industry expertise is generally seen as a positive.
The survey results also reflect the increased professionalism of sponsorship agreements. 70% of European cultural institutions carry out monitoring activities, a 13.2% increase in the German-speaking survey. Cultural institutions mostly determine the success of sponsorships using quantitative and/or qualitative media resonance analyses (30.4%). In addition, surveys of test and focus groups are carried out (14.5%). Recall and recognition tests are becoming more and more popular, in which the memory performance of the target groups are determined in relation to the sponsorship partner. 28% of the controlling is carried out after the closing of specific projects, 23% measure the success of the sponsorship after the completion of the project and 16% measure success during the sponsorships.
4. European Cultural Sponsorship Market – Quo vadis?
The first step has been taken - summarising the European cultural sponsorship market in figures and drawing reliable conclusions is a task both holding responsibility and posing a challenge. 251 cultural institutions from 13 different nations have shared their experience on working with the economic sector for the first time. Without doubt they demonstrate how important corporate investments are, as to present themselves as cooperation partners, some of whom have already entered private professional sponsorship agreements with companies (ref. Chapter 3, 32%) and have pointed out urgent issues that need to be addressed. The first European Cultural Sponsorship Survey draws the following conclusions:
1. The cultural sponsorship potential in individual European countries added up to around EUR 166m (12)
2. 74% of European cultural institutions acknowledge the increasing importance of sponsorship.
3. Compared to study results from the Ger- man-speaking countries, sponsorship as a means of funding and communication already has a greater significance.
4. Indispensible to sustainable cultural fun- ding is knowledge transfer, exchange with industry experts and intermediary services. 32.5% of the surveyed cultural institutions therefore see the work with external agents and service providers as indispensable.
5. While the acquisition of sponsorships from corporate funds are be well received by 75% of the respondents, 22% of the cultural institutions experience problems with compliance, which is dealt with inconsistently throughout Europe.
Causales – Cultural Marketing and Sponsoring Ltd. has been advising companies in strategic planning of sponsorship processes since ten years, and selects the most attractive cultural projects for social involvement. Causales advises cultural projects in brand- building processes and finds appropriate sponsors from the economic sector. Since its foundation, Causales has brought together more than 220 sponsorship partnerships between culture, business and media organisations in the German-speaking area, with a combined seven-figured financial value.
Our core services include: marketing and sponsorship advice, development of marketing and sponsorship concepts, matching of culture and businesses for sponsorship projects and coordination of the marketing and communication mix in the context of sponsorship projects. Furthermore, we have also developed several unique products to stimulate the cultural market further. Among them are the Cultural Brand Yearbook, the Annual of European Cultural Brands, the web portal for cultural marketing and culture sponsorship www.cultural-brands.com, the Cultural Brand Awards and the Culture Invest Congress.
Kristin Just, Eva Nieuweboer, Kira Potowski, Hans-Conrad Walter
Themes of the first European Cultural Sponsorship Survey (2):
_Significance of sponsorship income in the financing and communication mix of European cultural institutions
_Formations of performance and counter-performance
_Management with respect to planning, execution and monitoring of sponsorship _Satisfaction within the framework of the partnership 251 cultural institutions from Belgium, Bulgaria, Germany, Finland, France, Greece, Luxembourg, Austria, Romania, Switzerland, Slovenia, Spain and the Czech Republic provided their input to the survey, sharing with us – anonymously – their experience of working with sponsors from the economic sector
The aim of the survey:
_Illustrating the quality of sponsorship management of European cultural institutions
_Transparency and highlighting of future perspectives for the European cultural sponsorship market.
251 European study participants from the multi-faceted cultural sectors of:
_music concerts and festivals
_stage and music theatre
_libraries, archives and high schools
_film festivals, film and TV production
_choirs and singing groups
_performance and ballet
_art exhibitions and competitions
_studios and artist workshops
_tattoos (musical event)
25% of the respondents reach up to 50,000 visitors within a radius of 100 km.
European cultural sponsorship partnerships overview
_Trend towards a small pool of 3–9 sponsors
_Typical duration of cooperation is 1–4 years.
_90% of the sponsors are from the same region as the cultural institution
_At 46%, SMEs (with up to 500 employees) are the most common cultural investors // large companies are 5.9% behind.
_Media companies (+9.1%, 2nd place) and the hotel and catering industry (+8.4%, 4th place) are investing in culture more and more //Effect: upgrade of cultural core services, increase in quality, excellent sponsor integration perceived positively by customers.
_the tobacco industry
_the erotic industry
_political parties and religious groups
_negative influences related to human rights
_employment rights or environmental issues
Sponsorship designation rankings:
1. Main/co-sponsor or partner(45%)
2. Media partner (42%)
3. Project sponsor or partner (20%)
4. No attribute given (20%)
5. Other (15,9%): Partner, sponsor, official partner, with kind support from etc.
6. Event sponsor or partner (14,5%)
7. Presenting sponsor or partner (5,8%)
8. Gold, silver and bronze sponsor (2,9%)
The most important added values of cultural sponsorship in an overview
_The most important values added by cultural sponsorship – overview
_Development of effective advertising measure for uses of both parties
_Snowball effect: Attractive sponsors attract further partners
_Strengthening of the regional network
_Extended target market appeal
_Increase in quality through inclusion of the sponsors’ services and products
_Learning effect related to a better customer orientation
_Permanent examination of one’s own measures in terms of effectiveness
(1) Particularly endangered would be the European Film Funding.
(2) Editor’snote: Causales carried out surveys of the Germanspeaking cultural sponsorship market in 2005, 2007, 2010 and 2013 and demonstrated, by comparing the study results, the trend towards professionalisation within the cultural market: www.kulturmarken.de/fachwissen/causales-studien
(3) The calculation has no claim to general validity since the figures are related solely to the countries of the survey participants. The data for business cultural promotion through Europe is also extremely unreliable.
(4) The word brands Cultural Brand® and Cultural Brands® are registered trademarks in the register of the German Patenting and Branding Office and are protected.
(5) www.wikipedia.org/wiki/Liste_der_L%C3%A4nder_ Europas, last retrieved June 22, 2014
(6) Source„Media & Cultural Financing Information by Country“, European Institute for Comparative Cultural Research gGmbH (ERICarts)
(7) Flandern, 2011
(8) www.20min.ch/finance/news/story/Sozialsponsoring-laeuft-dem-Sport-den-Rang-ab-11412198,last retrieved June 22, 2014.
(9) The term “compliance”describes the entirety of all reasonable behavioural measures to which a company, its organisational members and employees should be expected to adhere, with respect to legal permissions and restrictions. Beyond that, the compliance of the corporate business practice should also be in line with all societal guidelines and values and with moral and ethical guarantees. (10) Further elaboration: Risch-Kerst,Mandy: Compliance– As a Part of Modern Corporate Leadership in the Culture Sector, published at www.kulturmarken.de/fachwissen/fachbeitraege/1264-compliance-als-teil-moderner-unternehmensfuehrung-im-kulturbereich (last retrieved June 26, 2014) // More on the tax law aspects of sponsorship: RSM Verhülsdonk: Sponsorship. Taxation Frameworks for Promoters and the Promoted, released on www.verhuelsdonk.de/pub/info/downloads/bro_sponsorring.pdf (last retrieved June 26, 2014)
(11) In Germany and France there are non-binding guidelines such as the German Corporate Government Codex www.dcgk.de/de/, and a basic programme from the French economic competition authority Autorité de la concurrence: www.autoritedelaconcurrence.fr/doc/ document_cadre_conformite_10_fevrier_2012.pdf (both retrieved on June 26, 2014)
(12) The calculation has no claim to general validity since the figures are related solely to the countries of the survey participants. The data for business cultural promotion through Europe is also extremely unreliable.