Municipal Sponsorship Emerging as a Critical Mass in the Canadian Sponsorship Sector

Over the past year, our organization has seen tremendous growth in the number of municipalities actively pursuing sponsorship, naming rights and new advertising sources as a means of generating new sources of non-tax revenue.

As a former municipal employee and an organization that specializes in this work, I am heartened by the developments in this area. Not only is it good for business, as more and more municipalities “get in the game”, I believe that municipal sponsorship has the potential to be a “game changer” in the Canadian sponsorship landscape. This is because municipalities have such a diverse range of untapped, community-based marketing opportunities that are opening up to sponsors that want to reach citizens (consumers) in unique environments where they are generally receptive to messages.

A conservative estimate on our part would indicate that municipalities have the potential to double the number of potential sponsorship properties in any community. While this may sound ominous to all the festivals, events, sports organizations and other properties currently seeking sponsors, this dynamic has the potential to bring a whole new group of community-minded sponsors to the table, thus increasing the overall number of corporations that view sponsorship as a legitimate element of the marketing mix.

However, sponsorship in the municipal sector is not without its challenges:

  • While municipalities are rich in opportunities to connect companies with targeted audiences, they typically don’t have the culture, processes and policies in place to effectively market these opportunities. Changing a culture in a large organization takes time and municipalities will need to gradually shift their organizational culture to be able to respond to the needs of the private sector on their terms and not the municipality’s.
  • Expectations will need to be managed. One of the biggest misperceptions on the part of municipalities is the amount of money that sponsorship programs can generate and how quickly it can be achieved.  There’s probably not a single company in Canada that has a naming rights budget and it can take anywhere from 6 to 18 months to get a naming rights deal approved. Municipalities also need to understand what their assets are worth and be prepared to offer value if they expect to achieve revenue targets.
  • Municipalities need to get over their fear that partnering with the private sector is going to make them look like they are “selling out”. The sponsorship environment has moved way beyond interruptive, in-your-face marketing to an environment where companies actually want to enhance the experience of the customer because they know that if the customer has a positive experience around the brand, they will likely look more favourably towards them. Besides, I’ve come to the realization that most people don’t care if companies are involved in municipal programs or services, as long as they see some value from the arrangement.
  • Businesses need to be educated on the opportunities that exist within municipalities and overcome their fear of working with a government bureaucracy.  Traditionally, business hasn’t looked to municipalities to help them with their marketing or communications objectives, so it will require a different mindset to move beyond preconceived notions. On the municipality’s part, they need to open up and prove to business that they have the capability to respond to a “business” approach towards partnerships.

Our firm launched the Municipal Forum on Sponsorship 3 years ago because we saw the untapped potential of sponsorship in the municipal sector. This year’s Forum, November 7th at the Grand Hotel and Suites in Toronto will tackle the key issues like the ones above, that municipalities face in the implementation of corporate sponsorship programs and help bridge the gap between the municipal and private sectors.

Later, BC

5 Replies to “Municipal Sponsorship Emerging as a Critical Mass in the Canadian Sponsorship Sector”

  1. Agreed, Bernie – good points. I also think increased activity in municipal sponsorship will bring increased challenges for activation. As more municipalities harness their assets and monitize their sponsorship potential, corporations will increasingly look for more effective ways to leverage that investment beyond the usual portfolio – names on walls and logos in print. It challenges everyone to up their game.

    Doug B

    1. Great point Doug. We seldom secure a sponsorship or naming right agreement without some form of customized activation and that’s typically where things get bogged down in a municipal environment. People have to realize that the stated benefits package for any sponsorship is usually the starting point. Frankly, that’s why the Municipal Forum on Sponsorship is so important, because it educates the sector on the realities of the marketplace. BC

  2. Sounds like you’re on the right track to be a major driving force for this change in municipality mindset, Bernie. Interesting stuff!

    1. Thanks Brendan. We’re building an incredible body of knowledge in this area. For example, we now have a very comprehensive inventory of potential municipal assets that we can draw on for our work with clients. However, like most organizations, the devil is in the details and getting the program off the ground remains one of the greatest challenges for municipalities.

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