Naming rights for municipal facilities are increasing significantly across the country. While it’s important to generate much needed revenue, municipalities also need to consider the impact that the “fit” plays in community support for naming rights initiatives.
Since we launched the Municipal Forum on Sponsorship in 2011, I’ve had the opportunity to work with municipalities of all sizes across the country on how they can effectively leverage naming rights, advertising and sponsorship assets to generate increased non-tax revenue for the municipality.
What I’ve learned from working with dozens of municipalities is that they face many challenges that are unique to the sector. Among them:
- A overall lack of marketing orientation (and expertise) in most municipalities creates a sizable cultural gap between what sponsors want and what municipalities are often prepared to do to bring companies on board;
- The process to get a sponsorship or naming rights program off the ground is a complex one; often requiring multiple levels of consultations and approvals from various stakeholder groups to ensure that there is an appropriate level of buy-in across the corporation;
- Managing expectations on how much municipal assets are worth to corporations as well as rationalizing the allocation of resources and how long it will take to achieve return on investment;
Despite these and other challenges, there is tremendous progress being made at the municipal level. Almost every day, new naming rights agreements are being announced as corporations get on board the municipal bandwagon and the overall sector matures.
This year’s Municipal Forum on Sponsorship, November 6 at the Grand Hotel and Suites in Toronto will feature education content and discussions that reflect the growth of the sector as we move beyond basic concepts to more specific aspects of implementing municipal programs.
I’m also pleased to announce that RBC will be on hand to make a special presentation to municipal delegates on their recently launched RBC Learn to Play Project and how municipalities can take advantage of the multi-year grant program to provide enhanced programs and services in their communities.
Personally, I’m really pleased with the how the municipal sector is evolving in the area of sponsorship. Municipalities are still an untapped opportunity from an industry perspective. As more companies become educated in the unique opportunities that municipalities offer to connect with customers where they live and play, the greater the collaboration between government and industry to improve the lives of citizens.
Every day there seems to be a new naming right agreement announced. By and large, most of these agreements are with the larger companies in the financial, telecommunications, energy and national consumer retail sectors.
What is it that these companies know that others could learn from? First of all, a naming opportunity is a unique way of planting your flag in the ground and saying to your customers or potential customer base that “this is an important community to us and we’re here to stay”. Ads come and go, but aligning your brand with a facility can put you in the forefront of your target audience on a year-round basis, associate your brand with something perceived as valuable by your audience and create a unique point of differentiation in the marketplace.
Most importantly, a naming opportunity provides a vehicle to engage your audience in ways you could likely never afford to do on your own. Unfortunately, many companies think that if they simply put their name up in lights, that people will flock to them. A naming opportunity without an activation program is like buying the latest smartphone and using it exclusively for phone calls.
Smaller businesses can also capitalize on the naming rights phenomena by aligning their company with high-value community facilities. Many municipalities are now offering naming rights opportunities for community recreation facilities for a fraction of the cost of major attractions such as professional sports venues or convention facilities; and many of these facilities attract just as many visitors as the larger venues. One such example is the City of Ottawa who has a wide range of facilities throughout the region where companies can purchase naming rights for less than $2,000 per month. While they might not sound as sexy as the major facilities, these community-based properties provide a pipeline to the local communities they serve and in many cases, are perceived as more important by the customer because they are an essential part of their daily lives. Just go into any arena on a winter weekend and you’ll see how important these facilities are to a local community.
And for smaller companies that can’t afford major price tags for a branding exercise, the on site activation of a naming rights sponsorship through contests, demonstrations, customer surveys and product sampling can create all kinds of opportunities to stimulate direct response traffic that can be measured against business objectives.
Larger companies that pay significant naming rights fees have done the resesarch and the work for smaller companies. If these companies didn’t think the investment was worth the money, they wouldn’t be doing it. Smaller firms need to think outside of the traditional box, steal a few ideas from the “big” guys and instead of competing with 10 similar companies on the same radio station, start thinking about how they can occupy a space that has not been claimed by anyone else. That’s where an effective naming rights program can pay off in spades, even for the “little guy”.