Sport is pricing itself right out of the sponsorship game - and more big ticket backers could pull out because they are not getting their money's worth.
That's the prospect following the decision last week by Standard Bank to abandon its long links to South African cricket.
While the bank's decision was based on its own hard economic reality - it is in the process of major staff retrenchments worldwide to improve operational efficiencies - it is also frank about the fact the sports sponsorships are rapidly losing their effectiveness as a marketing tool.
And its view is shared by Sasol, another major player in sport sponsorship.
Sarah-Anne Orphanides, director of group marketing and communications at Standard Bank, says in the current tough economic climate "marketing does have to work a lot harder. The business environment is tough; the economy is not recovering as quickly as expected, there has to be the assurance that real value is generated for each rand spent."
The group sponsorship strategy at Standard Bank is about "brand stature, awareness and creating connections with our customers and staff. But we had to reassess the costs of these sponsorships and the benefits for the Standard Bank brand in the light of changed business needs. So our marketing strategy had to change too,"adds Orphanides.
For the bank's marketers, the key is the Return on Objective (ROO) - "what we need to deliver influences the selection and application of various marketing 'tools', and at what time, in what quantity, and in which relevant segments".
Orphanides says that when this analyis was done, "we concluded that the sports sponsorships were no longer delivering the right value sought by us".
She adds: "Sports rights costs in South Africa and internationally have escalated significantly and the costs have increased faster than the costs of other marketing opportunities. The returns have diminished in recent years as escalating rights fees restrict the ability to leverage properties effectively to derive appropriate brand and awareness benefits."
Sasol, a sponsor of the Springbok rugby team and numerous other sporting codes and events, says it "broadly concurs" with the sentiments of Standard Bank that the expectation of rights fees is "unrealistic".
A Sasol spokesperson says this situation "is in a large part attributable to South Africa's recent hosting of the soccer World Cup, which appears to have resulted in an artificial inflation of rights fees in many sport sponsorships".
In other countries, the crunch on sponsorship rights fees hit between nine and 18 months ago.
The Sasol spokesperson adds: "We believe that we in South Africa are only now entering that phase and we will see increased pressure on renewals of sponsorships. As we evaluate sponsorship properties we have to weigh increasingly high rights fees which eat into leveraging budgets, against other branding and marketing opportunities, such as revenue-generating advertising campaigns and promotions."
Orphanides says many corporates are thinking along similar lines and questioning the value of sports sponships and that she believes "there has been a fundamental shift in the South African sports sponsorships industry. Our analysis shows that the 'bang for buck' that sports sponsorships once promised has been diminished in relation to other marketing choices."
Orphanides also acknowledges the reality that the World Cup showed, that without paying huge sponsorship fees and without breaking Fifa's draconian rules on ambush advertising, a number of brands both locally and internationally managed to raise their profile.
"A human 'insight' or emotional connection cannot be owned, and tapping into that is what makes great marketing campaigns. Sometimes that means not having to buy the official rights to leverage the insight or emotion effectively," she says.
Standard Bank is still sponsoring key arts and jazz portfolios in South Africa and remains a sponsor of CAF (Confederation of African Football) as well as maintaining sponsorships in other countries.
Says Orphanides: "They can be extremely valuable and high-profile tools in the marketing mix, and have proven their worth for us in South Africa to build brand awareness, stature and making meaningful connections with customers, employees and fans.
"When sponsorships are selected as part of the mix, marketers should consider fewer and more cost-effective properties that can be fully activated to build real brand appeal, relevance and/or sales."
Sasol believes that "sponsorships are an important tool, offering an opportunity for a company to strike strategic partnerships, thereby helping to positively profile itself among its target audience or selected stakeholders".
Says its spokesperson: "The most successful sponsorships are those which advance and complement our business strategy and which have a clear target audience.
"However, sport sponsorship is a universal language, in that sport can transcend cultures and reach many different audiences.
"The experience at Sasol has been that sports sponsorships work well when they are:
- Flexible in approach (allowing us to use leveraging to suit our needs).
- Have the potential of providing global reach.
- Able to compete with or combat larger advertising budgets of competitors.
- Provide an additional platform for staff engagement.
"The Springbok sponsorship has provided a platform for very successful Sasol forecourt and Sasol Delight promotions. It has also enhanced Sasol's share of voice, with brand-building and corporate citizenship also having been positively influenced by our association."