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Is the sponsor ship sinking?

Imagine you are at the starting line for one of the most historical


sporting events in Britain. You are in one of the crew in the Oxford v


Cambridge boat race and this is the moment you have been building up to


during all your days at university.


Hundreds of exhausting hours of training through rain and shine have


prepared you for the challenge of your life.


Your team members feel as close to you as your family and friends who are


cheer ing on the sidelines. You can already picture the celebrations in the


bar afterwards.


Suddenly, the starting pistol fires and you are off. The River Thames


stretches out in front of you for the four-and-a-quarter miles of the race


as you take your place in 146 years of history.


But hang on a minute. What if you lose? What if the years of physical


training and mental exertion end with the rival team swishing past and


stealing the glory?


Closing your eyes and thinking of Isas may not immediately spring to mind.


But as hopes were sunk this year for the Cambridge team, they could at


least take comfort in the fact that their sponsor claims to have done well


out of the event.


Aberdeen Asset Management had 185,000 clients in March 1999 when it


started sponsoring the boat race. It now has 400,000.


Chief executive Martin Gilbert says: “Our advertising campaign encourages


our Isa sales through IFAs. Strong brand awareness makes it easier for IFAs


to sell our products as clients are more likely to buy Isas from a company


they have heard of.”


Yet IFAs say fund managers which sponsor sporting events such as the boat


race are wasting their money.


Hargreaves Lansdown managing director Peter Hargreaves says: “Sponsoring


the boat race was the single biggest waste of money purported by any


investment company in the world. Aberdeen Asset Management would have been


better off chucking its money in the North Sea – at least it would have got


it some comment somewhere.”


Churchill Investment managing director Jamie Ware says: “As an IFA, I am


not going to switch on the television and say: &#39Oh, there is Aberdeen Asset


Management sponsoring the boat race. I must support its Isa funds more.&#39


“The only person who gets a thrill out of this sort of sponsorship is the


marketing manager but it is in his dreams if he thinks that it improves Isa


sales.”


Opinion is divided between fund managers themselves. Some say sponsoring


events such as the boat race raises brand awareness and provides a platform


for entertaining IFAs which encourages them to sell the company&#39s products.


But others say it is performance which sells Isa funds and that sports


sponsorship is a waste of money.


Jupiter sales and marketing director Steve Glynn says: “It is unlikely


that Jupiter would sponsor the boat race. It tends to be very expensive and


there are better ways for us to spend our money.”


So how can marketing managers justify spending vast amounts of money on


sponsorship, claiming it is an effective tool for attracting business


through IFAs?


Aberdeen Asset Management head of sponsorship Diane Finn says the company


has signed up to sponsor the boat race for a further three years. She says


6.3 million people watched the boat race on television this year compared


with 5.7 million last year.


With a further 300,000 supporters lining the banks of the Thames and media


coverage ranging from the Sun, Mirror and Financial Times to OK magazine


and even TV&#39s Ready Steady Cook, Finn says the total £8m cost of sponsoring


the event will be money well spent.


She says: “We have spent £4m on the sponsorship and will spend another £4m


on equipment for the teams but we have had a wide range of media coverage


as a result.”


All this for an event which boasts no famous sporting personalities and


where the participants are amateurs from two of the oldest academic


institutions.


But this does not seem to have impressed IFAs, who maintain there is very


little awareness that Aberdeen sponsors the event.


Hargreaves says: “I do not think if I asked the first million people who


pass by my office or even if I asked the entire UK population, they would


know that Aberdeen Asset Management sponsored the boat race.”


IFAs say sponsorship of this kind encourages people to go direct to


providers and miss out on independent advice.


Chase de Vere investment director Graham Hooper says: “Linking this sort


of sponsorship to sales of Isas through IFAs is tenuous. Joe Public would


be more likely to call Aberdeen Asset Management direct rather than call an


IFA.”


Some fund managers believe that corporate entertainment at sporting events


is a more effective way to gain IFA business.


Gartmore corporate marketing manager Claire Lewis says: “We sponsor a


yachtsman in the round the world race and this provides a great platform


for entertaining IFAs. It is a lot more effective than buying a box at the


Royal Albert Hall.”


Edinburgh Fund Managers head of marketing Marianne Cantley says: “We have


sponsored a Scottish golfer since 1998 and will continue to do so next


year. We think golf is a sport which is appropriate for our clients and


IFAs enjoy golfing days as a result of this sponsorship.” Cantley says the


key to this sponsorship is pitching at the right market. She says: “You


need to think about where your client base is.


The trick is to sponsor something that people who may be interested in


your products will be watching. The boat race is not something we have


considered sponsoring and it is not likely we will.”

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