Sponsorships

The issue of sponsorships is becoming a hot topic of discussion. As all shopping center owners are looking for ways to maximize the bottom line, sponsorships hold considerable allure and promise. But while they can offer some real benefits to both shopping center and owner, sponsorships can be hard to get and have some pitfalls that should be avoided.

Generally, the shopping center owner has little or no additional investment when taking on a sponsor for various programs.

Within the industry, common vehicles for sponsorship include shopping center newsletters or directories, advertising, various entertainment rides in centers, seasonal decorations, and other mall-wide events.
Large companies with sponsorship dollars to spend are going to be most interested in the regional and super regional shopping centers due to the amount of traffic generated in these large venues. The Mall of America offers one of the best examples of the successful use of sponsors; of course, it is one of the largest shopping centers in the world. The Mega Mall in Manila, also an extremely large facility, benefits from sponsors for its Christmas program and often attracts very large sponsorships, including some from entertainment giants like Disney, which uses the opportunity to plug upcoming movies.

It is difficult for smaller centers to attract sponsors and when they do, great care should be taken to ensure that the sponsorships are not offensive to the buying public. Smaller centers are most likely to attract local sponsors, including smaller businesses and regional companies interested in tapping the local traffic. There are many types of businesses that may have interest in advertising in local shopping centers in a way that benefits the center and presents the message in an acceptable fashion. Auto dealers are one of the first that come to mind. Recreational vehicle (RV) dealers would also be logical sponsors, as would large nurseries, furniture dealers, home improvement centers, health spas, hotels and motels, service companies, travel agents, local fast food companies, and restaurants.

Sponsors should not compete with merchants in the shopping center. It’s not reasonable to expect a tenant to pay rent and charges each month, only to have the owner of the center allow advertising space to a competitor - no matter what the return may be to the center owner.

While I am not in favor of the indiscriminate sale of ad space in shopping center common areas, the use of ads on two sides of a three-sided directory has worked fairly well over the years with little friction between shopping center owners and the tenants involved. The ads, for the most part, have generally been for merchandise and/or services not found in the shopping center. The automobile company sponsorships at the Mall of America are quite tasteful in that the car is displayed as much as a point of interest as it is an item for sale. There is no “high pressure” salesman lurking about the car to pounce on anyone that stops by to look at it.

The Mall of America newspaper is sponsored by a local printer and that company’s name is decorously listed on the publication. Pepsi has sponsored activities and there are Pepsi mock-ups in various areas that do not appear to bother anyone but still get Pepsi’s message across.

When the Mega Mall in Manila decided to work with Coca Cola for a sponsored Christmas decoration program, mall management wanted the display to provide the proper image to customers. The end result was quite stunning with Christmas trees made up of Coca Cola cans with matching red streamers and back-up decorations. There was nothing offensive about the promotion and it was quite profitable for the shopping center.

The small shopping center often has limited space for sponsorship activities. In addition to car shows, RV displays or mall directories, any number of center events could also be sponsored, especially public service events. Shopping center carts might offer a great vehicle for the ads of a sponsor supplying them; this is an especially successful strategy in a smaller center that doesn’t normally provide carts. A fountain or displayed artwork are also very feasible sponsorship ideas; the donation and/or maintenance of either could be indicated by a discreet plaque designating the sponsorship.

A sponsor could also be used to foot the bill for center-wide display placards for marketing events and public service announcements. The sponsor decides the overall theme, color scheme and message, which are then used throughout the mall. If the placards are displayed in merchant windows, the merchants should receive some benefit from the sponsor’s use of that space. A good solution is to give a portion of any proceeds to the center marketing fund and/or merchants association.

Sponsorship is a burgeoning issue that is likely to receive more attention in coming months. We are already seeing specialists in the industry who offer services in matching up sponsors and shopping centers. Sponsorship programs offer great appeal to center owners because they provide a potential source of income. They may also enable center management to offer various amenities, such as holiday decorations or center directories, in small centers that might not otherwise be able to afford them. And centers with limited marketing ability can get a real boost from well-selected sponsors.

However, the marketing director and/or center owner needs to cultivate sponsorship sources and negotiate programs that meet the needs of possible advertisers while avoiding possible negative impacts on tenants and customers. Each center should carefully consider sponsorships and make reasoned decisions as to how far to go with sponsors and how sponsors can help fill some of the needs of the shopping center.

The main watchword for sponsorships is “tasteful.”

Alan Alexander is a senior vice president with Woodmont Real Estate Services, Inc., 1050 Ralston Avenue, Belmont,
CA 94002; 480-860-2680, Fax 480-860-2681.