ASSOCIATIONS are facing difficulty in getting sponsorships and the consequences are dire for those that have allowed themselves to be hugely dependent on this revenue stream.
Since the GFC, major corporations have become more selective about what they support and demand more ROI from their sponsorships. Association professionals interviewed expect the trend to continue in the foreseeable future as there has been no end in sight to economic uncertainties in the eurozone and the US, which have now impacted Asia as well.
“Most associations would say that over the last two years, sponsorship has been more difficult than it has been in the past. Some major companies have withdrawn completely, while others are selective about what they support. There is no indication that’s going to change,” said Simon Pryor, CEO of Melbourne-based Mathematical Association of Victoria.
The association itself lost Hewlett-Packard (HP) as a sponsor, although HP continues to be an exhibitor at its event. It was able to secure Casio after making a strong business case to it.
“Essentially sponsors want access to delegates. If you are, say, the orthopaedic surgeons association, then there’ll be a pharmaceutical company or a manufacturer of prosthetics that wants to reach out to your members. To get sponsorship now, you have to think more carefully about the exhibition you run alongside the education programme so you give the sponsors as much access to the delegates as possible,” Pryor said.
Dave Cybak, executive vice president of the Canadian Society of Association Executives (CSAE), urged associations to customise their sponsorship offer to companies rather than take a one-size-fits-all approach. To further increase the ROI for sponsors, associations also must be proactive in educating companies on how best they can engage their members, and follow up regularly with sponsors following the event on targets outlined.
“Sponsors don’t understand the association market. Often, they do a direct ‘here’s what I want to sell’ approach as they come from sales-oriented backgrounds. Often, that does not work. You have to demonstrate to them that you’re supporting their profession, association, mission and vision,” Cybak said.
Cybak noted the impact of reduced sponsorships on associations could be devastating.
“We need the revenue to produce the products and services that provide value for our members. If we don’t see it coming from sponsorship, we either need to sell quite a number of new memberships and more conference registrations to make up for that sponsorship loss, or reduce costs, which often means a reduction in services to members.
“But that results in a vicious circle – members will then question why they are renewing their membership at the same fee when they are getting less service from their association,” he said.
Cybak said there had been increased dependence on sponsorships as a source of revenue since the early years of this century, as it was “easy and seductive”. He warned that if associations got a third of their revenue from sponsorships, they had “a risk management” issue.
CSAE was putting up more conferences, face-to-face and online education programmes, as well as publishing and distribution activities to diversify revenue streams. “I would suggest up to 40 per cent is the right percentage of revenue from membership dues, 10 per cent from sponsorship and the rest from conferences, etc,” he said.
