For the live events industry, these are uncertain times. By now almost everyone is beginning to feel the effects of COVID-19. As local governments all around the country increase restrictions on social gatherings, events are getting canceled or postponed. This can cause unrest, especially when it comes to the sponsorship landscape.
However, it’s important to remember that while things are changing they are not going away completely. Right now our agency is seeing prospects and sponsors respond one of four ways.
1. Holding on signing all pending sponsorships
The first and most common response we have seen is a hold on all pending sponsorships as brands try to find their footing and anticipate the economic impact they will face. This can be hard when you are trying to meet sales goals but try to think of this as a positive.
This is not a “No”. Staying in contact with these prospective sponsors is key. Remembering that there is another person on the brand side who is dealing with the same struggles as you can help put things into perspective. I have had conversations with several brands who have told me over the phone that they are “all-in” with our event but it’s a corporate mandate they can’t move forward until we see what happens. Most of the holds have been 4 to 6 weeks. This lull gives event organizers time to refine contracts, get the creative juices flowing, and prepare for a very busy fall.
2. Canceling their sponsorship agreements
I can’t sugar coat it, brands are canceling their sponsorship agreements. There are several reasons this might happen prematurely from the cancelation of an event. It could be because they target an age group that is considered vulnerable so they don’t want to be portrayed as irresponsible by partnering with a live event at this time. It might be that they have taken a huge financial hit and are trying to cut expenses everywhere.
Although sponsorship cancelations are our fear, there is some solace to remember. If they cancel and the event hasn’t, there is a good chance you might still get to keep the sponsorship money.
Make sure to double-check your agreement as most events have a no refund policy if the brand cancels. Now, whether or not your event actually keeps the money or refund’s it is up to you. Keep in mind it may affect future relationships with that sponsor. So be sure to assess the situation from all angles.
3. Willing to move forward but with a COVID-19 clause
Currently, there is increased importance around contracts. The good news is that not all hope is lost, although it is at a much slower pace we are still seeing brands move forward with sponsorships.
Now they are taking a closer look at clauses that deal with event cancellations. It’s highly recommended that every contract includes a plan of action regarding if an event is canceled or postponed due to COVID-19. This will allow sponsors to feel more comfortable with signing. During these uncertain times, preparedness and forethought can do a lot to build trust with a potential sponsor. The exact language that is included will vary but it’s worth exploring if brands are hesitant to sign. A full refund or a prorated amount based on deliverables (like digital marketing) are two options depending on the nature of the deal.
4. Holding tight to see what happens
Thankfully most of the sponsors that you have signed agreements with or were in the process of signing with will probably move forward or continue their commitment. They too, like you, have an investment in your event and they want to see it succeed. Your success is their success so like many of us...they are holding tight to see how this all plays out.
Keep in mind
Remaining positive is key right now. While it can feel like everything is coming to a screeching halt, the industry as a whole is simply taking a break.
Over the next several weeks, things will not be operating as normal. There will be a pause in new deals as many brands wait to see what the future holds. Everyone is waiting to see how these restrictions will affect schedules for the live event space. This also means that when things do finally start to normalize again that there will be many trying to make up for lost times and rebuild. Keep this in mind and take this break as an opportunity to prepare for busier times in the future.
Leveraging the time wisely
It’s easy to feel anxious waiting to move forward with a sponsorship contract but there is very little that can be done to move things forward right now (aside from the above suggestion of contract clauses). This is an excellent opportunity to explore new innovations. During this break, organizers can research new technology that can help their team or activation run more smoothly. They can also take the time to really get in the creative flow and delve into those blue- sky ideas they’ve never had the time to truly think about.
The only thing certain right now is that the sponsorship landscape in the wake of COVID-19 is changing. Over the next few weeks, there will be a bit of a pause as the industry awaits to see how things will look schedule-wise once the dust settles. Now is the time to ensure that contracts are written in preparation for the situation. It’s also good to take advantage of this slow period to create and innovate in order to come back stronger than ever once things get going again.
Disclaimer: This post has been written by a guest contributor. All views and opinions expressed in this post are those of the author, and may not represent those of Blerter.