Getting out clean from your sponsorship commitment

Regret is the periodic result of taking chances with one's marketing dollars. You do the research, run the numbers, maybe do some testing, and in the end, determine that a particular investment in a promotional vehicle or media buy is a good move. But, nobody bats 1,000 in the capricious world of advertising and marketing.

So, what do you do when you reach the conclusion that your maketing strategies have shifted and you no longer want to continue with a promotional vehicle or with that block of advertising or your "upfront" commitment? Unfortunately, you are locked into a contract that may run for many more months or years into the future.  You've decided that you are putting "good money after bad", but a contract is a contract and you feel stuck and frustrated.

Obsolving organizations of a media or sponsorship commitment is one of the lesser known applications of corporate trade. Considering that a currently "unwanted" media commitment or sponsorship is not unlike an excess inventory of, say, last year's athletic shoe, it makes perfect sense for corporate trade. It is simply another corporate asset that has become obsolete.

The structure of the transaction can take many forms. The trading company can take over your commitment entirely and sell or trade the media buy or sponsorship to another organization who sees it as a good opportunity. Especially because the trading company can now resell the sponsorship at a discount, it becomes a more appealing property for many. The trading company could, instead, reimburse the holder of that media commitment or sponsorship for their remaining obligation and the sponsorship could stay in place. Perhaps it's a worthwhile promotional vehicle, just not at the original price.

Like all corporate trade transactions, in exchange for the trading company purchasing or reimbursing the client for the sponsorship, the client will purchase a certain amount of their advertising or other service (printing, freight, etc.) through the trading company. If your advertising agency told you that they would reimburse you in cash for the remaining sponsorship commitment as long as you continued to place the next few million dollars in advertising through them, would you do it? Probably in a heartbeat, right?

So, if you have a media buy or sponsorship commitment or, for that matter, any type of long-term lease or other committment, corporate trade is ready and able to relieve you of your remaining committment.

About Mike Lake

Mike is the Senior Vice President of Marketing for Evergreen Trading. When not playing jazz trombone he is probably obsessing about writing content that will capture the attention and interest of business people and fellow learning junkies everywhere.

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