• Enhancing Your Company’s Brand Through Sponsorship, Endorsements, and other Promotions
  • April 28, 2015
  • Law Firm: Holland Hart LLP - Denver Office
  • Effective marketing and promotion is a vital aspect of every company’s business, irrespective of the industry. Becoming and staying “top of mind” with your target market depends on effective brand asset management and the successful execution of marketing campaigns. Sponsorships and endorsements represent multi-faceted, albeit conventional, marketing tools in this regard. A savvy company can utilize a first-class sponsorship “property” (e.g., a marquee sports franchise or venue; an A-level national trade show or business networking event; etc.) and/or leverage endorsements (e.g., via long-term spokesperson agreements with athletes; through shorter term TV or digital commercial spot runs featuring celebrity talent; etc.) as effective platforms to proliferate the company’s brand and related consumer messaging. However, in today’s digital world, companies are best served combining these more traditional tactics with other online-and social media-based advertising campaigns.

    Whether your company is considering a specific opportunity or developing a broader marketing strategy for the enterprise, there are a number of business and legal considerations to take into account beyond the specific marketing elements themselves. To illustrate this point, the following sets forth a non-exhaustive list of common marketing strategies and the attendant business and legal questions your company should evaluate prior to campaign execution:
    1. Sponsorship Agreements: Sponsorship can provide an excellent vehicle for making and obtaining meaningful consumer impressions, and for otherwise spreading and enhancing your company’s brand. Take, for example, your company’s potential sponsorship of a charity event or sports team. Depending on the scope of the deal you are able to cut, the sponsorship could include, among other benefits: (a) the right to use the applicable charity/event name or team’s marks/logos, as well as an “official” / “proud” sponsorship designation, in your company’s marketing and promotional materials; (b) in-venue signage and features; and (c) various experiential elements (that could also be utilized in connection with consumer-facing sweepstakes / contests) associated with the charity/event/team (e.g., meet and greets and personal appearances at your company’s events). Aside from sponsorship rights and entitlements, your company should bear the following in mind:
    • Usage of Property’s Marks and Designations: How may your company refer to itself in advertising, promotional and display materials in connection with the sponsorship? Are there any geographical limitations regarding use of these designations or your company’s rights to use the applicable property’s marks? Your company should consider these questions during negotiations, as they can impact the marketing efficacy of the sponsorship (e.g., an inability to use the property’s marks on your company’s website and social media platforms may decrease the value of the deal).
    2. Spokesperson and Talent Agreements: Leveraging the endorsement and support of a celebrity personality can pay immense dividends for your company’s brand and products / services. However, during contract negotiations with an athlete, actor / actress or other talent, it is vital to resolve, at the outset of such negotiations, numerous business and legal issues unique to these types of arrangements:
    • Approval Rights: Because celebrity talent are understandably concerned with their image and portrayal in a given medium (and because they are often subject to various contractual limitations set forth in their applicable television, movie, studio and other endorsement / spokesperson deals), such individuals and their representation will generally push hard to obtain sweeping approval rights prior to your company’s usage of any content or materials developed under any talent agreement. Thus, your company should carefully detail within the applicable talent agreement the scope and limitations of the talent’s pre-approval rights over such content or materials.
    • Screen Actors Guild (SAG) Issues: Depending on (a) whether the applicable talent and production agencies used by your company are SAG-signatories; (b) the specific content / materials your company (and/or its production agencies) intends to produce and disseminate using particular talent’s name and likeness; and (c) the scope of your company’s planned usage of such content / materials (including temporal and media type considerations), there are a number of complicated union- / SAG-related issues that your company must be aware of as they may significantly impact the dollars your company has budgeted for a particular campaign. These include, but are not limited to, residual payments that must be made to the talent, pension and health fees that must be remitted to SAG, and other SAG-imposed administrative requirements.
    3. Online Contests and Sweepstakes: Consumer-facing contests and sweepstakes provide excellent tools for creating loyalty and brand / product / service affinity (after all, who doesn’t love winning a contest and receiving prizes?). Nevertheless, execution of such a promotion is rife with legal issues that must be addressed by your company:
    • Consumer Protection: Due to the application of various state and federal consumer protection laws, rules and regulations, your company must develop and strictly adhere to comprehensive processes around how it conducts its contests / sweepstakes, especially when the same are administered via the Internet. Depending on the particular promotion, this may include processes around rules drafting, state and territory registration and bonding, liability releases, prize fulfillment issues, affidavits of eligibility, tax forms for prize winners, etc.
    • Data Security: The collection and use of a contest participant’s personal information is an inescapable (and valuable) element of consumer-facing contests, sweepstakes, and similar marketing vehicles. Regardless of whether your company generally conducts this type of promotion internally or uses an external agency (or agencies) to administer particular contests / sweepstakes, the manner with which the sensitive data of participants is collected, used and stored is highly regulated. Given the number and breadth of these issues, in either circumstance, your company should engage the services of a data security expert(s) to research and vet such issues prior to conducting such a promotion.
    4. Advertising / Marketing Agencies: By utilizing the expertise of advertising or marketing agencies, whether in connection with specific campaigns or to assist in the development of broader, long-term marketing strategies, your company can increase the reach and effectiveness of its promotional activities. Prior to entering into such an arrangement, your company should consider the following:
    • Responsibility for Rights Clearances: Advertising / marketing agencies tend to operate autonomously due to the intrinsically creative nature of their business and services. Once these agencies gain an understanding of the creative direction and objectives their clients desire to take and achieve, they begin executing accordingly—often interfacing with clients only to gain approvals over marketing materials or tactics. Thus, it is imperative to determine during contract negotiations which party (ideally the agency, given its presumptive expertise in the field) will be responsible for obtaining any applicable rights clearances (such as the right to use the name, image or likeness of any individuals, and/or the right to use a third party’s trademarks, featured in marketing materials developed by the agency) in connection with each campaign or generally. Resolving these issues in advance cannot be understated given agencies’ ease of access to proprietary materials via the Internet, as well as their use of social media platforms in marketing strategies.
    • Fulfillment / Activation: In the same vein, should your company desire to use a production or similar agency to assist in the fulfillment or activation of a given marketing event, the applicable contract should clearly delineate the agency’s related responsibilities. These may include: (a) management of event logistics (e.g., performing facility and site checks, routing materials for approval, managing project timelines, identifying staffing / security needs, etc.); (b) securing a venue(s) for the event and handling any related contractual requirements; (c) coordinating any other support agencies (e.g., caterers) assisting your company with the event /activation; and (d) obtaining any rights, approvals, licenses, permits or other clearances required with respect to the event / activation.
    While the above is by no means an exhaustive list of marketing tactics or associated issues, paying attention to the aforementioned considerations as your company approaches a discrete marketing transaction, or otherwise establishes an enterprise-wide promotional strategy, will save you time and resources in the long run.