Sponsorship: check it's right before you write the cheque

By Wright Communications

What started out no doubt as a positive piece of EY's overall marketing and PR strategy, the sponsorship and organisation of a credible awards initiative to recognise excellence in Kiwi business journalism and build relationships with business media, has ended in a shambles with those very media universally condemning EY and its awards.

To recap, things began to fall apart in late July when EY's judging panel (made up of two EY representatives and two independents) disqualified an entry by the NBR's Karyn Scherer, because her investigation presented one it its clients, Fuji Xerox, in an unfavourable light.

NBR immediately withdrew all entries from the awards, with all major news organisations - Sky, NZME (NZ Herald), Fairfax, Radio New Zealand and Media Works - following suit, and duly reporting their actions to their not inconsiderable business audiences.

It's a PR nightmare for EY.

At the time of writing it was not known if EY would even be able to rescue the annual awards, let alone how.

Even if this year's awards were quietly cancelled, with little or no further fuss and publicity - this may be the best short-term solution - EY has suffered significant reputational damage and more consequences are likely to follow.

Sadly the debacle around the Awards, which were clearly designed to create a positive relationship between EY and the business media, has had the opposite effect - big time.

EY has lost a huge amount of credibility with all business media in this country. Without suggesting that the New Zealand business media is anything less than objective, it's fair to say EY can't expect any favours from them in the medium term at least. And that may be an understatement.

And it gets worse. Ironically, the very client EY sought to protect by removing the NBR entry from the awards has become collateral damage in this whole mess. When this shemozzle hit the headlines, Fuji Xerox was mentioned, reminding those already aware that of the Scherer story, and making a whole new audience aware of the possibility that the company has been involved in something dodgy. Oh dear.

What difference could PR involvement have made?

PR or communications professionals can add value to the sponsorship process in a number of ways.

Here are our top tips:

  • Get your PR team to review all sponsorship agreements.
  • Enlist their help for issues management to consider any possible negative scenarios or reputation issues and plan for them.
  • Advise your PR team about any unforeseen decisions or occurrences as part of the sponsorship and they can assess the potential impacts and how best to mitigate them.

We've always recommended a review of draft sponsorship agreements by PR or communications professionals - either in-house or external.

As well as the potential to add value to a sponsorship agreement by suggesting additional or different benefits and leverage opportunities, which may boost the sponsor's ROI, a trained communications eye can spot any potential issues.

Issues management is a PR discipline which is often seen as reactive 'damage control'. That's only half the story. The real benefit of issues management is the ability to review a sponsorship document, or any other project plan, and spot any potential risks in advance. If you know all the things that could go wrong you can then plan to avoid them or minimise the damage should they occur.

In this instance, a news story being submitted for the awards that was potentially critical of an EY client - or worse EY itself - was a recognisable risk, given that the best business journalism is often about the expose of hidden wrongs and no media awards can exclude such stories without serious questions about ethics arising. A 'what if' scenario should have been worked through.

The best PR advice would have been for EY to extract themselves from the judging process as soon as a conflict of interest arose.

Hindsight is a wonderful thing.

Foresight is even better, and that's where PR can really help.



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