Coming into 2009, Beth Shluger, director and founder of the ING Hartford Marathon, was concerned that the bad economy could reduce corporate sponsorship money by as much as 25 percent.
But things turned out much better than expected.
While corporate donations declined by about 12 percent, the scope of this year’s Hartford Marathon was as strong as in years past.
It was boosted in part by a 20 percent surge in participants and a strong showing of support from in-kind contributors — companies donating services and goods instead of dollars.
Having long-term relationships with key sponsors like ING, which became the title sponsor of the event in 2008, also helped preserve the race.
“We were certainly thinking about a large drop in corporate sponsorships late last year and were making plans around it,” Shluger said. “But the race saw an increase in participation that surprised a lot of us.”
Shluger said it cost about $1.5 million to put on the annual race, which was in its 16th year. About half of the money for this year’s event came from cash sponsorships and participation fees.
But the race leveraged a 12 percent drop in cash donations with about $700,000 in “in-kind” contributions, which allow companies that may be limiting their marketing budgets because of the economic downturn to still play a role in the event.
Such contributions are a key driver in the race’s success, saving event organizers from having to spend tens of thousands of dollars on essential labor and services.
In this year’s race, for example, Vital Water donated about 10,000 gallons of water, an in-kind contribution that was valued at about $16,000.
Windsor-based SpaceFitters provided trucking and courier services, helping to move all of the water jugs through the course before and after the race. That service had an estimated value of $10,000.
William Woodman, CEO and founder SpaceFitters, which has been in business for 21 years, said the race is something his company’s employees like to be part of. It also serves as a way to get their brand name out there for thousands of people to see.
“We want people to notice our trucks,” said Woodward, whose company’s fleet of vehicles is well known for their dark black décor, adorned with a gold diamond and orange and red flames. “To have them be very visual around the track is nothing more than saying we support the community.”
Sporting events looking for a boost with in-kind contributions to make up for lost corporate dollars isn’t unique to the Hartford Marathon, according William Chipps, senior editor of the IEG Sponsorship Report, a Chicago-based publication that tracks the industry.
“Since companies are offering less in cash, event organizers are looking for budget-relieving contributions,” Chipps said. “The key is offsetting a cash outlay with some type of service or donation, and there is a lot of that going on right now.”
Chipps said the recession has forced many companies to take a closer look at their marketing expenses, forcing some of them to cut down on cash contributions and find other ways to get there brand name out there.
In 2009, North American companies are projected to spend only 1.1 percent more in sponsorships than they did last year, one of the lowest increases in years, Chipps said.
Total sponsorship spending is expected to reach $16.75 billion in 2009. Most of that money — $11.48 billion — will be spent on sporting events.
When companies do decide to invest time, money or services, return on investment is king, Chipps said. He said companies are only going to spend money where they know they can meet their marketing objectives.
Shluger said the race’s 10,000 participants, 30,000 spectators, and 1,800 volunteers helped to entice advertisers, even in tough times, since it is such a broad audience sponsors can cater to.
“Because more people participated in the race, more companies wanted a piece of it in some way,” Shluger said. “There are still companies out there spending marketing dollars. Since we had good solid numbers in the race it was very attractive and those marketing dollars came our way.”
Shluger said the race also had good demographics. More than 50 percent of race participants were woman, who are professional, well educated and between the ages of 30 and 45.
Chipps said that’s a demographic advertisers crave.
“Women make the bulk of household purchase decisions,” Chipps said. “It’s a very desirable demographic for many companies.”