Lesa Ukman Transcript      Listen Here

Mark: Welcome to Family First. The Wild World of Marketing to Parents. My name is Mark Giovino CEO and founder at the Allionce Group.

I’d like to welcome Lesa Ukman to this episode of Family First. Lesa is widely regarded as the godmother of sponsorship.  In 1982, Lesa founded IEG (sponsorship.com) and built a company that spawned a new industry, one currently worth more than $85 billion. She created the process to measure what was deemed immeasurable, the fair market value of sports, arts, entertainment, and nonprofit sponsorships. After selling IEG to WPP, she chartered a new path to put the “S” in ESG by founding ProSocial Valuation, where her company calculates the social capital as part of the greater partnerships and sponsorships market.  She’s been sought out and counseled the biggest names and properties in the world, including the IOC (International Olympic Committee) and NFL to name just a couple.

Lesa, thank you very much for joining me.

Lesa: Hi, Mark. It’s my pleasure. Thanks for having me!

“Sponsorship without activation is like buying an electric toy without the battery.”

Mark: Let’s start with family first. Can you tell us more about your own family?

Lesa: Oh my God, I have an amazing family. So I skipped the kid part, but luckily my husband had kids, so I have incredible grandkids and godkids who I spend as much time as possible with, although as they graduate college, their time for their grandmother becomes less and less. But it’s a highlight of my life seeing these kids.

Mark: What inspired you to launch IEG? Can you share more about the early days and what sponsorship looked like at the time and how it’s evolved?

Lesa:  So picture this. Back when I started IEG, there was no obviously internet. There was no cable tv. There was three networks and you could do an ad buy, a media buy during primetime and reach over 80% of the US market just with the three. Big networks buying 30 second spots during primetime. So basically it was advertising.

And I got my first job really working for the Mayor’s Office of Special Events in Chicago. I started out. her, the Mayor’s press secretary during her campaign and she took some of us with her and I ended up in special events and for sure we had this hotel motel budget at the time 40 years ago, $3 million.

That was a lot of money back then. It was from hotel motel tax, but it was not nearly enough money for the things that I wanted to do and do Chicago Jazz Festival the Blues Festival, the Taste Festival winter Carnival, neighborhood Festivals, those were all launched by the Mayor’s Office of Special Events when I was there.

And we quickly went through our $3 million. So I had this bright idea of calling companies and saying, and calling from the mayor’s office in the city of Chicago, would you like to sponsor X? And everyone said yes. And I thought I am so smart. I invented this new form of marketing that isn’t interruptive like advertising, but instead is like a service to citizens and is smarter than advertising and makes cities more livable and drives economic impact and social capital.

And to me it was like back to Machiavelli’s Bread and Circus, but in a positive. I started wanting to learn way more about this thing that I was calling sponsorship. And there was nowhere to go with that because while beer companies and tobacco companies were sponsoring it was because they’d been thrown off tv and that was basically the entire market then.

And it was seen as an auxiliary to public relations. I decided after three and a half years at the Mayor’s Office of Special Events to approach the publisher of AdAge in Chicago, Rance Crain, with this idea for a newsletter on sponsorship. And I didn’t know this, but Crain was very interested in newsletters, so we decided to make a joint venture.

“It really does require primary research and few sponsors bother measuring ROI on their sponsorship”

So I was launched under the guise of Advertising Age and spent a full year working at Crain Communications on my new baby.  It was called Special Events Report and was pretty miserable working in a big corporation.  So after one year I got the opportunity to buy it back and have been independent then ever since till I and my brother and sister were my partners until we sold to WPP. So it was a really wide open time for marketing. We went through so many changes, but basically my contention was, and still to this day, is that interrupting someone with an advertisement is gonna usually be far less effective than enhancing someone’s life by supporting the arts, the festivals, the causes, the destinations, the attractions, the cities that they love. When you can reach them by supporting the things that they’re passionate about, then there’s a much wider opportunity. To create a dialogue and create engagement. And that was like my founding premise and been proven out through research many times over.

And it’s still what I believe today, that it’s not about what the brand needs. And it’s not about how easy something is to count eyeballs and impressions and all about enhancing the lives of the people that you want as your customers or to keep as your customers

Mark: When it comes to those sponsors that you reference, how much does that resonate? How willing have brands been historically and are they today in truly taking that to the heart. Fair to assume the best sponsors do. But how easy or hard of a conversation is that to have with prospective sponsors?

Lesa:  Sponsors, just like rights holders, see things through a very narrow lens of their needs and objective. and for the most part, very few brands, whether they’re the advertising VP or the Chief Marketing Officer or the sponsorship person are really looking at the world, in my opinion, through the lens of their customers. So they miss the mark and sponsorships becomes really commoditized. It’s no longer rare or extraordinary for a company to sponsor something. In fact, it’s mainstream and commonplace. So in this environment, especially post covid, I think sponsors and rights holders all have to work much harder.

To identify where the intersection is between the opportunity for the brand to make a difference in people’s lives and to really understand what people would appreciate and want. And so it becomes tougher to stand out as a sponsor and more costly. And at the same time not many are playing in that sandbox, so to speak.  The opportunity for those extraordinary ones is still there big time because so many miss the mark and they’re just more stuff and more noise.

Mark: Are there other fundamentals to sponsorship that were true when you started IEG, that may have been lost over the years? Or perhaps like any other discipline, it’s often important and imperative to go back to the basics and go back to the fundamentals. Beyond making people’s lives better, which is so important, what are a couple other fundamentals to sponsorship you think that the entire community marketing ecosystem would be better to keep in mind?

Lesa: I think certainly the importance of research and insight in shaping the strategy has been somewhat lost and is critical because everybody thinks that they are an expert in sports arts, entertainment causes, blah, blah, blah, blah, blah. And that they know. They know. But the truth is really, again, going back to who are your customer? And understanding where there’s an opportunity for your brand to make a difference isn’t something that is intuitive. It really does require primary research and few sponsors bother measuring ROI on their sponsorship, much less in advance of sponsoring, investing in the research to identify where the opportunities are.

And I think that is really key. I’ll give you an example of some interesting research. Subaru, which is a big sponsor, was big sponsor of canoeing and kayaking and programs for science teachers. They really used research to understand their audience, what did they do with their Subaru?

What was important? Who were they? Not just as consumers of automobiles, but as people. So coming out of some of this research was the fact that many of their buyers and universe of buyers, potential buyers did errands on Saturday morning with their dogs in the car, and they also felt like many of them were the parents to their dogs.

Some even felt they gave birth to their dogs, believe it or not. But Subaru realized that this was a pretty important relationship in the life of their customers, and that if there was an accident while they were doing these errands together, that dog didn’t stand a chance they were going right through the windshield and goodbye.

So they teamed up with the SPCA, Society Prevention and Cruelty to Animals, and came out with this whole line of pet gear, like seat belts for your dogs in the car and other things like that, that we now take for granted, like of course, and a lot of people make it.  But for years it was only you could go buy a BMW, but then you were gonna go to Subaru for your pet seat belts.

And that brought in a lot of customers who felt like they really understood who they were as people. So what was the sponsorship? SPCA, what is it now today? This whole adopt a pet campaign from Subaru with SPCA they’ve really built it out into. Aligning with pet owners and pets came out of this insight that their drivers believed they were the parent of their pet.

So it’s not they didn’t start out saying, should we do rugby, soccer or cricket?  They started out by saying, who are our customers? What are they doing? What do they love to do? What are their feelings? Where’s there an opportunity in all of this for us to make a difference given what we are as a company?

Mark: If we were to apply the same approach to thinking about what’s important to parents and kids or families, are there any new sponsorship opportunities that you feel do well to address that type of consumer segmentation, those families?

Lesa: I think Pampers did a beautiful job with UNICEF a few years ago, and the whole angle. When you buy this box of Pampers you are not only benefiting your child, but we will donate the money to UNICEF to ensure that the full range of childhood vaccines is given to another child somewhere else where there’s the parents can’t afford it.

So basically it was saying to the parent, buy this box of Pampers, and you’re saving the life of another. And that was pretty profound as a cause might go and resonated with all these parents, with young kids still in diapers. And was a a great space and it was global and they did it in Egypt and they did it in South Africa and they did it throughout Europe, Asia, the U.S, every market there were subtle changes. every market it resonated.

Mark: What can the rights holders or IP holders do better to approach in that same spirit? Because I think you gave a couple great examples where it started with the brand who did some primary research to identify how to give back and how to make people’s lives better. What can those rights holders do better to approach it in that same way, be it new ideas to bring to prospective sponsors, or can you give any examples?

Lesa:  I think the rights holders because the range of categories they’re talking to with the brand prospects and sponsors is so vast that it’s not up to them to understand the customers of their sponsors or prospects. It’s up to them to understand, first of all, What is the meaning of their brand? Okay, so what do the five rings mean? What does San Diego Zoo mean?

Not by, this is my intuition that says, oh, friendship and peace and international goodwill, and stuff like that. But truly what does having the five rings or the San Diego Zoo marks on a can of Coca-Cola? That just a can of Coca-Cola on its own doesn’t say, so what is the two brands together, what are they saying?

So rights holders really need to understand what is the meaning of their IP? Who does it resonate with? Is it stronger with teens? Is it stronger with people 65 and over? And then what are the emotional touch points?  So for example with baseball the emotion for many baseball fans is actually the stadium.  They remember going there with their parents and grandparents, and there’s all this nostalgia tied into it. So the sponsors could know that there’s a lot of emotion there and a place to activate is around the stadium as opposed to say, the players. Okay. Whereas in NASCAR, the emotional connections directly to the drivers as opposed to the events say, so everybody’s maybe heard of the Indy 500 or any of the NASCAR races, but where’s the emotion? It’s with the drivers. So I think the rights holders really need to understand what image are they bringing to the table? What meaning are they bringing to the table? Who is their audience? Both demographically, psycho graphically, and then where’s the emotion to help the sponsors understand where they can get the biggest lift?

Mark: I love how you articulate that. When we think about identifying the intersection of values, to answer a very simple but profound question, how can we do something together that we can’t do alone?

Lesa: To me, sponsorship’s always been about bad math. One plus one has always gotta equal more than two, or there’s no reason to do it.

Mark: Let’s talk about sponsorship activations for a minute. How should marketers or sponsors thinking about activating? If you think about this very interesting mix of assets, whether it be media or experiential activation, licensing, consumer promotions, digital media, and on and on. Any examples you can give that bring that to life?

Lesa: First I’ll tell you my favorite quote about activation. It was from Steve Koonin, who is with the Atlanta NBA team now, but he was with Coke when he said it. And what he said was, sponsorship without activation is like buying an electric toy without the battery.

So the first thing you have to know is that so many brands buy sponsorship, but then they lack the budget to activate. It’s I don’t have the money for the batteries. What? What are we doing here? So you should always think about in advance how are we gonna activate, what do we need to budget to make it work?

And then again, I think activation has gotta be as strategic as the sponsorship was. So what were the objectives of the sponsorship? Say you them to add up to a hundred percent and you’ve got five objectives. So if your first objective is worth 40% or 35% and the rest somehow add up to a hundred, less than 35, obviously the way you should budget for your activation is 35% of the activation budget should be put against that objective, that’s 35% of the reason you bought it to begin with. So typically activation is just done on an ad hoc basis. Okay, so intuitively this makes sense. We’ll activate this way. That’s just wrong. It should go back to what were your objectives, and then budget according to the weight of each objective.

Mark: And what role should the IP or rights holder play in that activation? I’ve been surprised. I think Manchester United, it was well documented years ago, did a nice job building out capabilities in-house to help their sponsors activate.  Do you feel like there is a gap there or is that best left to others being the sponsor? What role should the IP holders play in that?

Lesa: The rights holder definitely has an incentive to ensure that the sponsor’s activation is successful. In fact we always advise our rights holder clients to set aside 10% of that rights fee upfront to an activation credit. So because so many sponsors don’t have the money to activate or don’t have enough budgeted, and the only way they’re gonna come back and upsell or buy bigger or renew is if it was the success. And the only way it’s gonna be success is if you do the activation. So the first thing is the rights holder should set aside up to 10%, maybe 5% depending on the rights fee as an activation credit that they can use towards driving their objectives.  Then the brand’s always got their agencies, and that’s how the agencies make money on sponsorship is through activation.

So I would leave lots of room there for the agencies to get involved in the fulfillment of the activation, but again, the rights holder should have some people focused on fulfillment, people who help ensure that the activation’s happening, so that when it’s time to, this story is positive

Mark: I think this naturally leads the conversation to sponsorship ROI.  And in many respects, you were the pioneer not only for sponsorship as a discipline within marketing, but even more so measuring. Sponsorships.  What’s the right way to approach sponsorship ROI?  And what advice do you have for those listening even if in general measurement across the larger marketing mix, which I would assume has as much relevancy as specific to sponsorship.

Lesa: Measure what matters, not what’s easy to count. Everybody goes back to now clicks. impressions and new followers. And yes, those are all easy to count, but do they have anything to do with why you’re there to begin with? So just as I said, you need to rank and weight your objectives, so it adds up to a hundred percent and typically five or fewer objectives.

And then you use those weightings to define how you’re gonna activate and how much you’re gonna spend against each objective. Then when it comes time to measure, you measure your objectives. You measure those five objectives each against a sponsorship baseline, ideally. But certainly you don’t always have those and you come up with other ways to get a sense of what it was, co-sponsorship. If you didn’t do the research then, but the idea here is everything stems from the objectives, the activation and the measurement.

Mark: Would you say it should be a balance of both the sponsor and the rightsholder when it comes to that ROI or what is the right balance?

Lesa: It’s up to the sponsor to measure because they’re the ones with the data tracking the outcome, the rightsholder has no access to any of that information

Mark: And they’d be essentially grading their own homework.

Lesa: For sure there’s that, but the rightsholders should be measuring things. Their followings have increased and when they do a post for a sponsor, how much engagement is there? And they should be knowing to put an ad in our email blast. Our emails are open more on Tuesday than any other day of the week, so our biggest sponsor should be in our Tuesday email. They should be measuring all the stuff that makes a difference for the sponsor, but only the sponsor can measure their own objectives.

Mark: And does that happen or happen enough?

Lesa: What do you think?

Mark: It’s surprising how often maybe the greater marketing ecosystem, they put it on the rights holder, the IP holder, where it’s they have the expectation that they’re gonna measure when, to your point, they don’t have necessarily the access to the data.

Lesa: Look it, most companies aren’t in the mentality of outputs, not outcomes. Okay? And I only believe in outcomes. I don’t care how many people attended your Super Bowl. Okay? I wanna know how many of those people were potentially my clients if I’m a sponsor, and did they change their attitude toward me? Did they change their behavior toward me? Are they recommending my company to their friends and family as a place to invest?

What are the outcomes? I don’t care about how many people attended or watched the Super Bowl. What I need to know is how did that affect my brand as a sponsor? Depending on what my objectives were was it to influence Wall Street and was it to change the impressions of young parents? What was it? That’s what I need to find out.

Mark: When it comes to outcomes what are your thoughts or opinion on Net Promoter Score? And have you seen that worked well? Where? Where how should sponsors think about Net Promoter Score. Cause it feels like at one time got a lot of attention. It’s what you put into it. So it doesn’t seem as though it comes up as much today. And it’s such a powerful metric in some ways, yet so simple.

Lesa:  It’s only powerful if it happens to fall within your objectives. And I think anytime you’re looking at aggregated data, you’re never measuring your objectives. Personally, I think you need primary research.

Mark: Let’s talk about ESG. I think in your current role leading ProSocial Valuation it’s very well documented that all of today’s generations, be it Millennials, Gen Z, and now even more so Generation Alpha have such a strong appreciation for brands that stand for something or support a cause important to them. Can you talk a little bit about what inspired you to launch ProSocial Valuation and how marketers should think and should prioritize ESG?

Lesa: There all the research is really clear that brands that mean more, make more.  There was a 10 year study showing this and a book written about it and all kinds of ala carte research, one-on-one showing this. But bottom line is people connect with the products and services that speak to powerful emotional drives and give meaning to purchasing decisions.

Partnerships are most effective when brands can embed some sort of mission or cause or ideal into that partnership. The ESG space always struck me as really fake because just those words, corporate social responsibility seems so wrong as long as you’re looking at this as responsibility.

It’s going to be throwing food at the food bank. And to me it’s always been about corporate social opportunity and brands that get that the Patagonia’s of the world, the Ben and Jerrys of the world, understand that this is not throwing food at the food bank. This is the lead idea that can connect your customers to your brand. Even when your competitors are having a sale going on, you know you’re not gonna go by North Face instead of Patagonia because some things are on sale. If if you can afford to buy Patagonia, you’re a Patagonia person and what they stand for you’re all in. It’s not. The promotion of the week or the month, or the discount, or even the short-term transaction.

It’s really about building long-term loyalty that allows you to have a substantial, sustainable competitive advantage. And so I think that this whole area of corporate social responsibility is just more of the same greenwashing, sport washing, gay washing blackwashing way for most big brands to feel like we’ve checked our boxes and done our part, and now let’s move on with what really matters.

The short term profits or whatever they’re looking at. But long term I think that especially with youth, No, that’s not enough. It has to be embedded into the DNA of your company. It’s run by people that understand that diversity isn’t some slogan, it’s a strength that makes your company stronger.

And if you have to be told to put two people of color and two women on your. You’re a moron. You don’t deserve to be in business. You’re not gonna be in business. So that whole ESG space just really hit me wrong. But at the same time, I do believe that knowing which nonprofits were doing the most good so you would know where to donate your money or your time, or if you are a brand, what to sponsor is an area that you.

Potentially opens up billions of dollars because when the good that you’re doing can be measured and people can understand that this homeless cause can get six to one with my dollar versus that homeless caused that can get two to one, then maybe you wanna give to the one where it’s gonna be six to one return.

So that’s why I started ProSocial Valuation to start putting dollar value on what we said couldn’t be measured just like I did with sponsorship. They said non-measured media can’t be measured. Yes, it could be measured, and here’s how we did it. We’re doing the same thing. Now with social capital, what’s the return on a park?

In most city budgets, a park is a cost. You have to maintain it. It’s a cost. So therefore, when a developer wants to buy a park, a city sells them the park, okay? The way I look at it. Oh my God. No. A park is not a cost. A park is what’s adding value, social capital to the fabric of your community. It’s reducing your carbon footprint. It’s reducing people’s stress. It’s where people go to relax and enjoy and have family time. So to look at a park as a cost and not something that’s adding to the quality of life. I understand why. Because until you. have language and ability to measure the social capital it creates, you’re not really in a position to determine its future.

So that’s what we’re doing at ProSocial. Another uphill battle

Mark: For some legacy brands that weren’t built with that type of purpose or social sensitivity as a part of their DNA, is there hope for them? And if so how do you advise those type of brands to start to course correct, if you will?

Lesa: Yeah look at relevance is easy to create again, with the right research. Sports, arts, entertainment are incredible platforms to communicate relevance, and that’s why they’re needed. Carling Black label, a beer company. They use their sponsorships of South Africa’s high profile Soweto Derby in South Africa to call attention to gender-based violence in South Africa, alcohol’s role in it and to challenge how men react to violence against women with this campaign called No excuse. What they found was that after a big soccer match, the fans, the male fans of the losing team abuse rates skyrocketed among them. So we are tensions high, there’s a lot of alcohol consume.

So they created this no excuse campaign where they mobilized men to protect women by driving awareness and conversations and tools for people to take positive action. And it became the centerpiece of their soccer program in South Africa. And it, they did all kinds of activation around it, blah, blah, blah, social media.

But to make long story short AB InBev rolled out the campaign to five other countries. So wasn’t in the DNA of Carling Black. Black label to be an advocate for stopping violence against women after soccer? No, but they created this campaign that did just that and really aligned them with the positive role they could play in the game. And not just the role that alcohol has on amplifying the violence, but in fact turning it around. So any brand can create a good story when it can find a role to play to solve a problem.

Mark: Let’s end as we started with your family what are some activities or experiences you enjoy with your family?

Lesa: A big part of this family has gone crazy for pickleball. But then there’s still the tennis holdouts. It’s like the skiing, snowboarding when that came along you had your diehard skiers and then your snowboarders. You have your pickle ballers and your tennis people. And I’m feeling the pressure on right now on the pickleball side to get with the program and start playing.

Mark: But were you the tennis holdout in the family then?

Lesa: No, my sister’s the real tennis holdout. She’s become like a professional since we sold IEG, but definitely more, I’m more a tennis person we like going to museums, we like traveling, we like playing sports. All the things that all families probably like to do. Mostly hanging out with each other.

Mark: Lesa, thank you so much for joining me today. This was a lot of fun. I enjoyed the conversation!

Lesa: Thank you so much. Talk to you soon, mark.