2014-12-11

Authors

Zenaida des Aubris
is Consultant for International Cultural Events. She has over 30 years experience in management and production of classical music in the United States, Europe and Asia.
Review Culture Invest Congress 2014

Trends in European Funding and Sponsorship

The Culture Invest Congress calls itself the "largest industry get-together for cultural institutions and culture investors". Well, with over 50 presenting partners, 100 presentations and 36 panel discussions, all crammed into 2 intensive days, it may very well be the largest in Europe. More than anything else, the congress was an opportunity, as usual, to network and find out who is doing what and how.
The presentations were broken down into 9 categories: cultural policy, cultural management, cultural tourism, cultural marketing, cultural funding, cultural sponsorship, cultural real estate, cultural personnel, and lastly online & social media marketing.

Measuring cultural sponsorship values

One of the most valuable presentations I attended was the presentation by the ESB Marketing Consult AG from St. Gallen, "Public events sponsored by... What sponsorship activities add what value?". With 20 years of experience, the consultants are market leaders. ESB has figured out a mathematical formula in order to give a value to the sponsorship of public events. This is very useful when trying to justify a sum to a potential sponsor and help to optimize sponsorship revenues in the long-term. For example, a cultural institution is asking a sponsor for a sum of 100,000. In return the institution is offering a mix of print, online media and tickets. How to determine the value? ESB uses this formula:Reach price (measured in thousands) x weighting factor (placement and size, i. e. where is the logo or ad placed) x nr. of contacts = equivalent value of the individual specification. This basic formula can be applied to most items, be they advertising space, reach of fans on social media, etc., as long as quantification is possible. The goodwill and CSR factors are more difficult to measure, but at least this one gives a basis on which to calculate concrete measures.

The tricky question of "How is art valued or the true value of art" was the topic of Dr. Roman Kräussl's presentation. As an associate professor at Luxembourg's School of Finance, and running his own art consultancy, he should know. His conclusion: "Buy what you like. Never buy art solely for investment purposes." That being said, there are consideration to take into account: Even though we are in the midst of one of the greatest "art bubbles" in history, one should not overlook that 83% of all paintings at auctions are sold for less than $5,000 each in 2013. Only 0,29 % of auctioned art fetched more than $1 million in the period 1970-2013. And one last statistic: the "brand" artists we constantly hear about (Hirst, Koons, Richter, etc.) make up barely 1% of all active artists. www.art-finance.com

The biggest misnomer, in my opinion, was a presentation named "Tips & tricks for successful event, sponsorship and third party funding acquisition", which turned out to be nothing more than the success story of how the NRW Museum of Art in Duesseldorf managed to be in the black and how it set up a foundation and a Limited company in order to manage its (very substantial) collections on the one hand and run the museum on the other. Good presentation, wrong title.

Funding of culture between countries, regions and the EU

Prof. Andreas J. Wiesand from the ERICarts Institute presented findings from his organization relating to the ever newsworthy topic of "Cultural financing - challenging but not hopeless". Specifically, he presented the Compendium Project, a constantly updated, multi-lingual database and monitoring system on cultural policies, debates and trends in Europe. This compendium of information is gathered from studies, institutions and experts from 45 countries and subsequently analyzed for a myriad of factors. Not surprisingly, the results show that cultural funding remains a domain of national policies, with strong local and regional tendencies. Also, European programs and funding instruments play no major role for arts institutions, artists and most of the independent companies although various studies have shown that the EU has a lot of influence on the national economic and legal frameworks for the arts and media. Prof. Wiesand comes to the conclusion that the current tendencies are to "feel local think European reach out globally".

While the Compendium is a most valuable tool, by the time all the findings are evaluated, they are in danger of already being outdated in our fast-living society and new challenges as demographic trends (squewed towards an ageing population) and increasing generational gaps, majority vs. minority issues, heritage protection or digitalisation. Since the Compendium's establishment in 1998, it newest analyzed data is from 2012. For many researchers, this information will be of more historical than current value.

Similarly, Cultural funding in Germany, the topic of Martin Dehli from Actori GmbH, unfortunately based on very old data (mostly 2007-2009), showed the same results: German cultural institutions receive more than 50% of their operating income from state subsidies compared to less than 5% in the United States, for example. Mr. Dehli further commented that effective cost cutting can only be a result of optimal controlling cuts cannot be undertaken haphazardly without damaging the integral structure of an organization. Analyzing the result of various studies, he was able to show that the higher the level of subsidy, the higher the number of performances, productions and presentation. In his words: "subsidies encourage innovation". In Germany, the subsidies supplied by the various levels of government (local, regional, national) amount to 9.1 billion per year as opposed to 0,3 billion raised through private industry/individual funds.

Sabine Bornemann from the EU's Cultural Contact Point presented the new European Union's funding for culture: Creative Europe 2014 2020. It was a too short introduction into the ever more complex EU funding policy for culture and the priorities, aims, criteria and application procedures for transnational cooperation projects in the new funding programs. Suffice it to say that even though the new program purports to have made navigation through its rules and regulations easier, it is still very good to know that Mrs. Bornemann and her team are in Bonn and can offer at no charge help through the complicated EU waters.

For the new "Creative Europe" program there is a budget allocated amounting to a total of 1.46 billion; this is broken down into 3 sectors: culture 31%, media 56%, supporting measures 13%. Concentrating on the cultural sector, the approx. 455 million are broken down as follows: cooperation projects 70%, translations of literature 7%, European platforms 6%, European networks 6%. As there has been an emphasis of the EU subsidies for every year, so far, nothing has been decided for 2015. CCP is still awaiting directives from Brussels. If thinking of applying, one must keep in mind that any EU funding can only be seen as a co-financing element.

Sponsorship and brands

"Act local, act global" was a presentation by Dr. Thomas Girst, head of cultural engagement at the BMW group. His title already gives an indication of the BMW Group's thinking it is not only a matter of paying the bills, but of actively engaging with the public and the event presenter, of establishing a dialogue. It is the personal, emotional dialogue that is of importance to BMW. Each of the BMW companies has a special image branding that needs to be taken into account. As an example, Dr. Girst mentioned that Rolls Royce, who receive more than 3000 inquiries a year, of which 80% are really good ideas, but there are less than a handful that will be chosen because they are perceived as a good fit. BMW itself concentrates on architecture & design, classical music & jazz and contemporary art. BMW Mini's involvement is much stronger with events for a younger demographic grafitti contests or poetry readings, for example. Key phrase: "With 10,000 you can do a lot of things right and with 1 million you can do a lot of things wrong".

Beyond the number - managing brand value was the topic presented by Calin Hertioga from Interbrand AG. Her central question was: What makes a brand strong? Interbrand analyzes a brand based on the 10 following criteria and assigns a score. In order to keep its ranking, a brand must dynamically adapt to the constantly changing requirements of the customer and the market.

  • Clarity it has to be instantly recognizable
  • Commitment to a cause, to a level of quality
  • Protection (of intellectual property)
  • Speed of reaction time how fast can a company react to the wishes of the consumer. The faster the more chances it has of gaining the customer's dollar.
  • Authenticity be true to yourself.
  • Relevance
  • Differentiation
  • Consistency
  • Presence
  • Understanding goes along with clarity. The message must reach the customer. The example used was the Pope as the instant conveyor of message.
Effectiveness and efficiency of cultural sponsorship are there new answers to the classic questions? In this presentation, Prof. Bruhn concluded that since 2010 social media and integrated measurements have become important (finally, even academic sources acknowledge social media!) for cultural sponsoring. As the central challenges of cultural sponsorship, he defined: target groups, presentation, partnerships, credibility, anchoring. Further points from the practical side include are: strategic anchoring in corporate and marketing communication, quality control through measurement of effectiveness and efficiency, cost-benefit analyses, value based communication management, benchmark development. So, what is the main problem with quality control measures? The "forced" attempt to transfer methods for business economics, marketing and promotion to cultural sponsoring. Therefore, Prof. Bruhn suggests a change of perspective and alternative approaches, a look it from the opposite side and above all, encouraged communication between the sponsor giver and the sponsor receiver. Knowing what the other party is expecting out of the deal means you are halfway there. Prof. Bruhn presented two studies that substantiate his thesis. All in all a presentation that proved that the academic world has understood the problems of the practical world, but, so far, has not provided any new solutions.

Conclusion

So what are the impressions that I take with me from this Congress? Some interesting examples of sponsorship and management problems and option in the cultural sectors as e.g. the successful Berlin Music Week, that no longer exists since September 2014, even though it was highly successful for five years and had over 25.000 visitors with more than 500 accredited journalists; over 80 national and international cooperation partners; over 100.000 in direct revenue from sponsor partnerships; over 200.000 subsidies; collateral revenue generated by the attendees estimated at a minimum of 13.2 million.

Another finding is that while during my university days there was no such thing as courses for cultural managment it was only learning by doing there are now over 350 courses to bachelor and masters degrees in the German speaking countries alone! Specialisation is the trend at the latest after a generalized bachelor. This means that not all cultural managers are suited for all artistic endeavors. As the demands of bureaucracy continue to escalate especially for internationally active institutions the sheer dimension of interdisciplinary knowledge is necessary growing exponentially.

Taking into consideration that everyone has something to buy or sell in mind, that there is no such thing as a free lunch, this congress proved no exception. The representatives of the presenting companies mostly told about their success stories or about the products and services they sell. We can only hope that everyone found an appropriate customer.
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