Backing the arts is good for business: Company logos on tutus? Not yet, but Helen Hague reports that sponsors demand a return

WHEN The Clothes Show is screened on Sunday, two 12ft-high horse sculptures should be assured of plenty of prime-time television exposure.

For the third year, Lloyds Bank is sponsoring the six-day Clothes Show Live event at the National Exhibition Centre in Birmingham, and the horse - the bank's corporate symbol - will be beamed into the sitting rooms of 8 million viewers by the BBC. So much for the ban on advertising.

The metal and neon thoroughbreds will form an integral part of the catwalk design delivering the subliminal message: Lloyds is the bank of choice for the youthful and fashion-conscious.

The bank has been shortlisted for an Association for Business Sponsorship of the Arts (ABSA) award at an event sponsored by Arthur Andersen, the accountants. The Princess of Wales will present prizes to the winners at a glitzy thrash at the National Theatre - and her presence, if nothing else, should ensure prime-time media coverage.

Times are tough for the arts. The heavily-trailed Arts Council cut of pounds 3.7m announced in the Budget - slightly less than expected - has prompted renewed warnings of economies and closures.

But there was a shred of comfort. Peter Brooke, the Secretary of State for National Heritage, found another pounds 300,000 to add to the pounds 4.5m he gives each year to the Business Sponsorship Incentive Scheme, which matches new money given to the arts by corporate sponsors and is administered by the ABSA.

Sponsorship shrank last year - from pounds 65.5m in 1991/92 to pounds 57.7m in 1992/1993 according to the ABSA - though the decrease was probably partly due to the near completion of an appeal launched by the Glyndebourne opera house. But sponsors are increasingly seeking a return for their money. 'No- strings' philanthropic donations plummeted in 1992/93 from pounds 7.46m to pounds 4.62m. Lloyds, which has won ABSA awards in the past, is in the forefront of image-building corporate sponsorship. It is investing a record pounds 2m in cultural sponsorship next year, rivalling BT as the biggest spender. Next year, it will sponsor the Bafta Awards as well as the Lloyds Bank Film Challenge with Channel 4, for which more than 1,500 11- to 19-year-olds have submitted 15-minute scripts. When sponsorship of the Young Musician of the Year contest and the British Fashion Awards is stirred into the mix, Lloyds will have secured 20 hours of television coverage for its sponsored events across all four terrestrial channels over the year.

David Goldesgeyme, the bank's sponsorship manager, explains how concentrating on film, fashion and young musicians is paying off. 'By buying big you get better value for money. Five years ago we were sponsoring 60 organisations but it did not sufficiently reflect our status as a top UK company. Unlike conventional advertising, our sponsorship is giving us a dialogue with the punter and we are reaching a teenage audience.'

The bank is also using traditional advertising but, he says: 'In the long term, sponsorship is a very cost-effective tool in generating goodwill and a positive response to the corporate image.'

Lloyds has embraced evaluation and the impact of all sponsorship is assessed by consultants. The results are encouraging. Of visitors to last year's Clothes Show Live, 74 per cent were aware of the bank's sponsorship, 58 per cent said the bank understood the needs of young people, and 21 per cent said the sponsorship would make them more likely to bank with Lloyds in future. This year, the response of television viewers will also be gauged.

The same hard-nosed business approach motivates Geoff Shingles, chairman of the Digital equipment company. Sponsorship is a core element in the company's marketing strategy - it has invested pounds 5m since 1986. Board-level decision- makers deciding what computer technology to install were the target audience, and dance, a fast-moving art form that was underfunded, the key chosen art form. Digital backs dance production tours and takes along potential clients; Northern Ballet's treatment of Dickens's A Christmas Carol is on the road this month and will be on television on Christmas Day. The company has made a point of using its expertise to revolutionise arts organisations, for example, installing the first computerised box office at the National Theatre. Six months ago, it announced a pounds 1m sponsorship deal to install a computer system at the new British Library: it will have a Digital Gallery on the history of communication. Mr Shingles is clear about his motivation. 'It is not philanthropic. We are not paid by shareholders to improve the well-being of the arts. If it stops being good for business we will stop very quickly.'

But there is no sign of that happening. Mr Shingles has an evangelical zeal about the business benefits of targeted sponsorship. In the changing sponsorship climate, where a bottom-line return is sought and canny companies are evaluating what they get for their money, he has agreed to chair ABSA Consultancy, launched as the trading arm of the arts sponsorship charity earlier this year. This has caused muttering among arts consultancies, twitchy about the governing body getting in on the act. The ABSA says it wants to grow the market, not snatch business from the private sector. All profits will be ploughed back into the ABSA.

As part of its drive to spread the gospel of evaluation, the ABSA is launching an evaluation handbook in the new year. Colin Tweedy, the director-general, believes that the increasing use of evaluation will boost sponsorship. 'There has been some fear in the arts community that evaluation could lead to sponsors pulling out. But we are confident that the arts can stack up in business terms and the more the business community understands what they should be getting out of it, the more likely they are to increase their budgets.'

Mr Tweedy says that the arts have accepted that plural funding is here to stay. But companies increasingly want more for their money. He predicts product placement and branding will be a growth area, but argues subtlety is called for. 'The arts are not sport so putting corporate logos on tutus is going to be counter productive.' Nevertheless, Doc Martens has sponsored contemporary dance, with some dancers wearing the company's distinctive footwear.

Though business sponsorship can substitute in part for state subsidy, there is a danger in cutting the public budget. Sponsors want to invest in success, not failure. A spate of closures and cancellations following the Budget cuts could do irreparable damage to the carefuly nurtured culture of corporate arts sponsorship. As Mr Tweedy acknowledges: 'Some arts companies have got their backs to the wall, and unless business sponsors come in they will go bust.'

(Photograph omitted)