Definition Of Sponsorship
The definition of sponsorship largely depends on the context you want to frame it. Nevertheless, the two most common ways to describe it are the following:
- A brand, organization or individual sponsoring an event, tournament or sport club in order to raise awareness and increase revenues.
- A person who vouches/recommends someone else for specific reasons, such as granting the sponsee a job/citizenship.
Breaking Down Sponsorship
Standing from a business perspective, sponsoring refers to a certain marketing technique whose purpose is to raise awareness and increase revenues. A company, in fact, can decide to allocate a specific percentage of its marketing budget in this area based on the estimated return. Usually big corporations such as Coca-Cola, McDonald’s and so on, in order to harness economy of scale, spend millions and millions of dollars every year to sponsor events such as World Cup and the Olympics. Their purpose, besides the one aforementioned, is to engage with customers, drive sales, launch new products and adapt to industry-related trends (if your competitor is sponsoring global events, you are forced to follow him).
Moreover, even in the business panorama, you need to sort out different forms of sponsorships (many of which are not mutually exclusive):
- Corporate: it’s when a corporation (such as P&G) sponsors an event, tournament or organization for brand awareness, reputation, image and so on. Also, it is relevant to point out that it differs from brand sponsorship for the fact that, unlike the latter, it’s the corporation name to gain visibility, not the single product/brand.
- Brand: in this case, the sponsor is represented by the brand/single product.
- Music: a lot of brands are craving for having the opportunity to sponsor a music festival. The reason: music fans and festival attendees are loyal customers and they are less sensitive to premium prices.
- Event: it’s when an organization sponsors an event for reasons that go from brand awareness or customer engagement to social cause support.
- Celebrity endorsement: it’s when a celebrity sponsors a brand/product through advertising, social media testimonial and so on.
How do you measure the return of your sponsorship investments?
- Brand awareness: it’s one of the basic principles of marketing. Connect to another brand or to an event and you will gain instant visibility.
- Acquisition: sponsorship allows your company to get in touch with new prospects and start brand new relationships.
- Customer Loyalty: brands sponsoring sport clubs or big events are perceived as more authentic and real, thus achieving loyalty.
- Brand reputation: imagine sponsoring a charity event. You can gain the reputation of a trustworthy and warmhearted company.
- Differentiation: living in a world where competition is more and more stiff, being able to stand out and differentiate can be hard. Investing in sponsorship, nonetheless, can represent a solution.