What is sponsorship?
In an era where traditional advertising is losing its impact, sponsorship is becoming increasingly important - and opening new opportunities for brand communication as a category in its own right. Sponsorship is much more than supporting sports clubs or cultural events. It is a strategic tool that can help companies on many levels. In this Insight, we'll explore how sponsorship works, what it can achieve, the upcoming trends and why it is a key factor in business success.
Mara Kottke
Published on August 20th, 2024
In this Insight:
Sponsorship is an effective and efficient communication tool used by companies in a wide range of different areas to achieve their marketing objectives. It is essentially a business relationship in which a company (rarely an individual) provides financial or material support to an event, person or organisation. In return, the sponsor receives advertising opportunities and positive publicity. Unlike donations, where nothing is given in return, sponsorship aims to reach a wide audience through targeted support. Sponsors benefit from media exposure and the opportunity to associate their brand with events of public interest.
How has sponsorship evolved?
Since the first partnerships in the 1960s, sponsorship has become one of the most established tools in the corporate communications mix. Initially used as a form of surreptitious advertising at sporting events and later as sports advertising, sponsorship took on a professional dimension in the 1980s. Since then, it has continued to evolve, adding new forms and uses.
Sponsorship has grown faster than any other communication tool, both in Germany and worldwide. While companies in Germany spent around 120 million Euro on sponsorship in 1985, this figure had risen to around 5.5 billion Euro by 2016. This trend is also seen globally, with spending reaching around $60.2 billion in 2016.
The importance of sponsorship in Germany is also reflected in its share of total corporate communications expenses, which stood at 12.4 per cent in 2013. The strong growth is primarily due to changes in the communications and media markets, which are bringing new challenges to traditional communication tools such as advertising.
What types of sponsorship are there?
There are many types of sponsorship - the most common are sports sponsorship, cultural sponsorship, educational sponsorship and social sponsorship.
Sports sponsorship is probably the best known. Companies support clubs, leagues or events in order to associate their brand with the positive image and emotion of sport. This allows them to reach a wide audience and build brand loyalty.
Cultural sponsorship focuses on supporting cultural events, museums or art projects. This form contributes to the development and promotion of culture and helps companies to maintain a sophisticated image.
Educational sponsorship involves investing in educational institutions or projects to support research and development as well as supporting young talent. This can be done, for example, by providing scholarships, equipment or finding for research projects.
Social and environmental sponsorship focuses on supporting charitable organisations or social projects. In this way, companies underline their social responsibility and demonstrate their commitment to society.
What are the benefits of sponsorship?
Sponsorship can be used to achieve a variety of objectives, and offers many benefits to both sponsors and the sponsored parties. For sponsors, the main focus is on revenue and sales objectives, as well as increasing brand equity and market share. Sponsorship helps to increase brand awareness, improve brand image and target specific audiences.
It can also increase employee motivation and identification with the company. Demonstrating a sense of responsibility and generating goodwill are particularly important in social and environmental sponsoring. In recent years, relationship-based goals have also gained in importance, strengthening personal contact with key target groups and promoting satisfaction and loyalty to the company.
Sponsorship also has many benefits for the sponsored parties - they receive financial support for their projects and can benefit from additional resources or valuable networks provided by the sponsor. In addition, working with a well-known sponsor can increase the visibility and awareness of the sponsored party in the public eye.
How do I plan my sponsorship strategy?
A successful sponsorship strategy is best developed on two levels: first, the broad selection of sponsorship areas, and then the fine selection of specific forms.
The first step is for companies to decide which areas of sponsorship are most suitable for them - be it sport, culture, social matters or the environment. This can be based on the so-called affinity concept, which establishes links between the sponsorship area and the products, target groups, desired images or corporate culture.
The next step is to determine the specific design of the sponsorship within the chosen area. Depending on whether individuals, groups, projects or events are to be sponsored, specific criteria must be taken into account. These may include the previous success of an athlete, the expected media coverage of an event or the activities of competitors in the same sponsorship area. It is crucial for success that the values and target groups of both parties are aligned. Such a partnership is based on mutual benefit and a clear shared vision.
The sponsorship strategy must be in line with the company's fundamental marketing objectives. It is necessary to analyse the communication challenge to be solved and the contribution that sponsorship can make to solving it. Different communication strategies can be used, such as competitive differentiation, target group development or relationship management. Particularly in the case of social and environmental sponsorship, it is important to ensure that the sponsorship is closely linked not only to the corporate purpose but also to the corporate identity, philosophy, image and culture, among other things, in order to convey credibility.
In addition, the effectiveness of the sponsorship should be regularly measured and evaluated. Figures and data such as reach, media presence and return on investment (ROI) can be used to measure the success of the engagement and optimise future strategy.
Trends in sponsorship
The sponsorship landscape is changing, driven by new technologies and digitalisation. Developments such as virtual reality and esports are opening up completely new and innovative opportunities for companies to develop creative sponsorship approaches. In particular, the growing importance of influencers and social media offers the opportunity to target younger audiences through new channels. Immersive marketing, such as VR experiences, is also becoming increasingly important.
Sponsorship will play an even greater role in brand and corporate communications in the future, as traditional forms of communication struggle to make an impact, as people are generally overwhelmed by the amount of information and develop a resistance to traditional effects. Sponsorship has become more than a communication tool, it has become a strategic value creation tool. In the future, companies will ensure that their sponsorship activities are more professional and efficient in order to achieve the best possible impact.
Another trend is the increased integration of sponsorship into companies' online presences. This allows for greater reach and interaction with target groups. The key challenge for future communication is to harmonise and systematically integrate sponsorship with other instruments. The full potential of sponsorship can only be realised with a holistic strategy.
Conclusion
Over the past few decades, sponsorship has become an essential part of corporate communications. Through strategic planning and the right forms of sponsorship, companies can not only increase their brand awareness, but also strengthen their image and reach new target groups. At the same time, sponsorship provides valuable financial support and access to key resources for the sponsored party. Sponsorship will continue to play an important role for brands as communication changes and becomes increasingly digital. Companies that are able to break new ground and integrate their sponsorship activities with other communication tools will be successful in the long term and gain an advantage over their competitors.
More about sponsorship
Sponsorship is a distinct and widely used form of marketing. It is a strategic business alliance where a brand provides financial or in-kind support to an event, team, athlete, or organisation in exchange for promotional benefits.
This collaboration aims to enhance brand visibility, build positive associations, and engage target audiences. Sponsorship is an integral part of a company's marketing strategy, contributing to the overall promotional mix alongside advertising, public relations, and personal selling.
It allows brands to connect with consumers in a meaningful way, leveraging the popularity and appeal of the sponsored entity to achieve specific marketing objectives. Whether in sports, entertainment, or other industries, sponsorship is a powerful tool for creating brand recognition, fostering customer loyalty, and aligning with the values and interests of the target market.
Sport sponsoring offers a range of benefits for brands, making it a valuable investment in marketing strategies:
Brand Visibility: Sponsoring provides extensive exposure through signage, uniforms, and broadcasts, increasing brand visibility to a wide and engaged audience.
Targeted Audience: Sports sponsorships enable brands to reach a specific and passionate target audience, aligning with the demographics and interests of sports fans.
Emotional Connection: Associating with sports entities helps create emotional connections with consumers, leveraging the positive sentiments associated with their favorite teams or athletes.
Global Reach: Sports sponsorships often have a global reach, allowing brands to connect with audiences on an international scale, contributing to global brand recognition.
Brand Image Enhancement: Sponsoring prestigious sports events or teams can enhance a brand's image, associating it with qualities such as excellence, teamwork, and success.
Consumer Engagement: Sponsorship activations, events, and promotions provide opportunities for direct consumer engagement, fostering brand loyalty and interaction.
Differentiation: Sponsoring allows brands to stand out from competitors by affiliating with unique and high-profile sports properties, differentiating themselves in the market.
Community Involvement: Sports sponsorship provides avenues for brands to support local communities and grassroots initiatives associated with the sponsored sports entities.
In essence, sport sponsoring contributes to enhanced visibility, brand loyalty, and positive brand associations, making it a potent tool for achieving diverse marketing goals.
To find sponsorship opportunities in the sports industry, individuals, teams, or organisations can explore various avenues:
Professional Agencies: Sports marketing agencies, like SPORTFIVE, specialise in connecting sponsors with sports properties, facilitating mutually beneficial partnerships.
Industry Events and Conferences: Attending sports industry events and conferences where networking opportunities can lead to potential sponsorship deals.
Local Businesses: Reach out to local businesses that may have an interest in supporting community sports teams or events.
Sports Federations: National and international sports federations often have guidelines and programs for sponsorship, providing opportunities for collaboration.
Networking: Engage in networking within the sports industry to build connections with potential sponsors, leveraging relationships to secure sponsorship deals.
By exploring these channels, individuals and entities in the sports industry can identify and secure sponsorship opportunities that align with their objectives and contribute to the growth and success of their sports endeavours.
If you are interested in becoming a sponsor, the specific contact person or department will depend on the entity or property you want to sponsor.
Sports Marketing Agencies: Agencies like SPORTFIVE specialise in connecting sponsors with sports opportunities. Contact their business development or sponsorship departments.
Sports Teams or Clubs: Contact the sponsorship or partnership department within the sports team or club.Look for information on the team's official website regarding sponsorship opportunities and contact details.
Sports Events or Leagues: Reach out to the event organiser's sponsorship or partnership department. Event websites often have dedicated sections providing information for potential sponsors.
Athletes: Contact the athlete's management or agent, who typically handles sponsorship inquiries. Some athletes manage their sponsorships independently, and contact information may be available on their official website or social media.
Sports Federations: Reach out to the sponsorship or business development department of the relevant sports federation. Check the official website of the federation for sponsorship guidelines and contact information.
For specific details, visit the official website of the entity you are interested in sponsoring or directly inquire through the provided contact information. If the information is not readily available, consider reaching out to the general contact line or email provided on their official platforms, and they can direct you to the appropriate department.
A good sponsorship fit is characterised by the alignment of the sponsoring brand with the sponsored entity in a way that creates mutual value and resonates with the target audience. Several factors contribute to a strong sponsorship fit:
Relevance: The sponsorship should align with the values, image, and interests of both the sponsoring brand and the sponsored entity, creating a natural and authentic connection.
Target Audience Alignment: The audience of the sponsored entity should closely match the target demographic of the sponsoring brand, ensuring that the partnership reaches the right consumers.
Brand Image Consistency: The sponsorship should enhance, not contradict, the overall image and messaging of the sponsoring brand, contributing positively to its perception.
Engagement Opportunities: A good fit provides meaningful opportunities for engagement, whether through events, activations, or collaborative campaigns, ensuring that the partnership goes beyond mere visibility.
Mutual Goals: Both the sponsor and the sponsored entity should share common objectives and goals, fostering a collaborative approach to the partnership.
Long-Term Viability: Ideally, a good sponsorship fit has the potential for a long-term relationship, allowing both parties to grow and evolve together.
Ultimately, a successful sponsorship fit is one where the collaboration is strategic, authentic, and creates a win-win scenario for both the sponsor and the sponsored entity.
