Brand sponsorships can lead to significant revenue growth by reaching consumers based on their passion for an event or special interest. The key is designing a value-generating program and activating the sponsorship by fulfilling promises.
— By Karen White
Brand sponsorships are everywhere and take many different forms. They have focused on charities, sports and special events, but sponsorships now include deals like paying to put the company name on a stadium, building or road sign. Suppliers sometimes bring their corporate clients into their sponsorship fold as a way to strengthen the relationship while generating revenues for the sponsored and the sponsoring.
Sponsorships can bring enormous benefits, like access to a wider market, or enormous problems, like a sporting event that turns political and offends the targeted audience.
Sponsorships are part of a total marketing strategy and should be treated with the same attention a
s any other business investment or revenue generating program. When striving to develop corporate sponsors, consider price, the deal structure, the timing and length of time of the sponsorship, the expected full value of successful outcomes, the use of technology, and the potential risks.
Get a Fix Through Data on What to Offer a Potential Sponsor
Sponsorships are not just a matter of handing money and T-shirts to a charity. For some companies, it is a major form of branding combined with community responsibility. The basic principle is that the brand must have a connection to the event's audience.
The challenge is finding and building that connection for a value-driven outcome, and it is a two-way street. The organization seeking sponsorship and the business awarding sponsorship are both looking for value in its many forms – market recognition for products or services, increased revenues, stronger audience or customer brand loyalty, name familiarity, and positive community relations. The sponsoring company expects to increase revenues through the marketing experience, and the sponsored event expects to increase revenues for the organization. Everyone on both sides want a return on their investment.
There is a lot of competition for sponsorships, especially offered by big brands because they have large amounts of resources. Due to the competitive nature of the sponsorship process, getting a brand's attention requires a lot of preparation and data collection in order to develop an effective pitch. The data collected includes items like event attendance numbers, demographics of attendees, vendors participating as exhibitors or supporters, number of contacts on the email list, media coverage, social media analytics, volunteer hours, and any other statistics that will help get brand attention.
The data helps with identifying the best match for the sponsor and brand. For example, an organization working primarily with underserved populations could target sponsors with the same focus like health companies.
The objectives of sponsorship includes generating interest in new products, building sales, and expanding brand awareness while providing community services. The more objectives an organization seeking sponsorship can help the sponsor meet, the better the match.
Identify the Sponsors’ Rights
To develop the package requesting sponsorship, it is necessary to offer them incentives that fit their objectives. Sometimes, a corporate supplier will sponsor an event and search for partners among its corporate clients. The advantage of this situation is the fact there is already a common interest, and both the supplier and partner can benefit.
Corporate sponsors are very careful about protecting their image. There are numerous cases in which a sponsorship went sour and cost both companies money because the event did not project the company values. This hurts the sponsor and whatever is being sponsored.
There are numerous approaches for convincing sponsors to participate. Will the sponsor get multimedia coverage through event promotional campaigns? Will the sponsor get exclusivity as a sector company, or will competitors also be included? Is the sponsorship relevant for a long period of time or just for a single event? Can the sponsor tie in some of its partners, suppliers, distributorships, retail stores or other organizations? Will event attendees be able to showcase the sponsor's products by wearing logos or using the products? Is it the type of event in which the sponsor can make new sales or develop new distribution outlets? What performance metrics will be made available? Can the sponsorship of the event lead to a long-term commitment or offer potential spinoff opportunities?
A well-designed sponsorship brings measurable value to both parties.
Looking at sponsorship from the sponsoring company's perspective, it will want these rights clearly identified in order to make a decision. The organization asking for sponsorship will also need to find a way to demonstrate it can deliver what it promises.
Sponsors get a number of rights, and each of those need addressing when structuring the deal. Rights include things like advertising in programs, exhibition space, ticket allocation, onsite signage, minimum number of mentions on scrolling digital displays or PA systems, category exclusivity, promotional materials, and dozens of other details.
The cost of sponsorship is a major factor. What are the levels of sponsorship and the cost per level? What is included in the price?
Sponsors do assume some risks, and acknowledging those risks is important to landing sponsorships.
For example, ambush marketing is when a rival company tries to market its products at an event that already has signed-on sponsors. Though the event organizers cannot guarantee ambush marketing will not take place, they can make sure all marketing is clear about the sponsoring company so people do not get confused. Organizers can develop a brand protection plan, proactively tell ambush marketers to cease-and-desist, and aggressively protect sponsor rights.
A well-designed sponsorship brings measurable value to both parties. Metrics include audience awareness changes, sales results, new media coverage, new leads, market share increase, social media positive comments, improved image, new supplier contacts, and any other metric with meaning.
The ROI of sponsorship depends of people having a positive experience upon seeing the marketing program activities, attending the event, reading social media, and buying products or services sold.
Protecting Brand Image
Brand sponsorships can generate money, but the key is paying attention to the details. A sponsorship risk is that there is always the chance something will go wrong and hurt the brand image.
A recent example is sponsoring an event in which the owner of the company putting on the event is a big game hunter and posts pictures of his "kills" online. This implies approval of hunting endangered animals.
In reverse, accepting a sponsorship from a company with a culture or values that are different from the company requesting it can hurt the brand image and lead to the loss of customers.
The more effort put into developing the right partnership, the more the risk is minimized.