Sponsorship occurs when a person, firm or organisation supports an activity or event in return for some form of promotion or marketing. Many events reply on sponsorship support to assist with the cost of staging the event.
The purpose of sponsoring an event is that the sponsor receives some form of advertising or promotion in exchange for the sponsorship. The sponsorship may be to the form of money provided directly or it could be an “in-kind” or “contra” sponsorship where the sponsor provides products, services, facilities, time or expertise rather than money.
Although sponsorship may be attached to social causes and broadcast media such as a television programme as well as to special events, nearly all public events are now sponsored in some way. With the emphasis on “connecting with” rather than “talking at” the marketplace, special event sponsorship can be an ideal way for organisations to create meaningful brand interactions with consumers and stakeholders.
The Exchange Relationship in Sponsorship
The relationship between sponsee and sponsor needs to be reciprocal with each party receiving and giving benefits in return. The business relationship between the sponsor (provider of finance, services or resources) and the sponsee (an organisation, individual or event) is one where the sponsee offers associations and rights that can be utilised for commercial advantage (generally brand awareness and market positioning) by the sponsor, in return for their investment.
Why Organisations provide Sponsorships
Broad reasons for an organisation to consider sponsorships may include:
Demonstrating to the wider community it takes into account their interests
Communicating their corporate values to the public to convey how they do business
Building mutually beneficial business to business connections that may be of future use
Position itself positively within the marketplace in comparison to its competitors
Reassure staff that the company is involved with and cares for the community (lifting morale)
An organisation expects something in return for providing its sponsorship and these may be either of a strategic nature (i.e. image enhancement) or of a tactical nature (i.e. product sales at an event).
Potential benefits to an organisation when providing sponsorships to events may be:
Building Brand Awareness
Target Specific Markets
Hospitality Provided for their Clients
Entertainment for their Clients
Client Base Growth
Philanthropy v Sponsorship
Sponsorships are not donations as the sponsor expects something in return for their investment whether that be naming rights, visible promotion of their company or access to potential customers.
Increasingly, the line between sponsorship and philanthropy has blurred as even philanthropic donations to charity, education etc. often have a public acknowledgement and consequent PR and branding benefit to the donator.
So what are the key distinctions between corporate philanthropy and corporate sponsorship:
Corporate sponsorship is a mutual business proposition that offers value in exchange for money or in-kind offerings. Corporations get a return on their investment, enhance their profile, associate their brand with a cause or attract customers who support that cause
Corporate philanthropy is motivated by altruism and supports a socially beneficial cause without financial or material reward to the corporation