You know those phone calls, the ones that come in regularly from schools and local charities, that go something like this: “Hello, Mr. Business Owner. My name is Kelly, and I’m calling from the High School Soccer Team. We’re looking for local businesses to sponsor our … something.”
Do you take those calls? See them as a nuisance? Or a waste of your time? Do you try to pawn them off on your manager? Well, they’re actually opportunity knocking. Supporting local causes and events not only gives you convenient localized advertising opportunities, but you’re also inviting potential customers to choose you over a competitor because you’re the one that supported something they care about.
Make no mistake, sponsorships are about creating relationships, loyalty and new customers.
Exactly What is Sponsorship?
IEG, a major player in the $57.5 billion sponsorship industry, defines sponsorship this way: “A cash and/or in-kind fee paid to a property (typically in sports, arts, entertainment or causes) in return for access to the exploitable commercial potential associated with that property.”
There are those who see sponsorship as charitable giving or philanthropy, but the difference, says IEG, is commerce. “Philanthropy is support of a cause without any commercial incentive. Sponsorship is undertaken for the purpose of achieving commercial objectives.” You—the sponsor—are promoted in association with the entity you sponsor.
And sponsorship is not simply advertising. In most cases sponsorship gives you access to a live audience, perhaps on-site sampling or sale of your product, opportunities to entertain your clients, and exposure.
Benefits of Sponsorship Marketing Packages
Companies, large and small, that choose sponsorship as a marketing tool, do so for various reasons. They may want to increase their niche market, boost sales, differentiate their business from a competitor, improve their public image, increase visibility, and get immediate results to gauge customer response.
As with all of your marketing efforts, you evaluate sponsorship opportunities based on your specific goals, and experts agree that sponsorship should be included in your overall marketing budget.
Types of Sponsorships
In its 2014 Guide to Sponsorships, IEG projected that a whopping 70 percent of North America business sponsorships would be related to sports, with the remaining 30 percent split between entertainment, annual events like festivals and fairs, charitable causes, the arts and associations.
Perhaps sports marketing sponsorships are so popular because they work. Performance Research, which studies sponsorship analytics and insight, took a look at Formula 1 racing’s return to the US after an absence of ten years, reported that sponsorship increased sponsor awareness, that nearly two-thirds of fans said they believe sponsors have more interest in their customers than non-sponsors, and more than half said they would choose a sponsor’s product over a non-sponsor’s product.
Josh Cartu is an international Formula 1 driver and entrepreneur who will soon compete in Europe’s Gumball 3000 who believes sponsorships enhance business to business relationships. In a recent interview, he said, “A single Formula 1 racing event can expose a company’s brand to hundreds of thousands of fans, hundreds of trade partners, and media outlets.”
Event sponsorships are effective, as well, in part because they offer so much opportunity to target niche markets. While sporting events attract a huge number of fans with varying other interests, festivals, concerts and annual events themselves are already niche-targeted.
Sponsoring a cause (not philanthropy here, but as a sponsor) is good for business, too. The 2013 Cone Communications Social Impact Study reported that 89 percent of US adults said they would be likely to change brands to support a company that supported a cause they cared about, and 93 percent had a more positive image of a company that supported a cause they cared about.
Evaluating Sponsorships Proposals
So what does this all mean for you? Should your business sponsor something? How do you decide between an event, a sports league, a local business - or anything else? What do you look for in ROI?
Here’s the good news first. It doesn’t have to be expensive - but it does have to be a good fit. The sponsorships you choose must align with your brand, because you are effectively associating your brand with the entity you sponsor.
For example, last summer NASCAR driver Danica Patrick and Stewart-Haas Racing announced a new sponsorship with Nature’s Bakery. You may think that’s a bit of a non-intuitive choice, since In the NASCAR world, we’re most accustomed to seeing more male and industry-type sponsors. Think tires and beer. But because Patrick uses her affinity with nature, yoga and health as a way to let fans get to know her off the track, Nature’s Bakery is an authentic choice for both Patrick and the company. It’s a win-win.
Where are your authentic sponsorship opportunities? In addition to aligning with your brand, you also need to know what you’re getting in return. Whether you’re considering a sport, an event, or a cause, ask yourself these questions before deciding:
What’s the target market? What kind of exposure will my company get if I invest in this? Will I have direct access to attendees? Does it make business sense for my company to be there? Which of my goals will I meet? Will my competitors be there as sponsors? Are there good reasons NOT to do this? How will your sponsorship be marketed and promoted? And the biggie, of course, what’s my eventual (or immediate) ROI?
Determining Sponsorship ROI
Marketers say it can be tough to measure ROI from sponsorships, but there are a few metrics that are most valuable and fairly easy to pin down: the amount of media exposure generated by the event, sales of any products presented at the event, and leads generated. From there, you may need to hire out to determine brand awareness, awareness of your company as sponsor, and any improved or changed attitudes to your brand.