by Ystrad Mynach College
Sponsorship is a process by which a company, organisation or individual provides an individual organisation with funds, products or services for commercial advantage. Sponsorship is a business relationship and should be mutually beneficial to the sponsored individual and the sponsoring company.
Most companies seek a return to their support or investment, ranging from goodwill within the community to more complex benefits such as media exposure, increased sales and brand awareness. Sponsorship is about building a long term relationship. The longer it lasts, the more its worth.
There are many different reasons why companies enter the sponsorship marketplace, ranging from brand awareness to satisfying a Chief Executive’s personal passion! Here are a few of the most common objectives that companies seek from sponsorship programme:
To increase sales Develop customer loyalty Heighten brand awareness Develop new market Develop business to business relationships Launch new brands Broaden customer base To develop community relations To change or revitalise brand image.
The bulk of major sports sponsorship deals in the UK and Europe are shared amongst the following industry sectors:
Automotive Consumer Electronics Clothing Information Technology Fast Moving Consumer Goods (FMCG) Tobacco Alcohol Financial Services
These are not the only industries and athletes may have to think outside the box for companies to approach.
ADDED VALUE - Sponsors look to sport to add value to the brand proposition. In almost all sectors of all markets there is intense competition among companies and brands. Often there is little to choose from in terms of quality, content or price. In order to make a brand stand out from the crowd a sponsor will use sport to create a unique position in the mind of the consumer.
At the highest levels, sport involves gold medals, world records, championship cups and global awareness. A world-wide, leading brand such as Coca-Cola wants to associate itself with such excellence and ubiquity so has chosen the Olympics and football World Cups for its sponsorships. But in order to personalise and localise its image and activity, Coca-Cola also supports grass roots sport to reinforce its global message. Smaller companies can also benefit from improved, awareness images and sales through sponsorship at a local or regional level: the principles are the same, the only difference is scale. Companies use sports sponsorship for a variety of reasons, and to attract sponsorship it is important to understand which objective a company is addressing:
Brand/Corporate image: attempts to create a personality and style which distinguishes a product from another in the market and allows, for example, premium pricing. Customer relations: sports sponsorship can open dialogue between companies, showing the sponsor as a global player worthy of recognition and suitable to do business with. Sponsorship can also provide suitable hospitality vehicles to meet and do business with clients. Employee relations: sports sponsorship can encourage company pride and loyalty to help attract and retain staff. Community relations: sponsorship can show that a company cares about it community and is prepared to invest in its future and the welfare of its citizens. Brand/Corporate awareness: seeks to put a name in front of the consumer so that he will give it favourable recognition when exposed to other, specific marketing messages.
A UNIQUE PROPERTY - Sponsors are looking for sports properties that can make a valuable and quantifiable contribution to existing or planned brand communications. To do so the sponsorship must have a good fit with the brand’s personality and, ideally, be unique to that brand so that there is no consumer confusion. A sponsor wants to create activities that are enjoyable and memorable for audiences and participants and provide them occasions to build the brand values and to develop sales opportunities and volumes. A beer company, for example, will gain national television awareness through sponsoring a rugby international but will also have the chance for thousands of spectators to sample its products in a favoured environment leading, hopefully, to repeat purchase away from the match. Top of the list of most sponsor’s requirements is media coverage. Sporting events create thousands of opportunities for exciting and interesting newspaper photographs and television images showing sponsor logos on shirts or banners. Such exposure creates brand familiarity for consumers making the logo stand out from competitors when consumers are in the supermarket or high street looking to spend money.
The biggest sponsorship deal in football belongs to Juventus.
They get £15m a year.
Manchester United now have the second largest sponsorship in the world behind that of Italian side Juventus, who have a deal with Tamoil worth in excess of £15 million per year.
AIG - Official kit sponsor Nike - Official kit manufacturer AirAsia - Official airline Audi - Official automobile and dugout seat provider Betfred - Official gambling partner Budweiser - Official beer Tourism Malaysia On 23 November 2005 Vodafone ended their £36 million, four year shirt sponsorship deal with Manchester United. Manchester United now have the second largest sponsorship in the world behind that of Italian side Juventus, who have a deal with Tamoil worth in excess of £15 million per year.
OBJECTIVE ASSESSMENT - Self evaluation of a project is an essential tool to measure performance against objectives and to provide a reporting process for the sponsor. It demonstrates to a sponsor that their investment is valued, what return they have achieved and provides data to help sell future sponsorships.
KEY PRINCIPLES Measuring participation - A sponsor wants to reach a specific sector of the market so data on participants that details age, sex, ethnic origin or socioeconomic groups can help measure success. Measuring skills - Achievement of sporting objectives can be measured by noting before and after performance levels of participants. Sports match needs to know this and the data will aid the search for future sponsorships. Photographic record - One of the best ways of showing the impact of a sponsorship is photographs: participants, spectators, sponsor branding will all help tell the story of your success. Media Monitoring - Collect press clippings, count column centimetres of coverage and the number of photographs and sponsor mentions. Record or note broadcast mentions and keep copies of advertisements and other branded materials.
Sponsorship is a commercial agreement between a company and a sport to enter into a joint venture to promote their mutual interests. In return for a financial contribution a sports organisation will allow the use of its name in commercial activities. These activities can be as varied as the imaginations of the participants. Some of the most obvious are: Display of the brand name on kit, banners around the venue, advertisements in programmes, and on other merchandise. Use of the club, event, team or individual in advertisements and other promotions undertaken by the brand. Personal endorsement of the sponsors products by teams or individuals by use of their products, kit or equipment Production of joint websites or developing close links between separate websites. For examples of this in action you only have to think of the Vodafone sponsorship of Manchester United, Tiger Woods endorsement of Nike products or the website work done by Guinness as a sponsor of the Rugby World Cup.
Most sponsorships are paid for in cash, but in-kind sponsorship can be useful and effective. Instead of money, the sponsor provides equipment, services or management expertise as all or part of its fee for the rights to a sporting activity. Companies may also provide money to sporting organisations in other ways.
Charitable donations - No commercial return is expected although a company make use donations to be seen as a good corporate citizen. Corporate patronage - A half-way house between donations and sponsorship, patronage generally provides only some recognition of a company’s activity among a relatively small, though influential, group. It is more common in the arts than sport. Corporate hospitality - The opportunity to meet customers and contacts in informal enjoyable circumstances to pursue business objectives. It is often part of a sponsorship package. Public/community relations - Sponsorship of sport can be used to meet objectives on a company’s social or political agenda. The aim is not to sell products but to improve a company’s image as an employer, corporate citizen or contributor to the economy.
Sponsorship is very wide ranging. It can be sponsorship of one-off events such as a tennis of golf tournament, or it can be a longterm three year sponsorship of a league such as the football league. Sponsorship can be of individuals such as the Adidas sponsorship of tennis player Ivan Lendl. Finally, sponsorship can be of a group of individuals forming a team or club, such as the 02 sponsorship of Arsenal Football Team.
SPONSORS pay all the costs of the administration of the scheme as well as providing the badges and certificates. The sponsor gets publicity when the certificates and badges go home to parents with sponsor's name prominent. The SPONSORS also hope to get credit from the public for encouraging young people to take part in sport and to improve their ability.
SPONSORS sometimes pay for running coaching and teaching courses which lead to official recognition. These awards are for adults in clubs, schools or sports organisations
For the Sponsor
PUBLICITY –The sponsor's name will be brought to the attention of the public. An event may be named after the sponsor, or the sponsor's name will be prominently displayed on advertising boards or on the shirts of the players. The sponsor's name will be seen on the TV and in newspapers, and will be heard on the radio and in everyday conversation. FINANCIAL - Companies who put money into sponsorship are able to reduce their tax bill.
IMAGE - It is good for a sponsor's image to be linked with a popular, healthy pastime like sport. It is also good to be associated with success (e.g. if a great athlete like Steve Cram is seen to be wearing Nike running shoes, then people will assume that Nike shoes are the best and will buy them). Companies will pay the top athletes many thousands of pounds to wear their goods.
FOR THE SPORT
EXTRA INCOME - In professional sport, sponsorship means that big prize money can be paid and events can be organised on a very large scale without the spectators having to pay huge admission prices. In amateur sport, sponsorship often means the difference between an event or team surviving or having to fold. The extra income can be used to pay for new kit, or for transport costs which otherwise would be too expensive for the players to afford. Other expensive items are league entry fees and registrations, hire of facilities and payment of referees. Some or even all of these items may be paid for by the sponsor.
RAISES STANDARDS - If a team is sponsored it may attract more or better players, thus raising the quality of the team. If an event is sponsored it will be better organised and may be able to expand to allow more teams/players to take part. Sponsorship often means a team or athlete can receive high quality coaching. In some cases sponsorship has allowed athletes to give up full-time work and concentrate on their sport. The top track and field stars are able to do this. Skaters torvill and dean were able to become world champions after Notts County Council's sponsorship enabled them to give up work. STATUS - Being sponsored gives a team status. If a company is prepared to give money to a team, then people will tend to think that the team must be a
FOR THE SPONSOR
POOR VALUE - The sponsor may feel they have not received enough publicity for the amount of money they have given. There are many ways a company can publicise itself, and doing it through sports sponsorship is fairly risky. If a team or event is a massive success and attracts media attention, then the sponsor has had good value. If the team or even was a failure with little or no media coverage, then the sponsor will have had poor value for money.
BAD IMAGE - During the time a sponsor is under contract with a sport, the image of the sport may suffer and thus damage the image of the sponsor. (Canon Electronics who sponsored the Football League for 1984-86 were rumoured to have pulled out of their sponsorship because of the very bad image of football caused by the Bradford and Brussels disasters). ONLY 1 WINNER - It is important to the sponsor to be associated with a team or individual that is successful. Sponsors associated with teams who are failures will not get the right kind of publicity. (E.g. if team is relegated from the Premiership this is not the right kind of publicity, but if a team is champion this is a different matter).
FOR THE SPORT
DEPENDENCE ON SPONSOR - Many sports become too dependent on sponsorship. when National League Basketball was televised by Channel 4, the sport was inundated with sponsors and a lot of money, but when Channel 4 pulled out so did most of the sponsors and almost caused a collapse in the League.
MAJOR-MINOR GAP - The difference between the heavily sponsored major sports (Football, Cricket, Motor Racing, etc.) and the minor sports who attract little or no sponsorship, has grown enormously in the last two or three decades. this over-emphasis on a few big sports is bad for sport generally. NO CONSULTATION - When there is an agreement between a large sporting body and a sponsor, the sports players may have to wear or use their equipment whether they, as individuals, approve of the sponsor of not. There is often no consultation of the people who have to wear the sponsor's name.