by Sponsoring something (or someone) is the act of supporting an event, activity, person, or organization financially or through the provision of products or services. The individual or group that provides the support, similar to a benefactor, is known as sponsor.
Sponsorship is 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.
While the sponsoree (property being sponsored) may be nonprofit, unlike philanthropy, sponsorship is done with the expectation of a commercial return.
While sponsorship can deliver increased awareness, brand building and propensity to purchase, it is different from advertising. Unlike advertising, sponsorship can not communicate specific product attributes. Nor can it stand alone, as sponsorship requires support elements.
Advertising that seeks to establish a deeper association and integration between an advertiser and a publisher, often involving coordinated beyond-the-banner placements.
Examples of sponsorships vary widely, as the whole point is to establish a more unique advertising opportunity than afforded by typical rotating advertisements. They may include several fixed ad placements, advertorials, co-branded content sections, or anything the advertiser and publisher can agree on.
Sponsorships attempt to deliver more than a “drive by” impression. Whereas much online activity is geared towards direct marketing, sponsorships add the element of brand marketing. Metrics such as CTR may be balanced with brand association, as sponsors seek to tap into the publisher’s goodwill and establish credibility in their target market.
All sponsorship should be based on contractual obligations between the sponsor and the sponsored party. Sponsors and sponsored parties should set out clear terms and conditions with all other partners involved, to define their expectations regarding all aspects of the sponsorship deal. Sponsorship should be recognisable as such.
The terms and conduct of sponsorship should be based upon the principle of good faith between all parties to the sponsorship. There should be clarity regarding the specific rights being sold and confirmation that these are available for sponsorship from the rights holder. Sponsored parties should have the absolute right to decide on the value of the sponsorship rights that they are offering and the appropriateness of the sponsor with whom they contract.
Sponsorship Markets
IEG projects spending on sponsorship globally to grow 4.5 percent in 2018 to $65.8 billion, including $24.2 billion in North America alone (a 4.5% increase from $24.1 billion in 2017). Europe is the largest source of sponsorship spending, with €26.44 million (US$29 million) in just the EU member states in 2014, followed by North America, the Asia Pacific region. Growth in Central and South America during 2010 did not materialize to the extent projected 3.8 percent versus a forecast of 5.7 percent despite the FIFA World Cup and Olympic Games in Brazil in 2014 and 2016, respectively. With the 2010 World Cup concluded, sponsorship activity should begin to heat up, thus the region is projected to be the fastest-growing source of sponsorship dollars outside North America, with a forecast growth rate of 5.6 percent for 2011.
Relaxed television industry legislation surrounding product placement has led to a small but increasing rise in TV programming sponsorship in the UK. However, commercial sponsorship of British sports teams and players is a multibillion-pound industry. For example, Adidas became the sponsor and supplier of Manchester United’s kit for ten seasons, in a 2014 sponsorship deal with a guaranteed minimum value of £750 million (more than US$1.1 billion).
As it has in most years over the past two-plus decades, sponsorship’s growth rate will be ahead of the pace experienced by advertising and sales promotion, according to IEG.
