Although there are many marketing channels a company can potentially use to meet its objectives, the many benefits of sponsorship make it the only one that covers all the marketing funnel stages – and more.
To misquote a famous ad campaign, sponsorship refreshes nearly all the parts of a business that other marketing channels cannot reach. Disciplines such as advertising, public relations, social media and experiential can each tick a few boxes and all have their place in any good marketing mix.
How sponsorship covers the entire marketing funnel
However, only sponsorship can potentially address every stage of the marketing funnel – Awareness, Consideration, Conversion, Loyalty, Advocacy – as well as covering other areas of the business such as corporate social responsibility, human resources and even product development. Thus, it can deliver a much wider business-wide return on investment far beyond the initial sponsorship fee.
1. Drive brand awareness
At its most fundamental level, sponsorship is another form of advertising a company can undertake to make it more well-known by having its image or logo appear on the various materials a rights holder owns – be it a team shirt, a stadium or an email. Audio streaming brand Spotify has just paid a reported €280 million to Spanish soccer giant Barcelona to sponsor its shirts, training kit and potentially naming rights to the club’s Nou Camp stadium. All this will give it global exposure on a regular basis.
However, sponsorship has two main advantages over traditional advertising: firstly, it tends to be more ‘evergreen’ in that the images or exposure can last for years (think of people who keep the old kit, seeing pictures of players from previous years or re-runs of events/matches). Secondly, it generates free advertising in terms of news or media coverage. For example, female-empowerment dating app Bumble paid $20 million to sponsor the NBA’s LA Clippers but some have suggested it generated well over that figure in free advertising alone for Bumble through the huge amount of publicity the deal itself received.
2. Generate positive PR
In an extension of the Bumble example, a sponsorship can help generate positive PR – be it news coverage or the reaction it engenders in the people who come across it. An example being Virgin Media who helped address the issue of high-ticket prices in soccer which are increasingly ruling out the average fan. Through its sponsorship of English team Southampton and the Football Supporters’ Federation, Virgin took part in the “Twenty is plenty” lobby that campaigns to cap ticket prices for away fans at £20. Fans who spent over £20 could send their ticket to Virgin who would refund the difference.
It also associated Virgin with the idea of loyalty in what is a low-loyalty industry (TV/broadband subscriptions) and generated goodwill among Southampton’s opposition supporters – an extremely rare occurrence in the tribal world of soccer.
3. Define how people perceive a company
This is what marketers refer to in marketing strategy as competitive “positioning.” Not only do companies want to become more well-known but they want people to think a certain way about them. One of the benefits of sponsorship is that it can do this by associating the characteristics of the rights holder with the sponsor itself – an industry term called ‘transference’.
For example, the rather uncool car brand Skoda wanted to reach a younger audience and alter perceptions of the brand being ‘dated’ so they sponsored British cycling legend Bradley Wiggins. Referred to as cycling’s Noel Gallagher (he of Oasis fame), ‘Wiggo’s unique character and rockstar image helped drive a 22% increase in likeability, a 54% increase in time spent on Skoda’s website and 14% growth in Skoda’s under-55 audience.
Another benefit related to how people perceive a company is how sponsorship generates high levels of trust. A Nielsen study across 56 countries revealed sponsorship is the 3rd most trusted form of advertising globally: trusted by 81% of consumers – behind only personal recommendations and a company’s own website.
4. Generate content
The explosion of digital/social media has given brands the opportunity to create their own marketing content and sponsorship is arguably the most effective enabler of this by giving brands the right and material to create content featuring the rights holders’ stars or athletes.
Telecoms brand Telstra, who sponsor the Australian Football League, created a ‘spin-off’ version of the sport during the Coronavirus pandemic – the Australian Dice Football League – where well-known players competed head-to-head by rolling dice to determine the game’s score. A great way for “fans to engage with their heroes in a fun and unscripted environment” as Telstra’s sponsorship manager noted.
5. Showcase a product
A successful sponsorship campaign enables a company to easily illustrate what their product is or does. Online trading brand eToro, for example, needed to educate people about the wider discipline of trading/investment. So they undertook a ‘profit-only’ deal with DS Techeetah in which the Formula E team was given an eToro trading account with £1 million for the team to invest and DS Techeetah got to keep any profit they made at the end of the deal.
As they also offered cryptocurrency trading, eToro paid to sponsor English football teams using Bitcoin at a time just before the first cryptocurrency wave hit the mainstream. This was crucial in showing the general public that crypto wasn’t this dodgy thing that only criminals used but has a real-life use case for everyone.
6. Gain prospect data
One of the benefits of sponsorship is that its a very effective way to gather data on potential customers. Asian-Pacific life insurance group AIA has sponsored English Premier League soccer team Tottenham Hotspur for years despite their product not even being available in the UK or Europe.
The Premier League is hugely popular in Asia so AIA’s sponsorship enables them to run lots of free competitions and promotions that Asian people enter and in doing so provide various personal details that the insurer then uses to target them with insurance products.
7. Broker introductions / network
Sponsorship can be an effective – and sometimes the only – way for a company to get in front of a certain target audience, particularly in the business-to-business world (B2B).
For example, the World Green City Awards run by the AIPH, is an initiative designed to identify the world’s greenest cities in terms of how they incorporate nature into the way a city is developed and run. Consequently, it provides sponsors such as real estate, engineering, architecture and consultancy companies with the opportunity to be introduced directly to highly influential city planners and local government decision-makers who would otherwise be very hard to reach when it comes to securing multi-million-pound development projects.
8. Directly drive sales
The ultimate point of marketing is to drive sales and although sponsorship mainly helps indirectly (through all the benefits being listed) it does enable a company to directly drive sales. The most obvious example of this is ‘pouring rights’ where a drinks company secures the right (often exclusively) for its product to be sold at events or in venues. Depending on the length or size of the event this can generate hundreds of thousands of pounds in sales.
A more specific example is that of taxi brand Gett who sponsored Surrey County Cricket Club in England. The company got an exclusive taxi rank right outside the ground which was promoted throughout the day to encourage attendees to use it to get home. A special code was also offered to anyone who downloaded the Gett app which gave them a large credit on the account which would encourage attendees to get in the habit of using the service generally in the future.
An analysis of 100 sponsorships in seven markets across 20 industries by Nielsen revealed that sponsorships drive an average 10% lift in purchase intent among the fanbase who are exposed to it. For example, 27% of the US population is interested in investing in cryptocurrency but this rises to 45% (a 67% uplift) across fans of the four major US sports which have seen a big rise in crypto sponsorships.
9. Entertain prospects and clients
Along with brand awareness, this is the original bedrock of sponsorship – hospitality. One of the benefits of sponsorship is in giving companies access to rights and opportunities which can be used to entertain prospects (drive new sales) and clients (renew current ones) such as corporate boxes at live events to ‘money can’t buy’ experiences including private dinner events, meeting star performers/athletes or attending training/rehearsal sessions.
10. Interact/engage with customers
Where hospitality enables a company to engage with a very small number of customers, sponsorship also allows them to engage with a large proportion of customers outside of the usual management touchpoints (e.g. purchase, renewal, addressing problems etc.)
A successful sponsorship example is mobile network brand O2’s sponsorship of both England Rugby and London’s Millennium Dome. The brand enabled customers to benefit from these partnerships in various ways including advance tickets, priority admission to events, onsite lounges reserved for O2 customers, access to exclusive player meets and greets, matchday discounts and exclusive behind the scenes content.
Not only do these make the company more attractive to its customers, it gives O2 more data/insight into their interests which it can also use to maintain loyalty or upsell other products – another example of the benefits of sponsorship.
11. Meet CSR goals and help society
Society is putting a much greater demand on companies to behave in more socially responsible ways – be it the environment, supporting local communities or championing equality/diversity. This is where sponsorship is incredibly powerful and the most effective marketing channel for a company to do this. It can take out advertising to say it’s socially responsible or it can engage in sponsorship to show it’s socially responsible.
For example, confectionery brand Mars – a sector that generates health concerns – created a joint ‘Just Play’ initiative with the English Football Association aimed at getting one million participants from all ages, abilities and backgrounds more active through grassroots soccer.
12. Engage and motivate employees
Sponsorships are increasingly being used as an effective way to engage and motivate staff. Not only does it provide kudos which can help lift staff spirits, pride and confidence, sponsorship lends itself well to providing opportunities and experiences as well as prizes for performance-based competitions.
The head of cycling partnerships at HSBC UK said in the first year of any partnership the only key performance indicator he measured against was the impact it had on staff. The recruitment brand Indeed noted one of the biggest benefits of their sponsorship of German football team Eintracht Frankfurt was the confidence and validation it gave staff. For example, salespeople now felt they could pick up the phone to anyone as the company was now at the “top table”.
13. Drive recruitment
As the battle for talent has become more extreme and with younger generations having much higher expectations from a job / employer, a company’s potential employee-facing brand is as important as their consumer-facing one. In this regard sponsorship is a major tool in making a company seem like a more desirable and relevant place to work and a great way to differentiate a company from the competition.
Deloitte, for example, cite their sponsorship of cycling event Ride across Britain in their recruitment material. It costs around £1,600 to enter but is paid for by the firm.
To conclude, from a company’s point of view, it’s worth considering how much more attention and resource could be devoted to sponsorship to satisfy objectives within many areas of the business such as sales, marketing, data/research, CSR and HR.
From the rights holders’ side, it’s about identifying to what degree your organisation is well-placed to meet the various objectives across an entire company and getting this point across concisely.
For both, consider how many objectives could be achieve within a single sponsorship that would potentially negate the need for a company to engage in various other activities – killing many birds with a single stone so to speak.