Sponsorship: A Key to Powerful Marketing

Sponsorship, in trade show terms, is still very much in its infancy. Major shows like CES use sponsorship very successfully. However, there are many shows that offer minimal opportunities which leaves the door open for savvy marketers to capitalize on unique promotional possibilities.

Some of the most frequent tradeshow promotional opportunities include sponsorship of the press room, an international lounge, a speaker or VIP room, an awards reception, educational programs, banners, badge holders, audio visual equipment, display computers, tote bags, shuttle buses, napkins and drink cups.

So, why should your company be interested in sponsorship? When done well, it offers significant opportunities for distinct marketing and competitive advantages, as well as showing support of the event.

What is sponsorship?

What exactly is sponsorship and how can a company use it to their advantage? Sponsorship is the financial or in-kind support of an activity, used primarily to reach specified business goals. According to IEG’s Complete Guide to Sponsorship, "the recipient of sponsorship may be nonprofit, although sponsorship should not be mistaken for philanthropy. Philanthropy is support of a cause without any commercial incentive whereas, sponsorship is undertaken for the primary purpose of achieving commercial objectives. Sponsorship should also not be confused with advertising. Advertising is considered a quantitative medium, whereas sponsorship is considered a qualitative medium. It promotes a company in association with the sponsee."

A large number of events these days need sponsorship support to offer more exciting programs and to help defray raising costs. Many companies are often thrilled to contribute sponsorship support - monetary, in-kind, or both - when they can see that their participation will bring them a return on their investment. Sponsorship allows companies to reach specifically targeted niche markets without any waste. In addition, it is a powerful complement to other marketing programs, in addition to having a dramatic influence on customer relations.

Why companies sponsor?

Sponsorship offers the possibility of achieving several goals at once. According to Schmader and Jackson in their book, "Special Events: Inside and Out," there are many ways in which a company can benefit from sponsorship, the six most popular reasons are:

1. Enhancing image/shaping consumer attitudes

2. Driving sales

3. Creating positive publicity/heightening visibility

4. Differentiating themselves from competitors

5. Helping with good "Corporate Citizen" role

6. Enhancing business, consumer and VIP relations

Defining sponsorship objectives

The starting point for any sponsorship opportunity is to first set some objectives. Decide exactly what you want to get out of your participation and how you will measure your success after the event. Clear objectives will help in your sponsorship selection; facilitate the development of original concepts; provide easier ties with advertising and public relations activities; and give you easier measurement of results.

1. Enhancing Image/Shaping Consumer Attitudes

Often companies are looking for ways to improve how they are perceived by their target audience. Sponsoring events that appeal to their market are likely to shape buying attitudes and help generate a positive reaction. Coca Cola, for example is always looking to generate a positive influence of their products in the minds of their consumers and as such regularly support events they feel can influence consumer opinions.

2. Driving Sales

Sponsorship geared to driving sales can be an extremely potent promotional tool. This objective allows sponsors to showcase their product attributes. Food and beverage companies often use sponsorship to encourage samplings and sales. Event attendees are usually eager to sample something new and may well buy on the spur of the moment from a purely emotional standpoint. Frequently sponsors are expected to pay a percentage of sales as well as the sponsorship fee.

Samplings and sales can also be supplemented with redeemable coupons. Another approach to driving sales is the use of proof of purchase, such as boxtops or labels, for discounted admissions.

IEG’s Complete Guide to Sponsorship cites Visa’s fund-raising effort around its sponsorship of the Olympic Games and the U.S. Olympic Team. They promoted their association by offering to make a donation to the team each time consumers charge a purchase to their card. American Express used a similar strategy by donating to needy causes with their "Charge Against Hunger" campaign. As a result, both companies experienced a significant rise in sales volume.

3. Creating positive publicity/heightening visibility

Every sponsor is seeking wide exposure in both electronic and print media. Positive publicity helps create heightened visibility of their products/services. Various media covering the event may automatically include sponsors names and/or photos. In addition, the kind of media coverage a sponsor may get is often unaffordable if the company were to think of purchasing it, and if it were available. To maximize this objective, it is important for the sponsoring company to have a comprehensive media campaign to augment the regular media coverage promoted by the organizers. Sponsorship can often generate media coverage that might otherwise not have been available.

4. Differentiating from competitors

The mere act of sponsoring an event, especially an exclusive sponsorship, is a significant way to create competitor differentiation. Your company name has the opportunity to stand out head and shoulders above the competition. This is particularly helpful if your company wants to combat a competitor with a larger ad budget. Sponsorship allows smaller companies to compete with their industry giants.

Target audiences often perceive sponsorship in a positive way. They see you as making a greater effort to support the event, often allowing more or better activities to take place as a result of your sponsorship.

5. Helping with good "Corporate Citizen" role

Another powerful sponsorship objective allows companies to be viewed as a "good neighbor". To be seen supporting the community and contributing to its economic development is extremely powerful and creates enormous goodwill.

6. Enhancing business, consumer and VIP relations

Sponsorship that offers hospitality opportunities is always very attractive to companies.

Perks may include special exclusive networking settings such as VIP receptions or golf tournaments - opportunities to meet key customers and solidify business relationships.

How to decide what to sponsor

When a show organizer approaches you with an opportunity, it is important to take time to review it. Consider some of the typical sponsorship criteria to see whether this is a worthwhile possibility.

1. Decide whether there is an image compatability with your company. Does the show have the image you want to establish or have in the marketplace? Find out more about cosponsors and decide if these are companies you want to be aligned with.

2. Know the make up of the audience and decide if these are potential customers.

3. Understand what media coverage the organizer is planning and what additional opportunities could exist.

4. Understand the terms and conditions of an exclusive sponsorship offer.

5. Investigate how best you will be able to showcase your products/services.

6. Ask about cross-promotional opportunities.

7. Explore possibilities for long-term sponsorship opportunities. Sponsorship has a build effect - the longer you sponsor the better known you become for being a part of the event.

8. Consider how easy the sponsorship is to administer. Check out how the show organizer is set up for sponsorship, whether they have dedicated staff to manage your specific needs. Also investigate the organizer’s track record - are they credible?

9. Find out exactly what you can expect for your sponsorships dollars.

10. Explore in-kind sponsorship opportunities and what support you could expect.

It is important to evaluate each opportunity and look for ways it could tie into your marketing objectives. If, however, you really are not interested in the offer, say so up front, rather than mislead the sponsorship seeker.

Information you need

When seriously considering a sponsorship opportunity, you need to have the following information:

1. The event’s operational history. How long has it been in existence, its success record and annual growth.

2. Details of the event - dates, expected attendance including demographics and psychographics.

3. Sponsorship history including present and past sponsors and their fee history.

4. Event attractions - what educational programming, attractions and receptions will be taking place.

5. Organization structure including the background of the organizers and any non-profit affiliation.

6. Promotional strategy including all advertising, PR and marketing planned for the event.

Based on all this information you can rate whether or not you feel this event would give you the kind of return on investment you are looking for.

Measuring sponsorship results

A major attraction of sponsorship as a marketing vehicle is that it can be measured. There are primarily three methods of evaluation, awareness levels or attitude changes; sales results; and comparison of value generated by media coverage versus the cost of comparable advertising space or time.

With each of these forms of measurement there needs to be a pre-sponsorship benchmark. Also it is important that each objective be measured separately.

Working with sponsorship agencies

In the U.S. sponsorship is unregulated with no guidelines for agency standards and practices. As a result, practices vary considerably from agency to agency. The purpose of an agency is to help either or both sponsor and sponsee develop a creative program to meet their marketing objectives. Payment of services is either on a project basis or on a retainer and often the agency may request a percentage of income generated.

To work successfully with an agency, it is important to give them specific guidelines defining your exact objectives, the desired outcome and your budget. Before working with an agency, check out their track record and speak to existing or past clients.

Why sponsorships fail

Not all sponsorships are the roaring successes companies would like them to be. There are several reasons why they might fail. A very common one is known as "the CEO Syndrome". This is when the CEO likes a sport such as rowing and has the company sponsor a rowing event without due consideration of marketing objectives.

Another reason for failure occurs when a company commits to a sponsorship and neglects to do any promotion prior to the event. They just turn up and hope that the on-site visibility will give them what they want.

Sponsorships fail when there is no long term commitment to an event. Creating a link between the sponsor and the event takes time, usually several years. Often companies withdraw their support if they do not see a return on investment after the first attempt. Failure also occurs when companies try to spread their sponsorship dollars too thin by having too many small sponsorships. It is often more effective to concentrate efforts into one or two events.

A major reason a sponsorship might fail is when there is little or no support from your own staff. Everyone needs to be supportive and promote the sponsorship to your target audience.

Finally, sponsorship is the fastest growing form of marketing in the U.S. It is still very much in its infancy, especially in the tradeshow arena. With this in mind there are unlimited opportunities for companies to broaden their competitive advantage by increasing their credibility, image and prestige in sponsoring events attracting their target market.